Document:

Blueprint

 

Exhibit
10.2

 

 

AMENDED AND RESTATED

LIMITED
LIABLITY COMPANY AGREEMENT

OF

AEMETIS BIOGAS
LLC

 

 

 

 

 

 

	
 

 

 

THE
UNITS ISSUED PURSUANT TO THIS AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE
SECURITIES LAWS. SUCH UNITS MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE
REGISTRATION UNDER SUCH ACT AND LAWS OR AN EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH
HEREIN.

 

 

 

 

 

 

 

 

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

TABLE OF CONTENTS

 

	
 

	
 

	

Page

	

ARTICLE 1  

	
 

	

CERTIFICATE OF FORMATION  

	

5

	

1.1

	

Formation of the Company

	

5

	

1.2

	

Name of the Company

	

6

	

1.3

	

Principal Executive Office

	

6

	

1.4

	

Registered Agent

	

6

	

1.5

	

Purpose

	

6

	

1.6

	

Term

	

6

	

1.7

	

Fiscal Year

	

6

	

1.8

	

No State Law Partnership

	

6

	

1.9

	

No Liability of Members

	

6

	

1.10

	

Representations and Warranties

	

7

	

ARTICLE 2  

	
 

	

CAPITAL CONTRIBUTIONS; UNITS; CAPITAL
ACCOUNTS

	

7

	

2.1

	

Capital Contributions

	

7

	

2.2

	

Authorized Units

	

8

	

2.3

	

Unit Ownership Ledger

	

8

	

2.4

	

Preference Payment

	

9

	

2.5

	

Liquidation Preference

	

9

	

2.6

	

Conversion

	

9

	

2.7

	

Redemption of Series A Preferred Units

	

9

	

2.8

	

Preemptive Rights

	

9

	

2.9

	

Capital Accounts

	

9

	

2.10

	

Interest

	

10

	

ARTICLE 3  

	
 

	

ALLOCATIONS OF PROFITS AND LOSSES

	

10

	

3.1

	

Allocation of Profits and Losses

	

10

	

3.2

	

Definitions of Profits and Losses

	

11

	

3.3

	

Additional Definitions

	

11

	

3.4

	

Special Allocations

	

12

	

3.5

	

Allocation of Member Nonrecourse Deductions

	

13

	

3.6

	

Capital Events

	

13

	

3.7

	

Allocation of Losses

	

13

	

3.8

	

Unrealized Appreciation and Depreciation

	

13

	

3.9

	

Contributed Property

	

14

	

3.10

	

Transferees

	

14

	

3.11

	

Adjustment of Gross Asset Value

	

14

	

3.12

	

Allocation of Tax Items

	

14

 

 

2

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

	

ARTICLE 4  

	
 

	

DISTRIBUTIONS  

	

15

	

4.1

	

Distributions

	

15

	

4.2

	

Limitation on Distributions on Common Units

	

15

	

4.3

	

Certain Taxes

	

15

	

ARTICLE 5  

	
 

	

MANAGEMENT  

	

16

	

5.1

	

General Powers

	

16

	

5.2

	

Composition

	

17

	

5.3

	

Board Actions; Meetings

	

18

	

5.4

	

Officers

	

18

	

5.5

	

Actions Requiring Member Approval

	

19

	

5.6

	

Budget

	

20

	

5.7

	

Other Business Interests

	

21

	

5.8

	

Assets in the Name of the Company

	

21

	

5.9

	

Funds

	

21

	

ARTICLE 6 
 

	
 

	

ACCOUNTS AND ACCOUNTING

	

21

	

6.1

	

Records

	

21

	

6.2

	

Accounting

	

21

	

6.3

	

Additional Records

	

21

	

6.4

	

Tax Information

	

22

	

6.5

	

Partnership Representative

	

22

	

6.6

	

Authorization of Partnership Representative

	

22

	

ARTICLE 7 
 

	
 

	

MEMBERSHIP—MEETINGS AND VOTING

	

23

	

7.1

	

Member Authority

	

23

	

7.2

	

Voting

	

23

	

7.3

	

Series A Preferred Unit Protective Provisions

	

23

	

7.4

	

Meetings of Members

	

25

	

7.5

	

Record Date

	

25

	

7.6

	

Adjournment of Meeting of Members

	

26

	

7.7

	

Attendance at Meeting; Proxies; etc

	

26

	

7.8

	

Voting

	

26

	

7.9

	

Telephonic and Video Meetings

	

26

	

7.10

	

Written Action

	

26

	

ARTICLE 8  

	
 

	

UNITS; TRANSFERS  

	

27

	

8.1

	

Unit Certificates

	

27

	

8.2

	

Restrictions on Transfers

	

28

	

8.3

	

Expenses

	

28

	

8.4

	

Transfers Generally; Substitute Members

	

29

	

8.5

	

Closing Date

	

30

	

8.6

	

Effect of Incapacity

	

30

	

8.7

	

No Appraisal Rights

	

30

	

8.8

	

Effect of Non-Compliance.

	

30

 

 

3

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

	

ARTICLE 9  

	
 

	

DISSOLUTION AND WINDING UP

	

31

	

9.1

	

Events of Dissolution

	

31

	

9.2

	

Procedure for Winding Up

	

31

	

9.3

	

Accounting

	

31

	

9.4

	

Certificate of cancellation

	

31

	

9.5

	

Recourse for Claims

	

32

	

ARTICLE 10 CONFIDENTIALITY  

	

32

	

10.1

	

Confidentiality

	

32

	

ARTICLE 11 
 

	
 

	

INDEMNIFICATION; EXCULPATION; FIDUCIARY
DUTIES

	

33

	

11.1

	

Indemnification

	

33

	

11.2

	

Exculpation

	

33

	

11.3

	

Competitive Activities

	

34

	

11.4

	

Indemnification of Employees and Agents

	

34

	

11.5

	

Appearance as a Witness

	

34

	

11.6

	

Nonexclusivity of Rights

	

34

	

11.7

	

Insurance

	

34

	

11.8

	

Savings Clause

	

35

	

ARTICLE 12 ATTORNEY-IN-FACT AND AGENT
   

	
 
35

	

12.1

	

Performance of Duties; No Liability of Members, Managers and
Officers

	

35

	

ARTICLE 13 
 

	
 

	

GENERAL PROVISIONS 
 

	

35

	

13.1

	

Notice

	

35

	

13.2

	

Amendment and Waiver

	

36

	

13.3

	

Effect of Waiver and Consent

	

36

	

13.4

	

Entire Agreement

	

36

	

13.5

	

Counterparts

	

36

	

13.6

	

Governing Law

	

36

	

13.7

	

Remedies.

	

37

	

13.8

	

Public Announcements

	

37

	

13.9

	

Further Assurances

	

37

	

13.10

	

severability

	

37

	

13.11

	

No Agency

	

37

	

13.12

	

Headings

	

37

	

13.13

	

Time of the Essence

	

37

	

13.14

	

No Third Party Beneficiaries

	

34

	

13.15

	

Acknowledgement

	

34

	

13.16

	

No Interest in Specific Property

	

35

	

13.17

	

Attorneys’ Fees and Expenses

	

35

	

ARTICLE 14 
 

	
 

	

DEFINITIONS 
 

	

35

	

14.1

	

Defined Terms

	

35

	

14.2

	

Construction

	

45

 

 

 

4

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

AEMETIS BIOGAS LLC

 

This
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this
“Agreement”) of Aemetis Biogas LLC, a Delaware limited
liability company (the “Company”), is entered into
effective as of December 19, 2018 (the “Effective
Date”), by and among the Company, Aemetis, Inc., a Nevada
corporation (“Aemetis”), and Protair-X Americas, Inc.,
a Delaware corporation. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in
Article
14.

 

RECITALS

 

A.           On
February 27, 2018, Aemetis caused the Company to be formed as a
limited liability company in accordance with the California
Act.

 

B.           Aemetis
is a party to that certain Operating Agreement of the Company dated
as of March 23, 2018 (the “Original Operating
Agreement”).

 

C.           In
anticipation of the admission of Investor as a new Member and
concurrent equity financing of the Company, the Company was
converted from a California limited liability company to a Delaware
limited liability company effective September 7, 2018.

 

D.           The
Company and the Members desire to amend and restate the Original
Operating Agreement in its entirety and continue the operations of
the Company on the terms set forth herein.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the
Members, intending to be legally bound, hereby amend and restate
the Original Operating Agreement and agree as follows:

 

ARTICLE 1

CERTIFICATE OF FORMATION

 

1.1           Formation
of the Company

 

The
Company was originally formed as a California limited liability
company on February 27, 2018, by the filing of the Articles of
Organization in the office of the Secretary of State of the State
of California pursuant to the California Act. Effective September
7, 2018, the Company was converted to a Delaware limited liability
company by the filing of a Certificate of Conversion and the
Certificate of Formation with the Secretary of State of the State
of Delaware. The Original Operating Agreement is hereby amended and
restated in its entirety, and the Company is continued on the terms
set forth herein. Except as provided herein, the rights, duties and
liabilities of each Member will be as provided in the Delaware Act.
To the extent that the rights, powers, duties, obligations and
liabilities of any Member are different by reason of any provision
of this Agreement than they would be under the Delaware Act in the
absence of such provision, this Agreement shall, to the extent
permitted by the Delaware Act, control. A copy of the Certificate
of Formation of the Company, as in effect on the Effective Date, is
attached hereto as Exhibit
1 (the “Certificate of Formation”).

 

 

 

5

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

1.2           Name
of the Company

 

The
name of the Company is Aemetis Biogas LLC. The Company may conduct
business in such name or such other names that comply with
applicable Law as the Board may select from time to
time.

 

1.3           Principal
Executive Office

 

The
address of the Company’s principal executive office is 20400
Stevens Creek Blvd, Suite 700, Cupertino, CA 95014, or any other
place or places determined by the Board from time to
time.

 

1.4           Registered
Agent

 

The
address of the Company’s registered office in the State of
Delaware is 850 New Burton Road, Suite 201, Dover, Delaware 19904.
The Company’s registered agent at such address is National
Corporate Research, Ltd. The Board may from time to time change the
Company’s agent for service of process in the State of
Delaware.

 

1.5           Purpose

 

The
Company may engage in any lawful act or activity for which a
limited liability company may be formed under the Delaware
Act.

 

1.6           Term

 

The
term of the Company commenced on February 27, 2018, the date the
Articles of Organization were filed with the office of the
Secretary of State of the State of California, and shall continue
until terminated by the provisions of this Agreement or as provided
by Law.

 

1.7           Fiscal
Year

 

The
fiscal year of the Company shall end on December 31 of each
calendar year unless, for United States federal income tax
purposes, another fiscal year is required. The Company shall have
the same fiscal year for United States federal income tax purposes
and for accounting purposes.

 

1.8           No
State Law Partnership

 

Except
to the extent provided in the next sentence, the Members intend
that the Company shall not be a partnership (including, without
limitation, a limited partnership) or joint venture, and that no
Member or Officer shall be a partner or joint venturer of any other
Member or Officer, for any purposes, and this Agreement shall not
be construed to the contrary. Notwithstanding the foregoing, the
Members intend that the Company shall be treated as a partnership
for U.S. federal and, if applicable, state or local income tax
purposes, and that each Member and the Company shall file all tax
returns and shall otherwise take all tax and financial reporting
positions in a manner consistent with such treatment.

 

1.9           No
Liability of Members

 

Except
as expressly provided otherwise in this Agreement or in the
Delaware Act, no Member (absent a separate written agreement by
such Member to the contrary) shall be liable for any debts,
liabilities, contracts or obligations of the Company whatsoever.
The failure of the Company to observe any formalities or
requirements relating to the exercise of its powers under this
Agreement or the Delaware Act shall not be grounds for imposing
personal liability on any Member for the debts, obligations or
liabilities of the Company.

 

 

6

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

1.10           Representations
and Warranties

 

Each
Member hereby represents and warrants to the Company and each other
Member that:

 

(a)           Power
and Authority. Such Member has full power and authority to
enter into this Agreement and to perform its obligations
hereunder;

 

(b)           No
Conflicts. The execution, delivery and performance of this
Agreement do not conflict with any other agreement or arrangement
to which such Member is a party or by which it or its assets are
bound;

 

(c)           Contributed
Property. All property contributed to the Company by such
Member, and any property thereafter to be contributed to the
Company by such Member, has been or will be duly and lawfully
acquired;

 

(d)           Own
Account. Such Member has acquired or is acquiring its Units
in the Company for investment purposes only for its own account and
not with a view to any distribution, reoffer, resale or other
disposition that is not in compliance with the Securities Act or
any applicable state securities Laws;

 

(e)           Expertise.
Such Member alone, or together with its representatives, possesses
such expertise, knowledge and sophistication in financial and
business matters generally, and in the type of transactions in
which the Company proposes to engage in particular, that such
Member is capable of evaluating the merits and economic risks of
acquiring and holding Units, and that such Member is able to bear
all such economic risks now and in the future;

 

(f)           Awareness
of Economic Risk. Such Member is aware that it must bear the
economic risk of such Member’s investment in the Company for
an indefinite period of time because Units have not been registered
under the Securities Act or under the securities laws of any state,
and, therefore, such Units cannot be sold unless they are
subsequently registered under the Securities Act and any applicable
state securities laws or an exemption from registration is
available;

 

(g)           Transfer
Restrictions. Such Member is aware that this Agreement
provides restrictions on the ability of a Member to Transfer Units,
and such Member will not seek to effect any Transfer other than in
accordance with such restrictions; and

 

(h)           Accredited
Investor. Such Member is, and at such time that it makes any
additional Capital Contributions to the Company, will be an
“accredited investor” within the meaning of Rule 501
under the Securities Act (an “Accredited Investor”)
unless such status as an Accredited Investor is not required in
order for the Transfer of Units to such Member to be exempt from
registration under the Securities Act.

 

ARTICLE 2

CAPITAL CONTRIBUTIONS; UNITS; CAPITAL Accounts

 

2.1           Capital
Contributions

 

(a)           On
the Effective Date, the Investor made Capital Contributions
pursuant to and in the amounts required by the Purchase
Agreement.

 

 

7

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

(b)           Prior
to the Effective Date, Aemetis made a Capital Contribution in the
amount set forth on the Unit Ownership Ledger (as defined
below).

 

(c)           After
the Effective Date and with no further approvals required under
this Agreement, Investor may make additional Capital Contributions
in exchange for issuance of Series A Preferred Units in accordance
with, and subject to, the terms and conditions of the Purchase
Agreement.

 

(d)           From
and after the Effective Date, no Member shall be required to make
any Capital Contributions, except as required by the Purchase
Agreement.

 

2.2           Authorized
Units

 

(a)           The
Membership Interests shall be represented by issued and outstanding
Units, which may be divided into one or more types, classes or
series. Each type, class or series of Units shall have the
privileges, preference, duties, liabilities, obligations and
rights, including voting rights, if any, set forth in this
Agreement and the Purchase Agreement with respect to such type,
class or series.

 

(b)           The
Units of the Company shall consist of 6,000,000 Common Units,
6,000,000 Series A Preferred Units, and the Conversion Units. The
Company is authorized to issue 11,000,000 Common Units (which
includes the Conversion Units) and 6,000,000 Series A Preferred
Units. The Company has issued 6,000,000 Common Units to Aemetis.
Subject to the terms and conditions set forth in this Agreement and
in the Purchase Agreement, the Company has issued on the Initial
Closing Date (as defined in the Purchase Agreement) 1,660,000
Series A Preferred Units to the Investor. The rights, preferences,
privileges, and restrictions granted to or imposed upon the Common
Units are set forth below in this Agreement and in the Purchase
Agreement. The rights, preferences, privileges, and restrictions
granted to or imposed upon the Series A Preferred Units are
described in this Agreement and in the Purchase Agreement. Each
Member that is not a party to the Purchase Agreement consents in
all respects and for all purposes to the terms and conditions of
the Purchase Agreement, authorizes the Company to enter into and
perform its obligations under the Purchase Agreement, and agrees
that the Purchase Agreement is a binding obligation of the Company.
In the event of an inconsistency between the Purchase Agreement and
this Agreement, the Purchase Agreement shall control and
prevail.

 

(c)           All
Members acknowledge and agree that the Capital Contributions set
forth on Schedule A
represent the amount of money and/or property contributed by the
Members to the Company as of the Effective Date.

 

2.3           Unit
Ownership Ledger

 

The
Company shall create and maintain a ledger (the “Unit
Ownership Ledger”), a copy of which as in effect on the
Effective Date is attached hereto as Schedule A, setting forth the
name and address of each Member, the number of each class of Units
held of record by each such Member, and the amount of the Capital
Contribution made (or deemed to be made) with respect to such
Units. Upon any change in the number or ownership of outstanding
Units (whether upon an issuance of Units, a Transfer of Units, a
cancellation of Units or otherwise), the Company shall amend and
update the Unit Ownership Ledger. Absent manifest error, the
ownership of Units recorded on the Unit Ownership Ledger shall be
conclusive record of the Units that have been issued and are
outstanding. Any reference in this Agreement to the Unit Ownership
Ledger shall be deemed a reference to the Unit Ownership Ledger as
amended and in effect from time to time.

 

 

8

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

2.4           Preference
Payment

 

The
Series A Preferred Units will accrue Preference Payments (as
defined in the Purchase Agreement), commencing on the second
anniversary of the Initial Closing Date, of $0.50 per Series A
Preferred Unit per calendar year, payable quarterly. Additional
terms and conditions with respect to Preference Payments by the
Company are contained in Section 6.3 of the Purchase Agreement and
are incorporated herein by reference.

 

2.5           Liquidation
Preference

 

In the
event of any Liquidation (as defined in the Purchase Agreement),
the holders of Series A Preferred Units will be entitled to receive
in preference to all other Membership Interests an amount equal to
$15.00 per Series A Preferred Unit (“Liquidation
Preference”). Additional terms and conditions with respect to
the Liquidation Preference are contained in Section 6.4 of the
Purchase Agreement and are incorporated herein by
reference.

 

2.6           Conversion

 

Each
holder of Series A Preferred Units shall have the right to convert
each of its Series A Preferred Units, at the option of such holder,
into one Common Unit; provided, that, the Common
Units resulting from such conversion shall have terms and
conditions identical to those of the Common Units held by Aemetis.
The total number of Common Units into which Series A Preferred
Units may be converted shall not exceed 1,200,000 Common Units or
5,000,000 Common Units in the event of a Trigger Event (as defined
in the Purchase Agreement), subject in each case to adjustment to
reflect dilutive events such as stock dividends, stock splits and
stock consolidations. Additional terms and conditions with respect
to the conversion of Series A Preferred Units into Common Units are
contained in Section 6.5 of the Purchase Agreement and are
incorporated herein by reference.

 

2.7           Redemption
of Series A Preferred Units

 

The
Company unconditionally and irrevocably agrees to redeem the Series
A Preferred Units in accordance with Section 6.9 of the Purchase
Agreement, which is incorporated herein by reference.

 

2.8           Preemptive
Rights

 

The
holders of the Series A Preferred Units shall have the preemptive
rights set forth in Section 6.10 of the Purchase Agreement, which
is incorporated herein by reference.

 

2.9           Capital
Accounts

 

An
individual Capital Account for each Member shall be maintained in
accordance with the requirements of Treasury Regulation
§1.704-1(b)(2)(iv) and adjusted in accordance with the
following provisions:

 

(a)           A
Member’s Capital Account shall be increased by that
Member’s Capital Contributions, that Member’s share of
Profits, and any items in the nature of income or gain that are
specially allocated to that Member under Article 3

 

(b)           A
Member’s Capital Account shall be increased by the amount of
any Company liabilities assumed by that Member subject to and in
accordance with the provisions of Treasury Regulation
§1.704-1(b)(2)(iv)(c).

 

 

 

9

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

(c)           A
Member’s Capital Account shall be decreased by (a) the amount
of cash distributed to that Member; (b) the Fair Market Value of
any property of the Company so distributed, net of liabilities
secured by the distributed property that the distributee Member is
considered to assume or to be subject to under Internal Revenue
Code §752; and (c) the amount of any items in the nature of
expenses or losses that are specially allocated to that Member
under Article 3.

 

(d)           A
Member’s Capital Account shall be reduced by the
Member’s share of any expenditures of the Company described
in Internal Revenue Code §705(a)(2)(B) or that are treated as
IRC section 705(a)(2)(B) expenditures under Treasury Regulation
§1.704-1(b)(2)(iv)(i) (including syndication expenses and
losses nondeductible under Internal Revenue Code §267(a)(1) or
§707(b)).

 

(e)           If
any Transferable Interest (or portion thereof) is Transferred, the
transferee of the Transferable Interest or portion shall succeed to
the transferor’s Capital Account corresponding to the
interest or portion.

 

(f)           The
principal amount of a promissory note that is not readily traded on
an established securities market and that is contributed to the
Company by the maker of the note shall not be included in the
Capital Account of any Person until the Company makes a taxable
disposition of the note or until (and to the extent) principal
payments are made on the note, all in accordance with Treasury
Regulation §1.704-1(b)(2)(iv)(d)(2).

 

(g)           Each
Member’s Capital Account shall be increased or decreased as
necessary to reflect a revaluation of the Company’s property
assets in accordance with the requirements of Treasury Regulation
§§1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(g),
including the special rules under Treasury Regulation
§1.701-1(b)(4), as applicable. The provisions of this
Agreement respecting the maintenance of Capital Accounts are
intended to comply with Treasury Regulation §1.704-1(b) and
shall be interpreted and applied in a manner consistent with those
Regulations.

 

(h)           Series
A Preferred Unit Capital Accounts shall not exceed $15.00 per unit
plus any accrued but unpaid Preference Payments discussed in
Article 2.4 of this Operating Agreement and Section 6.3 of the
Series A Preferred Unit Purchase Agreement.

 

2.10           Interest

 

No
interest shall be paid on Capital Contributions or on the balance
of a Member’s Capital Account except in the event that Series
A Preferred Units are required to be redeemed on any Redemption
Date and are not redeemed in accordance with the Series A Preferred
Unit Purchase Agreement, the Members Capital Account for the Series
A Preferred Units shall bear interest at a per annum rate equal to
ten percent (10%), compounded daily.

 

ARTICLE 3

ALLOCATIONS OF PROFITS AND LOSSES

 

3.1           Allocation
of Profits and Losses

 

The
Profits and Losses of the Company and items of Company income,
gain, loss, deduction, or credit shall be allocated as set forth in
Exhibit 2 attached
to this Agreement. The
Profits and Losses of the Company and all items of Company income,
gain, loss, deduction, or credit shall be allocated, for Company
book purposes and for tax purposes, to each Member in accordance
with the allocation as set forth in Exhibit 2.

 

 

10

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

3.2           Definitions
of Profits and Losses

 

As used
in this Agreement, “Profits and Losses” means, for each
fiscal year or other period specified in this Agreement, an amount
equal to the Company’s taxable income or loss for that year
or period, determined in accordance with Internal Revenue Code
§703(a), including all Tax Items required to be stated
separately under Internal Revenue Code §703(a)(1), with the
following adjustments:

 

(a)           Any
income of the Company that is exempt from federal income tax and
not otherwise taken into account in computing Profits or Losses
shall be added to taxable income or loss;

 

(b)           Any
expenditures of the Company described in Internal Revenue Code
§705(a)(2)(B) or treated as Internal Revenue Code
§705(a)(2)(B) expenditures under Treasury Regulation
§1.704-1(b)(2)(iv)(i) and not otherwise taken into account in
computing Profits or Losses shall be subtracted from taxable income
or shall increase that loss; and, notwithstanding the foregoing
provisions of this Section
3.1, any items of income, gain, loss, or deduction that are
specially allocated shall not be taken into account in computing
Profits or Losses under Section 3.1.

 

3.3           Additional
Definitions

 

The
following definitions shall apply for purposes of this Article 3.

 

(a)           “Adjusted
Capital Account Deficit” means, with respect to any Member,
the deficit balance, if any, in the Member’s Capital Account
as of the end of the relevant fiscal year of the Company, after the
Member’s Capital Account has been adjusted as follows:
(1) increased by the amount of the Member’s share of
Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, and
(2) decreased by the amount of the items described in Treasury
Regulation §1.704-1(b)(2)(ii)(d)(4)-(6).

 

This
definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Treasury Regulation
§1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
with that Regulation.

 

(b)           “Company
Minimum Gain” has the meaning set forth in Treasury
Regulation §1.704-2(d)(1).

 

(c)           “Member
Nonrecourse Debt” is defined in Treasury Regulation
§1.704-2(b)(4).

 

(d)           “Member
Nonrecourse Debt Minimum Gain” for a fiscal year of the
Company means the net increase in Minimum Gain attributable to
Member Nonrecourse Debt, determined as set forth in Treasury
Regulation §1.704-2(i)(2).

