OPERATING AGREEMENT of FORWARD PROFIT INVESTING LLC
Exhibit
3.2
of
Operating Agreement dated as of March
19th, 2009, made and entered into among the Members listed on Exhibit A to
become effective upon filing of the Articles of Organization for the Company
with the New York Department of State. As of the effective time of
the Company’s Articles of Organization, the Members enter into this Agreement
for the purpose of setting forth the agreements between themselves and the
Company and with one another. The terms of the Agreement are as
follows.
ARTICLE
I
Organizational
Matters
Section
1.01. Formation. The
Company has been or shall be formed as a limited liability company under the Act
by the filing with the Department of State of the State of New York of Articles
of Organization, which shall be furnished to each Member. The rights and
obligations of the Members, and the affairs of the Company, shall be governed
first by the mandatory provisions of the Act, second by the Company's Articles
of Organization, third by this Agreement, and fourth by the optional provisions
of the Act. In the event of any conflict among the foregoing, the
conflict shall be resolved in the order of priority set forth in the preceding
sentence.
Section
1.02. Name. The name of
the Company is "FORWARD PROFIT INVESTING LLC"
Section
1.03. Agent and
Principal Office. The agent and principal office of the
Company shall be as stated in the Articles of Organization, subject to change by
a Majority Interest of all Members on filing with the Secretary of
State. The Company may also maintain offices at such other place or
places as the Members deem advisable.
Section
1.04. Term. The Company
began upon the filing of the Company's Articles of Organization with the New
York Department of State, and shall continue through the term set forth in the
Articles of Organization, unless sooner terminated as provided in this
Agreement.
ARTICLE
II
Definitions
Section
2.01. Definitions. For
purposes of this Agreement, the following terms shall have the meanings ascribed
to them.
"Act"
means the New York Limited Liability Company Law (NLLC), Chapter 34 of
XxXxxxxx’x Consolidated Laws of New York Annotated, as it may be amended from
time to time, and any successor to such act.
"Agreement"
means this Operating Agreement, as it may be amended or supplemented from time
to time.
"Articles
of Organization" means the articles of organization, as amended from time to
time, filed by the Company under the Act.
"Assignee"
means a Person to whom a right to distributions has been transferred, by
transfer or assignment or otherwise, in a manner permitted under this Agreement,
but who has not become a Substitute Member.
"Capital
Account" means each capital account maintained for a Member pursuant to Section
3.02.
"Capital
Contributions" means the sum of the values of cash and property contributed to
the Company by all Members, or any one Member, as the case may be (or the
predecessor holders of any interests in the Company).
"Code"
means the Internal Revenue Code of 1986, as amended, as in effect from time to
time.
"Company"
means the limited liability company identified in Section 1.02.
"Company
Property" means all property owned, leased or acquired by the Company from time
to time.
"Dissociated
Member" has the meaning specified in Section 11.01
"Distributable
Cash" means, with respect to any period, the cash received from operations of
the Company less (i) cash disbursements in operations and (ii) a reasonable
allowance from reserves, contingencies, and anticipated obligations, as
determined by the Managers. The net cash realized by the Company from
the sale, refinancing, or other disposition of all or substantially all the
Company’s Property, after retirement of existing mortgage debt and transactional
expenses, shall be considered Distributable Cash.
"Event
of Dissolution" has the meaning specified in Section 11.01.
"Income"
or "Loss" means the net income or net loss from all sources determined under the
book accounting practices prescribed by this Agreement for Capital
Accounts.
“Majority
Interest” means Members with a majority of the interests in current Income and a
majority of the positive balances of the Capital Accounts.
"Member"
means those individuals executing this Agreement as Members of the Company on
the signature pages.
"Person"
means a natural person, partnership, domestic or foreign limited partnership,
domestic or foreign limited liability company, trust, estate, association or
corporation.
"Substitute
Member" means a transferee of an interest who is admitted as a Member to the
Company pursuant to Section 9.02 in place of and with all the rights of a
Member.
"Tax
Item" means each item of income, gain, loss, deduction, or credit of the Company
for Federal tax purposes, as separately stated and calculated pursuant to the
Code.
ARTICLE
III
Capital
Contributions
Section
3.01. Capital
Contributions. Each Member shall contribute the cash or
property set forth on Exhibit A to this Agreement, which is by this reference
incorporated into this Agreement.
Section
3.02. Capital
Accounts.
A. The
Company shall maintain one Capital Account. Such Capital Account
shall be increased by (i) the amount of all Capital Contributions by the
Members.
B. The
determination of any liability for purposes of this Section shall be made in
accordance with Section 752(a) of the Code and any other applicable provisions
of the Code. Property contributed by a Member shall be credited to
the Capital Account at the fair market value of such property. No
credit shall be made to the Capital Account for services rendered except as may
be specifically set forth in this Agreement.
