EXHIBIT B-10(f)(1)
OPERATING AGREEMENT
of
GOLDEN PEANUT COMPANY, LLC
THIS OPERATING AGREEMENT (this "Agreement") of GOLDEN
PEANUT COMPANY, LLC, a Georgia limited liability company (the
"Company"), is made and entered into as of the 30th day of
March, 2000 by and among Alimenta Holdings, Inc. ("Alimenta"),
Archer-Daniels-Midland Company ("ADM"), Cargill, Incorporated
("Cargill") and Gold Kist Inc. ("Gold Kist") (together, the
"Members", and each, a "Member").
RECITALS
WHEREAS, the Members deem it important and in the best
interest of the Company that certain rules regarding the
governance, management and operation of the Company be set
forth;
NOW, THEREFORE, in consideration of the mutual covenants
and conditions herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, all of the Members of the Company hereby agree
as follows:
ORGANIZATION
Formation. The Company became a limited liability
company under the Georgia Limited Liability Company
Act, O.C.G.A. 14-11-101, et seq. (the "Act"), by
the filing of the Certificate of Election and
Company's Articles of Organization with the
Secretary of State of the State of Georgia,
effective on March 30, 2000, and shall continue
until terminated pursuant to Section 7 or by
applicable law.
Principal Office. The principal office of the
Company shall be maintained at 100 North Point
Center East, Suite 400, Alpharetta, Georgia 30202,
or at such other place as may be designated by the
Board (as defined in Section 2.3).
Registered Office and Agent. The registered agent
of the Company is James W. Dorsett and the address
and county of the registered office of the Company
is 100 North Point Center East, Suite 400,
Alpharetta, Fulton County, Georgia 30222.
Purposes. The Company has been formed for the
limited purposes of growing, procuring, processing
and marketing peanuts and peanut products in order
to achieve economics of scale and other desirable
efficiencies; improving the relatively weak position
of the United States in the world peanut market;
conducting and sponsoring research to improve United
States peanut production; expanding the uses of and
demand for United States peanut products; sharing
the risks and costs associated with such activities;
and conducting other related business which the
Board deems necessary to effectuate such limited
purposes. No business other than that described in
this Section 1.4 shall be conducted without the
prior approval of all of the Members. No Member
shall have the power to act for or bind any other
Member or the Company except as specifically
provided in this Agreement.
Member and Company Services.
Subject to approval of the Board, at the
request of the Company and upon agreement of a
Member, such Member may provide certain
administrative and/or financial services to the
Company at a mutually agreed upon compensation
rate. No Member shall be entitled to any other
compensation for services to the Company and in
no event shall compensation under this Section
1.5 or provision of such services to the
Company be deemed additional contributions to a
Member's capital account. In the event a
Member transfers its Interest or for any reason
whatsoever ceases to be a Member of Company,
such Member shall cooperate with and continue
to provide services and/or support to the
Company for a reasonable time not to exceed six
(6) months; and
Subject to approval of the Board, the Company
may provide services or facilities to a Member
on terms mutually agreed upon by the Company
and the Member.
Notwithstanding Sections 1.5(a) and 1.5(b)
above, the Company and Cargill shall negotiate
a service agreement relating to the facility
located in Dawson, Georgia, such service
agreement to be subject to the unanimous
approval of the Board.
Name. The name of the Company shall be Golden
Peanut Company, LLC or such other name as is
designated from time to time by the Board, and such
name shall be the property of the Company. All
business of the Company shall be conducted in such
name. No Member has any interest in the property of
the Company in its own name.
No State-Law Partnership. The Members intend that
the Company not be a partnership (including, without
limitation a limited partnership) or joint venture,
and that no Member be a partner or joint venturer of
any other Member for any purposes other than a
partner in the Company for U.S. federal, state,
local and other tax purposes, and this Agreement may
not be construed to suggest otherwise.
MEMBERSHIP AND MANAGEMENT
Membership. The Members acknowledge their status as
members of the Company, adopt this Agreement as the
operating agreement of the Company and agree to be
bound by the terms and provisions hereof, by
executing this Agreement where provided on the
signature page(s) hereto. On the date of this
Agreement, each Member's percentage of ownership
interest in the Company shall be twenty-five percent
(25%). A Member's ownership interest in the Company
at any particular time, together with the rights and
obligations of such Member as provided hereunder,
shall be referred to hereinafter as such Member's
"Interest" in the Company. The Company may issue
certificates of membership interest in the Company
representing the Member's ownership interest.
Unanimous Membership Consent. Notwithstanding any
other provision of this Agreement, the following
Company actions shall require the unanimous consent
of all of the Members:
The sale, transfer or other disposition of all
or substantially all of the assets of the
Company;
As required pursuant to Section 2.6, the
admission of any Person (as defined in Section
3.3) as a Member unless such Person is a
transferee of a Member permitted under Section
3.3 or 3.4;
A significant change in the purpose of the
Company or the scope of its business;
A change or reorganization of the Company into
any other form of entity;
The merger or consolidation of the Company into
or with another Person;
An amendment to this Agreement or to the
Articles of Organization of the Company;
The liquidation or other dissolution of the
Company;
The withdrawal of a Member unless such Member
is withdrawing pursuant to Section 3;
Approval of a transfer if unanimous consent is
required pursuant to Section 3.4(c);
Mandatory additional capital contributions if
unanimous consent is required pursuant to
Section 4.1(b);
The retention of net income or gain pursuant to
Section 6.1;
A liquidating distribution of assets in kind if
unanimous consent is required pursuant to
Section 7.3;
The execution by the Company of an agreement
with the IRS pursuant to Section 8.6; and
Any action requiring unanimous consent
pursuant to the Act.
In accordance with Section 14-11-305 of the Act, the
Members agree that each Member may consent or
withhold consent to any of the foregoing actions
even if such Member believes that such consent or
failure to consent is not in the best interests of
the Company and/or is not prudent. No Member shall
be deemed to have any fiduciary duties to the
Company or the other Members in connection with its
decision to consent or withhold consent to any of
the foregoing actions.
Board of Directors.
The management of the Company shall be vested
in the Members and exercised through the Board.
The Members hereby establish a Board of
Directors (the "Board") composed of eight (8)
members, two (2) of whom shall be appointed by
each Member (that Member's "Delegation"). Each
Member agrees that such Member's Delegation
shall act in a manner which it believes in good
faith 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. All Board appointments
by Members shall be in writing and shall be
delivered to the other Members. ADM hereby
appoints J. McDonald and P. Mulhollem as its
Delegation and selects J. McDonald as Chairman
of the Board. Alimenta hereby appoints D.
Izmirlian and M. Wagner as its Delegation.
Cargill hereby appoints R. Dudley and J. March
as its Delegation. Gold Kist hereby appoints
G. Coan and J. Bekkers as its Delegation. Any
Member may, at any time, remove any of its
Board Delegation upon written notice to the
other Members. Each Board member shall hold
office until a successor shall have been
selected as provided in this Agreement, or his
or her earlier death, resignation or removal.
One of the Board members so appointed shall
serve as Chairman of the Board. ADM shall
select the Chairman for the remainder of the
Company's fiscal year ending June 30, 2000.
Gold Kist shall select the Chairman for the
subsequent fiscal year; Alimenta shall select
the Chairman for the next subsequent fiscal
year; Cargill shall select the Chairman for the
next subsequent fiscal year; and the selection
shall alternate among ADM, Gold Kist, Alimenta
and Cargill thereafter on a yearly basis. The
Company selecting the Chairman shall have the
power and authority to remove the Chairman
selected by it by delivering written notice of
such removal to the Company and the other
Members. A vacancy in the office of Chairman
shall be filled by the Member that appointed
the Chairman during that period.
The two Board members comprising each Member's
Delegation shall collectively be entitled to
cast one vote with respect to any decision made
by the Board, which vote shall be cast by
either Board member present at any meeting or
by proxy executed in writing by the Board
member and delivered to the meeting's Chairman.
Each Member shall be bound by the vote of its
Delegation, and each Member is hereby
authorized to rely upon the authority of each
other Member's Delegation to vote on behalf of
and bind the appointing Member.
No Board meeting may be held or action taken
unless notice thereof together with an agenda
and supporting materials shall be provided not
less than three (3) and not more than sixty
(60) days before the date of the meeting to all
Board members (or such notice shall have been
waived in writing) and at least three Board
members are present and voting, with at least
one representative from any three (3) Members'
Delegations. All Board decisions shall be by
majority vote of the Board members represented.
Each Member's Delegation may be accompanied and
assisted by such employees and representatives
of the Member as such Delegation reasonably
wishes. Each Member shall bear its own costs
of attendance at all Board meetings.
The Board shall meet periodically, but not less
than four times per year, at mutually agreed
times and locations. Any Board member may
request a meeting of the Board by giving ten
(10) days' notice to each other Board member,
unless all Board members waive such notice in
writing. With such notice or waiver, meetings
may be conducted by telephone, provided that
action taken thereby shall be confirmed in
writing within five (5) business days thereof.
Written minutes shall be prepared of all
meetings of the Board. Decisions of the Board
may be made without a meeting by unanimous
written consent (or separate counterparts
thereof) signed by at least one person from
each Member's Delegation, which shall have the
effect of unanimous action taken at a meeting.