 

(e)           “Member
Nonrecourse Deductions” has the meaning set forth in Treasury
Regulation §1.704-2(i)(2). For any Company fiscal year, the
amount of Member Nonrecourse Deductions with respect to a Member
Nonrecourse Debt equals the net increase during that fiscal year in
Member Nonrecourse Debt Minimum Gain attributable to that Member
Nonrecourse Debt during that fiscal year, reduced (but not below
zero) by the amount of any distributions during that year to the
Member bearing the economic risk of loss for Member Nonrecourse
Debt if the distributions are both from the proceeds of the Member
Nonrecourse Debt and are allocable to an increase in Member
Nonrecourse Debt Minimum Gain attributable to the Member
Nonrecourse Debt, all as determined according to the provisions of
Treasury Regulation §1.704-2(i)(2). In determining Member
Nonrecourse Deductions, the ordering rules of Treasury Regulation
§1.704-2(j) shall be followed.

 

 

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(f)           “Nonrecourse
Deductions” has the meaning set forth in Treasury Regulation
§1.704-2(c). The amount of Nonrecourse Deductions for a
Company fiscal year equals the net increase in the amount of
Company Minimum Gain during that fiscal year, reduced (but not
below zero) by the aggregate amount of any distributions during
that fiscal year of proceeds of a Nonrecourse Liability that are
allocable to an increase in Company Minimum Gain.

 

(g)           “Nonrecourse
Liability” has the meaning set forth in Treasury Regulation
§1.752-1(a)(2).

 

3.4           Special
Allocations

 

The
following special allocations shall be made in the following
order:

 

(a)           Company
Minimum Gain Chargeback. If there is a net decrease in
Company Minimum Gain during a fiscal year, each Member shall be
allocated, before any other allocation under this Section, items of
Company income and gain for the fiscal year equal to that
Member’s share of the net decrease in Company Minimum Gain as
determined in accordance with Treasury Regulation
§1.704-2(g)(2).

 

(b)           Member
Nonrecourse Debt Minimum Gain Chargeback. If there is a net
decrease in Member Nonrecourse Debt Minimum Gain during a fiscal
year (as defined in the Regulations), any Member with a share of
the Member Nonrecourse Debt Minimum Gain attributable to that
Member’s Nonrecourse Debt as of the beginning of the fiscal
year should be allocated items of Company income and gain for that
year (and, if necessary, subsequent years) equal to that
Member’s share of the net decrease in Member Nonrecourse Debt
Minimum Gain. A Member’s share of net decrease in Member
Nonrecourse Debt Minimum Gain shall be determined under Treasury
Regulation §1.704-2(g)(2). A Member shall not be subject to
the foregoing chargeback to the extent permitted under Treasury
Regulation §1.704-2(i)(4).

 

(c)           Qualified
Income Offset. If any Member unexpectedly receives an
adjustment, allocation, or distribution described in Treasury
Regulation §1.704-1(b)(2)(ii)(d)(4), (d)(5), or (d)(6), that
Member shall be allocated items of Company income and gain
(consisting of a pro rata portion of each item of Company income,
including gross income and gain for that fiscal year) in an amount
and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of that Member as
quickly as possible; provided that an allocation under this
Section 3.4(c)
shall be made only if and to the extent that the Member would have
an Adjusted Capital Account Deficit after all other allocations
provided for in this Agreement have been made as if this
Section 3.4(c) were
not in the Agreement.

 

(d)           Gross
Income Allocation. In the event any Member has a deficit
Capital Account at the end of any Company fiscal year in excess of
the sum of:

 

(1)           The
amount the Member is obligated to restore under any provision of
this Agreement, and

 

(2)           The
amount the Member is deemed to be obligated to restore under
Treasury Regulation §1.704-2(g)(1), (i)(5), each such Member
shall be specially allocated items of Company income in the amount
of the excess as quickly as possible; except that an allocation
under this Section
3.4(d) shall be made only if and to the extent that the
Member would have a deficit Capital Account in excess of that sum
after all other allocations provided for in this Article 3 have been made
as if Section
3.4(c) and this Section 3.4(d) were not in the
Agreement.

 

 

 

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(e)           Member
Nonrecourse Deductions. Any Member Nonrecourse Deductions
for any Company fiscal year shall be specially allocated to the
Member who bears the economic risk of loss with respect to the
Member Nonrecourse Debt to which those Member Nonrecourse
Deductions are attributable in accordance with Treasury Regulation
§1.704-2(i)(1).

 

(f)           Nonrecourse
Deductions. Nonrecourse Deductions for any fiscal year shall
be specially allocated in proportion to their respective
allocations of Profits for that fiscal year.

 

(g)           Section
754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Company asset under Internal Revenue Code
§734(b) or §743(b) is required under Treasury Regulation
§1.704-1(b)(2)(iv)(m)(2) or §1.704-1(b)(2)(iv)(m)(4) to
be taken into account in determining Capital Accounts as the result
of a distribution to a Member in complete liquidation of the
Member’s interest in the Company, the amount of the
adjustment to Capital Accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases the basis), and the gain or loss shall be
specially allocated to the Members in accordance with their
interests in the Company in the event that Treasury Regulation
§1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom
the distribution was made in the event that Treasury Regulation
§1.704-1(b)(2)(iv)(m)(4) applies.

 

3.5           Allocation
of Member Nonrecourse Deductions

 

Member
Nonrecourse Deductions for any fiscal year of the Company shall be
allocated to the Members in the same proportion as Profits are
allocated under Section
3.1, provided that any Member Nonrecourse Deductions for any
fiscal year or other period shall be allocated to the Member who
bears (or is deemed to bear) the economic risk of loss with respect
to the Member Nonrecourse Debt to which those Member Nonrecourse
Deductions are attributable in accordance with Treasury Regulation
§1.704-2(i)(2).

 

3.6           Capital
Events

 

In any
fiscal year of the Company, Profits in excess of Losses of the
Company resulting from a Capital Event for any fiscal year of the
Company shall be allocated to the Members in the same proportion as
Profits are allocated under Section 3.1.

 

3.7           Allocation
of Losses

 

In any
Company fiscal year, Losses in excess of Profits of the Company,
resulting from a Capital Event for any fiscal year of the Company
shall be allocated to the Members in the same proportion as Profits
are allocated under Section 3.1. For this purpose,
Capital Accounts shall be reduced by the adjustments set forth in
Treasury Regulation §1.704-1(b)(2)(ii)(d)(4)-(6).

 

3.8           Unrealized
Appreciation and Depreciation

 

Any
Unrealized Appreciation or Unrealized Depreciation in the values of
Company property distributed in kind to all the Members shall be
treated in accordance with applicable Law.

 

 

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3.9           Contributed
Property

 

Any
item of income, gain, loss, or deduction with respect to any
property (other than cash) that has been contributed by a Member to
the capital of the Company, or that has been revalued under the
provisions of Section
2.9(g), and that is required or permitted to be allocated to
the Member for income tax purposes under Internal Revenue Code
§704(c) so as to take into account the variation between the
tax basis of the property and its Fair Market Value at the time of
its contribution, shall be allocated solely for income tax purposes
in the manner required or permitted under Internal Revenue Code
§704(c) using the “remedial” method described in
Treasury Regulation §1.704-3(b), except that any other method
allowable under applicable Regulations may be used for any
contribution of property with respect to which there is agreement
among the contributing Member and the Managers (and, if the Manager
and the contributing Member are Affiliates, a Majority of Members
who are not Affiliates of Managers).

 

3.10           Transferees

 

A
Transferee shall succeed to the pro rata portion of the Capital
Account of the Transferor relating to the Membership Interest so
Transferred. Except as otherwise provided herein, all items of
income, gain, expense, loss, deduction, and credit allocable to any
Membership Interest that may have been Transferred during any
calendar year shall, if permitted by Law, be allocated between the
Transferor and the Transferee based on the portion of the calendar
year during which each was recognized as owning that Membership
Interest, based upon the interim closing of the books method or
such other method as agreed between the Transferor and the
Transferee; provided, however, that this allocation
must be made in accordance with a method permissible under section
706 of the Internal Revenue Code and the Treasury Regulations
thereunder.

 

3.11           Adjustment
of Gross Asset Value

 

(a) The
Gross Asset Value of all Company property shall be adjusted at the
following times: (1) on the acquisition of an interest or
additional interest in the Company by any new or existing Member in
exchange for more than a de
minimis Capital Contribution; (2) on the distribution of
money or other property (other than a de minimis amount) by the Company to a
Member as consideration for a Transferable Interest in the Company;
and (3) on the liquidation of the Company within the meaning of
Treasury Regulation §1.704-1(b)(2)(ii)(g), provided, however, that adjustments under
clauses (1) and (2) above shall be made only in the event of a
revaluation of Company property under Section 2.9(g) in accordance
with Treasury Regulation §1.704-1(b)(2)(iv)(f).

 

(b)           The
Gross Asset Value of Company property shall be increased or
decreased to reflect adjustments to the adjusted tax basis of the
property under Internal Revenue Code §732, §733, or
§743, subject to the limitations imposed by Internal Revenue
Code §755 and Treasury Regulation
§1.704-1(b)(2)(iv)(m).

 

(c)           If
the Gross Asset Value of an item of property has been determined or
adjusted as specified in the definition of “Gross Asset Value
in Section 14.1 or
pursuant to paragraph (a) or (b) of this Section 3.11, the Gross Asset
Value shall be adjusted by the Book Depreciation, if any, taken
into account with respect to that property for purposes of
computing Profits and Losses.

 

3.12           Allocation
of Tax Items

 

It is
the intent of the Members that each Member’s allocated share
of Company Tax Items be determined in accordance with this
Agreement to the fullest extent permitted by Internal Revenue Code
§704(b)-(c). Notwithstanding anything to the contrary in this
Agreement, if the Company is advised that, as a result of the
adoption of new or amended regulations under Internal Revenue Code
§704(b)-(c), or the issuance of authorized interpretations,
the allocations provided in this Agreement are unlikely to be
respected for federal income tax purposes, the Managers are granted
the power to amend the allocation provisions of this Agreement, on
advice of accountants and legal counsel, to the minimum extent
necessary for the allocation provisions to be respected for federal
income tax purposes.

 

 

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Amended and Restated Limited Liability Company
Agreement

 

ARTICLE 4

DISTRIBUTIONS

 

4.1           Distributions

 

Except
as provided elsewhere in this document all distributions by the
Company shall be determined by the Board. Subject to the
limitations set forth in the Delaware Act and any other applicable
Law, prior to the dissolution, winding-up and liquidation of the
Company, the Board may, in its discretion, direct the Company to
make distributions of cash or other property to the Members.
Notwithstanding any provision to the contrary contained in this
Agreement, neither the Company nor the Board, on behalf of the
Company, shall be required or permitted to make a distribution to
any Member on account of its Membership Interest if such
distribution would violate the Delaware Act or other applicable
Law.

 

4.2           Limitation
on Distributions on Common Units

 

Notwithstanding
anything to the contrary contained in this Agreement, all
distributions and dividends on Common Units shall be subject to the
prior approval of the holders of a majority of the Series A
Preferred Units in accordance with the terms of the Purchase
Agreement and Section
7.3 of this Agreement.

 

4.3           Certain
Taxes

 

(a)           Distributions
and Payments Free of Taxes. Any and all allocations,
distributions, payments, advances, or issuances by the Company to
Investor (including, for the avoidance of doubt any distributions,
payments, advances, or issuances by the Company to Investor under
the Purchase Agreement) shall be made free and clear of and without
deduction or withholding or other charge for any Covered Taxes,
except as required by applicable Law; provided, however, that if the Company
shall be required by applicable Law to deduct or withhold any
Covered Taxes from such allocations, distributions or payments,
then (i) the amounts distributable or payable or advanced shall be
increased as necessary so that after making all required deductions
or withholdings (including those applicable to additional amounts
distributable or payable under this Section 4.3) Investor receives
an amount equal to the amount it would have received had no such
deduction or withholding been made, (ii) the Company shall make
such deductions or withholdings and such amounts shall be borne by
Aemetis out of its share of distributions under Section 4.1 (determined before
taking into account this Section 4.3), and (iii) the
Company shall timely pay the full amount deducted or withheld to
the relevant Governmental Authority in accordance with applicable
Law.

 

(b)           Indemnification
by the Company and Aemetis. The Company and Aemetis shall
indemnify Investor, within ten (10) days after written demand
therefor, for the full amount of any Covered Taxes (including
Covered Taxes imposed or asserted on or attributable to amounts
payable under this Section) paid or payable by Investor on or with
respect to any payment by or on account of any obligation of the
Company hereunder (including Covered Taxes imposed or asserted on
or attributable to amounts payable under this Section 4.3) and any penalties,
interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Covered Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability
delivered to the Company by Investor shall be prima facie evidence
of the accuracy of the determinations and calculations contained or
asserted therein.

 

 

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(c)           Evidence
of Payments. As soon as practicable after any payment of
Covered Taxes by the Company to a Governmental Authority, the
Company shall deliver to Investor the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such
payment and a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to
Investor.

 

(d)           Refunds.
If Investor determines, in its sole discretion, that it has
received a refund of any Covered Taxes as to which it has been
indemnified by the Company and Aemetis or with respect to which the
Company has paid additional amounts pursuant to this Section 4.3, it shall pay over
such refund to the Company (but only to the extent of indemnity
payments made, or additional amounts paid, by the Company under
this Section 4.3
with respect to the Covered Taxes giving rise to such refund), net
of all out-of-pocket expenses of Investor and without interest
(other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Company,
upon the request of Investor, agrees to repay the amount paid over
to the Company (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event
Investor is required to repay such refund to such Governmental
Authority. This Section
4.3(d) shall not be construed to require the Investor to
make available its tax returns (or any other information relating
to its taxes which it deems confidential) to the Company, Aemetis
or any other Person.

 

(e)           Survival.
Without prejudice to the survival of any other provisions
hereunder, the agreement contained in Section 4.3 shall
survive the termination of this Agreement or the Purchase
Agreement, the liquidation of the Company, the dissolution of the
Company, the withdrawal, resignation or retirement of a Member from
the Company, the transfer of a Member’s interest in the
Company and the liquidation of a Member’s interest in the
Company.

 

ARTICLE 5

MANAGEMENT

 

5.1           General
Powers

 

The
Company shall be a “manager-managed” limited liability
company. Except for situations in which the approval of the Members
or any specific Member or group or class of Members is expressly
required by the terms of this Agreement or non-waivable provisions
of applicable Law, including the Delaware Act, (a) all management
powers over the business and affairs of the Company shall be
exclusively vested in the Board, (b) the Board shall have full,
exclusive, and complete discretion, power and authority to manage,
control, administer and operate the business and affairs of the
Company, and to make all decisions affecting such business and
affairs, and (c) the Board shall have the power to bind or take any
action on behalf of the Company, or to exercise in its sole
discretion any rights and powers (including the rights and powers
to take certain actions, give or withhold certain consents or
approvals, or make certain determinations, opinions, judgments, or
other decisions) granted to the Company under this Agreement, or
any other agreement, instrument, or other document to which the
Company is a party or by virtue of its holding the equity interests
of any Subsidiary or other Person. Each Manager shall be a
“manager” for purposes of the Delaware Act; however, no
single Manager (acting in his or her capacity as such) shall have
any authority to bind the Company with respect to any matter except
pursuant to a resolution expressly authorizing such action which
resolution is duly adopted by the Board by the affirmative vote
required for such matter pursuant to this Agreement. Unless
otherwise expressly provided herein, any action, approval or
determination that may or shall be taken or made by the Board shall
be taken or made by the Board in its sole discretion.

 

 

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5.2           Composition

 

(a)           The
Board shall consist of three (3) Managers. The Managers shall be
appointed as follows:

 

(i)           one
(1) Manager shall be appointed by the holders of a majority of the
Series A Preferred Units or, if there are no Series A Preferred
Units outstanding, by the holders of a majority of the Common Units
that have been converted into Common Units from Series A Preferred
Units (the “Series A Preferred Units Manager”);
and

 

(ii)           the
remaining Managers shall be appointed by a Majority of the
Members.

 

The
initial Manager appointed by the holders of the Series A Preferred
Units shall be Devdatt Bhangui. The other initial Managers shall be
Eric McAfee and Todd Waltz.

 

(b)           Managers
shall serve until their resignation, death, removal or the election
of their successor in accordance with the terms hereof. The removal
from the Board of the Series A Preferred Units Manager shall only
be at the written request of the Members entitled to designate such
Manager in Section
5.2(a)(i). A Manager may resign from the Board by delivering
his or her written resignation to the Company at the
Company’s principal office addressed to the Board. Such
resignation shall be effective upon receipt unless it is specified
to be effective at some other time or upon the happening of some
other event. The acceptance of a resignation shall not be necessary
to make it effective, unless expressly so provided in the
resignation.

 

(c)           In
the event that the Series A Preferred Units Manager ceases for any
reason to serve as a member of the Board during his or her term of
office, the resulting vacancy on the Board shall be filled by a
Manager designated by the Members entitled to designate such Series
A Preferred Units Manager in accordance with Section 5.2(a)(i). Failure of
such Members to at any time designate a Series A Preferred Units
Manager shall not impair or constitute a waiver of the future right
to do so. The Series A Preferred Units Manager may be removed from
the Board only by the Members entitled to designate a Series A
Preferred Units Manager in accordance with Section 5.2(a)(i).

 

(d)           During
the existence of the Company and at the request of the holders of
the Preferred Units at any time, the Company shall cause each of
its Subsidiaries to have a board of managers (or board of directors
or equivalent governing body, as the case may be) which mirrors (in
number of members and identity of the persons serving as members)
the above composition of the Board from time to time (having the
same voting rights), including amending organizational documents as
necessary to implement this Section 5.2(d).

 

(e)           The
Company shall provide each Manager with sufficient information
(and, as appropriate, access to Company’s management) to
enable each Manager to perform his or her duties as a Manager, to
evaluate matters presented to the Board and to participate in the
Board’s management, control, administration and operation of
the business and affairs of the Company, and to make all decisions
affecting such business and affairs as contemplated
hereunder.

 

 

 

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Amended and Restated Limited Liability Company
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5.3           Board
Actions; Meetings

 

Each
Manager shall have one (1) vote on all matters submitted to the
Board. Except as otherwise provided in this Agreement, all
decisions concerning the management of the Company’s business
shall be made by the vote of a majority, by number, of the
Managers. The presence, in person or by Proxy, of Managers holding
at least a majority of the votes of the total number of Managers
comprising the Board (which majority must include the Series A
Preferred Units Manager), shall constitute a quorum for the
transaction of business at any meeting of the Managers;
provided,
however, that if a
quorum cannot be obtained at two consecutive duly called meetings
because of the absence of the Series A Preferred Units Manager at
both of such consecutive meetings, the presence of the Series A
Preferred Units Manager shall not be necessary to constitute a
quorum at the next (and only the next) duly called meeting. The
affirmative vote (whether by Proxy or otherwise) of the Managers
holding at least a majority of the votes of the total number of
Managers comprising the Board (i.e., including any vacancies on the
Board) when a quorum is present shall be the act of the Board.
Meetings of the Board shall be held at the principal office of the
Company or at such other place as may be determined by the Board.
Regular meetings of the Board shall be held on such dates and at
such times as shall be determined by the Board. Special meetings of
the Board may be called by any Manager. Notice of each special
meeting of the Board stating the date, place and time of such
meeting shall be given to each Manager (in the case of a Board
meeting) by hand, telephone, electronic mail, telecopy or overnight
courier at least 48 hours prior to such meeting and shall be deemed
delivered when received. Notice may be waived before or after a
meeting or by attendance without protest at such meeting. The
actions taken by the Board (as opposed to by written consent),
however called and noticed, shall be as valid as though taken at a
meeting duly held after regular call and notice if (but not until),
either before, at or after the meeting, the Managers as to whom it
was improperly held sign a written waiver of notice or a consent to
the holding of such meeting or an approval of the minutes thereof.
The actions by the Board may be taken by written consent (without a
meeting, without notice and without a vote) so long as such consent
sets forth the action to be taken and is signed by all of the
Managers entitled to vote thereon. Any action taken pursuant to
such written consent of the Board shall have the same force and
effect as if taken by the Board or such committee at a meeting
thereof. A meeting of the Board may be held by telephone conference
or similar communications equipment by means of which all
individuals participating in the meeting can be heard, and
participation in such meeting shall constitute attendance and
presence in person at such meeting, except where the Manager
participates in the meeting for the express purpose of objecting to
the transaction of any business on the ground that the meeting is
not lawfully called or convened or is not called or convened in
accordance with this Agreement. The Board, with the approval of all
of the Managers, may adopt such other procedures governing meetings
and the conduct of business at such meetings as it shall deem
appropriate. The Company shall pay the reasonable out-of-pocket
expenses incurred by the Managers in connection with attending
meetings of the Board or the board of any Subsidiary. The Board
shall keep or cause to be kept with the books and records of the
Company full and accurate minutes of all meetings, notices, and
waivers of notices of meetings, and all written consents to actions
of the Board.

 

5.4           Officers

 

(a)           The
Board may (but need not), from time to time, designate and appoint
one or more persons as an Officer of the Company, provided that the Board (with
the written approval of the Series A Preferred Units Manager) shall
appoint a President of the Company who shall be a Manager. Any
Officers so designated shall have such authority and perform such
duties as the Board may, from time to time, delegate to them. The
Board may assign titles to particular Officers. Unless the Board
otherwise decides, if the title is one commonly used for officers
of a business corporation formed under the DGCL, the assignment of
such title shall constitute the delegation to such Officer of the
authority and duties that are normally associated with that office,
subject to (i) any specific delegation or limitation of authority
and duties made to such Officer by the Board, and (ii) any of the
specific limitations set forth herein. Each Officer shall hold
office until such Officer’s successor shall be duly
designated or until such Officer’s death or until such
Officer shall resign or shall have been removed in the manner
hereinafter provided. Any number of offices may be held by the same
individual. The salaries or other compensation, if any, of the
Officers of the Company shall be fixed from time to time by the
Board.

 

(b)           The
President shall be the chief executive officer of the Company and
shall have general supervision of the business and affairs of the
Company, shall preside at all meetings of Members and of Managers,
and shall have any other powers and duties usually vested in a
chief executive officer.

 

 

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(c)           Any
Officer (subject to any contract rights available to the Company or
any of its Subsidiaries, if applicable) may resign as such at any
time. Such resignation shall take effect at the time specified
therein, or if no time be specified, at the time of its receipt by
the Board. The acceptance of a resignation shall not be necessary
to make it effective. Any Officer may be removed as such, either
with or without cause, by the Board in its sole discretion at any
time. Any vacancy occurring in any office of the Company may be
filled by the Board and shall remain vacant until filled by the
Board.

 

(d)           Officers,
in the performance of their duties as such, shall owe to the
Company and to the Members fiduciary duties (including the duty of
loyalty and due care) of the type owed by officers of a corporation
to such corporation and its stockholders under the
DGCL.

 

5.5           Actions
Requiring Member Approval

 

Notwithstanding
anything to the contrary contained herein, neither the Board, nor
any Manager or Officer shall take any of the following actions for
or on behalf of the Company unless a Majority of Members (and the
holders of a majority of the Series A Preferred Units) has
consented to such action:

 

(a)           liquidate,
dissolve or wind-up the business and affairs of the Company or any
Subsidiary, or consent to or otherwise approve any of the
foregoing;

 

(b)           take
any action that would result in a Bankruptcy Event; adopt a plan of
liquidation of the Company or any of its Subsidiaries; take any
action to commence any suit, case, proceeding or other action under
any existing or future Law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors seeking
to have an order for relief entered with respect to the Company or
any of its Subsidiaries, or seeking to adjudicate the Company or
any of its Subsidiaries as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the
Company or any of its Subsidiaries; appoint a receiver, trustee,
custodian or other similar official for the Company or any of its
Subsidiaries, or for all or any material portion of the assets of
the Company or any of its Subsidiaries; or make a general
assignment for the benefit of the creditors of the Company or any
of its Subsidiaries;

 

(c)           amend,
modify, alter or repeal any provision of the Certificate of
Formation;

 

(d)           create,
or authorize the creation of, any additional class or series of
Units or reclassify or authorize the reclassification of any class
or series of Units (unless the same ranks junior in all respects to
the Series A Preferred Units with respect to the distribution of
assets on the liquidation, dissolution or winding up of the
Company, the payment of dividends and distributions, and redemption
rights) or increase or decrease the authorized number of Series A
Preferred Units or increase the authorized number of shares of any
additional class or series of Units (unless the same ranks junior
to the Series A Preferred Units with respect to the distribution of
assets on the liquidation, dissolution or winding up of the
Company, the payment of dividends and distributions, and redemption
rights);

 

(e)           purchase,
redeem or otherwise acquire (or permit any Subsidiary to purchase,
redeem or otherwise acquire), or pay, declare or make any dividend
or distribution on, any Common Units;

 

(f)           create
any bonds, notes or Equity Securities that are convertible into, or
exchangeable for, or have option rights to purchase or otherwise
acquire, any Units (or other ownership or profits interests) in the
Company that would rank senior to or pari passu with the Series A Preferred
Units with respect to the distribution of assets on the
liquidation, dissolution or winding up of the Company, the payment
of dividends and distributions, and redemption rights;

 

 

 

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Amended and Restated Limited Liability Company
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(g)           create,
incur, assume, guarantee or authorize the creation, incurrence,
guarantee, or assumption of, or issue, or authorize the issuance of
any Indebtedness, or permit any Subsidiary to take any such action
with respect to any Indebtedness, except for trade payables
incurred in the ordinary course of business, or amend, renew,
increase or otherwise alter in any material respect the terms of
any Indebtedness previously approved or required to be approved by
holders of Series A Preferred Units;

 

(h)           increase
or decrease the authorized number of Managers constituting the
Board from three (3) or otherwise affects the composition or
appointment of the Board;

 

(i)           engage
in any line of business other than the business conducted or
proposed to be conducted by the Company as of the Effective Date or
use, or permit the use of, the proceeds from the issuance of the
Series A Preferred Units for any purpose other than the purposes
specified in Section 2.3 of the Purchase Agreement;

 

(j)           enter
into, or become subject to or bound by, any agreement or instrument
or other obligation which by its terms restricts the
Company’s ability to perform any of its obligations under the
Purchase Agreement and/or this Agreement, including the ability of
the Company to pay dividends or distributions or make any
redemption or liquidation payments with respect to the Series A
Preferred Units required hereunder and/or under the Purchase
Agreement;

 

(k)           effect
any recapitalization, restructuring or reorganization or split or
combination of any Unit, Preferred Unit, or Common
Unit;

 

(l)           effect
or enter into any agreement to effect any Qualifying Liquidity
Event;

 

(m)         
sell, transfer, license, lease or otherwise dispose of, in any
transaction or series of related transactions, any assets of the
Company or any Subsidiary having a Fair Market Value in excess of
$100,000, other than inventory in the ordinary course of
business;

 

(n)           create,
form or acquire any Subsidiary; or

 

(o)           take
any action, authorize or approve, or enter into any binding
agreement with respect to or otherwise commit to do any of the
foregoing.