C. An
Assignee of an interest will succeed to the Capital Account relating to the
interest transferred. However, if the transfer causes a termination
of the Company under Section 708(b)(1)(B) of the Code, the Company Property
shall be deemed to have been distributed in liquidation of the Company to the
Members (including the transferee of an interest) pursuant to Section 11.02 and
again contributed by such Members and transferees in reconstitution of the
Company. The Capital Account of such reconstituted Company shall be
maintained in accordance with the principles of this Section 3.02.
D. At
such times as may be permitted or required by Treasury Regulations issued
pursuant to Section 704 of the Code, the Capital Account shall be revalued and
adjusted to reflect the then fair market value of Company Property and the
Capital Account shall be maintained to comply with Treasury Regulations Section
1.704-1(b)(2)(iv)(f). All allocations of gain resulting from such
revaluation shall be made consistent with that regulation, and to the extent not
inconsistent therewith, the Income allocation provisions of Section 4.02
hereof.
E. The
foregoing definition of Capital Account and certain other provisions of this
Agreement are intended to comply with Treasury Regulations Section 1.704-1(b),
and shall be interpreted and applied in a manner consistent with that
regulation. Such regulation contains additional rules governing
maintenance of capital accounts which are incorporated by this reference into
this Agreement.
Section
3.03. Interest. No
interest shall be paid by the Company on Capital Contributions, on balances in
the Capital Account, or on any other funds distributed or distributable under
this Agreement.
Section
3.04. Provisions
Relating To the Right To Withdraw. Any Member may withdraw by
notice to the Company and other Members. Except as provided under
Section 11.01, the withdrawing Member shall have no right to an immediate return
of capital or profits, shall be considered an unsecured creditor, and shall have
only the right to receive an amount equal to that which would have been
distributed to such Member but for the withdrawal until he has received amounts
equal to the fair market value of his interest at the date of
withdrawal.
Section
3.05. Loans. Loans by a
Member to the Company shall not be considered Capital
Contributions.
ARTICLE
IV
Allocations
and Distributions
Section
4.01. Distribution
of Distributable Cash. Distributions of all Distributable Cash
shall be made at least quarterly, unless otherwise agreed by the
Members. Any distribution of property shall be treated as a
distribution of cash in the amount of the fair market value of such
property. Except during the Company’s winding up, distributions shall
be made in the ratios of the Income interests. During the Company’s
winding up, all cash and other Company Property available for distribution shall
be distributed in the ratios of the positive balances in the Capital Accounts,
after adjusting the Capital Accounts for the income, gain and loss realized in
the winding up, plus the gain or loss that would have occurred on the sale at
fair market value of any Company Property distributed in kind.
Section
4.02. Allocation of
Income and Loss.
A. Income
and Loss for each taxable year shall be allocated among the Members and
Assignees in the ratio of the Income interests set forth in Exhibit
A.
B. Notwithstanding
anything to the contrary in this Section 4.02, if there is a net decrease in
"minimum gain" (within the meaning of Treasury Regulations Section
1.704-1(b)(4)(iv)(c)) during a fiscal year, all Members who would otherwise have
a deficit balance in their Capital Accounts at the end of that year (excluding
items described in Treasury Regulations Section 1.704-1(b)(4)(iv)(e)) shall be
allocated, before any other allocations of Company items for that year, Income
for such year (and if necessary, subsequent years), in an amount and in the
proportions necessary to eliminate such deficits as quickly as
possible. The foregoing sentence is intended to be a "minimum gain
charge back" provision as described in Treasury Regulations Section
1.704-1(b)(4)(iv)(e), and shall be interpreted and applied in all respects in
accordance with that regulation.
C. If
during any fiscal year of the Company, any Member unexpectedly receives an
adjustment, allocation, or distribution of the type described in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), that Member shall be
allocated items of Income and Gain consistently with the methods specified in
any applicable Regulations in an amount and manner sufficient to eliminate that
Member's deficit Capital Account balance as quickly as possible.
D. Under
regulations prescribed by the Secretary of the Treasury pursuant to Section
704(c) of the Code, Tax Items shall be allocated to account for any variation
between the basis of contributed property and its fair market value at the time
of contribution. Any items allocated under this Section 4.02(D) shall
not be debited or credited to the Capital Accounts.
E. Income
or Loss attributable to borrowing for which certain Members bear and others do
not bear an economic risk of loss shall be allocated among the Members in
accordance with the provisions of Treasury Regulations Section
1.704-2.
