Article I. Name

The name of this corporation is Bend Biofuels Cooperative, an Oregon cooperative corporation, hereinafter referred to as the "Cooperative."

Section A. Objective The object of the Cooperative shall be to produce bio-fuels and carry on such other related activities to the extent permitted under Oregon law.

Section B. Duration There shall be no set limit as to the period of time for the existence of the Cooperative as such period shall be considered perpetual except as may be provided  by these bylaws.

Section C. Offices The principal office of the Cooperative shall be located in the City of Bend, County of Deschutes, State of Oregon. The Cooperative may also have offices at such other places as the Board of Directors, from time to time, may designate.

Article 2. Membership

 Section A. Membership. Membership shall be lifetime membership and shall be open to any person, firm or organization who abides by the membership agreement, whose interests are not adverse to the objectives and purpose of the Cooperative, and who pays a one-time joining fee, $100.00, as established by the Board of Directors. Such membership agreement as established by the Board of Directors shall be uniform in its application to all members. No fuel or fuel related services shall be provided by the Cooperative to nonmembers, except as may be provided by these by-laws. Payment of such dues and fees is a condition precedent to lifetime membership in the Cooperative. Each membership is equivalent to one share and one vote. To qualify for a lifetime membership, a one-time only, non-refundable joining fee to be determined by the Board of Directors must be paid. All moneys paid for memberships shall be regarded as equity shares and are non-refundable as provided in these by-laws.

Section  B. Certificates for Membership. Certificates representing membership in the Cooperative shall be in such form as shall be determined by the Directors. Such certificates shall be signed by the President and by the Secretary or by such other officers authorized by law and by the Directors. All certificates for membership shall be consecutively numbered or otherwise identified. The name and address of the members and date of issue shall be entered on the membership certificate books of the Cooperative. Each certificate for membership shall contain terms and conditions governing the membership as well as providing provisions addressing membership termination and withdrawal. These terms and conditions shall represent the membership agreement and shall be binding upon the member from the date of issuance. Members shall be entitled to an equitable share of bio-fuel produced or collected by the Cooperative at a price and in a manner set by the Board of Directors.

Section C. Transferability of memberships. Memberships shall not be transferable.

Section D. Suspension, Termination, or Withdrawal of Memberships. The Board of Directors upon unanimous approval may suspend a member after 30 days notice for harboring interests adverse to the objectives and purpose of the Cooperative, or for failure to comply with the membership agreement. In the event that the non-payment or failure to comply with the membership agreement is corrected within 30 days of notice of the same to the member, the member may be reinstated upon unanimous approval of the Directors. No member may be reinstated if determined to harbor interests adverse to the objectives and purpose of the Cooperative. Any member whose membership has been terminated or any member who has chosen to withdraw his membership shall be reimbursed in full for any membership fees paid by such member for the existing membership period subject to termination or withdrawal. The membership fee shall be fully refunded within 60 days from the date of the written notice of membership termination or, in case of a member's voluntary withdrawal, within 60 days of the Directors' receipt of such request for withdrawal. Voting rights shall be terminated upon receipt of written notice.

Section E. Cooperative membership shall be limited to 30 buying members and not limited to non-fuel buying members. Buying members who volunteer a minimum amount of 2 hours per week, shall be allocated 50 gallons per month at $1.50 per gallon. Non-volunteer members shall pay $2.00 per gallon. Volunteer members shall have precedence over non-volunteer members for fuel allocation. A sign up sheet at the beginning of the month shall be posted and members shall estimate their needs. Volunteer members shall have first rights and then non-volunteer members, based on signed up volume. If needed and if available if available fuel oil exceeds signed up member needs, then an equal percentage shall be allocated to each. Volunteer members having precedence over non volunteer. Imported cost per gallon shall be set by the Board based on prevailing costs at the time.

Article 3. Meetings of Members A meeting of the members shall be held annually. A special meeting of the members may be called at certain times, by the members or by the Board of Directors.