If a member of each Member's Delegation shall
meet at any time and place, either within or
outside the State of Georgia, and consent to
the holding of a meeting at that time and
place, then the meeting shall be valid without
call or notice, and at the meeting lawful
action may be taken.
Board members shall not be compensated by the
Company for their service on the Board.
Except for the powers and authority exclusively
reserved to the Members in this Agreement, and
subject to their right to delegate the day-to-
day management of the Company to the officers,
the Company shall be directed solely and
exclusively by the Board. The Board members
shall in all cases act collectively as provided
herein and not individually. Without limiting
the generality of the foregoing, except as
expressly delegated by the Board, no Board
member acting individually shall be the agent
of the Company or shall have the right, power,
or authority to transact any business in the
name of the Company or bind the Company in any
way. No debt shall be contracted or liability
incurred by or on behalf of the Company except
by the Board members acting collectively as
provided herein or by one or more Board members
or officers acting pursuant to the authority
granted to them by the Board.
Officers and Employees.
The Board may appoint as officers of the
Company such officers as it may from time to
time deem advisable. No officer or other
representative of the Company need be an
employee of the Company but may be an employee
of any Member, or an Affiliate (as defined in
Section 3.3) of any Member. A single person
may hold more than one office. Each such
officer shall perform such duties and exercise
such powers not inconsistent with this
Agreement as the Board may, from time to time,
determine.
President. The President is the chief
executive officer of the Company and has
general supervision and control over the
affairs of the Company, its officers, agents
and employees. The President has the power to
execute bonds, deeds, mortgages, and other
major contracts on behalf of the Company when
the execution thereof has been expressly
delegated to him by the Board; provided,
however, that he is authorized to execute
contracts and other documents in the ordinary
course of business of the Company without such
express delegation. The President is
authorized to make reports to the Board and
perform all such other duties as are incident
to his office or as are properly required of
him by the Board
Vice President. A Vice President is authorized
to perform such duties as may be specifically
delegated to him by the Board or by the
President; provided, however, that even without
such express delegation, a Vice President is
authorized to execute contracts, deeds, and
other documents in the ordinary course of
business of the Company. In the absence of the
President, a Vice President as designated by
the Board shall have the authority to perform
the duties and exercise the authority of the
President.
Treasurer. The Treasurer is responsible for
the custody of all monies and securities of the
Company and for the maintenance of regular
books of account. He has general supervision
of the disbursement of funds of the Company and
is authorized to sign such contracts and other
documents as are appropriate in the performance
of his duties, including the investment and
management of funds. He is further authorized
and directed to give to the Board and Members
from time to time, as may be required of him,
an account of all transactions for which he is
responsible and an account of the financial
condition of the Company.
Secretary. The Secretary is responsible for
recording minutes of meetings of the Board and
otherwise carrying out such duties as the Board
may from time to time delegate to the
Secretary. The Board may also appoint an
Assistant Secretary to act in the absence of
the Secretary.
All persons appointed to such positions as may
be determined by the Board shall hold office at
the pleasure of the Board. Any officer of the
Company may be removed at any time, either with
or without cause, by the Board.
Third parties dealing with the Company shall be
entitled to rely conclusively upon the power
and authority of the President of the Company.
The Members shall not permit or require
employees of the Company to obtain, exchange or
disclose confidential information or trade
secrets of any Member which is unrelated to the
business of the Company. Each Member also
agrees that it and its Affiliates will use any
confidential information or trade secrets of
any other Member or of the Company only for the
purpose of supporting and pursuing the purposes
of the Company, and shall not make any other
use or disclosure thereof.
Limitation of Liability; Indemnification.
Except as otherwise expressly provided or
referred to in this Agreement, no Member shall
be personally liable for any of the debts,
losses, liabilities or obligations of the
Company.
The Board members shall be indemnified by the
Company to the maximum extent possible under
the Act from any loss or liability to any
person incurred in connection with any act,
omission or error in judgment in connection
with the conduct of the Company's business;
provided, however, that any indemnity under
this Section 2.5(b) shall be provided out of
and be limited to the extent of the Company's
assets only, and no Member shall have any
personal liability therefor.
The Members shall have no personal liability
for the repayment of the capital contribution
of any Member, and shall not be required to
contribute any additional capital or lend any
funds to the Company, except as expressly
provided herein or to the extent required by
law.
New Members. Except as provided in Section 3.3 and
3.4, a Person may become a Member of the Company
only upon (a) the consent of all of the Members, (b)
agreeing to be bound by all of the terms and
conditions of this Agreement, as then in effect, by
executing a counterpart of this Agreement, unless
otherwise agreed by all the Members, and (c) making
such capital contribution (and obtaining such
Interest) as agreed upon by such person and the
existing Members.
Other Activities. Except as provided in Section 11,
any Member may engage in or possess any interest in
any other business or venture of any nature and
description, independently or with others, and
neither the Company nor any other Member shall have
any rights in or to any such business or venture or
the income or profits derived therefrom.
WITHDRAWAL, REMOVAL, TRANSFER OF INTEREST, RIGHT OF FIRST
REFUSAL
Removal/ Withdrawal. No Member shall be removed as
a Member of the Company without the written consent
of the Member to be removed. Any Member may
withdraw from the Company at any time, effective as
of the end of the twelfth (12th) monthly accounting
period of the Company following written notice by
such withdrawing Member to the other Members and the
Company of its election to withdraw. Upon the
effective date of withdrawal of any Member, the
following shall be undertaken:
The withdrawing Member shall pay to the Company
in cash all amounts then owed by it to the
Company;
The Company shall pay to the withdrawing Member
amounts owing to it for loans or other
extensions of credit to the Company or upon
contracts with the Company or upon open
accounts;
The Company shall pay to the withdrawing Member
the amount equal to the withdrawing Member's
Interest times the book value of the Company as
of the effective date of withdrawal; and
Such Member shall be released from any further
obligation under any ancillary agreement or
arrangement associated with the Company,
including, without limitation, a guaranty or
reimbursement agreement with regard to the
financing of the Company, except to the extent
that such obligation arose from or was based
upon events or circumstances that existed or
occurred prior to the effective date of such
Member's withdrawal, including, without
limitation, those incurred but not reported.
Restrictions on Transfers. Except as permitted in
Section 3.3 or Section 3.4, a Member holding an
Interest, shall not (a) sell, assign, transfer,
convey, or otherwise dispose of all or part of its
Interest whether by act or deed, by merger or
consolidation, by sale of control of a Member or by
operation of law or (b) mortgage, pledge, encumber,
or create or suffer to exist any pledge, lien,
charge or encumbrance upon, security interest or
participation in, or trust in respect of all or any
part of its interest in the Company or its Interest,
excepting such of general application.
Transfers to Affiliates. As used herein, the term
"Affiliate" means a Person who directly or
indirectly, through one or more intermediaries,
controls, is controlled by or is under common
control with the Person specified, and "Person"
means an individual, a partnership, a joint venture,
a corporation, a company, a trust, an estate, an
unincorporated organization, or any other entity or
a government or any department or agency thereof.
Subject to Section 3.5, each Member shall be
entitled to sell, assign, transfer, or convey all
(but not less than all) of its Interest to (a) a
Person which is an Affiliate of such Member, (b) any
entity resulting from a merger or consolidation with
a Person, or the acquisition of control of, by ADM,
Cargill, Gold Kist or substantially all of the
entities majority owned or controlled directly or
indirectly by Dikran S. Izmirlian, as the case may
be, (c) any Person to whom ADM, Cargill, Gold Kist
or Dikran S. Izmirilian shall sell substantially all
of its agribusiness assets, (d) any institutional
lender that has agreed that it shall be bound by
this Agreement if it acquires a Member's Interest,
and (e) in the event of a death of Dikran S.
Izmirlian, the legal representative, heirs, or
beneficiaries of Dikran S. Izmirlian, as the case
may be. No transfer shall be permitted under this
Section 3.3 or 3.4 if, taking into account prior and
contemporaneous transfers, it would result in a
termination pursuant to the provisions of Section
708 of the Code (as defined in Section 4.2), cause a
material adverse tax consequence to the Company or a
Member or cause the Company to be treated as other
than a partnership for federal, state or local
income tax purposes.
Transfers to Third Parties.
In no event may a Member sell, assign, transfer
or convey less than all of its Interest. If a
Member desires to sell, assign, transfer or
convey all of its Interest other than as
provided in Section 3.1 or Section 3.3, such
Member ("Seller") shall so notify each other
Member and the Chairman of the Board in writing
of its desire to sell its Interest in the
Company (the "Offered Interest"). For a
period of sixty (60) days following such
written notice to the other Members (the "First
Period"), the Seller shall negotiate in good
faith exclusively with the Company and the
other Members to determine whether the Seller,
the Company and/or one or more of the other
Members may reach an agreement for the purchase
and sale of the Seller's Interest.