 

5.6           BUDGET

 

The
Company shall obtain the prior approval of the Board and the
Principal Members before:

 

(a)           establishing
or adopting any Budget; or

 

(b)           amending
or modifying any Budget, provided that the approval of
the Principal Members shall not be required for an amendment or
modification of any Budget that (i) increases or decreases the
aggregate amount of such Budget by no more than five percent (5%),
or (ii) increases or decreases any line item in such Budget by no
more than five percent (5%).

 

If the
Principal Members do not approve a Budget for any fiscal year of
the Company, then the Budget for such fiscal year shall be the
Budget for the prior fiscal year until a Budget for such fiscal
year is approved by the Board and the Principal Members. The
Company shall operate the Company and its Subsidiaries consistent
with the Budget as provided for in the Purchase
Agreement.

 

 

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5.7           Other
Business Interests

 

It is
acknowledged that the Managers have other business interests to
which the Managers devote part of their time. Each Manager shall
devote as much time to the conduct of the business of the Company
as the Manager, in the Manager’s own good faith and
discretion, deems appropriate.

 

5.8           Assets
in the Name of the Company

 

All
assets of the Company, whether real or personal, whether now owned
or hereafter acquired, shall be held in the name of the
Company.

 

5.9           Funds

 

All
funds of the Company shall be deposited in one or more accounts
with one or more recognized financial institutions in the name of
the Company, at locations determined by the Board.

 

ARTICLE 6

ACCOUNTS AND ACCOUNTING

6.1           Records

 

Complete books of
account of the Company’s business, in which each Company
transaction shall be fully and accurately entered, shall be kept at
the Company’s principal executive office and at other
locations that the Board shall determine from time to time, and
shall be open to inspection and copying on reasonable notice by any
Member or the Member’s authorized representatives during
normal business hours. The costs of inspection and copying shall be
borne by the Member.

 

6.2           Accounting

 

The
books and records of the Company shall be maintained, for financial
reporting purposes, in accordance with United States generally
accepted accounting principles (“GAAP”). All decisions
as to accounting matters, except as specifically provided to the
contrary herein, shall be made by the Board.

 

6.3           Additional
Records

 

At all
times during the term of existence of the Company, and beyond that
term if the Board deems it necessary, the Company shall keep or
cause to be kept the books of account referred to in Section 6.2, together
with:

 

(a)           progress
reports with respect to the Development of the
Project;

 

(b)           milestone
schedules with respect to the Development of the
Project;

 

(c)           permits
and approvals with respect to the Development of the
Project;

 

(d)           Budgets;

 

(e)           a
current list of the full name and last known business or residence
address of each Member, together with the Capital Contribution and
the share in Profits and Losses of each Member;

 

(f)           a
current list of the full name and business or residence address of
each Manager;

 

(g)           a
copy of the Certificate of Formation, as amended or
supplemented;

 

 

 

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(h)           copies
of the Company’s federal, state, and local income tax or
information returns and reports, if any, for the six (6) most
recent taxable years;

 

(i)           an
original executed copy or counterparts of this Agreement, as
amended;

 

(j)           any
powers of attorney under which the Certificate of Formation, this
Agreement or any amendments thereto or hereto were
executed;

 

(k)           financial
statements of the Company for the six (6) most recent fiscal years;
and

 

(l)           the
books and records of the Company as they relate to the
Company’s internal affairs for the four (4) most recent
fiscal years.

 

If the
Board deems that any of the foregoing items shall be kept beyond
the term of existence of the Company, the repository of those items
shall be as designated by the Managers.

 

6.4           Tax
Information

 

Within
105 days after the end of each taxable year of the Company, the
Managers shall send to each of the Members all information
necessary for the Members to complete their federal and state
income tax or information returns and a copy of the Company’s
federal, state, and local income tax or information returns for
that year.

 

6.5           Partnership
Representative

 

The
Members hereby appoint a Chief Financial Officer who will act as
"partnership representative" (the "Partnership Representative") as
provided in Internal Revenue Code Section 6223(a) (as amended by
the Bipartisan Budget Act of 2015). The Partnership Representative
can be removed at any time by a vote of a majority of the other
Members, and shall resign if it is no longer a Member. In the event
of the resignation or removal of the Partnership Representative, a
majority of the other Members shall select a replacement
Partnership Representative. If the resignation or removal of the
Partnership Representative occurs prior to the effectiveness of the
resignation or removal under applicable Treasury Regulations or
other administrative guidance, the resignation or removal shall be
effective upon the earliest date provided for in such Treasury
Regulations or administrative guidance.

 

6.6           Authorization
of Partnership Representative

 

The
Partnership Representative is authorized to do the
following:

 

(a)           Keep
the Members informed of administrative and judicial proceedings for
the adjustment of Company items (as defined in Internal Revenue
Code §6231(a)(3)) at the Company level, as required under
Internal Revenue Code §6223(g) and the implementing
Regulations;

 

(b)           Enter
into settlement agreements under Internal Revenue Code
§6224(c)(3) and applicable Regulations with the Internal
Revenue Service or the Secretary of the Treasury (the Secretary)
with respect to any tax audit or judicial review, in which
agreement the Partnership Representative may expressly state that
the agreement shall bind the other Members, except that the
settlement agreement shall not bind any Member who (within the time
prescribed under the Internal Revenue Code and Regulations) files a
statement with the Secretary providing that the Partnership
Representative shall not have the authority to enter into a
settlement agreement on behalf of that Member;

 

 

 

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(c)           On
receipt of a notice of a final Company administrative adjustment,
to file a petition for readjustment of the Company items with the
Tax Court, the District Court of the United States for the district
in which the Company’s principal place of business is
located, or the United States Court of Federal Claims, all as
contemplated under Internal Revenue Code §6226(a) and
applicable Regulations;

 

(d)           File
requests for administrative adjustment of Company items on Company
tax returns under Internal Revenue Code §6227(b) and
applicable Regulations; and, to the extent those requests are not
allowed in full, file a petition for adjustment with the Tax Court,
the District Court of the United States for the district in which
the Company’s principal place of business is located, or the
United States Court of Federal Claims, all as contemplated under
Internal Revenue Code §6228(a); and

 

(e)           Take
any other action on behalf of the Members or the Company in
connection with any administrative or judicial tax proceeding to
the extent permitted by Law, including retaining tax advisers (at
the expense of the Company) to whom the Partnership Representative
may delegate such rights and duties as deemed necessary and
appropriate.

 

(f)           If
the Partnership Representative takes any action (including, without
limitation, filing any U.S. tax election or entering into a
settlement agreement with the U.S. Internal Revenue Service) that
causes an adverse effect on the holders of the Series A Preferred
Units, the Partnership Representative shall obtain written consent
from the Series A Preferred Units Manager, which shall not be
unreasonably withheld, delayed or condition, prior to taking any
such action.

 

ARTICLE 7

MEMBERSHIP—MEETINGS AND VOTING

 

7.1           Member
Authority

 

No
Member in its capacity as such has the authority or power to act
for or on behalf of the Company in any manner or way, to bind the
Company, or do any act that would be (or could be construed as)
binding on the Company, in any manner or way, or to make any
expenditures on behalf of the Company, unless such specific
authority and power has been expressly granted to and not revoked
from such Member by the Board or the express provisions of this
Agreement, and the Members hereby consent to the exercise by the
Board of the powers conferred on it by Law and this
Agreement.

 

7.2           Voting

 

Each
holder of Unit will have the right to one vote per Unit, with the
holders of Common Units and Series A Preferred Units voting
together as one class. Unless otherwise provided by Law or this
Agreement, the affirmative vote of a majority of the Units having
the right to vote on the matter or action subject to such vote
shall constitute the act of the Members and the affirmative vote of
a majority of the Units of a specified class or series having the
right to vote on the matter or action subject to such vote shall
constitute the act of the Members holding that class or series of
Units.

 

7.3           Series
A Preferred Unit Protective Provisions

 

For so
long as any Series A Preferred Units remain outstanding, none of
the Company, any of its Subsidiaries, or any Member, nor any
Manager, Officer or agent of the Company on behalf of the Company
or any of its Subsidiaries, shall take any of the following actions
without (in addition to any other vote required by Law or this
Agreement) the prior written consent or affirmative vote of the
holders of at least a majority of the then outstanding Series A
Preferred Units (which consent may be withheld by such holders in
their sole discretion), given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a
class:

 

 

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(a)           liquidate,
dissolve or wind-up the business and affairs of the Company or any
Subsidiary, or consent to or otherwise approve any of the
foregoing;

 

(b)           take
any action that would result in a Bankruptcy Event; adopt a plan of
liquidation of the Company or any of its Subsidiaries; take any
action to commence any suit, case, proceeding or other action under
any existing or future Law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors seeking
to have an order for relief entered with respect to the Company or
any of its Subsidiaries, or seeking to adjudicate the Company or
any of its Subsidiaries as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the
Company or any of its Subsidiaries; appoint a receiver, trustee,
custodian or other similar official for the Company or any of its
Subsidiaries, or for all or any material portion of the assets of
the Company or any of its Subsidiaries; or make a general
assignment for the benefit of the creditors of the Company or any
of its Subsidiaries;

 

(c)           amend,
modify, alter or repeal any provision of the Certificate of
Formation, the Purchase Agreement or this Agreement in a manner
that affects the powers, preferences or rights of the Series A
Preferred Units or that increases or decreases the number of
authorized Series A Preferred Units;

 

(d)           create,
or authorize the creation of, any additional class or series of
Units or reclassify or authorize the reclassification of any class
or series of Units (unless the same ranks junior in all respects to
the Series A Preferred Units with respect to the distribution of
assets on the liquidation, dissolution or winding up of the
Company, the payment of dividends and distributions, and redemption
rights) or increase or decrease the authorized number of Series A
Preferred Units or increase the authorized number of shares of any
additional class or series of Units (unless the same ranks junior
to the Series A Preferred Units with respect to the distribution of
assets on the liquidation, dissolution or winding up of the
Company, the payment of dividends and distributions, and redemption
rights);

 

(e)           purchase,
redeem or otherwise acquire (or permit any Subsidiary to purchase,
redeem or otherwise acquire), or pay, declare or make any dividend
or distribution on, any Common Units;

 

(f)           create
any bonds, notes or Equity Securities that are convertible into, or
exchangeable for, or have option rights to purchase or otherwise
acquire, any Units (or other ownership or profits interests) in the
Company that would rank senior to or pari passu with the Series A Preferred
Units with respect to the distribution of assets on the
liquidation, dissolution or winding up of the Company, the payment
of dividends and distributions, and redemption rights;

 

(g)           create,
incur, assume, guarantee or authorize the creation, incurrence,
guarantee, or assumption of, or issue, or authorize the issuance of
any Indebtedness, or permit any Subsidiary to take any such action
with respect to any Indebtedness, except for trade payables
incurred in the ordinary course of business, or amend, renew,
increase or otherwise alter in any material respect the terms of
any Indebtedness previously approved or required to be approved by
holders of Series A Preferred Units;

 

(h)           increase
or decrease the authorized number of Managers constituting the
Board from three (3) or otherwise affects the composition or
appointment of the Board;

 

(i)           engage
in any line of business other than the business conducted or
proposed to be conducted by the Company as of the Effective Date or
use, or permit the use of, the proceeds from the issuance of the
Series A Preferred Units for any purpose other than the purposes
specified in Section 2.3 of the Purchase Agreement;

 

 

 

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(j)           enter
into, or become subject to or bound by, any agreement or instrument
or other obligation which by its terms restricts the
Company’s ability to perform any of its obligations under the
Purchase Agreement and/or this Agreement, including the ability of
the Company to pay dividends or distributions or make any
redemption or liquidation payments with respect to the Series A
Preferred Units required hereunder and/or under the Purchase
Agreement;

 

(k)           effect
any recapitalization, restructuring or reorganization or split or
combination of any Unit, Preferred Unit, or Common
Unit;

 

(l)           effect
or enter into any agreement to effect any Qualifying Liquidity
Event;

 

(m)         
sell, transfer, license, lease or otherwise dispose of, in any
transaction or series of related transactions, any assets of the
Company or any Subsidiary having a Fair Market Value in excess of
$100,000, other than inventory in the ordinary course of
business;

 

(n)           create,
form or acquire any Subsidiary; or

 

(o)           take
any action, authorize or approve, or enter into any binding
agreement with respect to or otherwise commit to do any of the
foregoing.

 

7.4           Meetings
of Members

 

Meetings of the
Members may be called at any time by the Board, or by Members
representing more than 10 percent of the Units of the Members, for
the purpose of addressing any matters on which the Members may
vote. If a meeting of the Members is called by the Members, notice
of the call shall be delivered to the Board. Meetings may be held
at the principal executive office of the Company or at any other
location designated by the Board. Following the call of a meeting,
the Board shall give notice of the meeting not less than 10, nor
more than 60, calendar days before the meeting date to all Members
entitled to vote at the meeting. The notice shall state the place,
date, and hour of the meeting, the means of electronic transmission
by and to the Company or electronic video communication, if any,
and the general nature of business to be transacted. No other
business may be transacted at the meeting. A quorum at any meeting
of Members shall consist of a Majority of Members, represented in
person or by Proxy. The Members present at a duly called or held
meeting at which a quorum is present may continue to transact
business until adjournment, notwithstanding the withdrawal of a
sufficient number of Members to leave less than a quorum, if the
action taken, other than adjournment, is approved by the requisite
Percentage Interest of the Members as specified in this Agreement
or the Delaware Act.

 

7.5           Record
Date

 

The
record date for determining the Members entitled to receive notice
of any meeting, to vote, to receive any distribution, or to
exercise any right in respect of any other lawful action, shall be
the date set by the Board or by a Majority of Members; provided that the record date
shall not be more than 60, or less than 10 calendar days before the
date of the meeting and not more than 60 calendar days before any
other action.

 

 

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7.6           Adjournment
of Meeting of Members

 

A
meeting of Members at which a quorum is present may be adjourned to
another time or place and any business that might have been
transacted at the original meeting may be transacted at the
adjourned meeting. If a quorum is not present at an original
meeting, that meeting may be adjourned by the vote of a majority of
Voting Units represented either in person or by Proxy. Notice of
the adjourned meeting need not be given to Members entitled to
notice if the time and place of the adjourned meeting are announced
at the meeting at which the adjournment is taken, unless (a) the
adjournment is for more than 45 days, or (b) after the adjournment,
a new record date is fixed for the adjourned meeting. In the
situations described in clauses (a) and (b), notice of the
adjourned meeting shall be given to each Member of record entitled
to vote at the adjourned meeting.

 

7.7           Attendance
at Meeting; Proxies; etc

 

The
transactions of any meeting of Members, however called and noticed,
and wherever held, shall be as valid as though consummated at a
meeting duly held after regular call and notice, if (a) a quorum is
present at that meeting, either in person or by Proxy, and (b)
either before or after the meeting, each of the persons entitled to
vote, not present in person or by Proxy, signs either a written
waiver of notice, a consent to the holding of the meeting, or an
approval of the minutes of the meeting. Attendance of a Member at a
meeting shall constitute waiver of notice, unless that Member
objects, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting was not lawfully called or
convened. Attendance at a meeting is not a waiver of any right to
object to the consideration of matters required to be described in
the notice of the meeting and not so included, if the objection is
expressly made at the meeting.

 

7.8           Voting

 

At all
meetings of Members, a Member may vote in person or by Proxy. The
Proxy shall be filed with the Board before or at the time of the
meeting, and may be filed by electronic transmission to the Board
at the principal executive office of the Company or any other
address given by the Board to the Members for those
purposes.

 

7.9           Telephonic
and Video Meetings

 

A
meeting of the Members may be conducted, in whole or in part, by
electronic transmission by and to the Company or by electronic
video communication if (a) the Company implements reasonable
measures to provide Members (in person or by Proxy) a reasonable
opportunity to participate in the meeting and to vote on matters
submitted to the Members, including an opportunity to read or hear
the proceedings of the meeting substantially concurrently with
those proceedings, and if (b) any Member votes or takes other
action at the meeting by means of electronic transmission to the
Company or electronic video communication, a record of that vote or
action is maintained by the Company.

 

7.10           Written
Action

 

Any
action that may be taken at any meeting of the Members may be taken
without a meeting if a consent thereto in writing, setting forth
the action so taken, is signed by Members having not less than the
minimum number of votes that would be necessary to authorize or
take that action at a meeting at which all Members entitled to vote
were present and voted. If the Members are requested to consent to
a matter without a meeting, each Member shall be given notice of
the matter to be voted on in the manner described in Section 7.4. Any action taken
without a meeting shall be effective when the required minimum
number of votes have been received. Prompt notice of the action
taken shall be given to all Members who have not consented to the
action.

 

 

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ARTICLE 8

UNITS; TRANSFERS

 

8.1           Unit
Certificates

 

(a)           Units
in the Company shall be evidenced by certificates in a form
approved by the Board (“Certificates”). Each
Certificate will bear the following legend reflecting the
restrictions on the Transfer of such securities:

 

“THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “33 ACT”), AND
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE 33 ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, QUALIFIES AS AN
EXEMPT TRANSACTION UNDER THE 33 ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.

 

THE
SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF THAT
CERTAIN AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT,
DATED AS OF DECEMBER 13, 2018, AS AMENDED FROM TIME TO TIME, BY AND
AMONG THE COMPANY AND THE MEMBERS IDENTIFIED THEREIN, INCLUDING
CERTAIN RESTRICTIONS ON TRANSFER. A COPY OF SUCH AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAS BEEN FILED WITH
THE SECRETARY OF THE COMPANY AND IS AVAILABLE UPON
REQUEST.”

 

(b)           Each
Unit in the Company shall constitute and shall remain a
“security” within the meaning of (i) Article 8 of the
Uniform Commercial Code (including Sections 8-102(a)(15) and 8-103
thereof) as in effect from time to time in the states of Delaware
and New York and (ii) the Uniform Commercial Code of any other
applicable jurisdictions that now or hereafter substantially
includes the 1994 revisions to Article 8 thereof as adopted by the
American Law Institute and the National Conference of Commissioners
on Uniform State Laws and approved by the American Bar Association
on February 14, 1995. Notwithstanding any provision of this
Agreement to the contrary, to the extent that any provision of this
Agreement is inconsistent with any non-waivable provision of
Article 8 of the Uniform Commercial Code as in effect in the State
of Delaware (6 Del C. § 8-101, et. seq.) (the
“UCC”), such provision of Article 8 of the UCC shall be
controlling.

 

(c)           Upon
any Transfer of all or a portion of the Units hereunder, the
Transferor shall surrender the Certificate(s) representing the
Units so Transferred to the Company for cancellation. If a
Certificate represents a greater portion of the Transferor’s
Units than that intended for Transfer, upon surrender of such
certificate for cancellation the Company shall issue to the
Transferor a new Certificate which represents the Units being
retained by such Transferor. Upon a determination by the Board, the
Company shall issue to each Transferee who is Transferred Units
pursuant to this Agreement and who is admitted to the Company as a
Substitute Member in accordance with Section 8.4(c), a Certificate
evidencing the Units held by such Transferee. Such Certificate
shall indicate the Units then owned by such Transferee and shall
represent the Units owned by such Transferee from time to time
thereafter as set forth in the then effective Schedule A hereto, regardless
of the Units indicated in the Certificate. Upon receipt of written
notice or other evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of any Certificate and,
in the case of any such loss, theft or destruction upon receipt of
the Member’s unsecured indemnity agreement, or in the case of
any other holder of a Certificate or Certificates, other indemnity
reasonably satisfactory to the Board or in the case of any such
mutilation upon surrender or cancellation of such Certificate, the
Company will make and deliver a new Certificate, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated
Certificate.

 

 

 

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8.2           Restrictions
on Transfers

 

(a)           General
Transfer Restrictions. Each holder of Common Units shall not
Transfer any Common Units or any interest therein to any Person
without the prior written consent of the Series A Preferred Units
Manager (which consent may be withheld by the Series A Preferred
Units Manager at his/her direction), provided that Aemetis may
pledge all or part of its Common Units to the Noteholders Agent,
pursuant to or in connection with the Note Purchase Agreement. The
pledge or assignment by Aemetis shall not, except as otherwise may
result due to an exercise of rights and remedies under such
collateral documentation, cause Aemetis to cease to be a Member or
to have the power to exercise any rights and powers of a Member.
Without limiting the foregoing, the right of the Noteholders Agent
to enforce and exercise its rights and remedies under such
collateral documentation is acknowledged by the Members and
Managers and any such action taken in accordance therewith shall be
valid and effective for all purposes under this Agreement and the
Certificate of Formation (in each case, regardless of any
restrictions or procedures otherwise herein or therein contained)
and applicable law, including, without limitation, the rights and
powers of a Member hereunder. Each holder of Series
A Preferred Units may at any time Transfer any or all of its
Series A Preferred Units to any Person.

 

(b)           Prohibited
Transfers. Notwithstanding anything to the contrary in this
Article 8, no
Transfer of Units shall be permitted or made if such Transfer
would:

 

(i)           violate
the then applicable federal or state securities Laws or rules and
regulations of the Securities Exchange Commission, any state
securities commission or any other Governmental Authority with
jurisdiction over such Transfer;

 

(ii)           terminate
the existence or qualification of the Company under Delaware
Law;

 

(iii)           cause
the Company to be treated as an association taxable as a
corporation or otherwise not to be treated as a partnership for
U.S. federal income tax purposes;

 

(iv)           cause
the Company to be required to register as an investment company
under the Investment Company Act of 1940, as amended, or subject
the Company, any of its Subsidiaries to the Investment Advisers Act
of 1940, as amended, or the Employee Retirement Income Security Act
of 1974, as amended;

 

(v)           violate
any provision of this Agreement; or

 

(vi)           result
in a Transfer of a Unit to a natural person.

 

Any
Transfer of Units in violation of this Agreement or applicable Law
shall be void ab initio,
and the Company has the power to rescind such
Transfer.

 

8.3           Expenses

 

The
Transferor and Transferee of any Units or other interest in the
Company shall be jointly and severally obligated to reimburse the
Company for all reasonable out-of-pocket expenses (including
attorneys’ fees and expenses) incurred by the Company for any
Transfer or proposed Transfer, regardless of whether
consummated.

 

 

 

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8.4           Transfers
Generally; Substitute Members

 

(a)           Additional
Procedural Conditions to Transfers. Without limiting
Section 8.2(a), any
Transfer of Units shall be valid hereunder only if:

 

(i)           the
Transferor and the Transferee execute and deliver to the Company
such documents and instruments of conveyance as may be reasonably
requested by the Board to effect such Transfer and to confirm the
agreement of the Transferee to be bound by the provisions of this
Agreement and the Purchase Agreement;

 

(ii)           the
Transferor and the Transferee provide to the Board the
Transferee’s taxpayer identification number 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; and

 

(iii)           the
Company is reimbursed by the Transferor and/or the Transferee for
all costs and expenses that the Company reasonably incurs in
connection with the Transfer as required by Section 8.3.