Section A. Annual membership meeting. A general membership meeting shall be held once each calendar year between October 1 and November 15 at which time members will elect Directors and conduct such other business as the members and the Board of Directors deem appropriate.

Section B. Notice of annual meeting. Notice of the general membership meeting shall be given at least 60 days prior to the meeting and shall be posted in the principal office and shall be sent to each member of the cooperative at the member's last known e-mail address and shall include the agenda of the meeting as well as a list of candidates for the Board of Directors with a short paragraph about each candidate, written by each candidate. If a member does not possess an e-mail address then such member may submit the appropriate information to receive notice by U.S. mail or facsimile. Each candidate for the Board of Directors must be a member of the Cooperative in good standing and must give said written notice of candidacy and a written statement at least 45 days prior to the annual membership meeting, which shall include giving notice to at least one Director.

Section C. Agenda of Annual Meeting. Members may have an item added to the agenda of the annual membership meeting by submitting a written request to a Board member no less than 35 days prior to the annual meeting. The request must be acted upon within 10 days of submission to the Board of Directors. If the request is denied, the requesting members have the option of gathering the signatures of 5 people of the membership to have the item added to the agenda. The agenda item and necessary signatures must be submitted 10 days prior to the annual meeting. If the Board of Directors fail to timely act upon the request as provided, the item submitted will automatically be added to the agenda. If an item is added to the original agenda, notice of the final agenda shall be posted in the principal office and shall be sent by e-mail to each member of the cooperative at the member's last known address.

Section D. Special Meetings. A special meeting of members may be called at any time by the President or the Board of Directors, or shall be called by the President at the written request of not less than 10% of the members. The agenda shall be limited to those specific items identified by the President, the Board of Directors, or the requesting members. Any written request to be submitted to the President by requesting members shall include a list of the specific items to be included on the agenda.

Section E. Notice of special meetings. Notice of special meetings shall be delivered to the secretary shall be posted in the principal office and shall be sent by e-mail to each member of the cooperative at the member's last known e-mail address. If a member does not possess an e-mail address then such member may submit the appropriate information to receive notice by U.S. mail or facsimile. The notice shall include the agenda of the meeting, and the place, date, and time of the meeting.

Section F. Voting. Each member shall be entitled to only one vote on each issue or for each vacancy on the Board of Directors. Proxy voting shall be prohibited. Candidates receiving the most votes for vacancies on the Board of Directors shall be elected by a simple majority vote. In no way shall the articles of incorporation or the by-laws be amended so as to allow for some members to have greater voting power than others, whether such power be proposed based on shares in the Cooperative, purchasing at the Cooperative, or participation in the Cooperative. No member shall be given more voting power than any other member. Voting for Board members shall be by secret vote.

Section G. Quorum. Membership meetings shall require a quorum of at least 30% of the membership, or 9 persons, whichever is less. Special meetings, shall require a quorum of at least 50% of the membership or 11 persons, whichever is less. Only members in actual attendance at the meeting shall count towards a quorum. Members present at a duly organized meeting may continue to do business until adjournment notwithstanding the withdrawal of enough members leaving less than a quorum.

Section H. Decisions by majority. Decisions at general membership meetings and special meetings shall be made by two thirds majority process as adopted by the general membership unless otherwise stated in the by-laws. I. Order of Business a. Determination of a quorum b. Proof of due notice of meeting c. Reading and disposition of minutes d. Reports of officers and committees e. Unfinished business f. New business g. Election of directors h. Adjournment Article 4. Board of Directors There shall be seven elected Directors, except that the General Manager may not also be elected to the Board of Directors. A. Staggering of terms. Terms shall be staggered so that there are at least three Directors elected each year.

B. Term of office. A term of office shall be twelve months. Director members may run for re-election. If paid employee members are elected, they shall have a term of twelve months and they may be re-elected.