F. If
made in accordance with this Agreement, the transfer of an interest shall be
deemed effective as of end of the month preceding the date of the transfer,
unless the transferee and transferor have designated some other month end as the
effective time, and the Income and Loss attributable to the transferred interest
shall, for Federal income tax purposes, be allocated accordingly. The
Members may revise, alter or otherwise modify the method of allocation as they
determine necessary to comply with Section 706 of the Code and regulations or
rulings promulgated thereunder.
G. If,
and to the extent that, any Member is deemed to recognize Income as a result of
any transaction between the Member and the Company pursuant to Sections 482,
483, 1272-1274, or 7872 of the Code, or any similar provision now or hereafter
in effect, any corresponding resulting Loss or deduction of the Company shall be
allocated to the Member who was charged with that Income.
H. All
tax credits for Federal or state income tax purposes shall be allocated in the
same manner as Income.
I. A
net loss for any taxable year shall be allocated in the ratio of the positive
balances in the Capital Accounts. Income for any year shall be
allocated in the ratio of the cash distributions during such year (to the extent
of such cash distributions). Any additional Income shall be allocated
in the ratio of deficit balances in the Capital Accounts until any deficit
balances are eliminated and then in the ratio of the Income interests set forth
on Exhibit A. Gain or loss from disposition of all or substantially
all the Company’s Company Property shall be excluded from the foregoing and
shall be allocated so as to bring the balances of the Capital Accounts into the
ratio of the Income interests. No allocation shall eliminate any
discrepancy in the Capital Accounts resulting from the failure to make any
required contribution or from any distribution contrary to this
Agreement.
ARTICLE
V
Management
and Operation of Business
Section
5.01. Management by
Members. The business of the Company shall be managed by its
Members. A Member or Members may exercise all the powers of the
Company whether derived from law, the Articles of Organization or this
Agreement. A person may rely in good faith on the apparent authority
of a Member to act on behalf of the Company. The Member's act shall
bind the Company regardless of whether the act was properly authorized, unless
the person relying on the act had actual knowledge that the act was
unauthorized.
Section
5.02. Limitations
on Authority of Members. Notwithstanding any other provision
in this Agreement, no Member shall have the authority to do the following acts
without the consent of the other Members:
A. Borrow
money in excess of $100,000.00;
B. Sell
any Company Property having a fair market value over $100,000.00;
C. Enter
into any contract which is not terminable at will, involving an anticipated
total expenditure of over $100,000.00;
D. Do
any act which would make it impossible to carry on the ordinary business of the
Company;
E. Compromise
any claim over $100,000.00;
F. Admit
a Person as a Member, except as provided in this Agreement; or
G. Knowingly
perform any act that would subject a Member to personal liability.
Section
5.03. Company
Funds. The funds of the Company shall be deposited in an
account or accounts designated by the Members and shall not be commingled with
any other funds. All withdrawals from or charges against these
accounts shall be made by the authorized agents of the Company.
Section
5.04. Outside
Activities. Each Manager agrees to give the Company the first
opportunity to participate in any business opportunity within the scope of
business then being conducted by the Company; provided that decision of the
other Members to decline such opportunity shall be conclusive.
Section
5.05. Limitation on
Liability. No Member of the Company shall be liable to the
Company or its other Members for monetary damages for breach of fiduciary duty;
provided, however, that nothing contained in this Agreement shall eliminate or
limit the liability of a Member (i) for any breach of his duty of loyalty to the
Company or its Members, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law and (iii) for
any transaction from which the Member derived an improper personal
benefit.
ARTICLE
VI
Rights
and Obligations of the Members
Section
6.01. Limitation on
Liability. Except as otherwise expressly agreed in writing, a
Member shall not be personally liable for any debts, liabilities, or obligations
of the Company, whether to the Company, to any of the other Members, or to
creditors of the Company, beyond the Capital Account of the Member, together
with the Member's share of the Property and undistributed profits of the
Company.
Section
6.02. Rights of
Member Relating to the Company.
A. Subject
to the restrictions of Section 6.03, this Agreement may be amended only by the
Members.
B. In
addition to other rights provided by this Agreement or by applicable law, a
Member shall have the right on demand and at such Member's own
expense:
(i) To
obtain any and all information regarding the status of the business and
financial condition of the Company;
(ii) Promptly
after becoming available, to obtain a copy of the Company's Federal, state, and
local income tax returns for each year;
(iii) To
have furnished to it a current list of the name and last known business,
residence or mailing address of each Member;
(iv) To
obtain information regarding the Capital Contributions made by each
Member;
(v) To
receive a copy of this Agreement and the Articles of Organization and all
amendments, together with copies of any powers of attorney pursuant to which
this Agreement, the Articles of Organization, and all amendments that have been
executed; and
(vi) To
inspect and copy any of the Company's books and records and obtain such other
information regarding the affairs of the Company during normal business
hours.