 

(b)           Rights
and Obligations of Transferees and Transferors. Subject to
Section 8.4(c), the
Transferee of any Transfer permitted pursuant to this Agreement
shall be a Transferee only, and only shall receive, to the extent
Transferred, the Economic Interest associated with the Units so
Transferred, and such Transferee shall not be entitled or enabled
to exercise any other rights or powers of a Member, such other
rights, and all obligations relating to, or in connection with,
such Units remaining with the Transferring Member. The Transferring
Member shall remain a Member even if it has Transferred all of its
Units to one or more Transferees until such time as all such
Transferees are admitted to the Company as Substitute Members
pursuant to Section
8.4(c), as applicable. In the event any Transferee desires
to make a further Transfer of all or any portion of its Units, such
Transferee shall be subject to all of the provisions of this
Agreement to the same extent and in the same manner as the Member
who initially held such Units.

 

(c)           Admission
of Transferee as Substitute Member. Subject to the other
provisions of this Article
8, a Transferee shall be admitted to the Company as a
Substitute Member following a Transfer of Units in accordance with
this Article 8 upon
satisfaction of all of the following conditions, upon which the
Transferee shall have all of the rights and powers, and be subject
to all of the restrictions and liabilities, of a Member under the
Delaware Act and this Agreement with respect to the Units
Transferred: (i) the Transferee shall become a party to this
Agreement as a Member by executing a joinder or counterpart
signature page to this Agreement and executing such other documents
and instruments as the Board may reasonably request for the sole
purpose of confirming such Transferee’s admission as a Member
and agreement to be bound by the terms and conditions of this
Agreement and the Purchase Agreement and (ii) the Transferee pays
or reimburses the Company for all reasonable costs that the Company
incurs in connection with the admission of the Transferee as a
Member as required by Section 8.3.

 

(d)           Effect
on Transferor and Company. Upon the admission of a
Transferee as a Substitute Member, (i) the Transferor shall (A)
cease to be a Member with respect to the portion of the Units so
Transferred and (B) be released from any obligations arising after
the date of such Transfer with respect to the Units so Transferred
and (ii) the Transferee will become a Member hereunder with respect
to such Units with all the rights and obligations of a Member held
by the Transferor in respect of such Units immediately prior to the
time of Transfer.

 

 

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8.5           Closing
Date

 

Any
Transfer and any related admission of a Person as a Member in
compliance with this Article 8 shall be deemed
effective on such date that the Transferee or successor in interest
complies with the requirements of this Agreement.

 

8.6           Effect
of Incapacity

 

Except
as otherwise provided herein, the Incapacity of a Member shall not
dissolve or terminate the Company. In the event of such Incapacity,
the executor, administrator, guardian, trustee or other personal
representative of the Member that has experienced such Incapacity
shall be deemed to be the assignee of such Member’s Economic
Interest and may, subject to the terms and conditions set forth in
this Article 8,
become a Substitute Member.

 

8.7           No
Appraisal Rights

 

No
Member shall be entitled to any valuation, appraisal or similar
rights with respect to such Member’s Units, whether
individually or as part of any class or group of Members, in the
event of a Qualifying Liquidity Event or other transaction
involving the Company or its securities unless such rights are
expressly provided by the documents effectuating such
transaction.

 

8.8           Effect
of Non-Compliance.

 

(a)           Improper
Transfers Void. ANY ATTEMPTED TRANSFER NOT STRICTLY IN
ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE 8 WILL BE VOID AB
INITIO AND OF NO FORCE OR EFFECT WHATSOEVER, PROVIDED, THAT ANY SUCH
ATTEMPTED TRANSFER MAY BE A BREACH OF THIS AGREEMENT,
NOTWITHSTANDING THAT SUCH ATTEMPTED TRANSFER IS VOID.

 

(b)           Other
Consequences. Without limiting the foregoing, if any Unit or
Certificate representing a Unit is purported to be Transferred in
whole or in part in contravention of this Article 8, the Person to whom
such purported Transfer was made shall not be entitled to any
rights as a Member whatsoever, including, without limitation, any
of the following rights:

 

(i)           to
participate in the management, business or affairs of the
Company;

 

(ii)           to
receive any reports pursuant to any provision hereof;

 

(iii)           to
inspect or copy the Company’s books or records;

 

(iv)           to
receive any Economic Interest in the Company; or

 

(v)           
to receive upon the dissolution and winding up of the Company the
net amount otherwise distributable to the Transferor pursuant to
Section 9.2
hereof.

 

 

 

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ARTICLE 9

DISSOLUTION AND WINDING UP

 

9.1           Events
of Dissolution

 

The
Company shall be dissolved on the first to occur of the following
events:

 

(a)           the
written agreement of a Majority of Members and the holders of a
majority of the Series A Preferred Units to dissolve the
Company.

 

(b)           Any
other event sufficient under the Delaware Act to cause the
dissolution of the Company.

 

No
other event, including the retirement, withdrawal, insolvency,
liquidation, dissolution, resignation, expulsion or bankruptcy of a
Member shall cause the dissolution of the Company.

 

9.2           Procedure
for Winding Up

 

On the
dissolution of the Company pursuant to Section 9.1, the Company shall
engage in no further business other than that necessary to wind up
the business and affairs of the Company. A majority of the Board
may appoint one or more Persons to act as liquidator of the Company
(the “Liquidator”). The Liquidator will proceed
diligently to wind up the affairs of the Company and liquidate the
Company’s assets in an orderly and business-like manner and
make final distributions as provided herein. The Liquidator shall
give notice of the commencement of winding up by mail to all known
creditors and claimants against the Company whose addresses appear
in the records of the Company.

 

The
Liquidator shall liquidate the assets of the Company and distribute
the proceeds of such liquidation in the following order of
priority, unless otherwise required by mandatory provisions of
applicable Law:

 

(a)           First,
to the payment of all of the Company's known debts and liabilities
(including debts and liabilities to Members who are creditors, if
applicable) and the expenses of liquidation (including sales
commissions incident to any sales of assets of the
Company);

 

(b)           Second,
to the establishment of and addition to reserves that are
determined by the Liquidator to be reasonably necessary for any
contingent unknown liabilities or obligations of the Company. On
the Liquidator’s determination that reserves are no longer
necessary, they shall be distributed as provided in this
Section
9.2;

 

(c)           Third,
to the holders of the Series A Preferred Units in accordance with
the Purchase Agreement; and

 

(d)           Last,
subject to the terms of the Purchase Agreement and Section 7.3 of this Agreement,
among the Members as provided in Section 4.1.

 

9.3           Accounting

 

As
promptly as possible after dissolution and again after final
liquidation, the Liquidator shall cause a proper accounting to be
made by a recognized firm of certified public accountants of the
Company's assets, liabilities, and operations through the last day
of the calendar month in which the dissolution occurs or the final
liquidation is completed, as applicable.

 

9.4           Certificate
of cancellation

 

Upon
the liquidation of the Company assets as provided in Section 9.2, the Company shall
be terminated, and the Liquidator shall cause the filing of a
Certificate of Cancellation with respect to the Company’s
Certificate of Formation and shall take such other actions as may
be necessary or appropriate to terminate the Company.

 

 

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9.5           Recourse
for Claims

 

EACH
MEMBER SHALL LOOK SOLELY TO THE ASSETS OF THE COMPANY FOR THE
RETURN OF THE MEMBER’S INVESTMENT, AND IF COMPANY PROPERTY
REMAINING AFTER THE PAYMENT OR DISCHARGE OF THE COMPANY’S
DEBTS AND LIABILITIES IS INSUFFICIENT TO RETURN THE INVESTMENT OF
EACH MEMBER, THE MEMBER SHALL HAVE NO RECOURSE AGAINST ANY OTHER
MEMBERS FOR INDEMNIFICATION, CONTRIBUTION, OR REIMBURSEMENT, EXCEPT
AS SPECIFICALLY PROVIDED IN THIS AGREEMENT.

 

ARTICLE 10

CONFIDENTIALITY

 

10.1           Confidentiality

 

Each
Unitholder agrees that such Unitholder will keep confidential and
will not disclose, divulge, or use for any purpose (other than to
monitor and manage its investment in the Company) any information
obtained from the Company or any of its Subsidiaries, unless such
information (a) is known or becomes known to the public in general
(other than as a result of a breach of this Section 10.1 by such
Unitholder), (b) is or has been independently developed or
conceived by the Unitholder without use of the Company’s or
its Subsidiaries’ information, or (c) is or has been made
known or disclosed to the Unitholder by a third party without a
breach of any obligation of confidentiality such third party may
have to the Company or its Subsidiaries; provided, however, that a Unitholder may
disclose confidential information (i) to its attorneys,
accountants, consultants, and other professionals to the extent
necessary to obtain their services in connection with monitoring
and managing its investment in the Company; (ii) to any
prospective purchaser of any Units from such Unitholder, if such
prospective purchaser agrees to be bound by confidentiality
agreements at least as restrictive as the provisions of this
Section 10.1;
(iii) to any existing or prospective Affiliate, partner,
member, stockholder, or wholly owned subsidiary of such Unitholder
in the ordinary course of business, provided that such Unitholder
informs such Person that such information is confidential and
directs such Person to maintain the confidentiality of such
information in accordance with this Section 10.1; (iv) as may
otherwise be required by Law, provided that the Unitholder promptly
notifies the Company of such disclosure and takes reasonable steps
to avoid or minimize the extent of any such required disclosure
and, in the absence of a protective order, provided, further, that the Unitholder
discloses only so much of such information to the Person requiring
disclosure as is required; or (v) in satisfaction of requests for
information in connection with a routine examination by a
Governmental Authority having jurisdiction over the Unitholder or
its Affiliates, as applicable, that is not specifically targeted at
the Company, provided that it shall advise
the Governmental Authority of the confidential nature of such
information. Notwithstanding the foregoing, Aemetis shall be
entitled to make communications or disclosures (a) to comply with
the accounting and the SEC disclosure obligations or the rules of
any stock exchange or (b) with public equity owners and/or analysts
in the ordinary course of business.

 

 

 

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ARTICLE 11

INDEMNIFICATION; EXCULPATION; FIDUCIARY DUTIES

 

11.1           Indemnification

 

(a)           To
the fullest extent permitted by applicable Law, the Company shall
and does hereby agree to indemnify and hold harmless and pay all
judgments and claims against the Board, each Manager, each Member
(including the Partnership Representative in its role as such), any
Affiliate thereof and their respective officers, directors,
employees, shareholders, partners, managers and members (each, an
“Indemnified Party,” each of which shall be a third
party beneficiary of this Agreement solely for purposes of this
Section 11.1),
from and against any loss or damage incurred by an Indemnified
Party or by the Company for any act or omission taken or suffered
by such Indemnified Party in good faith (including any act or
omission taken or suffered by any of them in reliance upon and in
accordance with the opinion or advice of experts, including of
legal counsel as to matters of law, of accountants as to matters of
accounting or of investment bankers or appraisers as to matters of
valuation) in connection with the Company’s business,
including costs and reasonable attorneys’ fees and any amount
expended in the settlement of any claims or loss or damage, except
with respect to (i) any act taken by such Indemnified Party
purporting to bind the Company that has not been authorized
pursuant to this Agreement, (ii) any act or omission with respect
to which such Indemnified Party was grossly negligent or engaged in
intentional misconduct, (iii) any act or omission taken or omitted
by such Indemnified Party in bad faith, or (iv) any act or omission
that constitutes a material breach of this Agreement or the
Purchase Agreement.

 

(b)           The
satisfaction of any indemnification obligation pursuant to
Section 11.1(a) shall be
from and limited to Company assets (including insurance), and no
Member, in such capacity, shall be subject to personal liability
therefor.

 

(c)           Expenses
reasonably incurred by an Indemnified Party in defense or
settlement of any claim that may be subject to a right of
indemnification hereunder shall be advanced by the Company prior to
the final disposition thereof upon receipt of an undertaking by or
on behalf of such Indemnified Party to repay such amount to the
extent that it shall be determined upon final adjudication after
all possible appeals have been exhausted that such Indemnified
Party is not entitled to be indemnified hereunder.

 

(d)           The
Company may enter into indemnification agreements with its Managers
providing for, among other things, the indemnification described
herein. The Company is authorized to enter into the Indemnification
Agreement in substantially the form attached as Exhibit G to the
Purchase Agreement with the Series A Preferred Units
Manager.

 

11.2           Exculpation

 

(a)           No
Indemnified Party shall be liable, in damages or otherwise, to the
Company, the Members or any of their Affiliates for any act or
omission performed or omitted by any of them in good faith
(including any act or omission performed or omitted by any of them
in reliance upon and in accordance with the opinion or advice of
experts, including of legal counsel as to matters of law, of
accountants as to matters of accounting or of investment bankers or
appraisers as to matters of valuation), including any breach of a
duty (fiduciary or otherwise) that such Indemnified Party may have
with respect to the Company, the Members or any of their
Affiliates, except for (i) any act taken by such Indemnified Party
purporting to bind the Company that has not been authorized
pursuant to this Agreement, (ii) any act or omission with respect
to which such Indemnified Party was grossly negligent or engaged in
intentional misconduct, (iii) any action taken by such
Indemnified Party in bad faith, or (iv) any material breach of this
Agreement or the Purchase Agreement.

 

(b)           To
the extent that, at law or in equity, any Indemnified Party has
duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any Member, such Indemnified Party
acting under this Agreement shall not be liable to the Company or
to any Member for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that
they restrict the duties and liabilities of an Indemnified Party
otherwise existing at law or in equity, are agreed by the Members
to replace such other duties and liabilities of such Indemnified
Party, to the maximum extent permitted by applicable
Law.

 

 

 

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(c)           Any
repeal or amendment of this Section 11.2, or adoption of
any other provision in the Certificate of Formation or this
Agreement inconsistent with this Section 11.2 shall be
prospective only and shall not adversely affect any limitation on
the liability of any Indemnified Party to the Company, the Members
or any of their Affiliates existing at the time of such repeal,
amendment or adoption of an inconsistent provision.

 

11.3           Competitive
Activities

 

No
Manager shall be required to manage the Company as his or her sole
and exclusive function, and the Managers, Members and their
respective Affiliates may have other business interests and may
engage in other activities in addition to those relating to the
Company. Such other business interests or activities may be of any
nature or description, and may be engaged in independently or with
others. Neither the Company nor any Member shall have any right, by
virtue of this Agreement or the Company relationship created
hereby, in or to such other ventures or activities of any Manager,
any other Member or any of their respective Affiliates, or to the
income or proceeds derived therefrom, and the pursuit of such
ventures shall not be deemed wrongful or improper. Nothing in this
Section 11.3
shall limit a Member’s obligations pursuant to Article 10.

 

11.4           Indemnification
of Employees and Agents

 

The
Company, at the discretion of the Board, may indemnify and advance
expenses to an employee or agent of the Company to the same extent
and subject to the same conditions under which it may indemnify and
advance expenses under Section 11.1.

 

11.5           Appearance
as a Witness

 

Notwithstanding any
other provision of this Article 11, the Company may pay
or reimburse reasonable out-of-pocket expenses incurred by a
Manager, Member, Officer, employee or agent in connection with his
appearance as a witness or other participation in a Proceeding at a
time when he is not a named defendant or respondent in the
Proceeding.

 

11.6           Nonexclusivity
of Rights

 

The
right to indemnification and the advancement and payment of
expenses conferred in this Article 11 shall not be
exclusive of any other right that a Member, Manager, Officer or
other Person indemnified pursuant to this Article 11 may have or
hereafter acquire under any Law (common or statutory) or provision
of this Agreement.

 

11.7           Insurance

 

The
Board shall obtain and maintain, at the Company’s expense,
insurance to protect the Members, Managers, Officers, employees and
agents from any expense, liability or loss arising out of or in
connection with such Person’s status and actions as a Member,
Manager, Officer, employee or agent. In addition, the Board may
cause the Company to purchase and maintain insurance, at the
Company’s expense, to protect the Company and any other
Member, Manager, Officer or agent of the Company who is or was
serving at the request of the Company as a manager, director,
officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of a foreign or domestic limited liability
company, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise
against any expense, liability or loss, whether or not the Company
would have the power to indemnify such Person against such expense,
liability or loss under this Article 11.

 

 

 

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11.8           Savings
Clause

 

If this
Article 11 or any
portion hereof shall be invalidated on any ground by any court or
other Governmental Authority of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Person
indemnified pursuant to this Article 11 as to costs, charges
and expenses (including reasonable attorneys’ fees),
judgments, fines and amounts paid in settlement with respect to any
such Proceeding, appeal, inquiry or investigation to the full
extent permitted by any applicable portion of this Article 11 that shall not have
been invalidated and to the fullest extent permitted by applicable
Law.

 

ARTICLE 12

ATTORNEY-IN-FACT AND AGENT

 

12.1           Performance
of Duties; No Liability of Members, Managers and
Officers

 

Each
Unitholder hereby constitutes and appoints the Company and the
Liquidator, if any and as applicable, and their respective
designees, with full power of substitution, as his, her or its true
and lawful agent and attorney in fact, with full power and
authority in his, her or its name, place and stead, to execute,
swear to, acknowledge, deliver, file and record in the appropriate
public offices (to the same extent such Person could take such
action) (a) all certificates and other instruments which the Board
deems appropriate or necessary to form, qualify, or continue the
qualification of, the Company as a limited liability company in the
State of Delaware and in all other jurisdictions in which the
Company may conduct business or own property or as otherwise
permitted herein; (b) all conveyances and other instruments or
documents which the Board and/or the Liquidator deems appropriate
or necessary to reflect the dissolution and liquidation of the
Company pursuant to the terms of this Agreement, including a
certificate of cancellation; and (c) all instruments relating to
the admission, withdrawal or substitution of any Member pursuant to
Article 8. The
foregoing power of attorney is irrevocable and coupled with an
interest, and shall survive the death, disability, incapacity,
dissolution, bankruptcy, insolvency or termination of any
Unitholder and the Transfer of all or any portion of its Units and
shall extend to such Unitholder’s heirs, successors, assigns
and personal representatives.

 

ARTICLE 13

GENERAL PROVISIONS

 

13.1           Notice

 

Except
as expressly set forth to the contrary in this Agreement, all
notices, requests or consents provided for or permitted to be given
under this Agreement must be in writing and must be given either by
(a) depositing such writing with a reputable overnight courier
for next day delivery, (b) depositing such writing in the United
States mail, addressed to the recipient, postage paid, and
registered or certified with return receipt requested or
(c) delivering such writing to the recipient in person, by
courier or by electronic mail transmission; and a notice, request
or consent given under this Agreement is effective upon receipt
against the Person who receives it. All notices, requests and
consents to be sent to a Member must be sent to or made at the
address given for that Member on Schedule A, or such other
address as that Member may specify by notice to the other Members
and the Board. Any notice, request or consent to the Company or the
Board must be given to the Board or, if appointed, the secretary of
the Company at the Company’s chief executive offices.
Whenever any notice is required to be given by Law or this
Agreement, a written waiver thereof, signed by the Person entitled
to notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.

 

 

 

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13.2           Amendment
and Waiver

 

Except
for amendments authorized by Section 2.2, this
Agreement and any provision hereof may be amended, waived (except
as otherwise provided herein) or modified from time to time only by
a unanimous written instrument signed by the Members.

 

13.3           Effect
of Waiver and Consent

 

A
waiver or consent, express or implied, to or of any breach or
default by any Person in the performance by that Person of its
obligations hereunder or with respect to the Company is not a
consent or waiver to or of any other breach or default in the
performance by that Person of the same or any other obligations of
that Person hereunder or with respect to the Company. Failure on
the part of a Person to complain of any act of any Person or to
declare any Person in default hereunder or with respect to the
Company, irrespective of how long that failure continues, does not
constitute a waiver by that Person of its rights with respect to
that default until the applicable statute-of-limitations period has
run.

 

13.4           Entire
Agreement

 

This
Agreement, together with the Purchase Agreement, constitute the
whole and entire agreement of the parties with respect to its
subject matter. This Agreement, together with the Purchase
Agreement, replace and supersede all prior written and oral
agreements by and among the Company, Members and Managers or any of
them.

 

13.5           Counterparts

 

This
Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile or in electronic
(i.e., “pdf” or “tif”) format shall be
effective as delivery of a manually executed counterpart of this
Agreement.

 

13.6           Governing
Law

 

The
validity, interpretation, construction and performance of this
Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Delaware, without giving effect to
the principles of conflict of laws of such State. The Company and
Members each hereby irrevocably consent to the jurisdiction of the
Chancery Court of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the Chancery Court of
the State of Delaware. In the event of a direct conflict between
the provisions of this Agreement and any provision of the
Certificate of Formation or any mandatory provision of the Delaware
Act, the applicable provision of the Certificate of Formation or
the Delaware Act shall control.

 

 

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13.7           Remedies.

 

THE
COMPANY AND THE MEMBERS SHALL BE ENTITLED TO ENFORCE THEIR RIGHTS
UNDER THIS AGREEMENT SPECIFICALLY, TO RECOVER DAMAGES BY REASON OF
ANY BREACH OF ANY PROVISION OF THIS AGREEMENT (INCLUDING COSTS OF
ENFORCEMENT) AND TO EXERCISE ANY AND ALL OTHER RIGHTS EXISTING IN
THEIR FAVOR. THE PARTIES HERETO AGREE AND ACKNOWLEDGE THAT MONEY
DAMAGES MAY NOT BE AN ADEQUATE REMEDY FOR ANY BREACH OF THE
PROVISIONS OF THIS AGREEMENT AND THAT THE COMPANY OR ANY MEMBER MAY
IN ITS OR HIS SOLE DISCRETION APPLY TO ANY COURT OF LAW OR EQUITY
OF COMPETENT JURISDICTION FOR SPECIFIC PERFORMANCE OR INJUNCTIVE
RELIEF (WITHOUT POSTING A BOND OR OTHER SECURITY) IN ORDER TO
ENFORCE OR PREVENT ANY VIOLATION OR THREATENED VIOLATION OF THE
PROVISIONS OF THIS AGREEMENT.

 

13.8           Public
Announcements

 

No
Member will issue any public announcements or disseminate any
advertising or marketing material concerning the existence or terms
of this Agreement without the prior written approval of all of the
other Members, except to the extent such announcement is required
by Law. If a public announcement is required by Law, the Members
will consult with each other before making the public announcement.
To the extent any announcement or any advertising or marketing
material permitted under this Section 13.9 expressly refers
to any Member or their Affiliates, such Member shall, in its sole
discretion, have the right to revise such announcement or
advertising or marketing material prior to granting such written
approval.

 

13.9           Further
Assurances

 

In
connection with this Agreement and the transactions contemplated
hereby, each Member shall execute and deliver any additional
documents and instruments and perform any additional acts that may
be necessary or appropriate to effectuate and perform the
provisions of this Agreement and those transactions.

 

13.10       
Severability

 

If any
term or provision of this Agreement or the application thereof to
any Person or circumstances shall be held invalid or unenforceable,
the remaining terms and provisions of this Agreement and the
application of such term or provision to Persons or circumstances
other than those to which it is held invalid or unenforceable shall
not be affected thereby.

 

13.11       
No
Agency

 

Except
as provided in this Agreement, no provision of this Agreement shall
be construed to establish a Member as the agent of any other
Member.

 

13.12      
Headings

 

The
Article, Section, and subsection titles and headings in this
Agreement are inserted as matters of convenience and for ease of
reference only and shall be disregarded for all other purposes,
including the construction or enforcement of this Agreement or any
of its provisions.

 

13.13     
Time of the
Essence

 

Time is
of the essence for every provision of this Agreement that specifies
a time for performance.

 

 

 

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13.14      
No Third Party
Beneficiaries

 

This
Agreement is made solely for the benefit of the parties to this
Agreement and their respective permitted successors and assigns,
and no other Person (other than each Indemnified Person) shall have
or acquire any right by virtue of this Agreement; provided, however, the Noteholders Agent
is an intended third party beneficiary of the provisions in Section
8.2(a) and such provisions shall not be amended without the prior
written consent of Noteholders Agent.

 

13.15      
Acknowledgement

 

The
parties acknowledge that this Agreement was prepared by Structure
Law Group, LLP, which represents the Company in this matter and not
any individual Members. The Members have had an opportunity to read
all the provisions contained herein, and to have this Agreement
reviewed by legal, tax or other professional advisors of their own
choice before signing it. The Members represent that they have
reviewed this Agreement carefully and have the capacity to execute,
deliver, and perform all obligations required under this Agreement.
In the event any claim is made by any Member relating to any
conflict, omission or ambiguity in this Agreement, no presumption
or burden of proof or persuasion is implied by virtue of the fact
that this Agreement was prepared by or at the request of a
particular Member or his, her, or its counsel.

 

13.16       
No Interest in Specific
Property

 

No
Member has any interest in specific property of the Company.
Without limiting the foregoing, each Member irrevocably waives any
right to maintain any action for partition with respect to the
property of the Company.