C. Compensation. Directors will receive no compensation.

D. Removal. The Board of Directors can remove a Director for not attending three consecutive regularly scheduled Board meetings or three regularly scheduled meetings over a six month period. The Board of Directors can recommend to the Cooperative membership removal of a Director for cause, including but not limited to:

1) conduct detrimental to interests of the Cooperative;

 2) lack of empathy with the Cooperative's objectives; or

 3) refusal to render reasonable assistance in carrying out the Cooperative's purposes. Any Director subject to a recommendation of removal for cause by the Board of Directors shall be given an opportunity to appeal the decision at the next general membership meeting or special meeting held for such purpose. Said Director may be reinstated on the Board of Directors at such time based on a two thirds vote of approval by the general membership present at the general membership meeting or special meeting as applicable. Directors may be removed by the members present at a general membership meeting or at a special meeting held for such purpose by a two thirds vote so long as said Director has been given written notification at least five weeks prior to the meeting and is given the opportunity to put forth a defense at the meeting.

E. Vacancies. Vacancies on the Board of Directors shall be filled by appointment based on a consensus vote of the Board of Directors. The appointment of any Director as a result of a vacancy shall be subject to general membership approval at the next general membership meeting. Any such approval shall be limited to the remaining balance, if any, of the previous Director's existing term.

F. Idemnification. The personal liability is limited to the same personal liability of any of the cooperative members, neither more nor less.

Article 5. Duties of Directors The duties and powers of the Board of Directors, in addition to those defined elsewhere in the by-laws, and in addition to those necessary or appropriate for the proper conduct of the affairs of the cooperative, shall be as follows:

A. Powers. The Board of Directors shall coordinate and facilitate through the General Manager the functioning of the Cooperative. The Board shall adopt such rules, regulations and resolutions not inconsistent with the Articles of Incorporation and the By-laws as it may deem proper for the conduct of its meetings and the management of the Cooperative. The Board of Directors will have powers to hire, evaluate, and dismiss a General Manager, elect Officers of the Cooperative, fill vacancies on the Board, and generally oversee the management of the Cooperative.

 B. Membership meetings. The Directors shall be required to be present at the annual and special meetings of the members.

C. Officers. The Board of Directors shall elect a President, a Vice President, a Treasurer, and a Secretary.

D. Official acts of the Board. Decisions shall be made on a majority basis.

E. Board meetings. The Board shall meet within fourteen (14) days after the first election and within (14) days after each annual election and shall elect by ballot a president, vice president, secretary, and treasurer. The Board of Directors shall meet at least once monthly, and more often if it is appropriate, at a time and place determined by the Board of Directors and posted seven days in advance in the principal office. A quorum shall consist of four of the Directors in office. Special meetings may be called by the Chairperson, or by three members of the Board of Directors and all Directors shall receive notice in writing seven days prior to each such meeting. Directors who cannot attend a meeting in person may participate by telephone by notifying the President no less than twenty-four hours before the meeting. Any member, who is not already a member of the Board of Directors, may attend a Board meeting, however, such member(s) may not provide comment, vote, or otherwise actively participate in the meeting. The Board of Directors shall have the authority to close the Board meeting to attendance by the general membership when the Board of Directors, in a consensus vote, determines such is in the best interest of the Cooperative. Board meetings shall be open at all times except for some very limited circumstances:

1.) To discuss personnel matters;

2) to discuss transactions related to property and other matters where another party has requested confidentiality. This shall occur only after a consensus vote of the board.

F. Procedure. The Board can establish its own rules of procedure not inconsistent with the matters addressed herein.

G. Committees. The Board of Directors shall call together and dissolve committees as they see fit. Standing committees may only be dissolved through majority approval of the Board of Directors.

Article 6. Officers

A. Number. The officers of the Cooperative shall be a President, a Vice-President, a Secretary and a Treasurer, each of whom shall already be a Director and elected by the Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Directors.