If the Seller fails to reach an agreement with
the Company and/or the other Members for the
purchase and sale of the Seller's Interest
during the First Period, the Seller shall be
entitled, but not obligated, subject to the
terms and conditions of this Section 3.4 and
Section 3.5, for a period of one hundred eighty
(180) days (the "Second Period") from the
expiration of the First Period to sell all, but
not less than all (unless otherwise agreed by
the non-transferring Members), of its Interest
to a third party. If, during the Second
Period, the Seller receives, in the Seller's
opinion, an acceptable offer to purchase its
Interest, Seller shall notify the other Members
in writing of the identity of the proposed
purchaser, and the price, terms and conditions
of the sale, provide the other Members a
written copy of the offer of the proposed
purchaser, and give the other Members the right
to accept or reject such third party as a
member. If any Member or Members reject the
third party, the Member or Members rejecting
the third party shall buy the Interest of the
Seller at 1.10 times the price, and upon the
same terms and conditions that the Seller was
willing to accept from such third party. The
other Members shall have until the earlier of
(i) sixty (60) days from the date of the notice
from the Seller and (ii) the date on which the
Seller is given notice that the third-party
offer is no longer in effect in which to elect
to accept or reject the third party as a
member. If non-transferring Member(s) reject
the third party as a member, its or their
notice shall so state and shall set forth the
place (which shall be located in the state of
Georgia) and time (which shall be a business
day not more than thirty (30) days after the
date of such notice) at which the Closing of
its or their purchase at 1.10 times the price
as mentioned above shall take place. If the
other Members fail to give notice to accept or
reject the third party within such time, the
Seller may then sell its Interest to the third
party on the same terms and conditions notified
to the non-transferring Members and without the
consent or acceptance by the non-transferring
Members of such third party. If the Seller
does not dispose of its Interest to such third
party upon the terms set forth above within one
hundred twenty (120) days after the expiration
of the Second Period, such Interest will again
be subject to all restrictions set forth in
this Section 3.4.
Notwithstanding the foregoing, no such transfer
shall be permitted if it would result in a
termination pursuant to the provisions of
Section 708 of the Code, unless consented to by
all Members, which consent shall not be
unreasonably withheld.
Closing; Assumption of Obligations by a Transferee.
At the closing of any sale of an Interest to
Member(s) pursuant to Section 3.4 the selling
Member shall execute or cause to be executed
any and all documents necessary to transfer
completely of record and beneficially the
Interest being transferred free and clear of
any and all liens, encumbrances, or pledges of
any kind, including the delivery of any
certificate representing the Interest being
transferred, duly endorsed for transfer, and
(ii) the purchaser of such Interest shall make
payment therefor on the terms as provided in
Section 3.4.
Any sale, transfer, or other disposition of the
Interest of a Member pursuant to this Section 3
shall be effective only upon the execution and
delivery by the purchaser or transferee and, in
the case of clause (i) below, the non-
transferring Members, of an instrument
reasonably satisfactory to the Members (i)
evidencing the agreement of such purchaser or
transferee to become a Member, to be bound by
the provisions of this Agreement and any
applicable ancillary agreements to which the
transferring Member was at the time of transfer
a party, provided, however, that if the
transferring Member was not a party to any such
agreement, including without limitation a
guaranty or reimbursement agreement with regard
to the financing of the Company, at the time of
transfer the transferee shall not be obligated
to assume or become a party to such agreement,
and to assume all of the liabilities and to
perform all of the obligations and duties of
the Member with respect to the Interest to be
sold, transferred, or disposed of; (ii)
evidencing the consent of such purchaser or
transferee to the jurisdiction of the United
States District Court for the North District of
Georgia and the courts of the State of Georgia
and the commitment of such purchaser or
transferee to maintain an agent for service of
process in the State of Georgia and the State
of Georgia in connection with any action
relating to this Agreement; and (iii)
evidencing an appropriate waiver of sovereign
immunity, if applicable, by such purchaser or
transferee. Upon the transfer by any Member of
its Interest, at its discretion such Member
shall be released from any further obligation
under any ancillary agreement or arrangement
associated with the Company, including without
limitation a guaranty or reimbursement
agreement with regard to the financing of the
Company. The foregoing sentence shall not
release a Member from its obligation to
continue to provide certain services to the
Company for a certain time period as provided
in Section 1.5 of this Agreement. Upon the
transfer by any Member of its Interest, the
transferee shall be entitled to exercise all of
the rights of such transferring Member under
this Agreement to approve, consent and vote on
actions or matters. Notwithstanding the
foregoing sentence, if at any time the Company
shall have only three Members consisting of
three of ADM, Alimenta, Cargill and Gold Kist,
each of such three Members shall have the same
rights to approve, consent and vote on actions
or matters notwithstanding any differences in
the Interests of such three Members.
Each Member, if requested by any transferee of
an Interest, shall perform, execute,
acknowledge, and deliver all such further acts,
deeds, and assurances contemplated by this
Agreement reasonably required to effect the
sale, transfer, or other disposition of its
interest in the Company to, or the assumption
of obligations hereunder by, such transferee.
Restraining Order. In the event that a Member shall
at any time attempt to transfer its Interest in
violation of the provisions of this Agreement, then
any other Member shall, in addition to all rights
and remedies at law and in equity, be entitled to a
decree or order restraining and enjoining such
transfer, without any bond or other security being
required, and the Member purporting to make such
transfer shall not plead in defense thereto that
there would be an adequate remedy at law, it being
hereby expressly acknowledged and agreed that
damages at law will be an inadequate remedy for a
breach or threatened breach of the violation of the
provisions concerning transfer set forth in this
Agreement.
Fees. The Company may, but a Buyer may not, in its
reasonable discretion, charge a reasonable fee to
cover the costs and additional expenses incurred in
connection with or as a consequence of the transfer
of all or part of an Interest, including reasonable
attorneys' fees, provided however, that if the
Company is effecting a Purchase Offer in behalf of
all non-transferring Members, then the Company will
be deemed to be the Buyer.
More Than One Seller. If a second Member indicates
through written notice its desire to sell its
Interest in the Company prior to the deadline for
the first Seller and the other Members to submit
their Purchase Offers pursuant to Section 3.4(a),
the Offered Interests of the Sellers will be deemed
to have been joined and the procedures set forth in
Section 3.4(a) and 3.4(b) to the extent not modified
in this Section 3.8, shall be followed with the
Sellers providing a joint Purchase Offer of their
combined Offered Interests. The non-selling Members
may act as individual Buyers or pool their Purchase
Offer for the combined Offered Interests in
response. In the event that no Buyer submits a
Purchase Offer, or in the event the Sellers cannot
agree upon a sale to either of the Buyers (if one or
both of the Buyers does submit a Purchase Offer) or
a third party that is acceptable, the Board shall
take action to sell, liquidate and dissolve the
Company as provided pursuant to Section 7.
More Than One Withdrawing Member. If a Member
notifies the other Members of its election to
withdraw as a Member pursuant to Section 3.1, and
before the effective date of such withdrawal a
second Member notifies the Members of its election
to withdraw from the Company, the Board shall take
action to sell, liquidate and dissolve the Company
as provided pursuant to Section 7 and all notices by
Members of elections to withdraw from the Company
shall be null and void unless the non-withdrawing
Members notify the Board and the withdrawing Members
that they wish to continue the Company and will
cause the Company to perform its obligations with
respect to the withdrawing Members pursuant to
Section 3.1.
Members' Pro Rata Purchase. When two (2) or more
Members elect to purchase the Interest of a Member
whereby such purchasing Members have elected to
purchase more than one hundred percent (100%) of the
transferring Member's Interest, then such purchasing
Members shall purchase the Interest of the
transferring Member on a pro rata basis relative to
their respective Interests before such purchase.
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Capital Contributions.
Upon execution of this Agreement, each of the
Members will have contributed, caused to have
contributed or agreed to contribute to the
capital of the Company an amount of assets
having a fair market value of twenty million
dollars ($20,000,000), as agreed by all of the
Members. A Member may not make any additional
capital contributions to the Company unless
either (i) such additional capital contribution
is expressly required or permitted under this
Agreement, or (ii) all of the other Members
shall approve such additional capital
contribution in writing. Any additional
contribution by a Member to the capital of the
Company shall constitute a capital
contribution. A Member may not make any
capital contribution other than in cash or cash
equivalency unless all of the other Members
shall approve in writing. Any additional
capital contribution other than cash or cash
equivalency shall be valued at its fair market
value as of the date of contribution, which
fair market value, absent manifest error, shall
be the value set forth in any agreement among
the Members .
Each of the Members shall make, after the
Company exhausts debt sources of working
capital, such additional capital contributions
in such amounts as are necessary to maintain
adequate working capital to operate the Company
when requested and adopted by the Board,
provided, however, any capital contribution
which in the aggregate for all Members exceeds
five million dollars ($5,000,000) in any
Company fiscal year shall not be required
except by the unanimous consent of the Members.
In absence of such a unanimous consent, the
dissenting Member(s) may decline to contribute.
Any contributions, from contributing Members,
described in this Section 4.1(b) shall be made
in proportion to each Member's then Interest
(as defined in Section 2.1).
The Members' Interests shall be adjusted to the
extent the Members make disproportionate
capital contributions to the Company. If the
Members make disproportionate capital
contributions, each Member's Interest shall
equal the percentage that such Member's total
capital contributions bear to the aggregate of
all capital contributions.
Capital Accounts.
A separate capital account shall be established
and maintained for each Member throughout the
term of the Company in accordance with Section
1.704-1(b)(2)(iv) and any other applicable
sections of the Federal Income Tax Regulations
(the "Regulations") issued under the Internal
Revenue Code, as amended (the "Code"), in order
for allocations of taxable profits and losses
pursuant to this Agreement to have "substantial
economic effect" under the Code and
Regulations.