 

13.17       
Attorneys’ Fees and
Expenses

 

In the
event that any dispute between the Company and the Members or among
the Members results in litigation, the prevailing party will be
entitled to recover from the other party all reasonable fees, costs
and expenses of enforcing any right of the prevailing party,
including, without limitation, reasonable attorneys’ fees and
expenses. In addition to the foregoing award for attorneys’
fees, the prevailing party will be entitled to its attorneys’
fees incurred in any post-judgment proceedings to enforce any
judgment. The provisions set forth in this section will survive the
merger of these provisions into any judgment.

 

ARTICLE 14

DEFINITIONS

 

14.1           Defined
Terms

 

Capitalized terms
used but not otherwise defined herein shall have the following
meanings:

 

“Adjusted
Capital Account Deficit” has the meaning specified in
Section
3.3(a).

 

“Aemetis”
has the meaning specified in the preamble of this
Agreement.

 

“Affiliate”
means, with respect to any Person, any other Person that directly
or indirectly controls, is controlled by or is under common control
with such Person. As used herein, the term “control”
means: (i) the power to vote at least ten percent (10%) of the
voting power of a Person, or (ii) the possession, directly or
indirectly, of any other power to direct or cause the direction of
the management and policies of such a Person, whether through
ownership of voting securities, by contract or
otherwise.

 

 

38

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Agreement”
means this Amended and Restated Limited Liability Company
Agreement, as it may be amended, modified and/or waived from time
to time in accordance with the terms hereof.

 

“Bankruptcy
Event” means, with respect to any Person, the occurrence of
one or more of the following events: (a) such Person (i) admits in
writing its inability to pay its debts as they become due, (ii)
files, or consents or acquiesces by answer or otherwise to the
filing against it of a petition for relief or reorganization or
rearrangement, readjustment or similar relief or any other petition
in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, dissolution, reorganization, moratorium or
other similar Law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part
of its property, (v) is adjudicated as bankrupt or as insolvent or
to be liquidated, (vi) gives notice to any Governmental Authority
of insolvency or pending insolvency, or (vii) takes corporate
action for the purpose of any of the foregoing; or (b) a court of
Governmental Authority of competent jurisdiction enters an order
appointing, without consent by such Person, a custodian, receiver,
trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency
Law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of such Person, or a petition or involuntary case with
respect to any of the foregoing shall be filed or commenced against
such Person.

 

“Board”
means the Board of Managers of the Company, which shall have the
power and authority described in this Agreement.

 

“Book
Adjustments” means, for any item of Company property for a
given fiscal year, adjustments with respect to Book Value for
depreciation, cost recovery, or other amortization deduction or
gain or loss computed in accordance with Treasury Regulation
§1.704-1(b)(2)(iv)(g), including Book
Depreciation.

 

“Book
Depreciation” means, for any item of Company property for a
given fiscal year, a percentage of depreciation or other cost
recovery deduction allowable for federal income tax purposes for
that item during that fiscal year equal to the result (expressed as
a percentage) obtained by dividing (1) the Gross Asset Value of
that item at the beginning of the fiscal year (or the acquisition
date during the fiscal year) by (2) the federal adjusted tax basis
of the item at the beginning of the fiscal year (or the acquisition
date during the fiscal year). If the adjusted tax basis of an item
is zero, the Managers may determine Book Depreciation, provided
that he or she does so in a reasonable and consistent
manner.

 

“Budget”
has the meaning ascribed thereto in the Purchase
Agreement.

 

“California
Act” means the California Revised Uniform Limited Liability
Company Act (California Corporations Code
§§17701.01-17713.13), as it may be amended from time to
time, and any successor thereto.

 

“Capital
Account” means, with respect to any Member, the account
reflecting the capital interest of the Member in the Company,
consisting of the Member’s Capital Contributions maintained
and adjusted in accordance with Section 2.8.

 

“Capital
Contributions” means any cash, cash equivalents, promissory
obligations or the Fair Market Value of other property which a
Member contributes to the Company with respect to any Unit pursuant
to Section 2.1. For
the avoidance of doubt, “Capital Contributions” shall
include all amounts paid by the Investor for the purchase of Series
A Preferred Units pursuant to the Purchase Agreement.

 

 

 

39

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Capital
Event” means (a) any direct or indirect sale, exchange,
transfer, assignment or other disposition of any of the
Company’s or any Subsidiary’s assets, including any
disposition of interests in an entity that owns assets (other than
to the Company or a Subsidiary), (b) the receipt of insurance and
other proceeds on account of an involuntary conversion of Company
property, (c) the receipt of proceeds from a refinancing of Company
property, or (d) any event similar to any of the foregoing with
respect to any property or assets of the Company or any
Subsidiary.

 

“Certificates”
has the meaning specified in Section 8.1(a).

 

“Certificate
of Formation” has the meaning specified in Section 1.1.

 

“Common
Unit” means a Unit having the rights and obligations
specified with respect to a Common Unit in this Agreement and the
Purchase Agreement, but does not include any Series A Preferred
Unit.

 

“Company”
has the meaning specified in the preamble of this
Agreement.

 

“Company
Minimum Gain” has the meaning specified in Section 3.3(b).

 

“Conversion
Units” has the meaning specified in the Purchase
Agreement.

 

“Covered
Taxes” shall mean California Taxes imposed on or with respect
to any allocation or distribution or payment made by or on account
of the Company under this Agreement or the Purchase
Agreement.

 

“Delaware
Act” means the Delaware Limited Liability Company
Act.

 

“Development”
has the meaning specified in the Purchase Agreement.

 

“DGCL”
means the Delaware General Corporation Law.

 

“Economic
Interest” means a Person’s right to share in the income
or loss or similar items of, and to receive distributions from, the
Company, but does not include any other rights of a Member
including, without limitation, the right to vote, consent or
otherwise participate in the management of the Company, the right
to vote for or appoint Managers to the Board, or, except as
specifically provided in this Agreement or required under the
Delaware Act, any right to information concerning the business and
affairs of the Company.

 

“Effective
Date” has the meaning specified in the preamble of this
Agreement.

 

“Electronic
transmission by the Company” and “electronic
transmission to the Company” have the meanings set forth in
California Corporations Code §17701.02(i)(1)-(2).

 

“Entity”
means any general partnership, limited partnership, limited
liability company, corporation, joint venture, trust, business
trust, cooperative, association or other entity.

 

 

 

40

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Equity
Securities” means, with respect to the Company, all of the
Units of (or other ownership or profit interests in) the Company,
all the warrants, options or other rights for the purchase or
acquisition of Units from (or other ownership or profit interests
in) the Company, all securities and/or instruments (including,
without limitation, bonds, notes or other obligations) convertible
into or exchangeable for Units of (or other ownership or profit
interests in) the Company, all warrants, rights or options for the
purchase or acquisition from the Company of Units (or other
ownership or profits interests), and all of the other ownership or
profit interests in the Company (including Membership Interests
therein), whether voting or nonvoting, and whether or not such
Units, warrants, options, rights or other interests are outstanding
on any date of determination.

 

“Fair Market
Value” of any asset shall mean the fair value thereof as of
the date of valuation as determined by the Board in good faith on
the basis of an orderly sale to a willing, unaffiliated buyer in an
arm’s length transaction occurring on the date of valuation
and, in the case of any Equity Securities, without regard to the
lack of liquidity due to any restrictions (contractual or
otherwise) applicable thereto or any discount for minority
interests; provided, however, that if a Principal
Member disputes any such determination, the Fair Market Value shall
be as mutually agreed upon by the Board and such Principal Member;
provided,
further, that if
the Board and such Principal Member are unable to agree on the Fair
Market Value within 10 days, such Fair Market Value shall be
determined within 20 days thereafter by a nationally recognized
investment banking, accounting or valuation firm jointly selected
by the Board and such Principal Member.

 

 “GAAP”
has the meaning specified in Section 6.2.

 

“Governmental
Authority” means any federal, state, municipal, national or
other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case whether associated
with a state of the United States of America, the United States of
America or a foreign entity or government.

 

“Gross Asset
Value” means, for any item of property of the Company, the
item’s adjusted basis for federal income tax purposes, except
that:

 

(a)           The
initial Gross Asset Value of any item of property contributed by a
Member to the Company shall be the fair market value of that
property, as mutually agreed by the contributing Member and the
Company;

 

(b)           The
Gross Asset Value of any item of Company property shall be adjusted
as of the following times: (1) the acquisition of an interest or
additional interest in the Company by any new or existing Member in
exchange for more than a de
minimis Capital Contribution; (2) the distribution of
money or other property (other than a de minimis amount) by the Company to a
Member as consideration for a Transferable Interest in the Company;
and (3) the liquidation of the Company within the meaning of
Treasury Regulation §1.704-1(b)(2)(ii)(g); provided, however,
that adjustments under clauses (1) and (2) above shall be made only
if the Members have determined that the Company must revalue its
assets in accordance with Treasury Regulation
§1.704-1(b)(2)(iv)(f);

 

(c)           The
Gross Asset Value of any Company asset distributed to any Member
shall be the book value of that asset on the date of distribution;
and

 

(d)           The
Gross Asset Value of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted tax basis of
those assets under Internal Revenue Code §734(b) or
§743(b), subject to the limitations imposed by Internal
Revenue Code §755 and only to the extent that those
adjustments are taken into account in determining Capital Accounts
under Treasury Regulation §1.704-1(b)(2)(iv)(m), and if the
Gross Asset Value of an asset has been determined or adjusted under
paragraph (a), (b), or (d) of Section 3.11, that Gross Asset
Value shall thereafter be adjusted by the Book Adjustments, if any,
taken into account for the asset for purposes of computing Profits
and Losses.

 

 

 

41

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Incapacity”
means with respect to any Person, the bankruptcy, liquidation,
dissolution or termination of such Person.

 

“Indebtedness”
means, without duplication, (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes or
other similar instruments or debt securities, (c) all obligations
under swaps, hedges or similar instruments, (d) all obligations for
the deferred purchase price of any property or services (other than
trade accounts payable and accrued expenses incurred in the
ordinary course of business), (d) all obligations created or
arising under any conditional sale or other title retention
agreement, (f) all obligations secured by a Lien, (g) all
obligations under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, (h) all
obligations in respect of bankers’ acceptances or letters of
credit, (i) all guarantees of any of the foregoing, and (j) all
interest, principal, prepayment penalties, premiums, fees or
expenses due or owing in respect of any item listed in clauses (a)
through (i) above.

 

“Indemnified
Party” has the meaning specified in Section 11.1.

 

“Initial
Public Offering” means any initial underwritten sale of Units
or other Equity Securities (or the common stock or other equity
securities of any Person that holds, directly or indirectly, all of
the equity interests of the Company or the successor to the
Company) pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission on
Form S-1 (or a successor form) under the Securities Act after which
sale of such Units or Equity Securities (or the common stock or
other equity securities of such Person) are (a) listed on a
national securities exchange and (b) registered under the
Securities Exchange Act.

 

“Investor”
means Protair-X Americas, Inc., a Delaware
corporation.

 

“IRC”
or “Internal Revenue Code” means the Internal Revenue
Code of 1986, as amended, and any successor provision.

 

“Law”
means any federal, state and local statute, law (including common
law and the Delaware Act), rule, regulation, code, order,
ordinance, license, writ, injunction, judgment, award (including
awards of any arbitrator) and decree and other legally enforceable
requirement enacted, adopted, issued or promulgated by any
Governmental Authority.

 

“Liquidator”
has the meaning specified in Section 9.2.

 

“Liquidation
Preference” has the meaning specified in Section 2.5.

 

“Losses”
has the meaning specified in Section 3.2.

 

“Majority of
Members” means the Members holding a majority of the Voting
Units then outstanding.

 

“Manager”
means, at any time, a then current member of the Board, who will be
deemed a “manager” (as defined in the Delaware Act),
but will be subject to the rights, obligations and limitations set
forth in this Agreement.

 

“Member”
“means each Person identified as a holder of Units on the
Unit Ownership Ledger as of the date hereof who has executed this
Agreement or a counterpart hereof and each Person who is hereafter
admitted as a Member in accordance with the terms of this Agreement
and the Delaware Act, in each case so long as such Person is shown
on the Unit Ownership Ledger as the owner of one or more Units. The
Members shall constitute the “members” (as that term is
defined in the Delaware Act) of the Company.

 

 

 

42

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Member
Nonrecourse Debt” has the meaning specified in Section 3.3(c).

 

“Member
Nonrecourse Debt Minimum Gain” has the meaning specified in
Section
3.3(d).

 

“Member
Nonrecourse Deductions” has the meaning specified in
Section
3.3(e).

 

“Membership
Interest” means a limited liability company interest in the
Company represented by Units, including the right of the holder
thereof to any and all benefits to which such holder may be
entitled as provided in the Delaware Act, this Agreement or
otherwise, together with the obligations of such holder to comply
with all terms and provisions of this Agreement, the Purchase
Agreement and the Delaware Act.

 

“Nonrecourse
Deductions” has the meaning specified in Section 3.3(f).

 

“Nonrecourse
Liability” has the meaning specified in Section 3.3(g).

 

“Note
Purchase Agreement” means the Amended and Restated Note
Purchase Agreement, dated as of August 6, 2015, is made by and
among, Aemetis Advanced Fuels Keyes, Inc, a Delaware corporation,
Aemetis Facility Keyes, Inc., a Delaware corporation, Aemetis,
Inc., a Nevada corporation, the noteholders parties thereto, and
Third Eye Capital Corporation, an Ontario corporation, as agent for
such noteholders (together with its successors and assigns in such
capacity, the “Noteholders Agent”), as amended,
restated, supplemented or otherwise modified from time to
time.

 

“Noteholders
Agent” has the meaning specified in the definition herein of
“Note Purchase Agreement”.

 

“Original
Operating Agreement” has the meaning specified in Recital B
hereof.

 

“Officers”
means each person designated as an officer of the Company to whom
authority and duties have been delegated by the Board in accordance
with this Agreement.

 

“Partnership
Representative” has the meaning specified in Section 6.5.

 

“Percentage
Interest” means, as of the date of determination (a) with
respect to any Member and particular class or series of Units, that
percentage corresponding with the ratio that such Member’s
relative number of Units within such class or series bears to the
total outstanding number of Units of such class or series held by
all Members and (b) with respect to any Member and all Units, that
percentage corresponding with the ratio that such Member’s
relative Membership Interests represented by its Units bears to the
total Membership Interests of all Members represented by their
outstanding Units (disregarding any distinction in the type of
Units), in each case, as set forth in the Units Ownership
Ledger.

 

“Person”
means any individual or Entity and, where the context so permits,
the legal representatives, successors in interest and permitted
assigns of such Person.

 

“Principal
Members” means the collective reference to (a) Aemetis and
(b) the Investor and its Affiliates.

 

 

 

43

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Proceeding”
has the meaning specified in Section 11.2

 

“Profits”
has the meaning specified in Section 3.2.

 

“Project”
means the construction of biogas collection from dairy waste ponds
and the transport of such biogas in biogas pipelines to ethanol
plants and natural gas interconnections.

 

“Proxy”
means a written authorization signed or an electronic
transmission authorized by a Member or the Member’s
attorney-in-fact giving another Person the power to exercise the
voting rights of that Member. A Proxy may not be transmitted
orally.

 

“Purchase
Agreement” means the Series A Preferred Unit Purchase
Agreement, dated as of the date hereof, among the Company, the
Investor, and Third Eye Capital Corporation, as agent (together
with its successors and assigns in such capacity, the
“Agent”), as the same may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Qualifying
Liquidity Event” means (a) an Initial Public Offering, (b) a
sale, lease, exclusive license or other disposition, in a single
transaction or series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries
on a consolidated basis, or (c) the consummation, whether through a
single transaction or series of related transactions, of a merger
or consolidation of the Company with or into another Entity or any
other reorganization or sale of Units or other Equity Securities,
if Persons who were not Members (or Affiliates of Members)
immediately prior to such merger, consolidation, reorganization or
sale own immediately after such merger, consolidation,
reorganization or sale a majority of the voting power of the
outstanding Securities of the continuing or surviving Entity (or,
if the continuing or surviving Entity is a wholly owned Subsidiary
of a Person, any direct or indirect parent of such continuing or
surviving Entity); provided, however, that a Qualifying Liquidity
Event shall not include (x) a transaction if its sole purpose is to
change the jurisdiction of the Company’s formation, or (y) a
transaction to transfer the Company’s business or assets to
another entity that will be owned in substantially the same
proportions by the Persons who were, directly or indirectly, the
Members immediately before such transaction.

 

“Regulations,”
“Reg,” or “Treasury Reg” means the income
tax regulations promulgated by the United States Department of the
Treasury and published in the Federal Register for the purpose of
interpreting and applying the provisions of the Code, as those
Regulations may be amended from time to time, including
corresponding provisions of applicable successor
regulations.

 

“Reserves”
means the aggregate of reserve accounts that the Board, in the
Board’s sole discretion, deems reasonably necessary to meet
accrued or contingent liabilities of the Company, reasonably
anticipated operating expenses, and working capital
requirements.

 

“Series A
Preferred Unit” means a Unit having the rights and
obligations specified with respect to a Series A Preferred Unit in
this Agreement and the Purchase Agreement.

 

“Series A
Preferred Units Manager” has he meaning specified in
Section
5.2(a)(i).

 

 

 

44

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

“Subsidiary”
means, as to any Person, any corporation or other entity of which:
(a) such Person or a Subsidiary of such Person is a general partner
or, in the case of a limited liability company, the managing member
or manager thereof; (b) at least a majority of the outstanding
equity or ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity
(irrespective of whether or not at the time any equity or ownership
interests of any other class or classes of such corporation or
other entity shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly
owned or controlled by such Person or one or more of its
Subsidiaries; or (c) any corporation or other entity as to which
such Person consolidates for accounting purposes. Unless otherwise
qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.

 

“Substitute
Member” means any Transferee that has been admitted as a
Member of the Company pursuant to Section 8.4(c) by virtue of
such Transferee receiving all or a portion of a Member’s
Units from a Member.

 

“Tax
Item” means each item of income, gain, loss, deduction, or
credit of the Company.

 

“Transfer”
means to, directly or indirectly, sell, transfer, assign, gift,
pledge, encumber, hypothecate, or similarly dispose of, either
voluntarily or involuntarily, by operation of Law or otherwise, or
to enter into any contract, option, or other arrangement or
understanding with respect to the sale, transfer, assignment, gift,
pledge, encumbrance, hypothecation, or similar disposition of, any
Membership Interests owned by a Person or any interest in any
Membership Interests owned by a Person. "Transfer" when used as a
noun, and "Transferred" when used to refer to the past tense, shall
have correlative meanings. "Transferor" and "Transferee" mean a
Person who makes or receives a Transfer, respectively.

 

“Transferable
Interest” means the right, as originally associated with a
Person’s capacity as a Member, to receive distributions from
the Company in accordance with the terms of this Agreement, whether
or not the Person remains a Member or continues to own any part of
the right.

 

“UCC”
has the meaning specified in Section 8.1(b).

 

“Unit”
means a unit representing a fractional part of the Membership
Interest of a Member; provided, that any type, class or series of
Unit shall have the privileges, preference, duties, liabilities,
obligations and rights set forth in this Agreement and the Purchase
Agreement, and the Interests represented by such type, class or
series of Unit shall be determined in accordance with such
privileges, preference, duties, liabilities, obligations and
rights.

 

“Unitholder”
means any owner of one or more Units as reflected on the
Company’s books and records. Any owner who holds one or more
Units but is not also a Member shall not be entitled to exercise
any rights of a Member with respect to such Units, except as
otherwise provided by non-waivable provisions of applicable
Law.

 

“Unit
Ownership Ledger” has the meaning set forth in Section 2.3.

 

“Voting
Unit” means, with respect to a Member, the right to vote or
participate in management and any right to information concerning
the business and affairs of the Company provided under the Delaware
Act, except as limited by the provisions of this Agreement and the
Purchase Agreement. A Member’s Voting Unit shall be directly
proportional to that Member’s Percentage Interest. The Common
Units and Series A Preferred Units are Voting Units.

 

14.2           Construction

 

Whenever the
context requires, (a) the gender of all words used in this
Agreement includes the masculine, feminine, and neuter and (b)
terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this
Agreement, and such words do not refer to the Delaware Act or any
particular section, clause or provision of this Agreement. All
references to a Person include such Person’s successors and
permitted assigns. All references to Articles and Sections refer to
articles and sections of this Agreement, and all references to
Exhibits are to exhibits attached hereto, each of which is made a
part hereof for all purposes. The use herein of the word
“include” or “including,” when following
any general statement, term or matter, will not be construed to
limit such statement, term or matter to the specific items or
matters set forth following such word or to similar items or
matters, whether or not non-limiting language (such as
“without limitation” or “but not limited
to” or words of similar import) is used with reference
thereto, but rather will be deemed to refer to all other items or
matters that fall within the broadest possible scope of such
general statement, term or matter. The term “or” is not
exclusive. The definitions set forth or referred to in Section 14.1 will apply equally
to both the singular and plural forms of the terms defined and
derivative forms of defined terms will have correlative meanings.
Where any provision in this Agreement refers to action to be taken
by any Person, or which such Person is prohibited from taking, such
provision will be applicable whether such action is taken directly
or indirectly by such Person, including actions taken by or on
behalf of any Affiliate of such Person. All accounting terms used
herein and not otherwise defined herein will have the meanings
accorded them in accordance with GAAP and, except as expressly
provided herein, all accounting determinations will be made in
accordance with GAAP. The parties acknowledge that this Agreement
has been negotiated by such parties with the benefit of counsel
and, accordingly, any principle of Law that provides that any
ambiguity in a contract or agreement shall be construed against the
party that drafted such contract or agreement shall be disregarded
and is expressly waived by all of the parties hereto.

 

 

 

[Signature
Pages Follow]

 

 

45

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

IN
WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement, effective as of the Effective
Date.

 

 

	
 

	

 

	
 

	
 

	

 AEMETIS,
INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/
Eric
A. McAfee

	
 

	
 

	
Name:

	
Eric
A. McAfee

	
 

	
 

	
Title:

	
CEO

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

Signature
Page

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

 

 

	
 

	

 

	
 

	
 

	

PROTAIR-X AMERICAS,
INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/
Dev
Bhangui 

	
 

	
 

	
Name:

	
Dev
Bhangui 

	
 

	
 

	
Title:

	
President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

Signature
Page 

Aemetis Biogas LLC Limited Liability Company
Agreement 

  

                             

 

Aemetis Biogas LLC

Amended and Restated Limited Liability Company
Agreement

 

 

	
 

	

 

	
 

	
 

	

AEMETIS
BIOGAS LLC

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/
Eric
A. McAfee

	
 

	
 

	
Name:

	
Eric
A. McAfee

	
 

	
 

	
Title:

	
PresidentBlueprint

 

Exhibit 10.3

 

 

SECURITY AGREEMENT

 

BY

 

AEMETIS BIOGAS LLC,

 

as
Grantor

 

IN FAVOR OF

 

THIRD EYE CAPITAL CORPORATION,

 

as
agent

 

DATED AS OF DECEMBER 20, 2018

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	

1

	

DEFINITIONS

	

1

	

1.1

	

Reference to Security Agreement

	

1

	

1.2

	

Principles of Construction

	

1

	

1.3

	

Definitions

	

1

	

2

	

GRANT OF SECURITY INTEREST

	

5

	

2.1

	

Security Interest

	

5

	

2.2

	

Grantor Remains Liable

	

6

	

2.3

	

Authorization to File Financing Statements

	

6

	

2.4

	

Limitation

	

6

	

3

	

REPRESENTATIONS AND WARRANTIES

	

6

	

3.1

	

Purchase Agreement

	

6

	

3.2

	

Title; Authorization; Enforceability; Perfection

	

6

	

3.3

	

Conflicting Legal Requirements and Contracts

	

6

	

3.4

	

Governmental Authority

	

6

	

3.5

	

Grantor Information

	

6

	

3.6

	

Property Locations

	

6

	

3.7

	

Litigation

	

6

	

3.8

	

No Financing Statements or Control Agreements

	

6

	

3.9

	

Maintenance of Collateral

	

6

	

3.10

	

Collateral

	

7

	

3.11

	

Deposit, Commodity, and Securities Accounts

	

7

	

3.12

	

Receivables

	

7

	

3.13

	

Letter of Credit Rights

	

7

	

3.14

	

Instruments; Chattel Paper; Collateral Notes; and Collateral Note
Security

	

7

	

3.15

	

Investment Related Property

	

7

	

3.16

	

Intellectual Property

	

7

	

4

	

COVENANTS

	

8

	

4.1

	

Transaction Documents

	

8

	

4.2

	

General

	

8

	

4.3

	

Receivables

	

9

	

4.4

	

Equipment

	

9

	

4.5

	

Accounts

	

9

	

4.6

	

Intellectual Property

	

9

	

4.7

	

Collateral Notes and Collateral Note Security

	

10

	

4.8

	

Instruments; Chattel Paper; and Documents

	

10

	

4.9

	

Deposit, Commodity, and Securities Accounts

	

10

	

4.10

	

Commercial Tort Claims

	

10

	

4.11

	

Letters-of-Credit Rights

	

10

 

 

 

 

	

4.12

	

Fixtures

	

10

	

4.13

	

Federal, State or Municipal Claims

	

10

	

4.14

	

Collateral Access Agreements

	

10

	

4.15

	

Use and Operation of Collateral

	

10

	

4.16

	

Certain Proceeds

	

10

	

4.17

	

Further Assurances

	

11

	

5

	

REMEDIES UPON TRIGGER EVENT

	

11

	

5.1

	

Remedies

	

11

	

5.2

	

Grantor’s Obligations Upon Trigger Event

	

11

	

5.3

	

Condition of Collateral; Warranties

	

11

	

5.4

	

Collection of Receivables

	

11

	

5.5

	

Cash Collateral Account

	

12

	

5.6

	

Intellectual Property

	

12

	

5.7

	

Record Ownership of Securities

	

12

	

5.8

	

Investment Related Property

	

12

	

5.9

	

Sales on Credit

	

12

	

5.10

	

Application of Proceeds

	

12

	

5.11

	

Power of Attorney

	

12

	

6

	

GENERAL PROVISIONS

	

12

	

6.1

	

Recovered Payments

	

12

	

6.2

	

No Waiver

	

13

	

6.3

	

Agent Performance of Grantor’s Obligations; Authority of
Agent

	

13

	

6.4

	

Waivers

	

13

	

6.5

	

Benefit of Agreement

	

13

	

6.6

	

Survival

	

13

	

6.7

	

Notices

	

13

	

6.8

	

Taxes and Expenses

	

13

	

6.9

	

Headings

	

13

	

6.10

	

Counterparts

	

13

	

6.11

	

Termination

	

13

	

6.12

	

GOVERNING LAW/VENUE

	

13

	

6.13

	

Indemnity

	

14

	

6.14

	

WAIVER OF JURY TRIAL

	

14

	

6.15

	

FINAL AGREEMENT

	

14

 

SCHEDULES

 

Schedule 3.5

Grantor
Information

Schedule 3.6

Property
Locations

Schedule 3.10

Collateral

Schedule 3.16

Intellectual
Property

 

 

 

 

SECURITY AGREEMENT

 

THIS
SECURITY AGREEMENT (as it
may be amended, restated, supplemented, or otherwise modified from
time to time, this “Security
Agreement”) is entered into as of December 20, 2018,
between Aemetis Biogas LLC,
a Delaware limited liability company (“Grantor”), and
Third Eye Capital
Corporation, as agent (in such capacity, together with its
successors and assigns, “Agent”) for
the Secured Parties (as defined below).