B. Election and Term. The officers of the Cooperative to be elected by the Directors shall be elected annually at the first meeting of the Directors held after each annual meeting of the members. Each officer shall hold office until his successor shall have been duly elected and qualified, or until his/her death or until s/he resigns or has been removed as provided in these by-laws.

C. Removal. Any officer elected or appointed by the Directors may be removed by the Directors whenever in their judgment the best interests of the Cooperative would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

D. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Directors for the un-expired portion of the term. Article

7. Duties and Powers of Officers The duties and powers of the Officers, in addition to those defined elsewhere in the by-laws, and in addition to those necessary or appropriate for the proper conduct of the affairs of the Cooperative, shall be as follows:

A. President. The President shall:

a) preside over all meetings of the Cooperative and of the Directors;

b) sign as President, with the Secretary, all notes, deeds and other conveyances of real estate, as well as all certificates of stock of the Cooperative.

B. Vice President. In the absence or disability of the President, the Vice President shall perform the duties of the President. The Vice President shall also perform such duties as may be assigned to him/her by the President or Board of Directors.

 C. Secretary. The Secretary shall:

a) ensure that a complete record of the meetings of the Cooperative and of the Board of Directors is kept;

b) sign as secretary, with the President, all notes, deeds and other conveyances of real estate, as well as all certificates of stock of the Cooperative, and affix the corporate seal to all documents requiring attestation;

c) cause to be prepared and submitted to the annual meeting of the members a complete and detailed report of the current year's business which annual report shall contain a statement of assets and liabilities, a statement of income and expenses, and such other statements and statistical memoranda as the Board of Directors shall require; d) provide that all notices required by law be served;

e) perform such other duties as may be required of him or her by the Cooperative or the Board of Directors.

D. Treasurer. The Treasurer shall:

a) oversee the receipt and disbursement of all funds of the Cooperative;

b) ensure that complete records of all financial transactions of the Cooperative are kept; and,

 c) perform such other duties pertaining to his or her office as may be required by the Board of Directors.

E. Secretary-Treasurer. In the event that the office of Secretary-Treasurer are combined by the Board of Directors, his or her duties shall be a combination of the duties of the Secretary and the Treasurer and his or her office shall be known as Secretary-Treasurer.

F. General Manager. The General Manager shall be an at-will employee of the cooperative and shall serve at the pleasure of the Board of Directors. The General Manager shall have general charge of the ordinary and usual business operations of the Cooperative subject to the direction and approval of the Directors. The General Manager with the Treasurer shall be required to maintain all business records and accounts in such a manner that the true and correct condition of the business may be determined whenever practical. They shall provide annual and periodic reports in a form and manner prescribed by the Directors. The General Manager shall employ and discharge employees subject to direction and guidelines approved by the Directors. The General Manager and Treasurer shall handle and account for all monies belonging to the Cooperative. which come into his or her possession in the manner and form prescribed by the Directors.

Article 8. Contract. Checks. Deposits. Loans

A. Contracts. Checks. Loans. The Directors may authorize any officer or officers to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Cooperative, and such authority may be general or confined to specific instances. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Cooperative, shall be signed by such officer or officers of the Cooperative and in such manner as shall from time to time be determined by resolution of the Directors. No loans thereby indebting the Cooperative shall be authorized prior to approval by the general membership.

B. Deposits. All funds of the Cooperative shall be deposited from time to time to the credit of the Cooperative in such banks, trust companies or other depositories as the Board of Directors may select.

Article 9. Production

A. It is the intention of the Cooperative to produce high quality, environmentally and socially responsible fuels for use by Cooperative members. The General Manager shall submit to the Board of Directors on an annual basis a report about the production process and any recommendations for improving such process, which the Board of Directors shall have the right to approve or disapprove. The General Manager shall comply with the Directors' decision within a reasonable time period, unless such period is specifically determined by the Directors.