No interest shall be paid on any capital
invested in the Company except as expressly
provided herein.
Except as otherwise provided in Section
1.704-1(b)(2)(iv) of the Regulations:
Each Member's capital account shall be
increased by (A) the amount of money
contributed by the Member to the Company,
(B) allocations to the Member of Company
income and gain (or items hereof),
including income and gain exempt from tax
and income, special allocations of income
and gain pursuant to Section 5 hereof and
gain described in Section 1.704-
1(b)(2)(iv)(g), but excluding items of
"tax" (as distinguished from "book")
income and gain described in Section 1.704-
1(b)(4)(i) of the Regulations; and (C) the
fair market value of any property
contributed by the Member (net of
liabilities secured by the contributed
property that the Company is considered to
assume or take subject to under Section
752 of the Code); and
each Member's capital account shall be
decreased by (A) the amount of money
distributed to the Member by the Company,
(B) the fair market value of any property
distributed to the Member by the Company
(net of liabilities secured by the
distributed property that the Member is
considered to assume or take subject to
under Section 752 of the Code),
(C) allocations to that Member of
expenditures of the Company described in
Section 705(a)(2)(B) of the Code or
otherwise treated as Section 705(a)(2)(B)
expenditures pursuant to the Regulations,
and (D) allocations to the Member of
Company loss or deduction (or items
hereof), including loss and deduction
described in Section 1.704-1(b)(2)(iv)(g)
of the Regulations and special allocations
of loss and deduction pursuant to Section
5 hereof, but excluding items of "tax"
(as distinguished from "book") loss or
deduction (or items thereof) described in
Section 1.704-1(b)(4)(i) or (iii) of the
Regulations.
Capital accounts shall be adjusted in
accordance with the Regulations from time to
time, to reflect unrealized income, gain, loss,
or deduction, including adjustments made in
accordance with Section 1.704-1(b)(2)(iv)(d)-
(f) of the Regulations. Such adjustments, to
reflect the then fair market value of Company
assets, shall be made as appropriate at the
following times:
the acquisition of an additional Interest
in the Company by any new or existing
Member in exchange for more than a de
minimis capital contribution;
the distribution by the Company to a
Member of more than a de minimis amount of
Company assets as consideration for an
Interest in the Company; and
the liquidation of the Company for
federal income tax purposes pursuant to
Section 1.704-1(b)(2)(ii)(g) of the
Regulations .
The transferee of any Member's Interest shall
succeed to the capital account of the
transferor to the extent it relates to the
transferred Member's Interest.
The provisions of this Agreement relating to
the maintenance of capital accounts are
intended to comply with Section 1.704-1(b) of
the Regulations, and shall be interpreted and
applied in a manner consistent with such
Regulations.
Return of capital contributions. No Member shall be
entitled to withdraw any part of its capital
contributions or its capital account or to receive
any distribution from the Company, except as
specifically provided in this Agreement. Except as
otherwise provided herein, there shall be no
obligation to return to any former Member or his
successor any part of such Member's capital
contribution or capital account, or to make any
distribution thereto, for so long as the Company
continues in existence.
Deficit Capital Account Restoration. Except as
otherwise provided herein, Members shall not be
obligated to restore any negative capital account or
contribute any amounts to the Company in respect of
any negative capital account, nor shall any Member
be liable for any of the debts, losses, liabilities
or obligations of the Company beyond such Member's
capital contributions. Members shall not be
obligated to restore any reduction in their own
capital account.
ALLOCATION OF PROFITS AND LOSSES
Except as otherwise provided in this Agreement, the
Company's profits and losses for each fiscal year
shall be allocated among the Members in proportion
to their respective Interests in effect during such
fiscal year. Notwithstanding the foregoing, (i) net
profits for any Fiscal Year shall first be allocated
to Members in proportion to previously allocated net
losses under this Section 5.1 to the extent those
net losses have not been previously offset by
allocation under this clause (i), and (ii) net
losses for any Fiscal Year shall first be allocated
to Members in proportion to previously allocated net
profits under this Section 5.1 to the extent those
net losses have not been previously offset by
allocations under this clause (ii).
Profits and losses of the Company shall be
determined for each fiscal year in accordance with
Section 703(a) of the Code and the method of
accounting followed by the Company for federal
income tax purposes and otherwise in accordance with
generally accepted accounting principles and
procedures applied in a consistent manner, as
modified by Section 1.704-1(b)(2)(iv) of the
Regulations. Except as otherwise provided in this
Agreement, whenever a proportionate part of the
Company's profit or loss is allocated to a Member,
every item of income, gain, loss or deduction
entering into the computation of such profit and
loss shall be considered allocated and every item of
credit or tax preference applicable to the period
during which such profit or loss was realized shall
be considered allocated to such Member in the same
proportion. All allocations of such items for
federal income tax purposes shall be identical to
the allocations set forth in this Section 5, except
as otherwise required by Section 704(c) of the Code
and Section 1.704-1(b)(4) of the Treasury
Regulations.
No allocation of loss, deduction or expenditure
shall be charged to the Capital Account of any
Member if such allocation would cause the Member to
have a deficit Capital Account, but instead shall be
charged to the Capital Account of any Members which
would not have a deficit Capital account as a result
of such allocation in proportion to the positive
Capital Accounts of such Members or, if no such
Members exist, then to the Members in accordance
with percentage Interests.
If a Member transfers its interest in the Company,
and the transferee is admitted as a substituted
Member as provided herein, the distributive shares
of the various items allocable among the Members
during such fiscal year of the Company shall be
allocated between the transferor and the transferee
based on the number of days in such fiscal year
preceding and following the effective date of the
transfer. However, if the Company, the transferor
and the transferee consent, the distributive shares
of the various items allocable among the Members may
be allocated between the transferor and the
transferee on the basis of the closing-of-the-books
method.
Notwithstanding any other provision of this
Agreement, (a) nonrecourse deductions of the Company
within the meaning of Section 1.704-2(b)(1), other
than partner nonrecourse deductions within the
meaning of Section 1.704-2(i)(1), of the
Regulations, shall be allocated among the Members in
accordance with their respective Interests, (b) any
Member nonrecourse deductions within the meaning of
Section 1.704-2(i)(1), shall be allocated in
accordance with Section 1.704-2(i), of the
Regulations, and (c) if there is a net decrease in
"minimum gain" within the meaning of Sections 1.704-
2(d) and 1.704-2(i)(3) of the Regulations for any
fiscal year of the Company, items of gain and income
shall be allocated among the Members in accordance
with the "minimum gain chargeback" rules contained
in Sections 1.704-2(f) and 1.704-2(i)(4) of the
Regulations. The Members' respective interests in
Company profits for purposes of allocating excess
nonrecourse liabilities of the Company within the
meaning of Section 1.752-3(a)(3) of the Regulations
shall be equal to their respective Interests.
In the event any Member unexpectedly receives any
adjustments, allocations or distributions described
in Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of
the Regulations which creates or increases a deficit
balance in the Capital Account of such Member, items
of Company income and gain (consisting of a pro rata
portion of each item of Company income, including
gross income and gain for such fiscal year) shall be
specially allocated to such Member in an amount and
manner sufficient to eliminate, to the extent
required by the Regulations, such deficit in the
capital account of such Member as quickly as
possible. This provision is intended to comply with
the "qualified income offset" requirements of
Section 1.704-1(b)(2)(ii)(d) of the Regulations, and
this provision shall be interpreted in accordance
with those requirements.
The Members intend that the allocations of profits
and losses under this Agreement shall have
substantial economic effect (or be consistent with
the Members' Interests in the Company in the case of
allocation of losses attributable to nonrecourse
debt) within the meaning of Section 704(b) of the
Code as interpreted by the Regulations promulgated
pursuant thereto. Accordingly, the provisions of
Section 5 hereof and the other relevant provisions
of this Agreement shall be interpreted in a manner
consistent with such intent. It is intention of the
Members that the Company comply with the provisions
of Regulations Section 1.704-1(b).
In accordance with Section 704(c) of the Code and
the Regulations thereunder, income, gain, loss, and
deduction with respect to any property contributed
to the Company or property revalued under Section
1.704-1(b)(2)(iv)(f) of the Regulations shall,
solely for federal income tax purposes, be allocated
among the Members so as to take account of any
variation between the tax bases of such property and
such property's fair market value as of the time of
contribution to the Company using the remedial
allocation method described in Section 1.704-3(d) of
the Regulations.
If the value for capital account purposes of any
Company property is adjusted pursuant to Section
4.2(d) hereof, 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 adjusted value in the same manner
as under Section 704(c) of the Code and the
Regulations thereunder.
DISTRIBUTIONS
Distributions. Within ninety (90) days following
the end of each fiscal year of the Company, the
Company shall distribute the net income and gain of
the Company for such fiscal year among the Members
in accordance with their respective Interests in
effect at the end of such fiscal year; provided,
however, that upon the unanimous consent of the
Members the Company shall retain all or a certain
amount of any net income and gain.
All amounts withheld pursuant to any tax law from any
distribution to the Members shall be treated as amounts
distributed to the relevant Members pursuant to this Section
6.1. Anything to the contrary in this Agreement
notwithstanding, no distribution shall be made to a Member
if such Member has, or would have as a result of such
distribution, a deficit Capital Account.
Distribution of the Proceeds of Dissolution.