 

RECITALS

 

WHEREAS, Grantor, Agent and Protair-X
Americas, Inc., a Delaware corporation (“Purchaser”),
have entered into a Series A Preferred Unit Purchase Agreement,
dated as of the date hereof (as it may be amended, restated,
supplemented, or otherwise modified from time to time, the
“Purchase
Agreement”).

 

WHEREAS, the execution and delivery of
this Security Agreement is required by the Purchase
Agreement.

 

NOW, THEREFORE, in consideration of the
premises and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

1. DEFINITIONS.

 

1.1 Reference to Security
Agreement.
Unless otherwise specified, all references herein to Sections,
Recitals, and Schedules refer to Sections of, and Recitals and
Schedules to, this Security Agreement. All Schedules include
amendments and supplements thereto from time to time.

 

1.2 Principles
of Construction. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender,
masculine, feminine or neutral, as the context indicates is
appropriate. Whenever the words “include,” “includes” or “including” are used in this Security Agreement, they
shall be deemed to be followed by the words
“without
limitation”. Any
definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth in the
Transaction Documents). Furthermore, any reference to any law shall
include all statutory and regulatory provisions consolidating,
amending, replacing, or interpreting such law and any reference to
any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified, or supplemented from
time to time. The words “asset” and
“property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and
contract rights. The words “hereof,”
“herein”, “hereto” and
“hereunder” and words of similar import when used in
this Security Agreement shall refer to this Security Agreement as a
whole and not to any particular provision of this Security
Agreement, and Section and Schedule references are to this Security
Agreement unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and
plural forms of such terms. Where the context requires, terms
relating to the Collateral or any part thereof shall refer to
Grantor’s Collateral or the relevant part
thereof.

 

1.3 Definitions.
Unless otherwise defined herein, or the context hereof otherwise
requires, each term defined in either the Purchase Agreement or the
UCC is used in this Security Agreement with the same
meaning; provided
that, if the definition given
to such term in the Purchase Agreement conflicts with the
definition given to such term in the UCC, the Purchase Agreement
definition shall control to the extent legally allowable; and if
any definition given to such term in Article 9
of the UCC conflicts with the
definition given to such term in any other chapter of the UCC,
the Article 9
definition shall prevail. As used
herein, the following terms have the meanings
indicated:

 

“Account” means
any “account,”
as such term is defined in Section 9-102(a)(2) of the
UCC.

 

“Account
Debtor” means any Person who is obligated on a
Receivable.

 

“Agent” has the
meaning set forth in the preamble of this Security
Agreement.

 

“Cash Collateral
Account” has the meaning set forth in Section 5.5.

 

“Chattel Paper”
means any “chattel
paper”, as such term is defined in Section 9-102(a)(11) of the UCC,
including all Electronic Chattel Paper and Tangible Chattel
Paper.

 

“Collateral”
has the meaning set forth in Section 2.1.

 

“Collateral Access
Agreement” means any landlord waiver or other
agreement, in form and substance satisfactory to Agent, between
Agent and any third party (including any bailee, consignee, customs
broker, or other similar Person) in possession of any Collateral or
any landlord of any real property where any Collateral is located,
as such landlord waiver or other agreement may be amended,
restated, supplemented or otherwise modified from time to
time.

 

 

1

 

 

“Collateral Note
Security” means all
rights, titles, interests, and Liens Grantor may have, be, or
become entitled to under all present and future loan agreements,
security agreements, pledge agreements, deeds of trust, mortgages,
guarantees, or other documents assuring or securing payment of or
otherwise evidencing the Collateral Notes, including those set
forth on Schedule 3.10.

 

“Collateral
Notes” means all rights, titles, and interests of
Grantor in and to all promissory notes and other Instruments
payable to Grantor, including all inter-company notes from the
Affiliates of Grantor and those set forth on Schedule 3.10.

 

“Collateral
Records” means books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical
specifications, manuals, computer software, computer printouts,
tapes, disks and related data processing software and similar items
that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.

 

“Collateral
Support” means all property (real or personal)
assigned, hypothecated or otherwise securing any Collateral and
shall include any security agreement or other agreement granting a
Lien or security interest in such real or personal
property.

 

“Commercial Tort
Claims” means any “commercial tort claim”, as such
term is defined in Section 9.102(a)(13) of the UCC,
including all commercial tort claims listed on Schedule 3.10.

 

“Commodity
Account” means any “commodity account”, as such term
is defined in Section 9.102(a)(14) of the UCC,
and all sub-accounts thereof.

 

“Contractual
Obligations” means, as to any Person, any provision of
any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party
or by which it or any of its property is bound.

 

“Control” has
the meaning set forth in Sections 7-106, 8-106, 9-104, 9-105, 9-106, or 9-107 of the UCC, as
applicable.

 

“Copyright
Licenses” means any and all agreements providing for
the granting of any right in or to Copyrights (whether a Grantor is
licensee or licensor thereunder), including each agreement referred
to on Schedule 3.16.

 

“Copyrights”
means all United States and foreign copyrights (including Community
designs), including copyrights in software and databases, and all
Mask Works (as defined under 17 U.S.C. § 901 of the
U.S. Copyright Act), whether registered or unregistered, and, with
respect to any and all of the foregoing:  (a) all
registrations and applications therefor, including the
registrations and applications referred to on Schedule 3.16;
(b) all extensions and renewals thereof; (c) all rights
corresponding thereto throughout the world; (d) all rights to
sue for past, present and future infringements thereof; and
(e) all products and Proceeds of the foregoing, including any
income, royalties, and awards and any claim by Grantor against
third parties for past, present, or future infringement of any
Copyright or any Copyright licensed under any Copyright
License.

 

“Default Rate”
means a per annum rate of interest equal to the rate of interest
specified in Section 6.9(c) of the Purchase Agreement plus ten
percent (10%), provided that in no event shall
the Default Rate exceed the maximum rate of interest permitted by
applicable law.

 

“Deposit
Accounts” means any “deposit account”, as such term is
defined in Section 9-102(a)(29) of the UCC,
including those deposit accounts identified on Schedule 3.10, and
any account which is a replacement or substitute for any of such
accounts, together with all monies, Instruments, certificates,
checks, drafts, wire transfer receipts, and other property
deposited therein and all balances therein.

 

“Document”
means any “document”, as such term is
defined in Section 9-102(a)(30) of the
UCC.

 

“Electronic Chattel
Paper” means any “electronic chattel paper”, as
such term is defined in Section 9-102(a)(31) of the
UCC.

 

“Equipment”
means: (a) any “equipment”, as such term is
defined in Section 9-102(a)(33) of the UCC;
(b) all machinery, equipment, furnishings, Fixtures, and Vehicles;
and (c) any and all additions, substitutions, and replacements of
any of the foregoing, wherever located, together with all
attachments, components, parts, equipment, and accessories
installed thereon or affixed thereto (in each case, regardless of
whether characterized as equipment under the UCC).

 

“Equity
Interests” means (a) shares of capital stock,
partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity
interest, and (b) all rights to receive dividends and
distributions, all voting rights, all management rights, and all
economic right relating to any of the foregoing.

 

“Farm Products”
means any “farm products”, as such term is defined in
Section 9-102(a)(34) of the
UCC.

 

 

2

 

 

“Fixtures”
means any “fixtures”, as such term is
defined in Section 9-102(a)(41) of the
UCC.

 

“General
Intangibles” means: (a) any “general intangibles”, as such
term is defined in Section 9-102(a)(42) of the UCC;
and (b) all interest rate or currency protection or hedging
arrangements, computer software, computer programs, all tax refunds
and tax refund claims, all licenses, permits, concessions and
authorizations, all contract rights, all joint venture interests,
partnership interests, or membership interests that do not
constitute a Security, and all Intellectual Property (in each case,
regardless of whether characterized as general intangibles under
the UCC).

 

“Goods” means:
(a) “goods”, as
that term is defined in Section 9-102(a)(44) of the UCC;
(b) all Inventory; and (c) all Equipment (in each case,
regardless of whether characterized as goods under the
UCC).

 

“Grantor” has
the meaning set forth in the preamble of this Security
Agreement.

 

“Indemnified
Party” has the meaning specified in Section
6.13.

 

“Instrument”
means any “instrument”, as such term is
defined in Section 9-102(a)(47) of the UCC,
including the Collateral Notes.

 

“Intellectual
Property” means, collectively, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, the Trade Secrets, and the
Trade Secret Licenses.

 

“Inventory”
means: (a) any “inventory”, as such term is
defined in Section 9-102(a)(48) of the UCC;
(b) all wrapping, packaging, advertising, and shipping
materials; (c) all goods that have been returned, repossessed,
or stopped in transit; (d) all Documents evidencing any of the
foregoing; and (e) all computer programs embedded in any goods
and all accessions thereto and products thereof (in each case,
regardless of whether characterized as inventory under the
UCC).

 

“Investment Related
Property” means: (a) any “investment property”, as such
term is defined in Section 9-102(a)(49) of the UCC;
and (b) all Pledged Equity Interests (regardless of whether such
interest is classified as investment property under the
UCC).

 

“Letter-of-Credit
Right” means any “letter-of-credit right”, as such
term is defined in Section 9-102(a)(51) of the
UCC.

 

“Money” means
“money” as
defined in Section 1-201(b)(24) of the
UCC.

 

“Obligations”
has the meaning specified in the Purchase Agreement.

 

“Patent
Licenses” means all agreements providing for the
granting of any right in or to Patents (whether a Grantor is
licensee or licensor thereunder), including each agreement referred
to on Schedule
3.16.

 

“Patents” means
all United States and foreign patents and certificates of
invention, or similar industrial property rights, and applications
for any of the foregoing, including: (a) each patent and
patent application referred to on Schedule 3.16;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations
thereof; (c) all rights corresponding thereto throughout the
world; (d) all inventions and improvements described therein;
(e) all rights to sue for past, present and future
infringements thereof; (f) all licenses, claims, damages, and
Proceeds of suit arising therefrom; and (g) all products and
Proceeds of the foregoing, including any income, royalties, and
awards and any claim by Grantor against third parties for past,
present, or future infringement of any Patent or any Patent
licensed under any Patent License.

 

“Permitted
Liens” means:

 

(a)           Liens
for taxes not yet due or that are being contested in good faith by
appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of Grantor in
conformity with GAAP

 

(b)           carriers',
warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than
thirty (30) days or are being contested in good faith by
appropriate proceedings;

 

(c)           pledges
and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance and other social
security laws or regulations; and

 

 

3

 

 

(d)           deposits
to secure the performance of bids, trade contracts (other than
Indebtedness), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in
each case in the ordinary course of business.

 

“Pledged Equity
Interests” means all Equity Interests listed on
Schedule
3.10, together with any other shares, stock certificates,
options or rights of any nature whatsoever in respect of the Equity
Interests of any Person that may be issued or granted to, or held
by, Grantor while this Security Agreement is in
effect.

 

“Proceeds”
means any “proceeds,” as such term is
defined in Section 9-102(a)(65) of the UCC
and, in any event, shall include, but not be limited to,
(a) any and all proceeds of any insurance, indemnity,
warranty, or guaranty payable to a Grantor from time to time with
respect to any of the Collateral, (b) any and all payments (in
any form whatsoever) made or due and payable to a Grantor from time
to time in connection with any requisition, confiscation,
condemnation, seizure, or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any Person acting
under color of Governmental Authority), and (c) any and all
other amounts from time to time paid or payable under or in
connection with any of the Collateral.

 

“Receivables”
means the Accounts, Chattel Paper, Documents, Investment Related
Property, Instruments, or Commercial Tort Claims, and any other
rights or claims to receive Money which are General Intangibles or
which are otherwise included as Collateral, together with all of
the Grantor’s rights, if any, in all Collateral Support and
Supporting Obligations related thereto.

 

“Requirement of
Law” means, as to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, other
legal requirement or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any
of its property is subject.

 

“Secured
Obligations” means:

 

(a)

all
Obligations;

 

(b)

all costs and
expenses, including all attorneys’ fees and legal expenses,
incurred by any of the Secured Parties or their Affiliates to
preserve and maintain the Collateral, collect the obligations
herein described, and enforce this Security Agreement or any rights
under the other Transaction Documents;

 

(c)

the obligation to
reimburse any amount that Agent (in its sole and absolute
discretion) elects to pay or advance on behalf of Grantor following
the occurrence of any Trigger Event;

 

(d)

all amounts owed
under any extension, renewal, or modification of any of the
foregoing; and

 

(e)

any of the
foregoing that arises after the filing of a petition by or against
Grantor under the Bankruptcy Code, even if the obligations due do
not accrue because of the automatic stay under Bankruptcy Code
§ 362 or otherwise;

 

in each
case with respect to clauses (a) through
(e)
above, whether or not (i) such Secured Obligations arise or accrue
before or after the filing by or against Grantor of a petition
under the Bankruptcy Code, or any similar filing by or against
Grantor under the laws of any jurisdiction, or any bankruptcy,
insolvency, receivership or other similar proceeding, (ii) such
Secured Obligations are allowable under Section 502(b)(2) of the
Bankruptcy Code or under any other insolvency proceedings, (iii)
the right of payment in respect of such Secured Obligations is
reduced to judgment, or (iv) such Secured Obligations are
liquidated, unliquidated, similar,
dissimilar, related, unrelated, direct, indirect, fixed,
contingent, primary, secondary, joint, several, or joint and
several, matured, disputed, undisputed, legal, equitable,
secured, or unsecured.

 

“Secured
Parties” means the collective reference to Agent,
Purchaser, each holder of Series A Preferred Units, and the
Indemnified Parties.

 

“Securities
Account” means any “securities account”, as such term
is defined in Section 8-501(a) of the UCC, and
all sub-accounts thereof.

 

“Security” has
the meaning set forth in Section 8-102(a)(15) of the
UCC.

 

“Supporting
Obligations” means all “supporting obligations” as
defined in Section 9-102(a)(78) of the
UCC.

 

“Tangible Chattel
Paper” means any “tangible chattel paper”, as such
term is defined in Section 9-102(a)(79) of the
UCC.

 

“Trademark
Licenses” means any and all agreements providing for
the granting of any right in or to Trademarks (whether a Grantor is
licensee or licensor thereunder), including each agreement referred
to on Schedule 3.16.

 

“Trademarks”
means all United States and foreign trademarks, trade names,
corporate names, company names, business names, fictitious business
names, Internet domain names, service marks, certification marks,
collective marks, logos, other source or business identifiers,
designs and general intangibles of a like nature, all registrations
and applications for any of the foregoing,
including:  (a) the registrations and applications
referred to on Schedule 3.16;
(b) all extensions or renewals of any of the foregoing;
(c) all of the goodwill of the business connected with the use
of and symbolized by the foregoing; (d) the right to sue for
past, present and future infringement or dilution of any of the
foregoing or for any injury to goodwill; and (e) all products
and Proceeds of the foregoing, including any income, royalties, and
awards and any claim by Grantor against third parties for past,
present, or future infringement of any Trademark or any Trademark
licensed under any Trademark License.

 

 

4

 

 

“Trade Secret
Licenses” means any and all agreements providing for
the granting of any right in or to Trade Secrets (whether a Grantor
is licensee or licensor thereunder), including each agreement
referred to on Schedule 3.16.

 

“Trade Secrets”
means all trade secrets and all other confidential or proprietary
information and know-how, whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all
documents and things embodying, incorporating, or referring in any
way to such Trade Secret, including: (a) the right to sue for
past, present and future misappropriation or other violation of any
Trade Secret; and (b) all products and Proceeds of the
foregoing, including any income, royalties, and awards and any
claim by Grantor against third parties for past, present, or future
infringement of any Trade Secrets or any Trade Secrets licensed
under any Trade Secret License.

 

“UCC” means the
Uniform Commercial Code as from time to time in effect in the State
of Delaware.

 

“Vehicles”
means all present and future automobiles, trucks, truck tractors,
trailers, semi-trailers, or other motor vehicles or rolling stock,
now owned or hereafter acquired by a Grantor.

 

2. GRANT
OF SECURITY INTEREST.

 

2.1 Security
Interest. To secure the prompt and complete payment and
performance of the Secured Obligations when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand
or otherwise (including the payment of amounts that would become
due but for the operation of the automatic stay under
Section 362(a)
of the Bankruptcy Code or any similar
provisions of other applicable laws), Grantor hereby grants to
Agent, for the benefit of the Secured Parties, a continuing
security interest in and a lien upon, and hereby assigns to Agent,
for the benefit of the Secured Parties, as security, all personal
property of Grantor, whether now owned or hereafter acquired or
existing, and wherever located (together with all other collateral
security for the Secured Obligations at any time granted to or held
or acquired by Agent, collectively, the “Collateral”),
including:

 

(a) all
Accounts;

 

(b) all
Chattel Paper;

 

(c) all
Commercial Tort Claims;

 

(d) all
Deposit Accounts, Securities Accounts, and Commodity
Accounts;

 

(e) all
Documents;

 

(f) all
Farm Products;

 

(g) all
General Intangibles;

 

(h) all
Goods;

 

(i) all
Instruments;

 

(j) all
Investment Related Property;

 

(k) all
Letter of Credit Rights;

 

(l) all
Money;

 

(m) all
Fixtures;

 

(n) all
Intellectual Property;

 

(o) all
Vehicles;

 

 

5

 

 

(p) to
the extent not otherwise included above, all Collateral Records,
Collateral Support, and Supporting Obligations relating to any of
the foregoing; and

 

(q) to
the extent not otherwise included above, all accessions to,
substitutions for, and all replacements, products, Proceeds of the
foregoing, including Proceeds of and unearned premiums with respect
to insurance policies, and claims against any Person for loss,
damage, or destruction of any Collateral.

 

2.2 Grantor
Remains Liable.
Notwithstanding anything to the contrary contained herein, (a)
Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein to
perform all of its respective duties and obligations thereunder to
the same extent as if this Security Agreement had not been
executed, (b) the exercise by Agent of any of its rights
hereunder shall not release Grantor from any of its duties or
obligations under the contracts and agreements included in the
Collateral, and (c) Agent shall not have any obligation or
liability under any of the contracts and agreements included in the
Collateral by reason of this Security Agreement, nor shall Agent be
obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.

 

2.3 Authorization
to File Financing Statements. Grantor hereby irrevocably authorizes Agent at
any time and from time to time to file in any jurisdiction any
financing statements and amendments thereto that (a) indicate
the Collateral (i) as all assets of Grantor or words of similar
effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9
of the UCC, or (ii) as being of
an equal or lesser scope or with greater detail, and
(b) contain any other information required by
Article 9
of the UCC for the sufficiency or
filing office acceptance of any financing statement or amendment,
including (A) whether Grantor is an organization, the type of
organization and any organization identification number issued to
Grantor and (B) in the case of a financing statement filed as
a fixture filing or indicating Collateral as as-extracted
collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Grantor agrees to furnish
any such information to Agent promptly upon
request.

 

2.4 Limitation.
The Obligations secured by this Agreement are limited by Section
6.17(d) of the Purchase Agreement.

 

3. REPRESENTATIONS
AND WARRANTIES. Grantor represents and warrants to Agent on the
date hereof and on the date of each Purchase
that:

 

3.1 Purchase
Agreement.
Certain representations and warranties in the Purchase Agreement
are applicable to Grantor or its assets or operations, and each
such representation and warranty is true and correct.

 

3.2 Title;
Authorization; Enforceability; Perfection. (a) Grantor has good and valid rights in and
title to the Collateral free and clear of all Liens except for
Permitted Liens, and has full power and authority to grant to Agent
the security interest in the Collateral; (b) the execution and
delivery by Grantor of this Security Agreement has been duly
authorized, and this Security Agreement constitutes a legal, valid
and binding obligation of Grantor and creates a security interest
in all now owned and hereafter acquired Collateral; and (c)(i) upon
the filing of all UCC financing statements naming Grantor as
“debtor” and Agent as “secured party”
and describing the Collateral in the filing offices set forth
opposite Grantor’s name on Schedule 3.5
hereof, (ii) upon delivery of all
Instruments, Chattel Paper, certificated Pledged Equity Interests,
and Collateral Notes, (iii) upon sufficient identification of
Commercial Tort Claims, (iv) upon execution of a control agreement
establishing Agent’s Control with respect to any Deposit
Account, Securities Account, or Commodity Account, (v) upon
consent of the issuer or any nominated Person with respect to
Letter of Credit Rights, and (vi) to the extent not subject
to Article 9
of the UCC, upon recordation of the
security interests granted hereunder in Intellectual Property in
the applicable intellectual property registries, including the
United States Patent and Trademark Office and the United States
Copyright Office, the security interests granted to Agent hereunder
constitute valid and perfected first priority Liens (subject in the
case of priority only to (1) Permitted Liens, and (2) the
rights of the United States government (including any agency or
department thereof) with respect to United States government
Receivables).

 

3.3 Conflicting
Legal Requirements and Contracts.
Neither the execution and delivery by Grantor of this Security
Agreement, the creation and perfection of the security interest in
the Collateral granted hereunder, nor compliance with the terms and
provisions hereof will (a) violate (i) any Requirement of Law
binding on Grantor or its property, (ii) any of Grantor’s
organizational documents, or (iii) any Contractual Obligation by
which Grantor, or its property, is bound; or (b) conflict with
or constitute a default under, or result in the creation or
imposition of any Lien pursuant to, the terms of any such
Contractual Obligation (other than any Lien of Agent).

 

3.4 Governmental
Authority.
No authorization, approval, or other action by, and no notice to or
filing with, any Governmental Authority is required either
(a) for the pledge by Grantor of the Collateral pursuant to
this Security Agreement or for the execution, delivery, or
performance of this Security Agreement by Grantor, or (b) for
the exercise by Agent of the voting or other rights provided for in
this Security Agreement or the remedies in respect of the
Collateral pursuant to this Security Agreement (except as may be
required in connection with the disposition of the Pledged Equity
Interests by legal requirements affecting the offering and sale of
securities generally).

 

3.5 Grantor
Information. Grantor’s exact legal name, jurisdiction
of organization, type of entity, state issued organizational
identification number and the location of its principal place of
business, or chief executive office and of the books and records
relating to the Receivables, are disclosed on Schedule 3.5;
Grantor does not have any other places of business except those set
forth on Schedule 3.5.
Except as noted on Schedule 3.5 hereto,
all such books and records are in Grantor’s possession.
Grantor has not done, and does not, do business under any other
name (including any trade-name or fictitious business name) except
for those names set forth on Schedule 3.5.
Except as provided on Schedule 3.5,
Grantor has not changed its name, jurisdiction of organization,
principal place of business, or chief executive office or its
organizational structure in any way (e.g., by merger,
consolidation, change in corporate form or otherwise) since its
formation.