B. Prohibited sales. The Cooperative will not offer fuels or fuel related services for sale or distribution to non-members, except as authorized by the Board of Directors for the limited purpose of selling surplus fuels.

Article 10. Distribution of Net Savings The Board of Directors shall at the end of each fiscal year provide for the distribution of the Cooperative's net savings from operation remaining after expenses have been met, according to the following method:

A. General Surplus Reserve. The Board of Directors shall first allocate from such net savings to the Cooperative's general surplus reserve such amount as it shall determine to be necessary or appropriate. The general surplus reserve shall be used to absorb operating deficits, losses, and unanticipated costs or expenses. The general surplus reserve shall be the indivisible property of the Cooperative as a whole.

 B. Patronage Refunds. The remainder of the net savings shall be distributed to the members as patronage refunds in proportion to their respective percentages of patronage of the Cooperative; provided, however, that these patronage refunds may be immediately paid in cash, or in certificates of indebtedness, or may be placed in a revolving fund upon the books of the Cooperative to the credit of the members, to be paid at some future data at the discretion of the Board of Directors.

Article 11. Books and Records The Cooperative shall keep a correct and complete record of annual reports and related recommendations submitted by the General Manager to the Board of Directors and a correct and complete record of accounts for the Cooperative, and the Board of Directors shall keep copies of the minutes of the membership meetings and meetings of the Board of Directors. The Board of Directors shall make available the annual reports and related recommendations submitted by the General Manager, the record of accounts, and the minutes of the membership meeting and meetings of the Board of Directors for the examination and review of the members by appointment within seven days of receipt of a written request by members to review said documents and records of accounts.

Article 12. Waiver of Notice Unless otherwise provided by law, whenever any notice is required to be given to any member or Director of the Cooperative under the provisions of these by-laws or under the provisions of the articles of incorporation, a waiver thereof in writing, signed by the person or persons entitled to such notices whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

Article 13. Indemnification The Cooperative shall indemnify, defend, and hold harmless each officer and director of the Cooperative as provided under Oregon law from and against all costs, losses, expenses, and claims incurred by such person because the person is or was a director or officer of the Cooperative provided such person conducted himself or herself in good faith, the person reasonably believed that his or her conduct was in the Cooperative's best interests, in the case of conduct in such person's official capacity, or in all other cases, his or her conduct was at least not opposed to the Cooperative's best interests, and in the case of any criminal proceeding, the person had no reasonable cause to believe that his or her conduct was unlawful. Notwithstanding the foregoing, this indemnification shall not include any damages caused by the sole negligence of the officer, director, their agents, consultants, legal counsel, or other representatives.

Article 14. Miscellaneous Provisions

 A. Fiscal Year. The fiscal year of the Cooperative will run from January 1 through December 31.

 B. Corporate Seal. The Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Cooperative, the State of incorporation, and the words, "Cooperative Association Seal."

C. Amendments and Initiatives. All of the by-laws and articles of incorporation for the Cooperative, except as otherwise provided in these by-laws, may be amended or repealed and new by-laws adopted by consensus approval of the members at the next general membership meeting.

D. Notice. Whenever notice is given pursuant to these by-laws by United States mail, it shall be deemed to have been given when deposited in the United States mail.

E. Dissolution. In the event of the dissolution of the Cooperative, assets shall be distributed in the following manner: First, any outstanding secured loans shall be paid off. Second, unsecured loans shall be paid. Third, equity shares shall be returned to members. Fourth, remaining assets of the Cooperative shall be distributed by the Directors to non-profit organizations, other cooperatives and cooperative organizations that possess a mission, objectives, and purpose similar to that of this Cooperative.

F. Severability. Wherever possible, each provision of these by-laws shall be interpreted in such manner as to be effective and valid under the laws of the State of Oregon, or, as applicable, under the laws of the United States, but if any provision of these by-laws shall be prohibited or invalidated thereby, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of these by-laws.