Upon a dissolution of the Company, the net
proceeds of liquidation and dissolution shall
be applied and distributed in the following
order of priority:
first, towards the satisfaction of all
outstanding debts and other obligations of
the Company, including expenses of
dissolution and the establishment of any
reserves deemed necessary by the Board for
any contingent or unforeseen liabilities
or obligations of the Company;
second, towards repayment of outstanding
loans, if any, made by Members to the
Company;
third, to the Members with positive
capital accounts, to be shared among such
Members in the ratio that their respective
positive capital accounts bears to the sum
of all such positive capital accounts.
For purposes of the preceding sentence,
the capital account of each Member shall
be determined after all adjustments to
capital accounts are made in accordance
with Section 4.2 hereof; and
fourth, the balance of such proceeds shall
be distributed to the Members pro rata in
accordance with their respective
Interests.
Any distributions pursuant to this Section 6.2
shall be made by the end of the Company's
fiscal year in which the dissolution has
occurred (or, if later, within 90 days after
the date of such dissolution).
DISSOLUTION AND TERMINATION OF THE VENTURE
Events of Termination. The Company shall be
dissolved upon the occurrence of any of the
following events:
The consent of all of the Members;
The expiration of the term of the Company as
provided in the Articles of Organization;
The change in status from a limited liability
company to any other business form;
The sale, transfer or assignment of all or
substantially all of the assets of the Company;
The adjudication of the Company as insolvent in
either bankruptcy or equity proceedings; the
filing of an involuntary petition in bankruptcy
against the Company which is not dismissed
within ninety (90) days; the filing against the
Company of a petition for reorganization under
the Federal Bankruptcy Code or any comparable
state statute which is not dismissed within
ninety (90) days; a general assignment by the
Company for the benefit of creditors; a
voluntary claim of insolvency by the Company
under the Federal Bankruptcy Code or any state
insolvency statutes; or the appointment for the
Company of a temporary or permanent receiver,
trustee, custodian or sequestrator, and the
same is not dismissed within ninety (90) days;
As otherwise required under the Act; or
As provided in Section 3.8 or 3.9 of this
Agreement.
Conclusion of Affairs. In the event of the
dissolution of the Company for any reason the Board
shall proceed promptly to wind up the affairs of and
liquidate the Company. Except as otherwise provided
in this Agreement, the Members shall continue to
share distributions and allocations during the
period of liquidation in the same manner as before
dissolution.
Liquidating Distributions. The proceeds of the
liquidation and dissolution and any other assets of
the Company shall be distributed in accordance with
Section 6.2 of this Agreement. Except as provided
below, no Member shall have any right to demand or
receive property other than cash upon dissolution
and termination of the Company; however, the Board ,
on unanimous resolution, shall have the right to
distribute assets in kind, valued at the then fair
market value of such assets, as a liquidating
distribution to any Member. Without the consent of
the Company or any other Member, Alimenta may elect
to receive a distribution of assets in kind, valued
at the then fair market value of such assets, if and
to the extent Alimenta contributed such assets to
the Company. This right to receive a distribution
in kind is limited to facilities (not individual
assets) in their then current condition. If
Alimenta elects to receive a distribution of assets
in kind and as a result thereof the value of the
remaining assets of the Company is diminished,
Alimenta shall reimburse the Company for the amount
by which the value of the Company's remaining assets
is diminished. In determining whether and to what
extent the value of the Company's remaining assets
is diminished by reason of a distribution of assets
in kind to Alimenta, value diminishment as a result
of potential competition by Alimenta shall not be
taken into account.
Termination. Within a reasonable time following the
completion of the liquidation of the Company, each
of the Members shall be provided a statement setting
forth the assets and the liabilities of the Company
as of the date of complete liquidation and each
Member's portion of the distributions pursuant to
this Agreement. Upon completion of the liquidation
of the Company and the distribution of all Company
assets, the Company shall terminate, and the Members
shall execute and file Articles of Dissolution and
such other documents and take such other actions as
are necessary or appropriate to effect the
dissolution and termination of the Company.
TAXES AND ACCOUNTING
Partnership for Tax Purposes; Tax Returns. It is
the intention of the parties hereto that the
relationships created by this Agreement will, for
federal, state and local income tax purposes, be
treated as a partnership and no Member nor the Tax
Matters Partner shall take any action inconsistent
with the Company's status as a partnership for
federal, state or local income tax purposes without
the consent of all the Members. The Board shall
arrange for the preparation and timely filing of all
income tax returns and any other returns or
statements required of the Company by any taxing
authority. The Board shall, within a reasonable
period of time prior to filing any such returns or
statements (but not less than 30 days prior to the
due date thereof), deliver copies thereof to each
Member for its review and comment. If a Member
disagrees with the proposed treatment of an item on
a proposed tax return of the Company, such Member
shall give prompt written notice to the Tax Matters
Partner. The Members shall consult in good faith to
agree on the treatment of such item, and failing
such agreement, the Company shall treat the item in
the manner determined by the Members holding a
majority of Interest in the Company. No Member
shall file, pursuant to Section 6222(b) of the Code
a notification of inconsistent position with respect
to the Company without first notifying the other
Members.
Elections. The Board is granted authority and
agrees to make elections under the Code and the
Regulations in each year's federal (and, if
applicable, state and local) partnership income tax
returns with respect to the Company's activities,
including without limitation, elections under
Sections 709 of the Code. Notwithstanding the
foregoing, in the event of a transfer of all or part
of the Interest of a Member, a distribution of
Company property to a Member, or the death of a
Member, the Company shall, at the written request of
a Member or its estate, elect to adjust the basis of
Company property under Section 754 of the Code and
shall not otherwise make a Section 754 election to
adjust basis.
Financial Statements; Auditors. The Board shall
retain a national firm of independent certified
public accountants as independent auditors of the
Company to conduct an examination in accordance with
generally accepted auditing standards of the
financial statements of the Company as of the close
of business of each fiscal year of the Company and
to furnish its certificate to the effect that: (i)
the balance sheet of the Company as of such date and
(ii) the related statements of income, Members'
income accounts and capital accounts for the fiscal
period then ended have been prepared in accordance
with generally accepted accounting principles
consistently applied and fairly present the
financial position and results of the operations of
the Company for the period indicated. A copy of the
audited annual financial statements shall be
furnished to each Member within seventy-five (75)
days after the end of each fiscal year. Pursuant to
a Litigation Sharing and Indemnification Agreement,
dated March 30, 2000 (the "Indemnification
Agreement"), ADM, Alimenta and Gold Kist have agreed
to indemnify the Company with respect to the civil
action entitled Neon Earl Bass, Jr., Dry Branch
Farms, Inc. and Varner Bass Enterprises, Plaintiffs.
Vs. Golden Peanut Company, Defendant, Civil Action
File No. 94-VS-85847, State Court of Fulton County,
Georgia (the "Varner Bass Case"). As a result of
the Indemnification Agreement, the auditors for the
Company shall record a receivable of the Company
from ADM, Alimenta and Gold Kist to offset any
liability or reserve on the financial statements of
the Company with respect to the Varner Bass Case.
Fiscal Year; Tax Year. The Company's fiscal year
for financial accounting purposes shall end on June
30 of each year. The Board shall have the right to
change such fiscal year from time to time if it
deems it appropriate. The Company's tax year shall
end on December 31 and, in any event, shall be
determined in accordance with Section 706 of the
Code.
Member Audits; Book and Records. (a) Upon notice in
writing to the Company and the other Members, each
Member, at its own expense, shall have the right to
audit or cause to be audited the books, records,
reports and operations of the Company. No
exceptions to the books and records of the Company
with respect to normal or recurring items shall be
taken for any fiscal year unless taken within three
(3) months following the receipt of the annual
audited financial statements. The Company shall make
available to each Member such books, records,
financial statements and other information,
including information related to state tax
allocations and apportionments of such Member's
allocable share of Company income, as shall be
reasonably requested by such Member in connection
with either its right to audit or with the
preparation of tax returns or other documents
required to by filed by such Member or their
Affiliates, and the Company shall cooperate in the
preparation of such documents.
(b) The Company shall retain, at its principal
office, such books and records (including tax
returns of the Company) that may be relevant to the
tax filings or tax audits of the Members for at
least 10 years , or such later date as reasonably
requested by a Member. Each Member shall have the
opportunity to copy any such records prior to the
time they are to be destroyed by the Company.
Tax Matters Partner. The Members shall designate
ADM as the Tax Matters Partner of the Company. The
Tax Matters Partner shall obtain the consent of each
Member before it shall execute on behalf of all
Members an agreement with the Internal Revenue
Service ("IRS") extending the statute of limitations
for making an assessment of federal income taxes or
the time periods relating to submitting
administrative adjustment requests for the Company.
Any such agreements will be binding on all Members.
The Board may change the Tax Matters Partner at any
time by designating a different Member as the Tax
Matters Partner. The Tax Matters Partner may not
enter into any agreement with the IRS which affects
the amount, deductibility or creditability of any
Company item without the prior consent of each of
the other Members. In the event of an audit of the
Company's federal income tax return or other action
taken with respect to the Company by an applicable
tax authority, the Tax Matters Partner will promptly
(and in any event within 10 days of receipt of any
written action) advise all of the Members of all
developments with respect to the audit or other
matter and shall provide each Member with a copy of
all notices received from any tax authority,
including any final partnership administrative
adjustment. The Tax Matters Partner shall consult
with the Members with respect to any action to be
taken by the Tax Matters Partner and shall obtain
the consent of all Members prior to taking such
Action. The Tax Matters Partner shall be entitled
to reimbursement by the Company for all out of
pocket expenses reasonably incurred by it in
representing the Company in accordance with this
Agreement.