 

3.6 Property
Locations. The Equipment, and Fixtures are located solely
at the locations described on Schedule 3.6
and at the Digesters. All of such
locations are owned by a Grantor except for Digesters and locations
which are leased by a Grantor as lessee and designated in
Part B
of Schedule 3.6.

 

3.7 Litigation.
There is no litigation, investigation, or governmental proceeding
threatened against Grantor or any of its properties which if
adversely determined could reasonably be expected to have a
Material Adverse Effect.

 

3.8 No
Financing Statements or Control Agreements.
Other than the financing statements and control agreements in favor
of Agent with respect to this Security Agreement, there are no
other outstanding financing statements or control agreements
covering any Collateral.

 

3.9 Maintenance
of Collateral. All tangible Collateral which is necessary to
Grantor’s business is in good repair and condition (ordinary
wear and tear excepted), and none of the Collateral is a Fixture
except as specifically referred to herein on Schedule 3.6.

 

 

6

 

 

3.10 Collateral.
Schedule 3.10
accurately lists all Pledged Equity
Interests, Securities Accounts, Commodity Accounts, Deposit
Accounts, Collateral Notes, Collateral Note Security, Commercial
Tort Claims, and all letters of credit, in which Grantor has any
right, title, or interest. All information supplied by Grantor to
Agent with respect to any of the Collateral is true, correct, and
complete in all material respects.

 

3.11 Deposit,
Commodity, and Securities Accounts. Schedule 3.10
correctly identifies all Deposit
Accounts, Commodity Accounts, and Securities Accounts in which a
Grantor has an interest and the institutions holding such accounts.
Grantor is the sole account holder of each such account, and
Grantor has not consented to, and is not otherwise aware of, any
Person (other than Agent) having Control over, or any other
interest in, any such account or the property credited
thereto.

 

3.12 Receivables.

 

(a) Each
Receivable (i) is and will be the legal, valid and binding
obligation of the Account Debtor in respect thereof, representing
an unsatisfied obligation of such Account Debtor, (ii) is and
will be enforceable in accordance with its terms, (iii) is not
and will not be subject to any setoffs, defenses, taxes,
counterclaims (except with respect to refunds, returns and
allowances in the ordinary course of business with respect to
damaged merchandise), and (iv) is and will be in compliance
with all applicable laws, whether federal, state, local or
foreign.

 

(b) None
of the Account Debtors in respect of any Receivable is the
government of the United States, any agency or instrumentality
thereof, any state or municipality or any foreign
sovereign.

 

3.13 Letter
of Credit Rights. All letters of credit to which Grantor has
rights are listed on Schedule 3.10,
and Grantor has obtained the consent of each issuer or the
nominated Person of any letter of credit to the assignment of the
Proceeds of the letter of credit to Agent.

 

3.14 Instruments;
Chattel Paper; Collateral Notes; and Collateral Note
Security. All Instruments and Chattel Paper, including the
Collateral Notes, have been delivered to Agent, together with
corresponding endorsements duly executed by Grantor in favor of
Agent, and such endorsements have been duly and validly executed
and are binding and enforceable against Grantor in accordance with
their terms. Each Collateral Note and the documents evidencing the
Collateral Note Security are in full force and effect; there have
been no renewals or extensions of, or amendments, modifications, or
supplements to, any thereof about which Agent has not been advised
in writing; and no “default” or “potential
default” has occurred and
is continuing under any such Collateral Note or documents
evidencing the Collateral Note Security, except as disclosed
on Schedule 3.10.

 

3.15 Investment
Related Property.

 

(a) Schedule 3.10
sets forth all of the Pledged Equity
Interests owned by Grantor and such Pledged Equity Interests
constitute the percentage of issued and outstanding shares of
stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial interest of the
respective issuers thereof indicated on such
Schedule.

 

(b) Except
as set forth on Schedule 3.10,
Grantor has not acquired any Equity Interests of another Person or
substantially all the assets of another Person since the formation
of Grantor.

 

(c) Grantor
is the record and beneficial owner of the Pledged Equity Interests
owned by it free of all Liens, rights or claims of other persons
other than Permitted Liens, and there are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust
or similar agreements outstanding with respect to, or property that
is convertible into, or that requires the issuance or sale of, any
Pledged Equity Interests.

 

(d) No
consent of any Person, including any member of Grantor, is
necessary or desirable in connection with the creation, perfection
or first priority status of the security interest of Agent in any
Pledged Equity Interests or the exercise by Agent of the voting or
other rights provided for in this Security Agreement or the
exercise of remedies in respect thereof.

 

(e) None
of the Pledged Equity Interests are or represent interests in
issuers that (i) are registered as investment companies or
(ii) are dealt in or traded on securities exchanges or
markets.

 

(f) (i) Grantor
has delivered to Agent all certificates, instruments and documents
representing or evidencing the Pledged Equity Interests,
together
with corresponding assignments
or transfer powers duly executed in blank by Grantor, and such
powers have been duly and validly executed and are binding and
enforceable against Grantor in accordance with their terms and
(ii) to the extent such Pledged Equity Interests are
uncertificated, Grantor has taken all actions necessary or
desirable to establish Agent’s Control over such Pledged
Equity Interests.

 

3.16 Intellectual
Property.

 

(a) All
of the Intellectual Property is subsisting, valid, and enforceable.
The information contained on Schedule 3.16
is true, correct, and complete. All
issued Patents, Patent Licenses, Trademarks, Trademark Licenses,
Copyrights, Copyright Licenses, Trade Secret, and Trade Secret
Licenses of Grantor are identified on Schedule 3.16.

 

 

7

 

 

(b) Grantor
is the sole and exclusive owner of the entire and unencumbered
right, title, and interest in and to the Intellectual Property
purported to be owned by Grantor free and clear of any Liens,
including any pledges, assignments, licenses, user agreements, and
covenants by Grantor not to sue third Persons, other
than Permitted Liens.

 

(c) To
the best of Grantor’s knowledge, no third party is
infringing, or in Grantor’s reasonable business judgment, may
be infringing, any of Grantor’s rights under the Intellectual
Property.

 

(d) Grantor
has performed and will continue to perform all acts and has paid
and will continue to pay all required fees and taxes to maintain
each and every item of the Intellectual Property in full force and
effect throughout the world, as applicable.

 

(e) Each
of the Patents and Trademarks identified on Schedule 3.16
has been properly registered with the
United States Patent and Trademark Office and in corresponding
offices throughout the world (where appropriate) and each of the
Copyrights identified on Schedule 3.16
has been properly registered with the
United States Copyright Office and in corresponding offices
throughout the world (where appropriate).

 

(f) To
the best of Grantor’s knowledge, no claims with respect to
the Intellectual Property have been asserted and are pending
(i) to the effect that the sale, licensing, pledge, or use of
any of the products of Grantor’s business infringes any other
party’s valid copyright, trademark, service mark, trade
secret, or other intellectual property right, (ii) against the
use by Grantor of any Intellectual Property used in Grantor’s
business as currently conducted, or (iii) challenging the
ownership or use by Grantor of any of the Intellectual Property
that Grantor purports to own or use, nor, to Grantor’s
knowledge, is there a valid basis for such a claim described in
this Section 3.16.

 

4. COVENANTS.
From the date of this Security
Agreement, and thereafter until this Security Agreement is
terminated:

 

4.1 Transaction
Documents.
Grantor shall comply with, perform, and be bound by all covenants
and agreements in the Transaction Documents that are applicable to
it, its assets, or its operations.

 

4.2 General.

 

(a) Inspection.
Grantor will permit Agent, by its representatives and agents
(i) to inspect the Collateral, (ii) to examine and make copies
of the records of Grantor relating to the Collateral, and (iii) to
discuss the Collateral and the related records of Grantor with, and
to be advised as to the same by, Grantor’s officers,
employees, and accountants (and, in the case of any Receivable,
with any Account Debtor), all at such reasonable times and
intervals as Agent may determine, and all at Grantor’s
expense.

 

(b) Records
and Reports; Notification of Potential Trigger Event or Trigger
Event. Grantor will maintain
true, complete, and accurate books and records with respect to the
Collateral, and furnish to Agent such reports relating to the
Collateral at such intervals as Agent shall from time to time
request. Grantor will give prompt notice in writing to Agent of the
occurrence of any Trigger Event or Potential Trigger Event and of
any other development, financial or otherwise, which might
materially and adversely affect the Collateral. Grantor shall mark
its books and records to reflect the security interest of Agent
under this Security Agreement.

 

(c) Schedules.
Grantor shall immediately update any Schedules hereto if any
information therein shall become inaccurate or incomplete. The
failure of property descriptions to be accurate or complete on any
Schedule shall not impair Agent’s security interest in such
property.

 

(d) Financing
Statements and Other Actions; Defense of Title. Grantor will deliver to Agent all financing
statements and execute and deliver control agreements and other
documents and take such other actions as may from time to time be
requested by Agent in order to maintain a first priority perfected
security interest in and, in the case of Investment Related
Property, Deposit Accounts, Letter-of-Credit-Rights, and Electronic
Chattel Paper, Control of, the Collateral. Grantor will take any
and all actions necessary to defend title to the Collateral against
all Persons and to defend the security interest of Agent in the
Collateral and the priority thereof against any Lien not expressly
permitted hereunder.

 

(e) Disposition of
Collateral. Grantor will not
sell, lease, license or otherwise dispose of the Collateral except
(i) prior to the occurrence of a Trigger Event, dispositions
specifically permitted pursuant to the Purchase Agreement, (ii)
until such time following the occurrence of a Trigger Event, as
Grantor receives a notice from Agent instructing Grantor to cease
such transactions, sales or leases of Inventory in the ordinary
course of business, and (iii) until such time as Grantor receives a
notice from Agent pursuant to Section 5.4,
Proceeds of Inventory and Accounts collected in the ordinary course
of business.

 

(f) Liens. Grantor will not create, incur, or suffer to
exist any Lien on the Collateral except (i) the security
interest created by this Security Agreement, and (ii) Permitted
Liens.

 

(g) Change
in Location, Jurisdiction of Organization or
Name. Grantor will not (i)
store, place or hold any Inventory, Equipment, Fixtures, or
Proceeds or products thereof (other than Inventory and Proceeds
thereof disposed of as permitted by Section
4.2(e))
at a location other than a Digester or a location specified
on Schedule
3.6, (ii) maintain records
relating to the Receivables at a location other than at the
location specified on Schedule
3.10, (iii) maintain a place of
business at a location other than a location specified on
Schedule
3.6, (iv) change its name
or taxpayer identification number, (v) change its mailing address,
or (vi) change its jurisdiction of organization, unless Grantor
shall have given Agent not less than thirty (30) days’ prior
written notice thereof, and Agent shall have determined that such
change will not adversely affect the validity, perfection or
priority of Agent’s security interest in the Collateral.
Prior to making any of the foregoing changes, Grantor shall execute
and deliver all such additional documents and perform all
additional acts as Agent, in its sole discretion, may request in
order to continue or maintain the existence and priority of its
security interest in all of the Collateral.

 

(h) Taxes
and Other Obligations. Grantor
will pay and discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as
all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of Grantor and such
proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any
interest therein.

 

 

8

 

 

(i) Compliance
with Agreements. Grantor shall
comply with all Contractual Obligations binding on it or affecting
its properties or business.

 

(j) Compliance
with Legal Requirements.
Grantor shall comply with all applicable Requirements of
Law.

 

(k) Other
Financing Statements. Grantor
will not authorize any other financing statement naming it as
debtor covering all or any portion of the Collateral, except with
respect to Liens permitted by Section 4.2(f).

 

4.3 Receivables.

 

(a) Certain
Agreements on Receivables.
Other than in the ordinary course of business consistent with its
past practice, Grantor will not (i) grant any extension of the time
of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any
manner that could adversely affect the value
thereof.

 

(b) Collection
of Receivables. Except as
otherwise provided in this Security Agreement, Grantor will, at
Grantor’s sole expense, collect all amounts due or hereafter
due to Grantor under the Receivables and enforce Grantor’s
rights under all Collateral Support or Supporting Obligation with
respect to the Receivables.

 

4.4 Equipment.

 

(a) Maintenance
of Equipment. Grantor will do
all things necessary to maintain, preserve, protect and keep the
Equipment in good repair and working and saleable condition
(ordinary wear and tear excepted).

 

(b) Insurance.
Grantor will (i) maintain fire and extended coverage insurance
on the Inventory and Equipment containing a lender’s loss
payable clause in favor of Agent, and providing that said
insurance will not be terminated except after at least
thirty (30) days’ written notice from the insurance
company to Agent, (ii) maintain such other insurance on the
Collateral for the benefit of Agent as Agent shall from time to
time request, (iii) furnish to Agent upon the request of Agent
from time to time the originals of all policies of insurance on the
Collateral and certificates with respect to such insurance, and
(iv) maintain general liability insurance naming Agent as an
additional insured.

 

(c) Certificates
of Title. With respect to any
item of Equipment which is covered by a certificate of title and
indication of a security interest on such certificate is required
as a condition of perfection, upon the request of Agent, the
Grantor shall cause Agent’s security interest to be properly
indicated thereon.

 

4.5 Accounts.
Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably
considers advisable, and Grantor shall furnish all such assistance
and information as Agent may require in connection with such test
verifications. At any time and from time to time, upon the
Agent’s request and at the expense of Grantor, Grantor shall
cause independent public accountants or others satisfactory to
Agent to furnish to Agent reports showing reconciliations, aging
and test verifications of, and trial balances for, the
Receivables.

 

4.6 Intellectual
Property.

 

(a) Prosecution
of Applications. Grantor shall
prosecute diligently all applications in respect of Intellectual
Property, now or hereafter pending.

 

(b) Federal
Applications. Except to the
extent not required in Grantor’s reasonable business
judgment, Grantor shall make federal applications on all of its
unpatented but patentable inventions and all of its registrable but
unregistered Copyrights and Trademarks.

 

(c) Maintenance
of Rights. Grantor shall
preserve and maintain all of its material rights in the
Intellectual Property and protect its Intellectual Property from
infringement, unfair competition, cancellation, or dilution by all
appropriate action necessary in Grantor’s reasonable business
judgment, including the commencement and prosecution of legal
proceedings to recover damages for infringement and to defend and
preserve its rights in the Intellectual
Property.

 

(d) No
Abandonment. Grantor shall not
abandon any of the Intellectual Property necessary to the conduct
of its business in the exercise of Grantor’s reasonable
business judgment.

 

(e) Licenses.
(i) Grantor shall not sell or assign any of its interest in any of
the Intellectual Property without the prior written consent of
Agent; (ii) Grantor shall not grant any license or sublicense with
respect to any of its Intellectual Property without the prior
written consent of Agent; and (iii) Grantor shall maintain the
quality of any and all products and services with respect to which
the Intellectual Property is used.

 

(f) No
Conflicting Agreements. Grantor
shall not enter into any agreement, including any licensing
agreement, that is or may be inconsistent with Grantor’s
obligations under this Security Agreement or any of the other
Transaction Documents.

 

 

9

 

 

(g) Additional
Intellectual Property. Grantor
shall give Agent prompt written notice if Grantor shall obtain
rights to or become entitled to the benefit of any Intellectual
Property not identified on Schedule 3.16.
Grantor shall execute and deliver any and all Patent Security
Agreements, Copyright Security Agreements, or Trademark Security
Agreements, each in form and substance satisfactory to Agent, as
Agent may request to evidence Agent’s Lien on such
Intellectual Property.

 

(h) Obligation
upon Trigger Event. On and
after the occurrence of a Trigger Event, Grantor shall use its
reasonable efforts to obtain any consents, waivers, or agreements
necessary to enable Agent to exercise its rights and remedies with
respect to the Intellectual Property.

 

4.7 Collateral
Notes and Collateral Note Security.
Without the prior written consent of Agent, Grantor shall not (a)
modify or substitute, or permit the modification, or substitution
of, any Collateral Note or any document evidencing the Collateral
Note Security or (b) release any Collateral Note Security unless
specifically required by the terms thereof.

 

4.8 Instruments;
Chattel Paper; and Documents.
Grantor will (a) deliver to Agent immediately upon execution
of this Security Agreement the originals of all Chattel Paper and
Instruments (if any then exists), (b) hold in trust for Agent
upon receipt and immediately thereafter deliver to Agent any
Chattel Paper and Instruments constituting Collateral,
(c) mark conspicuously all Chattel Paper and Instruments
(other than any delivered to Agent) with an appropriate reference
to the security interest of Agent, and (d) upon Agent’s
request, deliver to Agent (and thereafter hold in trust for Agent
upon receipt and immediately deliver to Agent) any Document
evidencing or constituting Collateral.

 

4.9 Deposit,
Commodity, and Securities Accounts. With respect to any Deposit Account, Commodity
Account, or Securities Account, Grantor shall (a) maintain
such accounts at the institutions described on Schedule 3.10
or such additional institutions as
have complied with clause (b)
hereof; (b) upon the request of the
Agent, deliver to and obtain from each depository bank and security
intermediary a Control agreement in form and substance satisfactory
to Agent which provides that Agent shall have exclusive Control
over such account; and (c) deliver to Agent all certificates or
Instruments, if any, now or hereafter representing or evidencing
such accounts, accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance reasonably
satisfactory to Agent. If Agent has requested exclusive Control
thereof, Grantor shall not establish or maintain any Deposit
Accounts, Commodity Accounts or Securities Accounts, unless such
accounts are subject to Agent’s exclusive
Control.

 

4.10 Commercial
Tort Claims.
If Grantor at any time holds or acquires a Commercial Tort Claim,
Grantor shall (a) immediately deliver to Agent written
notification of any and all Commercial Tort Claims, including any
and all actions, suits and proceedings before any court or
Governmental Authority by or affecting Grantor; and
(b) execute and deliver such statements, documents and notices
and do and cause to be done all such things as may be required by
Agent, or required by law, including all things which may from time
to time be necessary under the UCC to fully create, preserve,
perfect and protect the priority of Agent’s security interest
in any Commercial Tort Claims.

 

4.11 Letters-of-Credit
Rights.
If Grantor is at any time a beneficiary under a letter of credit
now or hereafter issued in favor of Grantor, Grantor shall promptly
notify Agent thereof in writing and, at Agent’s request,
Grantor shall, pursuant to an agreement in form and substance
satisfactory to Agent, either (a) arrange for the issuer or
any confirmer of such letter of credit to consent to an assignment
to Agent of the Proceeds of any drawing under the letter of credit
or (b) arrange for Agent to become the transferee beneficiary
of the letter of credit, with Agent agreeing, in each case, that
the Proceeds of any drawing under the letter of credit are to be
applied to the Secured Obligations as provided in the Purchase
Agreement.

 

4.12 Fixtures.
With respect to any Collateral that is a Fixture or an accession
which has been attached to real estate or other goods prior to the
perfection of the security interest of Agent, the Grantor shall
furnish Agent, upon reasonable demand, a disclaimer of interest in
each such Fixture or accession and a consent in writing to the
security interest of Agent therein, signed by all Persons having
any interest in such Fixture or accession by virtue of any interest
in the real estate or other goods to which such Fixture or
accession has been attached.

 

4.13 Federal,
State or Municipal Claims.
Grantor will notify Agent of any Collateral which constitutes a
claim against a Governmental Authority, or any instrumentality or
agency thereof, the assignment of which claim is restricted by
federal, state or municipal law.

 

4.14 Collateral
Access Agreements.
Grantor shall obtain a Collateral Access Agreement from the lessor
of each leased property, mortgagee of owned property or bailee or
consignee with respect to any warehouse, processor or facility or
other location where Collateral is stored or located, which
Collateral Access Agreement shall provide access rights, contain a
waiver or subordination of all Liens or claims that the landlord,
mortgagee, bailee or consignee may assert against the Collateral at
that location, and shall otherwise be reasonably satisfactory in
form and substance to Agent.

 

4.15 Use
and Operation of Collateral.
Grantor agrees to promptly reimburse and pay to Agent, at
Agent’s request, the amount of all expenses (including the
cost of any insurance and payment of taxes or other charges)
incurred by Agent in connection with its custody and preservation
of the Collateral, and all such expenses, costs, taxes, and other
charges shall bear interest at the Default Rate until repaid and,
together with such interest, shall be payable by Grantor to Agent
upon demand and shall become part of the Secured Obligations. All
risk of loss or damage to, or diminution in value of, the
Collateral is on Grantor, and Agent shall have no liability
whatever for failure to obtain or maintain insurance, nor to
determine whether any insurance ever in force is adequate as to
amount or as to the risks insured. With respect to the Collateral
that is in the possession of Agent, Agent shall have no duty to
preserve rights against prior parties to such Collateral and shall
never be liable for any failure to use diligence to collect any
amount payable in respect of such Collateral, but shall be liable
only to account to Grantor for what it may actually collect or
receive thereon. The provisions of this Section are applicable
whether or not a Trigger Event has occurred.

 

4.16 Certain
Proceeds.
Notwithstanding any contrary provision herein, if a Trigger Event
shall occur, any and all Proceeds of any Collateral consisting of
cash, checks and other non-cash items shall be part of the
Collateral hereunder, and shall, if received by Grantor, be held in
trust for the benefit of Agent, and shall forthwith be delivered to
Agent (accompanied by any necessary endorsements) to be held
pursuant to this Security Agreement. Any cash Proceeds of the
Collateral which come into the possession of Agent on and after the
occurrence of a Trigger Event (including insurance Proceeds) may,
at Agent’s option, be applied in whole or in part to the
Secured Obligations (to the extent then due), be released in whole
or in part to or on the written instructions of Grantor for any
general or specific purpose, or be retained in whole or in part by
Agent as additional Collateral. The provisions of this Section are
applicable whether or not a Trigger Event has
occurred.

 

 

10

 

 

4.17 Further
Assurances.
At any time and from time to time, upon the request of Agent, and
at the sole expense of Grantor, Grantor shall promptly execute and
deliver all such further instruments, agreements and documents and
take such further actions as Agent may deem necessary or desirable
(a) to assure Agent that its security interests hereunder are
perfected first priority security interests, and (b) to carry out
the provisions and purposes of this Security Agreement, including
(i) the filing of such financing statements as Agent may require,
(ii) executing control agreements with respect to the Collateral,
in each case naming Agent, as secured party, in form and substance
satisfactory to Agent, (iii) furnishing to Agent from time to time
statements and schedules further identifying and describing
the Collateral and such other reports in connection with the
Collateral as Agent may reasonably request, all in reasonable
detail, (iv) the deposit of all certificates of title issuable with
respect to any of the Collateral and noting thereon Agent’s
security interest hereunder, and (v) taking all other actions
required by applicable Requirements of Law. Grantor shall use its
best efforts to obtain any required consents from any Person other
than Grantor and its Affiliates with respect to any permit or
license or any Contractual Obligation with such Person entered into
by Grantor that requires such consent as a condition to the
creation by Grantor of a Lien on any right, title or interest in
such permit, license or Contractual Obligation related thereto. A
carbon, photographic, or other reproduction of this Security
Agreement or of any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement and
may be filed as a financing statement.

 

5. REMEDIES
UPON TRIGGER EVENT

 

5.1 Remedies.
On and after the occurrence of a Trigger Event, Agent may exercise
any or all of the following rights and remedies:

 

(a) Contractual
Remedies. Those rights and
remedies provided in this Security Agreement, the Purchase
Agreement, or any other Transaction Document, provided that this Section
5.1(a) shall not limit any
rights or remedies available to Agent prior to the occurrence of a
Trigger Event.

 

(b) Legal
Remedies. If a Trigger Event
shall occur, Agent, on behalf of the Secured Parties, may exercise,
in addition to all other rights and remedies granted to them in
this Security Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the UCC or any other
applicable law.

 

(c) Disposition
of Collateral. Without notice
except as specifically provided in Section 5.2(c)
or elsewhere herein, sell, lease,
assign, grant an option or options to purchase or otherwise dispose
of the Collateral or any part thereof in one or more parcels at
public or private sale, for cash, on credit or for future delivery,
and upon such other terms as Agent may deem commercially
reasonable. Neither Agent’s compliance with any applicable
state or federal law in the conduct of such sale, nor its
disclaimer of any warranties relating to the Collateral, shall be
considered to affect the commercial reasonableness of such sale.
Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or
may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.

 

(d) Distributions.
On and after the occurrence of a Trigger Event, all payments and
distributions made to Grantor upon or with respect to the
Collateral shall be paid or delivered to Agent, and Grantor agrees
to take all such action as Agent may deem necessary or appropriate
to cause all such payments and distributions to be made to Agent.
Agent shall have the right, at any time after the occurrence of any
Trigger Event, to notify and direct any issuer to thereafter make
all payments, dividends, and any other distributions payable in
respect thereof directly to Agent. Such issuer shall be fully
protected in relying on the written statement of Agent that it then
holds a security interest which entitles it to receive such
payments and distributions. Any and all Money and other property
paid over to or received by Agent hereunder shall be retained by
Agent as additional collateral hereunder and may be applied in
accordance with Section 5.10
hereof.

 

(e) Use
of Premises. Agent shall be
entitled to occupy and use any premises owned or leased by Grantor
where any of the Collateral or any records relating to the
Collateral are located until the Secured Obligations are paid or
the Collateral is removed therefrom, whichever first occurs,
without any obligation to pay Grantor for such use and
occupancy.

 

5.2 Grantor’s
Obligations Upon Trigger Event.
Upon the request of Agent on and after the occurrence of a Trigger
Event, Grantor will:

 

(a) Assembly
of Collateral. Assemble and
make available to Agent the Collateral and all records relating
thereto at any place or places specified by
Agent.

 

(b) Agent
Access. Permit Agent, and
Agent’s representatives and agents, to enter any premises
where all or any part of the Collateral, or the books and records
relating thereto, or both, are located, to take possession of all
or any part of the Collateral and to remove all or any part of the
Collateral.

 

(c) Notice of Disposition of
Collateral. Grantor hereby
waives notice of the time and place of any public sale or the time
after which any private sale or other disposition of all or any
part of the Collateral may be made. To the extent such notice may
not be waived under applicable law, any notice made shall be deemed
reasonable if sent to Grantor, addressed as set forth in
Section 6.7,
at least ten (10) days prior to (i) the date of any such
public sale or (ii) the time after which any such private sale
or other disposition may be made. Agent shall not be obligated to
make any sale or other disposition of the Collateral regardless of
notice having been given. Subject to the provisions of applicable
law, Agent may postpone or cause the postponement of the sale of
all or any portion of the Collateral by announcement at the time
and place of such sale, and such sale may, without further notice,
to the extent permitted by law, be made at the time and place to
which the sale was postponed, or Agent may further postpone such
sale by announcement made at such time and
place.

 

5.3 Condition
of Collateral; Warranties.
Agent has no obligation to clean-up or otherwise prepare the
Collateral for sale. Agent may sell the Collateral without giving
any warranties as to the Collateral. Agent may disclaim any
warranties of title or the like. This procedure will not be
considered adversely to affect the commercial reasonableness of any
sale of the Collateral.

 

5.4 Collection of
Receivables. On and after the occurrence of a Trigger Event,
Agent may at any time in its sole discretion, by giving Grantor
written notice, elect to require that the Receivables be paid
directly to Agent. In such event, Grantor shall, and shall permit
Agent to, promptly notify the Account Debtors under the Receivables
of Agent’s interest therein and direct such Account Debtors
to make payment of all amounts then or thereafter due under the
Receivables directly to Agent. Upon receipt of any such notice from
Agent, Grantor shall thereafter hold in trust for Agent, all
amounts and Proceeds received by it with respect to the Receivables
and immediately and at all times thereafter deliver to Agent all
such amounts and Proceeds in the same form as so received, whether
by cash, check, draft or otherwise, with any necessary
endorsements. Agent shall hold and apply funds so received as
provided by the terms of Section 5.10.
If after the occurrence of a Trigger Event, any Account Debtor
fails or refuses to make payment on any Collateral when due, Agent
is authorized, in its sole discretion, either in its own name or in
the name of Grantor, to take such action as Agent shall deem
appropriate for the collection of any amounts owed with respect to
Collateral or upon which a delinquency exists. Grantor agrees that
Agent may at any time and from time to time, if a Trigger Event has
occurred, compromise with the obligor on any Receivable, accept in
full payment of any Receivable such amount as Agent in its sole
discretion shall determine or abandon any Receivable, and any such
action by Agent shall be commercially reasonable. Regardless of any
other provision hereof, however, Agent shall never be liable for
its failure to collect, or for its failure to exercise diligence in
the collection of, any amounts owed with respect to Collateral, nor
shall it be under any duty whatsoever to anyone except Grantor to
account for funds that it shall actually receive
hereunder.

 

 

11

 

 

5.5 Cash Collateral
Account. On and after the occurrence of a Trigger Event,
Agent shall have, and Grantor hereby grants to Agent, the right and
authority to transfer all funds on deposit in the Deposit Accounts
to a “Cash
Collateral Account”
(herein so called) maintained with a depository institution
designated by Agent and subject to the exclusive direction,
dominion, and Control of Agent, and no disbursements or withdrawals
shall be permitted to be made by Grantor from such Cash Collateral
Account. Such Cash Collateral Account shall be subject to the
security interest in favor of Agent herein created, and Grantor
hereby grants a security interest to Agent in and to, such Cash
Collateral Account and all checks, drafts, and other items ever
received by Grantor for deposit therein. If a Trigger Event has
occurred, Agent shall have the right, at any time in its discretion
without notice to Grantor, (a) to transfer to or to register in the
name of Agent or nominee any certificates of deposit or deposit
instruments constituting Deposit Accounts and shall have the right
to exchange such certificates or Instruments representing Deposit
Accounts for certificates or Instruments of smaller or larger
denominations and (b) to take and apply against the Secured
Obligations any and all funds then or thereafter on deposit in the
Cash Collateral Account or otherwise constituting Deposit
Accounts.

 

5.6 Intellectual
Property.
For purposes of enabling Agent to exercise its rights and remedies
under this Security Agreement and enabling Agent and its successors
and assigns to enjoy the full benefits of the Collateral, Grantor
hereby grants to Agent an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to
Grantor) to use, license, or sublicense any of the Intellectual
Property. Grantor shall provide Agent with reasonable access to all
media in which any of the Intellectual Property may be recorded or
stored and all computer programs used for the completion or
printout thereof. This license shall also inure to the benefit of
all successors, assigns, and transferees of Agent. If no Trigger
Event has occurred, Grantor shall have the exclusive,
non-transferable right and license to use the Intellectual Property
in the ordinary course of business and the exclusive right to grant
to other Persons licenses and sublicenses with respect to the
Intellectual Property for full and fair consideration.

 

5.7 Record
Ownership of Securities.
On and after the occurrence of a Trigger Event, Agent at any time
may have any Collateral that is Pledged Equity Interests and that
is in the possession of Agent, or its nominee or nominees,
registered in its name, or in the name of its nominee or nominees,
as Agent; and, as to any Collateral that is Pledged Equity
Interests so registered, Agent shall execute and deliver (or cause
to be executed and delivered) to the Grantor all such proxies,
powers of attorney, dividend coupons or orders, and other documents
as Grantor may reasonably request for the purpose of enabling
Grantor to exercise the voting rights and powers which it is
entitled to exercise under this Security Agreement or to receive
the dividends and other distributions and payments in respect of
such Collateral that is Pledged Equity Interests or Proceeds
thereof which it is authorized to receive and retain under this
Security Agreement.

 

5.8 Investment
Related Property. Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder (collectively,
the “Securities
Act”) and applicable
state securities laws, Agent may be compelled, with respect to any
sale of all or any part of the Investment Related Property
conducted without prior registration or qualification of such
Investment Related Property under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for
their own account, for investment and not with a view to the
distribution or resale thereof. Grantor acknowledges that any such
private sale may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such
circumstances, Grantor agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and
that Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Investment Related Property
for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even
if such issuer would, or should, agree to so register it. If Agent
determines to exercise its right to sell any or all of the
Investment Related Property, upon written request, Grantor shall
and shall cause each issuer of any Pledged Equity Interests to from
time to time to furnish to Agent all such information as Agent may
request in order to determine the number and nature of interest,
and shares included in the Investment Related Property which may be
sold by Agent in exempt transactions under the Securities Act and
the rules and regulations of the Securities and Exchange Commission
thereunder. In case of any sale of all or any part of the
Investment Related Property on credit or for future delivery, such
Collateral so sold may be retained by Agent until the selling price
is paid by the purchaser thereof, but Agent shall not incur any
liability in case of the failure of such purchaser to take up and
pay for such assets so sold and in case of any such failure, such
Collateral may again be sold upon like notice. Agent, instead of
exercising the power of sale herein conferred upon them, may
proceed by a suit or suits at law or in equity to foreclose
security interests created hereunder and sell the Investment
Related Property, or any portion thereof, under a judgment or
decree of a court or courts of competent
jurisdiction.

 

5.9 Sales
on Credit.
If Agent sells any of the Collateral upon credit, Grantor will be
credited only with payments actually made by the purchaser,
received by Agent, and applied to the indebtedness of the
purchaser. In the event the purchaser fails to pay for the
Collateral, Agent may resell the Collateral and Grantor shall be
credited with the Proceeds of the sale.

 

5.10 Application of
Proceeds.
On and after the occurrence of a Trigger Event, the Proceeds of the
Collateral shall be applied by Agent to payment of the Secured
Obligations in such manner and order as Agent may elect in its sole
discretion. If the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay all of the Secured Obligations,
Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Agent to collect such
deficiency.

 

5.11 Power
of Attorney. Grantor hereby appoints Agent and Agent’s
designee as its attorney, with power: (a) to endorse
Grantor’s name on any checks, notes, acceptances, money
orders, or other forms of payment or security that come into
Agent’s possession; (b) to sign Grantor’s name on any
invoice, bill of lading, warehouse receipt, or other negotiable or
non-negotiable Document constituting Collateral, on drafts against
customers, on assignments of Accounts, on notices of assignment,
financing statements, and other public records, and to file any
such financing statements by electronic means with or without a
signature as authorized or required by applicable law or filing
procedure; (c) to notify the post office authorities to change the
address for delivery of Grantor’s mail to an address
designated by Agent and to receive, open, and dispose of all mail
addressed to Grantor; (d) to send requests for verification of
Accounts to customers or Account Debtors; (e) to exercise all of
Grantor's rights and remedies with respect to the collection or
enforcement of the Receivables and any other Collateral; (f) to
file such financing statements with respect to this Security
Agreement, with or without Grantor’s signature, or to file a
photocopy of this Security Agreement in substitution for a
financing statement, as Agent may deem appropriate and to execute
in Grantor’s name such financing statements and amendments
thereto and continuation statements which may require
Grantor’s signature; (g) to discharge past due taxes,
assessments, charges, fees or Liens on the Collateral; (h) to
settle, adjust, compromise, extend or renew the Receivables; and
(i) to take all actions necessary to carry out the terms and
provisions of the Purchase Agreement and this Security Agreement.
Grantor ratifies and approves all acts of such attorney. None of
the Secured Parties nor their attorneys will be liable for any acts
or omissions or for any error of judgment or mistake of fact or law
except for their willful misconduct or gross negligence as
determined by a court of competent jurisdiction in final and
non-appealable judgment. This power, being coupled with an
interest, is irrevocable until this Security Agreement is
terminated in accordance with Section
6.11. Agent agrees that, except
for the powers granted in paragraphs (b), (d) and (f) of this
Section, it shall not exercise any power or authority granted to it
unless a Trigger Event has occurred and is continuing. The powers
conferred on Agent, for the benefit of the Secured Parties, under
this Section
5.11 are solely to protect
Agent’s and the other Secured Parties’ interests in the
Collateral and shall not impose any duty upon Agent or any other
Secured Party to exercise any such powers.

 

6. GENERAL
PROVISIONS.

 

6.1 Recovered
Payments.
The Secured Obligations shall be deemed not to have been paid,
observed or performed, and the Secured Obligations shall continue
and not be discharged, to the extent that any payment, observance
or performance thereof by Grantor is recovered from or paid over by
or for the account of Agent for any reason, including as a
preference or fraudulent transfer or by virtue of any subordination
(whether present or future or contractual or otherwise) of the
Secured Obligations, whether such recovery or payment over is
effected by any judgment, decree or order of any court or
governmental agency, by any plan of reorganization or by settlement
or compromise by Agent (whether or not consented to by Grantor) of
any claim for any such recovery or payment over. Grantor hereby
expressly waives the benefit of any applicable statute of
limitations and agrees that it shall be liable hereunder whenever
such a recovery or payment over occurs.

 

 

12

 

 

6.2 No
Waiver.
No delay or omission of Agent to exercise any right or remedy
granted under this Security Agreement shall impair such right or
remedy or be construed to be a waiver of any Trigger Event, or an
acquiescence therein, and any single or partial exercise of any
such right or remedy shall not preclude any other or further
exercise thereof or the exercise of any other right or remedy. No
waiver, amendment or other variation of the terms, conditions or
provisions of this Security Agreement whatsoever shall be valid
unless in writing signed by Agent and then only to the extent in
such writing specifically set forth. All rights and remedies
contained in this Security Agreement or by law afforded shall be
cumulative and all shall be available to Agent until the Secured
Obligations have been paid in full.

 

6.3 Agent
Performance of Grantor’s Obligations; Authority of
Agent.

 

(a) Without
having any obligation to do so, Agent may perform or pay any
Secured Obligation which Grantor has agreed to perform or pay in
this Security Agreement and Grantor shall reimburse Agent for any
amounts paid by Agent pursuant to this Section
6.3. Grantor’s Secured
Obligation to reimburse Agent pursuant to the preceding sentence
shall be a Secured Obligation payable on
demand.

 

(b) Grantor
acknowledges that the rights and responsibilities of the Agent
under this Security Agreement with respect to any action taken by
Agent or the exercise or non-exercise by Agent of any option,
voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Security Agreement
shall, as between Agent and the Secured Parties, be governed by
such agreements with respect thereto as may exist from time to time
among them, but, as between Agent and Grantor, Agent shall be
conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and
Grantor shall not be under any obligation, or entitlement, to make
any inquiry respecting such authority.

 

6.4 Waivers.
Except to the extent expressly otherwise provided herein or in
other Transaction Documents and to the fullest extent permitted by
applicable law, Grantor waives (a) any right to require Agent to
proceed against any other Person, to exhaust its rights in
Collateral, or to pursue any other right which Agent or any other
Secured Party may have; (b) with respect to the Secured
Obligations, presentment and demand for payment, protest, notice of
protest and nonpayment, notice of intent to accelerate, and notice
of acceleration; and (c) all rights of marshaling in respect
of any and all of the Collateral.

 

6.5 Benefit
of Agreement.
The terms and provisions of this Security Agreement shall be
binding upon and inure to the benefit of Grantor, Agent and the
other Secured Parties and their respective successors and assigns,
except that Grantor shall not have the right to assign any of its
rights or delegate any of its Secured Obligations under this
Security Agreement or any interest herein, without the prior
written consent of Agent.

 

6.6 Survival.
All representations and warranties of Grantor contained in this
Security Agreement shall survive the execution and delivery of this
Security Agreement. Without prejudice to the survival of any other
Secured Obligations, the provisions of Section
6.8 and Section
6.13 shall survive the
termination of this Security Agreement.

 

6.7 Notices.
All notices, requests and demands to or upon Agent or Grantor
hereunder shall be effected in the manner provided for in Section
8.6 of the Purchase Agreement

 

6.8 Taxes
and Expenses.
Any taxes (including income taxes) payable or ruled payable by
federal or state authority in respect of this Security Agreement
shall be paid by Grantor, together with interest and penalties, if
any. Grantor shall reimburse Agent for any and all out-of-pocket
expenses and internal charges (including reasonable
attorneys’, auditors’ and accountants’ fees and
reasonable time charges of attorneys, paralegals, auditors and
accountants who may be employees of Agent) paid or incurred by
Agent in connection with the preparation, execution, delivery, and
administration, of this Security Agreement and in the audit,
analysis, administration, collection, preservation or sale of the
Collateral (including the expenses and charges associated with any
periodic or special audit of the Collateral). In addition, Grantor
shall be obligated to pay all of the costs and expenses incurred by
Agent, including attorneys’ fees and court costs, in
obtaining or liquidating the Collateral, in enforcing payment of
the Secured Obligations, or in the prosecution or defense of any
action or proceeding by or against Agent or Grantor concerning any
matter arising out of or connected with this Security Agreement,
any Collateral or the Secured Obligations, including any of the
foregoing arising in, arising under or related to a case under any
bankruptcy, insolvency or similar law. Any and all costs and
expenses incurred by Grantor in the performance of actions required
pursuant to the terms hereof shall be borne solely by
Grantor.

 

6.9 Headings.
The title of and section headings in this Security Agreement
are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security
Agreement.

 

6.10 Counterparts.
This Security Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security
Agreement by signing any such counterpart. Delivery of an executed
counterpart of a signature page of this Security Agreement by
facsimile or other electronic transmission shall be effective as
delivery of a manually executed counterpart of this Security
Agreement.

 

6.11 Termination.
This Security Agreement shall continue in effect until (a) all
obligations of Grantor to redeem Series A Preferred Units pursuant
to the Purchase Agreement have been indefeasibly paid in full in
cash, (b) all obligations of Purchaser to purchase Series A
Preferred Units pursuant to the Purchase Agreement have terminated
or expired, and (c) all of the Secured Obligations have been
indefeasibly paid and performed in full in cash;
provided that
the termination of this Security
Agreement under this Section 6.11
is subject to Section 6.1.

 

6.12 GOVERNING
LAW/VENUE.

 

(a) THIS
SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

 

 

13

 

 

(b) Grantor
hereby irrevocably and unconditionally:

 

(i) submits
for itself and its property in any legal action or proceeding
relating to this Security Agreement and the other Transaction
Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the Delaware,
the courts of the United States of America sitting in the State of
Delaware, and appellate courts from any thereof;

 

(ii) consents
that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(iii) agrees
that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to
such Grantor at its address referred to in Section
6.7 or at such other address of
which the Agent shall have been notified pursuant
thereto;

 

(iv) agrees
that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and

 

(v) waives,
to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential
damages.

 

6.13 Indemnity.
GRANTOR DOES HEREBY ASSUME ALL LIABILITY FOR THE COLLATERAL, FOR
THE SECURITY INTEREST OF AGENT, AND FOR ANY USE, POSSESSION,
MAINTENANCE, AND MANAGEMENT OF, ALL OR ANY OF THE COLLATERAL,
INCLUDING ANY TAXES ARISING AS A RESULT OF, OR IN CONNECTION WITH,
THE TRANSACTIONS CONTEMPLATED HEREIN, AND AGREES TO ASSUME
LIABILITY FOR, AND TO INDEMNIFY AND HOLD THE SECURED PARTIES AND
THEIR RESPECTIVE SUCCESSORS, ASSIGNS, AGENTS, ATTORNEYS, AND
EMPLOYEES HARMLESS FROM AND AGAINST, ANY AND ALL CLAIMS, CAUSES OF
ACTION, OR LIABILITY, FOR INJURIES TO OR DEATHS OF PERSONS AND
DAMAGE TO PROPERTY, HOWSOEVER ARISING FROM OR INCIDENT TO SUCH USE,
POSSESSION, MAINTENANCE, AND MANAGEMENT, WHETHER SUCH PERSONS BE
AGENTS OR EMPLOYEES OF GRANTOR OR OF THIRD PARTIES, OR SUCH DAMAGE
BE TO PROPERTY OF GRANTOR OR OF OTHERS.

 

GRANTOR SHALL INDEMNIFY EACH SECURED PARTY AND
EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
MANAGERS, EMPLOYEES, ATTORNEYS, AND AGENTS (COLLECTIVELY, THE
“INDEMNIFIED
PARTIES” AND INDUVIDUALLY
AN “INDEMNIFIED
PARTY”) FROM, AND HOLD
EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING ATTORNEYS’ FEES) TO WHICH ANY OF THEM MAY
BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO
(A) ANY OF THE TRANSACTION DOCUMENTS INCLUDING THE NEGOTIATION,
EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE TRANSACTION DOCUMENTS, (B) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS, (C) ANY BREACH BY
GRANTOR OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER
AGREEMENT CONTAINED IN ANY OF THE TRANSACTION DOCUMENTS, (D) ANY
ACTION TAKEN OR NOT TAKEN BY ANY SECURED PARTY (OR ANY TRUSTEE
UNDER ANY COLLATERAL DOCUMENT) THAT IS ALLOWED OR PERMITTED UNDER
ANY OF THE TRANSACTION DOCUMENTS, INCLUDING THE PROTECTION OR
ENFORCEMENT OF ANY LIEN, SECURITY INTEREST, OR OTHER RIGHT, REMEDY,
OR RECOURSE CREATED OR AFFORDED BY THE TRANSACTION DOCUMENTS OR AT
LAW OR IN EQUITY, (E) THE PRESENCE, RELEASE, THREATENED RELEASE,
DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS SUBSTANCE LOCATED
ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF
GRANTOR, OR (F) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING
INCLUDING THOSE BROUGHT OR INITIATED BY GRANTOR. WITHOUT LIMITING
ANY PROVISION OF THIS SECURITY AGREEMENT OR OF ANY OTHER
TRANSACTION DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT THE INDEMNIFIED PARTIES BE INDEMNIFIED FROM AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING
ATTORNEYS’ FEES) ARISING OUT OF OR RESULTING FROM THE STRICT
LIABILITY, SOLE CONTRIBUTORY OR ORDINARY NEGLIGENCE OF ANY OF THE
INDEMNIFIED PARTIES, PROVIDED THAT THE INDEMNITY SET FORTH IN THIS
PARAGRAPH SHALL NOT APPLY TO ANY CLAIM CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY SEEKING
INDEMNIFICATION AS DETERMINED BY A COURT OF COMPETENT JURISDICTION
IN A FINAL NON-APPEALABLE JUDGMENT.

 

AGENT MAY EMPLOY AN ATTORNEY OR ATTORNEYS OF ITS
OWN CHOOSING TO PROTECT OR ENFORCE ITS RIGHTS, REMEDIES, AND
RECOURSES, AND TO ADVISE AND DEFEND THE INDEMNIFIED PARTIES WITH
RESPECT TO THOSE ACTIONS AND OTHER MATTERS. GRANTOR SHALL REIMBURSE
AGENT FOR THE ATTORNEYS’ FEES AND EXPENSES (INCLUDING
EXPENSES AND COSTS FOR EXPERTS AND/OR CONSULTANTS) OF THE
INDEMNIFIED PARTIES IMMEDIATELY ON RECEIPT OF WRITTEN DEMAND FROM
AGENT, WHETHER ON A MONTHLY OR OTHER TIME INTERVAL, AND WHETHER OR
NOT AN ACTION IS ACTUALLY COMMENCED OR CONCLUDED. ALL OTHER
REIMBURSEMENT AND INDEMNITY OBLIGATIONS UNDER THIS SECURITY
AGREEMENT SHALL BECOME DUE AND PAYABLE WHEN ACTUALLY INCURRED BY
AGENT OR ANY OF THE OTHER THE INDEMNIFIED PARTIES. ANY PAYMENTS NOT
MADE WITHIN TEN (10) DAYS AFTER WRITTEN DEMAND FROM AGENT SHALL
BEAR INTEREST AT THE DEFAULT RATE FROM THE DATE OF THAT DEMAND
UNTIL FULLY PAID. THE PROVISIONS OF THIS SECTION
6.13 SHALL SURVIVE REPAYMENT
AND PERFORMANCE OF THE SECURED OBLIGATIONS, THE RELEASE OF ANY
LIENS SECURING THE SECURED OBLIGATIONS, ANY FORECLOSURE (OR ACTION
IN LIEU OF FORECLOSURE), THE TRANSFER BY GRANTOR OF ANY OF ITS
RIGHTS, TITLE, AND INTERESTS IN OR TO ANY COLLATERAL SECURING THE
SECURED OBLIGATIONS, AND THE EXERCISE BY ANY SECURED PARTY OF ANY
OR ALL REMEDIES SET FORTH IN ANY TRANSACTION
DOCUMENT.

 

6.14 WAIVER
OF JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT THE RIGHT TO A
TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT SUCH RIGHT MAY BE
WAIVED. AGENT AND GRANTOR, AFTER CONSULTING (OR HAVING THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, HEREBY
KNOWINGLY, VOLUNTARILY, IRREVOCABLY, AND EXPRESSLY WAIVE TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING IN ANY WAY
TO ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR THE CONDUCT, ACTS OR OMISSIONS OF SECURED
PARTY AND EACH GRANTOR IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION
6.14.

 

6.15 FINAL
AGREEMENT.
THIS SECURITY AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

remainder of page intentionally left blank.

 

signature pages follow.

 

 

14

 

 

IN WITNESS WHEREOF, Grantor and Agent
have executed and delivered this Security Agreement as of the date
first above written.

 

 

	

 

	
GRANTOR:

	

 

	

 

	
 

	

 

	

 

	
AEMETIS
BIOGAS LLC

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/
Eric
McAfee  

	

 

	

 

	

 

	
Name:
Eric
McAfee  

	

 

	

 

	

 

	

Title:
President
 

	

 

 

Signature
Page

Security
Agreement

15

 

 

 

	

 

	
AGENT:

	

 

	

 

	
 

	

 

	

 

	
THIRD EYE CAPITAL CORPORATION, as
Agent

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ Arif N.
Bhalwani  

	

 

	

 

	

 

	
Name: Arif N.
Bhalwani  

	

 

	

 

	

 

	

Title:
Managing
Director  

	

 

 

 

 

 

16

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