NOTICES. All notices, requests, demands, directions and
other communications hereunder shall be in writing signed by
an authorized representative of the Member issuing the same
and shall be deemed to have been duly given five (5) days
after the date of the mailing thereof, as determined by the
date set forth on the Post Office receipt, when sent by
certified or registered mail, postage prepaid, or upon the
date of receipt, when sent by cable, telex or other form of
electric transmission, and promptly confirmed in writing,
addressed:
If to the Company: Golden Peanut Company, LLC
100 North Point Center East
Suite 400
Alpharetta, GA 30022
Attention: President
Telecopy Number: (770) 752-8308
or to such other address as the Company shall have directed in
accordance with this Section 9.
If to Gold Kist: Gold Kist Inc.
244 Perimeter Center Parkway, N.E.
Atlanta, Georgia 30346-2397
Attention: Vice President - Law
Telecopy Number: (404) 393-5421
or to such other address as Gold Kist shall have directed in
accordance with this Section 9.
If to ADM: Archer-Daniels-Midland Company
P. O. Box 1470
Decatur, Illinois 62525
Attention: General Counsel
Telecopy Number: (217) 424-6196
or to such other address as ADM shall have directed in
accordance with this Section 9.
If to Alimenta: Alimenta
Route de Suisse 154
1290 Versoix, Geneva
Switzerland
Attention: Dikran S. Izmirlian
Telecopy Number: (41) 22 775 0290
With a copy to: C. L. Wagner, Jr.
Hunton & Williams
4100 Bank of America Plaza
600 Peachtree Street
Atlanta, Georgia 30308
Telecopy Number: (404) 888-4190
or to such other address as Alimenta shall have directed in
accordance with this Section 9.
If to Cargill: Cargill, Incorporated
15407 McGinty Road West
Law Department/24
Wayzata, Minnesota 55391-2399
Attention: Peanut Dept. Attorney
Telecopy Number: (612) 742-6349
or to such other address as Cargill shall have directed in
accordance with this Section 9.
RESOLUTION OF DISPUTES
Mediation. If a dispute or disagreement arising out
of, or relating to, the interpretation, performance
or breach of this Agreement or any amendment hereto
(a "Dispute") exists, any party may submit the
reasons for its position, in writing, to the other
party(ies) and require the other party(ies) within
ten (10) days to submit the reasons for its
position, in writing, to the first party and to then
enter into good faith negotiations to attempt to
resolve the Dispute. If such Dispute cannot be
settled by good faith negotiation between the
parties within thirty (30) days after the last
written submission is due, then any party to the
Dispute may require that the Dispute be submitted,
in writing, for resolution to an executive officer
of each party. All negotiations and written
statements conducted or made pursuant to this
Section are confidential and shall be treated as
compromise and settlement negotiations for purposes
of the U.S. Federal Rules of Evidence and state
rules of evidence. If the parties reach agreement
pertaining to any Dispute pursuant to the procedures
set forth in this Section, such agreement shall be
reduced to writing, signed by the parties and shall
be final and binding upon both parties.
Arbitration. If any Dispute shall not have been
resolved through the use of the procedures specified
in Section 10.1 within sixty (60) days of the
initial written submission of the issue by one party
to the other, then any party to the Dispute may
initiate an arbitration in accordance with the
provisions of this Section 10.2. The Dispute shall
be submitted to and settled by arbitration in
accordance with the Commercial Arbitration Rules of
the American Arbitration Association, now in effect,
except to the extent modified herein. Unless the
parties shall mutually agree otherwise, any
arbitration hearings shall be conducted in or about
Atlanta, Georgia. The decision of the arbitrators
shall be final and binding upon, and unappealable
by, the parties to such arbitration. Judgment on
the award rendered may be entered in any court
having jurisdiction thereof. The arbitrators shall
not be empowered to award punitive or exemplary
damages. If there are two parties to the Dispute,
each party shall, within thirty (30) days of receipt
of notice that a party has referred the Dispute to
arbitration, appoint one arbitrator and, within
thirty (30) days of the appointment of the last of
such two arbitrators the two arbitrators shall
appoint a third arbitrator. If either party or the
two arbitrators fail to timely appoint an
arbitrator, the said arbitrator shall be appointed
by the American Arbitration Association. If there
are more than two parties to the Dispute, unless the
parties to the Dispute agree otherwise, the American
Arbitration Association shall appoint the
arbitrator(s). The arbitrator(s) shall permit the
parties to conduct discovery pursuant to rules
established by the arbitrator(s). Unless otherwise
determined by the arbitrator(s), the parties shall
bear their respective costs incurred in connection
with the procedures described in this Section,
except that the parties shall share equally the fees
and expenses of the arbitrators. The parties shall
require the arbitrators to make a decision within
sixty (60) days of the appointment of the third
arbitrator.
Provisional Remedies. The procedures specified in
this Section 10 shall be the sole and exclusive
procedures for the resolution of Disputes; provided,
however, a party, without prejudice to the mandatory
procedures of this Section, may file a complaint for
purposes of tolling the statute of limitations, or
seek a preliminary injunction or other provisional
judicial relief, if in its sole judgment such action
is necessary to avoid irreparable damage or to
preserve the status quo. Notwithstanding such
action, the parties will continue to participate in
good faith in the procedures specified in this
Section.
Tolling Statute of Limitations. All applicable
statutes of limitation and defenses based upon the
passage of time shall be tolled while the procedures
specified in this Section are pending. The parties
will take such action, if any, required to
effectuate such tolling.
SPECIAL PROVISIONS
Option to Purchase Cargill's Interest. The Company
shall have the right and option to purchase
Cargill's Interest for Twenty-Five Million Dollars
($25,000,000) effective July 1, 2002. The Company
may exercise its option to purchase Cargill's
Interest only with the unanimous written approval of
ADM, Alimenta and Gold Kist. ADM, Alimenta and
Gold Kist shall confer and determine if such
unanimous approval can be obtained on or before
April 15, 2002. If one or two but not all of ADM,
Alimenta and Gold Kist approve the exercise of such
option, the non-electing parties may reconsider
their decision. If one or two but not all of ADM,
Alimenta and Gold Kist approve the exercise of the
Company's option to purchase Cargill's Interest, the
Company shall be deemed to have transferred and
assigned (without further act) this right and option
to the Member or Members approving the Company's
exercise of this option and such Member(s) shall
thereafter have the right and option to purchase
Cargill's Interest for twenty-five million dollars
($25,000,000) effective July 1, 2002. For purposes
of this Section 11.1, the Company or the Member(s)
which exercise the option to purchase Cargill's
Interest, as the case may be, are hereinafter
referred to as the "Optionee." The Optionee shall
give Cargill written notice of its intent to
exercise this option no sooner than June 1, 2002,
and no later than July 1, 2002, at which time the
option and right shall expire and become null and
void. The closing for such sale shall occur, unless
the parties otherwise agree, on or before August 31,
2002. At the closing Cargill shall execute or cause
to be executed any and all documents necessary to
transfer completely of record and beneficially the
Interest being transferred free and clear of any and
all liens, encumbrances, or pledges of any kind,
including the delivery of any certificate
representing the Interest being transferred, duly
endorsed for transfer, and the Optionee shall make
payment therefore by wire transfer of the
$25,000,000 in immediately available funds. In the
event the Optionee exercises the option to purchase
Cargill's Interest, the Optionee shall also
purchase, and Cargill shall sell, Cargill's oil mill
located in Dawson, Georgia for a purchase price
equal to one hundred twenty-five percent (125%) of
the net book value of such oil mill as reflected on
Cargill's financial statements as of the closing
determined in accordance with GAAP and the closing
of the purchase and sale of such oil mill shall
occur simultaneously with the closing of the
purchase and sale of Cargill's Interest. In the
month of March, 2002, Cargill agrees to provide ADM,
Alimenta and Gold Kist with such information
regarding the net book value of Cargill's oil mill
as shall be reasonably requested. Upon the transfer
by Cargill of its Interest, at its discretion
Cargill shall be released from any further
obligation under any ancillary agreement or
arrangement associated with the Company, including
without limitation any guaranty and/or reimbursement
agreement with regard to the financing of the
Company, except to the extent that such obligation
arose from or was based upon events or circumstances
that existed prior to the effective date of
Cargill's transfer of its Interest, including,
without limitation, those incurred but not reported.
Notwithstanding the foregoing, the twenty-five
million dollars ($25,000,000) purchase price shall
be reduced to the extent of any value added tax
applicable to the Fondo de Comercio, as such term
was defined in the Membership Purchase Agreement
dated March 30, 2000 between the Members ("Fondo VAT
Tax") that has not been recovered by Golden as of
the closing date of the purchase pursuant to this
Section, provided, however, that the Fondo VAT Tax
shall be reduced on a first in, first out basis by
the value added tax recovered by Golden from April
1, 2000 until the closing date, and to the extent
assignable, Golden shall transfer and convey value
added tax credits equal to the reduction to Cargill
or its Affiliate. The foregoing sentence shall be
null and void in the event the law or regulations
regarding value added tax in Argentina which effect
peanuts is adversely changed or modified between
March 30, 2000 and the closing date pursuant to this
section. Any outstanding claims by Golden for the
Fondo VAT Tax refund as of the closing date shall be
paid over to Cargill upon its receipt, up to the
amount of the reduction of the purchase price
hereunder.
Option to Purchase Oil Mill. The Company shall have
the right and option, at any time between July 1,
2002 and June 30, 2003, upon not less than thirty
(30) days advance written notice to Cargill, to
purchase Cargill's oil mill at Dawson, Georgia for
the net book value thereof as reflected on the
financial statements of Cargill as of the closing as
determined in accordance with GAAP. The Company may
exercise this option to purchase Cargill's oil mill
only upon the unanimous written approval of ADM,
Alimenta and Gold Kist. At the closing Cargill
shall execute or cause to be executed any and all
documents necessary to transfer completely of record
and beneficially the oil mill and all related sales
and services agreements, etc., being transferred
free and clear of any and all liens, encumbrances,
or pledges of any kind, and the Company shall make
payment therefore by wire transfer of the purchase
price in immediately available funds. In the event
of the purchase of Cargill's oil mill pursuant to
Section 11.1 or 11.2, the purchaser thereof shall
also purchase the inventory of peanut goods or
products and the purchase and sale contracts for
peanut goods or products related to Cargill's oil
mill at the fair market value thereof.
(a) Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
"Additional Peanuts" - edible peanuts
grown in the United States which under
applicable law and regulations must be
exported from the United States or sold as
edible peanuts by the United States
federal government for export.
"African Peanuts" - edible peanuts grown
in the African continent with the
exception of the country of South Africa.
"Company Oil Stock" - Oil Stock owned by
Company as a result of its shelling,
blanching or remilling operations, for
sale and use, including Domestic Sheller
Residue Oil Stock acquired by Company in a
trade or swap in like amounts with another
sheller of Company Oil Stock for such
Domestic Sheller Residue Oil Stock.
"Domestic Government Farmer Stock" -
Farmer stock which is sold by the United
States federal government, but only to the
extent sold for crushing within the United
States.
"Domestic Sheller Residue Oil Stock" - Oil
Stock, other than Company Oil Stock,
Domestic Government Oil Stock and Export
Government Oil Stock, for sale and use.
"Export Government Farmer Stock" - Farmer
stock which is sold by the United States
federal government for export from the
United States.
"Export Sheller Residue Oil Stock" - Oil
Stock, other than Company Oil Stock,
Domestic Sheller Residue Oil Stock,
Domestic Government Farmer Stock and
Export Government Farmer Stock, for export
from the United States.
"Oil Products" - non-edible peanut
products, including peanut oil and peanut
meal, but excluding Oil Stock.
"Oil Stock" - peanut skins, peanut
fragments, or peanuts to be processed or
crushed to make peanut oil, peanut meal,
and any other byproducts from such
processes.
"Other Origin Peanuts" - edible peanuts
grown anywhere in the world except in the
United States.
"Quota Peanuts" - edible peanuts grown in
the United States which under applicable
law and regulations may be disposed of in
the United States.
"Specialty Oil and Related Products"
-peanut flour, peanut butter and aromatic
peanut oil.
Peanut Transactions.
Among the Members, their Affiliates, and
the Company, the Company shall be the sole
seller, purchaser, processor, handler and
marketer of Quota Peanuts, Additional
Peanuts, Other Origin Peanuts and
Specialty Oil and Related Products. The
Members and their Affiliates, shall not
engage in transactions involving Quota
Peanuts, Additional Peanuts, Other Origin
Peanuts and Specialty Oil and Related
Products, provided however, that the
Members and their Affiliates may resell
any such products if they purchase such
products from the Company.
Notwithstanding the foregoing, (A)
Alimenta, or its Affiliate, may sell,
purchase, process, handle and/or market
African Peanut, and (B) any Member, or an
Affiliate thereof, may sell, purchase,
process, handle and/or market aromatic
peanut oil.
GPX, Inc. or Company appointed third party
agents shall be the Company's exclusive
marketing agents outside the United States
for Quota Peanuts, Additional Peanuts and
Specialty Oil and Related Products of the
Company.
The Members and Affiliates of Members may
engage in transactions involving Domestic
and Export Government Farmer Stock,
Domestic and Export Sheller Residue Oil
Stock, Oil Products or Oil Stock for its
own account, including the handling and
processing thereof. Unless Golden
acquires Cargill's oil mill pursuant to
Section 11.1 or 11.2, any Domestic
Government Farmer Stock or Domestic
Sheller Residue Oil Stock acquired by the
Company shall be offered and sold by the
Company to the Members pursuant to Section
11.3(b)(iv).
Company Oil Stock will be offered and sold
to all Members or one of each of their
Affiliate(s) pursuant to the following
process. Golden shall sell its Company
Oil Stock by conducting an auction by
progressively higher oral outcry among its
Members, or a Member's designated
Affiliate, as the case may be, at times
periodically set by Golden. Such auction
may be conducted via a telephone
conference call. Golden shall offer its
Company Oil Stock by individual units,
which may range from a minimum of one
month of Golden's production thereof from
one specific plant location to all months
of production in a specific crop year at
all or a combination of Golden's plants,
each at Company's discretion. Golden
shall not offer less than a month's
production at a particular plant, offer
Company Oil Stock as one unit from more
than a single crop year, or offer units
from other than the current crop year.
Any Member not participating in a
particular auction will be deemed to have
declined to participate or purchase any
Company Oil Stock offered in that
particular auction. The highest and thus
winning bidder for any unit offered
automatically receives that fraction of
the unit offered computed by dividing the
number 1 by the total number of
participants, which with four Members can
be no less than 1/4. Each other
participant in the auction can also buy
the same fraction of the unit at the
winning bid price. If the other
participant(s) declines to purchase at
that price, the winning bidder can elect
to buy the declining participant's share
at such price. If the winning bidder
declines to purchase all of the remaining
fractions of the unit at such price and a
portion of the unit thus remains unsold,
another auction shall immediately be
conducted on the same terms as provided
herein with regard to the winning bidder
purchasing a fractional amount of the
portion of the original unit offered and
the other participants having a right to
purchase a fractional amount at the
winning bid price. This auction process
shall be repeated until all of the offered
unit(s) are sold, provided, however, that
if any volume of a particular unit remains
unsold after three rounds of bidding,
Golden shall have the option to not
conduct another round of the auction and
instead withdraw and offer such peanuts at
a later time at its discretion. The
Members and Golden shall agree on a
quality standard for the Company Oil Stock
and a deduction from the purchase price
for all loads that fail to meet such
standard. All units shall be offered and
purchase on an FOB plant basis. The
President of Golden may establish
reasonable procedural rules for the
auction process except for rules regarding
minimum bids or overbids. If any volume
of a particular unit remains unsold after
three (3) rounds of bidding, Golden shall
have the right to dispose of such volume
to purchasers other than the Members if
and to the extent necessary to avoid
incurring storage charges to third party
warehouses. The provisions of this
Subsection 11.3(b)(iv) shall terminate in
the event Golden purchases Cargill's oil
mill.
EVENTS OF DEFAULT AND REMEDIES
Definition of Events of Defaults. The following
events shall constitute Events of Default:
Failure by a Member to make any required
capital contribution to the Company within
thirty (30) days after receiving notice that
the same is due (a "Capital Contribution
Default");
Failure by a Member to perform any of the other
material terms and conditions of this Agreement
and failure thereafter to cure such failure to
perform within 45 days after receiving written
notice of such failure from at least two other
Members;
The occurrence of any of the following events
with respect to a Member:
The Member shall be adjudicated insolvent
or bankrupt, or shall file any petition
seeking any reorganization,
rehabilitation, liquidated, dissolution or
similar relief under federal or state laws
relative to bankruptcy, insolvency or
other relief for debtors ("Bankruptcy
Laws"), or the Member shall seek or
acquiesce in the appointment of any
custodian, trustee, receiver, conservator
or liquidator of such Member or of all or
a substantial part of its properties or
its interest in the Company; or
The Member shall permit or suffer the
filing of an involuntary petition against
it seeking any reorganization,
rehabilitation, liquidation, dissolution
or similar relief under Bankruptcy Laws
and such petition shall have been granted
or not dismissed within 90 days of filing;
or
The Member permits or suffers a custodian,
trustee, receiver, conservator or
liquidator of it or all or a substantial
part of its property or interest in the
Company to be appointed without the
consent of such Member and such
appointment shall remain unvacated and
unstayed for ninety (90) days with or
without the acquiescence of such Member.
Remedies. If any Event of Default shall occur, the
non-defaulting Members, acting by a majority in
Interest, shall have the following remedies in
addition to all other rights and remedies available
at law or in equity:
If the Event of Default is a Capital
Contribution Default, the non-defaulting
Members may:
contribute to the Company, in such
relative amounts as the non-defaulting
Members shall between themselves agree,
for such non-defaulting Members' own
capital accounts the capital contribution
not paid by the defaulting Member in
exchange for an increase in the non-
defaulting Members' respective Interests.
In such event, each non-defaulting
Member's Interest shall increase to the
percentage represented by a fraction, the
numerator of which is the amount of such
Member's capital account immediately prior
to any payment by it of the capital
contribution plus the amount of the
capital contribution paid by it, and the
denominator of which is the sum of all
Members' capital accounts immediately
prior to any payment of the additional
capital contributions plus the amount of
the additional capital contributions. The
defaulting Member's Interest shall then
equal the result of subtracting the sum of
the non-defaulting Members' Interests from
one hundred percent (100%); or
treat the amount of such required capital
contribution as a sum of money owed to the
Company by the defaulting Member, due
immediately, with interest at the rate of
either (A) two (2) percentage points above
the per annum rate of interest published
from time to time in the Wall Street
Journal as being the "prime rate" (or the
average of such rates), adjusted daily, or
(B) the highest lawful rate permitted by
applicable law, whichever is less (the
"Default Rate"), and may file suit to
collect such debt; or
advance on behalf of the defaulting
Member, in such relative amounts as the
non-defaulting Members shall between
themselves agree, to or for the benefit of
the Company the amount of such required
additional capital contribution, which
advances shall be considered a debt due on
demand from the defaulting Member to the
non-defaulting Members repayable with
interest at the Default Rate. Any
distributions of the Company otherwise
allocable to the defaulting Member shall
be paid directly to the non-defaulting
Members on account of such respective
obligations, to be applied first to
interest and next to principal of such
debt; or
take any combination of or all of such
actions described in (i), (ii) or (iii)
above, without the necessity of an
election of remedies.
If the Event of Default is other than a Capital
Contribution Default, the non-defaulting
Members may, without notice to the defaulting
Member, cure such default for the account of
and at the expense of the defaulting Member,
and the full amount so expended, including
reasonable accountants' and attorneys' fees,
shall be deemed a debt of the defaulting Member
to the non-defaulting Members, due immediately,
with interest at the Default Rate, and the non-
defaulting Members may file suit to collect
such debt.
If any Event of Default occurs, the non-
defaulting Members shall have the option to
dissolve the Company and to wind up the affairs
of the Company, and any amount due by the
defaulting Member to the non-defaulting Members
hereunder shall be offset from the defaulting
Member's distribution pursuant to the
dissolution and paid over to the non-defaulting
Members.
Rights of Defaulting Members. If any Event of
Default described in Section 12.1(a) or 12.1(b)
shall occur, the defaulting Member, during such time
as it shall remain in default, shall not have any
voice in the management and operation of the
Company, nor have any rights which it would have
under the terms of this Agreement to transfer any
part of its Interest in the Company, except as
otherwise expressly provided under the terms of this
Section 12. During such time, the non-defaulting
Members shall have the right to make all of the
management decisions for the Company without first
having to obtain the consent or approval of the
defaulting Member. The defaulting Member shall
continue to be obligated to make capital
contributions as required by this Agreement. The
Member in default shall also continue to bear its
share of any losses of, and be entitled to receive
its share of any profits or distributions from, the
Company, subject to offset as otherwise provided in
this Section 12.
MISCELLANEOUS
Further Assurances. The parties to this Agreement
and their respective permitted successors or
transferees hereby agree to provide all other
information, execute and deliver any further
instruments or documents, and take or forbear from
any further acts, that may be reasonably required or
useful to carry out the intent and purpose of this
Agreement, provided that none of the foregoing
actions is inconsistent with any express terms
hereof.
Amendments. This Agreement may not be modified or
amended except in writing signed by all of the
Members.
Headings. Section headings used in this Agreement
are for convenience and reference only, and are not
to be considered in construing the terms of this
Agreement.
Usage. Whenever the context may require, any noun
or pronoun used herein shall include the
corresponding masculine, feminine or neuter forms.
The singular form of nouns, pronouns and verbs shall
include the plural and vice versa.
Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the
State of Georgia.
Severability. Every provision of this Agreement is
intended to be severable, and if any term or
provision hereof shall be declared illegal, invalid
or in conflict with the Act, such term or provision
shall be ineffectual and void, and the validity of
the remainder of this Agreement shall not be
affected thereby.
Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an
original but all of which together will constitute
one instrument, binding upon all parties hereto,
notwithstanding that all of such parties may not
have executed the same counterpart.
No Agency. Nothing contained in this Agreement
shall constitute the Members as agents for one
another, or render any Member liable for any debts
or obligations which are incurred, outside the scope
of the authority granted by this Agreement.
Entire Agreement. This Agreement constitutes the
entire agreement among the Members and supersedes
all prior agreements and understandings of the
Members in connection herewith. No change in or
additions to this Agreement shall be binding upon
any Members unless and until in writing and signed
by an authorized representative of each Member.
No Third Party Beneficiaries. All obligations of a
Member under this Agreement, including the
obligations to make additional capital
contributions, are imposed solely and exclusively
for the benefit of the Members, and no other Person
shall having standing to require satisfaction of
such obligations and no other Person shall, under
any circumstances, be deemed to be a beneficiary of
such obligations, any and all of which a Member may
freely waive in whole or in part at any time.
Waiver of Petition Rights. Except as set forth
herein with respect to procedures for the
dissolution of the Company each Member hereby waives
all rights it may at any time have to maintain any
action for the partition of any property now or
hereafter acquired by the Company.
Interest Rate. Unless otherwise specified herein,
whenever interest is payable on any amount due
pursuant to this Agreement, such interest shall be
at a rate equal to the then prevailing cost of funds
to the Company.
Representatives and Warranties. Each of Alimenta,
ADM, Cargill and Gold Kist hereby represents,
warrants and covenants to each of the other Members,
as of the date of this Agreement, as follows:
It is a corporation duly organized, validly
existing and in good standing under the laws of
the state of its incorporation, with power and
authority to own its property and to carry on
its business as now conducted and has the power
and authority to execute and deliver this
Agreement.
The execution and delivery by it of this
Agreement and the performance by it of its
obligations hereunder, have been duly
authorized by all requisite corporate action on
its part, and do not and will not violate any
provision of any law, rule or regulation, any
judgment, order or ruling of any court or
governmental agency, its articles or
certificate of incorporation or bylaws, or any
indenture, agreement or other instrument to
which it is a party or by which it or any of
its properties are bound, or be in conflict
with, result in a breach of, or constitute upon
notice or lapse of time or both, a default
under any such indenture, agreement or other
instrument. It is not subject to or in default
under any order, writ, injunction or decree of
any court or governmental authority, which
would affect its entrance into this Agreement
or any exhibit hereto, or the performance by it
of its obligations hereunder or thereunder.
This Agreement will constitute, upon the valid
execution and delivery hereof by all parties
hereto, its legal, valid and binding
obligations, enforceable against it in
accordance with its terms.
There are no outstanding actions, suits,
claims, investigations or other proceedings
pending, or, to the knowledge of its officers,
threatened, against it which could have a
material adverse effect on the business or
properties of the Company, and there is no
reasonable basis upon which the same could be
brought or initiated.
New or Resumed Operations. In the event Company
opts to start or resume certain operations at a
facility or location that had not been operating in
such capacity on the date of this Agreement, any
Member shall have the option of having a "Phase I"
environmental evaluation conducted upon such
facility or location prior to the commencement of
such operations. For example, if the Company were
to resume shelling operations at a facility which is
not operating as a shelling facility on the date of
this Agreement, any Member would have the option of
conducting a "Phase I" environmental evaluation upon
such facility or location prior to the commencement
of such shelling operations.
Authorization. The Members authorize James W.
Dorsett, as President of the Company, to execute and
deliver, by and on behalf of the Company, this
Agreement, the Membership Purchase Agreement of even
date herewith among the Company and the Members and
the "Ancillary Agreements" referred to therein, and
any other agreements, deeds, instruments of
conveyance or other documents necessary or desirable
to consummate the transactions which are the subject
of such agreements. ADM, Alimenta and Gold Kist
agree that James W. Dorsett shall have such
authority notwithstanding the absence of any
approval by representatives of ADM, Alimenta or Gold
Kist who constitute members of the "Partnership
Committee" of Golden Peanut Company, a general
partnership.
IN WITNESS WHEREOF, the Members have caused this
Agreement to be signed as of March 30, 2000, by their duly
authorized representatives.
GOLD KIST INC.
BY:/s/ Stephen O. West
Title: CFO & Treasurer
Signed, sealed and delivered on
this 30 day of March, 2000,
in the presence of:
/s/ Phyllis N. Gee
Notary Public
Commission Expires:
July 8, 2002
ARCHER-DANIELS-MIDLAND
COMPANY
BY: /s/ D. J. Schmalz
Title: VP & CFO
Signed, sealed and delivered on
this 30 day of March, 2000,
in the presence of:
/s/ Phyllis N. Gee
Notary Public
Commission Expires:
July 8, 2002
ALIMENTA HOLDINGS, INC.
BY:/s/ C. L. Wagner, Jr.
Title: Asst. Secy.
Signed, sealed and delivered on
this 30 day of March, 2000,
in the presence of:
/s/ Phyllis N. Gee
Notary Public
Commission Expires:
July 8, 2002
CARGILL, INCORPORATED
BY: /s/ Ronald G. Dudley
Title: President Cargill
Peanut Products
Signed, sealed and delivered on
this 30 day of March, 2000,
in the presence of:
/s/ Phyllis N. Gee
Notary Public
Commission Expires:
July 8, 2002
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