C. Services To
Company. The Company shall reimburse each Member for
reasonable expenses directly incurred for the Company and, if the other Members
agree, shall compensate each Member for services
rendered. Compensation paid to Members shall be reported for tax
purposes on Schedule K-1 to Form 1065.
Section
6.03. Restrictions
on Powers. Except as otherwise provided in this Agreement or
required by law, a Member shall lack the power and authority to act for or to
bind the Company or any other Member, if such action would change the Company to
a general partnership, change the limited liability of a Member, or affect the
status of the Company for Federal income tax purposes.
Section
6.04. Indemnification.
A. Company
Indemnity. The Company may indemnify and hold harmless its
Members, their respective Affiliates, and Managers, employees and agents (each,
an "Indemnitee") from and against any and all losses, claims, demands, costs,
damages, liabilities, joint and several, expenses of any nature (including
attorneys' fees and disbursements), judgments, fines, settlements, penalties and
other expenses actually and reasonably incurred by the Indemnitee in connection
with any and all claims, demands, actions, suits, or proceedings, civil,
criminal, administrative or investigative, in which the Indemnitee may be
involved, or threatened to be involved, as a party or otherwise, by reason of
the fact that the Indemnitee is or was a Member or manager of the Company or is
or was an employee or agent of the Company, including Affiliates of the
foregoing, arising out of or incidental to the business of the Company, provided
(i) the Indemnitee's conduct did not constitute willful misconduct or
recklessness, (ii) the action is not based on breach of this Agreement, (iii)
the Indemnitee acted in good faith and in a manner he or it reasonably believed
to be in, or not opposed to, the best interests of the Company and within the
scope of such Indemnitee's authority and (iv) with respect to a criminal action
or proceeding, the Indemnitee had no reasonable cause to believe its conduct was
unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendre, or
its equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee acted in a manner contrary to that
specified above.
B. Advancement of
Expenses. The Company may advance expenses incurred by an
Indemnitee in defending any claim, demand, action, suit or proceeding subject to
this Section 6.04 prior to the final disposition of such claim, demand, action,
suit or proceeding if the Company determines that the Indemnitee will more
likely than not be able to demonstrate compliance with the standard of conduct
set forth in paragraph A and receives an undertaking by the Indemnitee to repay
amounts advanced if such person is ultimately determined to be not entitled to
indemnification. The determination shall be made by the independent
Members or special legal counsel specifically retained for the making of the
determination.
C. Non-Exclusivity. The
indemnification provided by this Section shall be in addition to any other
rights to which the Indemnitee may be entitled under any agreement, vote of the
Members, as a matter of law or equity, or otherwise, and this indemnification
shall inure to the benefit of the successors, assignees, heirs, personal
representatives and administrators of the Indemnitee.
D. Insurance. The
Company may purchase and maintain insurance, at the Company's expense, on behalf
of any Indemnitee against any liability that may be asserted against or expense
that may be incurred by an Indemnitee in connection with the activities of the
Company regardless of whether the Company would have the power to indemnify such
Indemnitee against such liability under the provisions of this
Agreement.
E. Definition of Affiliate.
"Affiliate" means any Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person. "Control" means either (i) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise or (ii) a direct or indirect
equity interest of ten percent (10%) or more in the entity.
ARTICLE
VII
Books,
Records, Accounting, and Reports
Section
7.01. Books and
Records. Appropriate books and records with respect to the
Company's business, including, without limitation, all books and records
necessary to provide to the Member any information, lists and copies of
documents required to be provided pursuant to Section 6.02, shall at all times
be kept at the principal office of the Company or at such other places as agreed
to by the Members. Without limiting the foregoing, the following
shall be maintained at the Company's principal office: (i) a current list of the
full name and last known business address of each Member and Manager, (ii)
copies of records that would enable a Member to determine the relative voting
rights of the Members, (iii) a copy of the Articles of Organization, and any
amendments, (iv) copies of the Company's Federal, state and local income tax
returns and reports, if any, for the three most recent years, (v) the minutes of
all meetings of the Members and all written consents in lieu of meetings, and
(vi) copies of any financial statements of the Company for the three most recent
fiscal years. Any records maintained by the Company in the regular
course of its business may be kept on, or be in the form of, magnetic tape,
photographs or any other information storage device, provided that the records
so kept are convertible into clearly legible written form within a reasonable
period of time.
Section
7.02. Accounting. The
Company shall maintain its books in accordance with generally accepted
accounting principles, provided that the Company may use accounting methods and
principles permitted for income tax purposes, including the cash method of
accounting, and shall maintain the Capital Accounts in compliance with Section
704 of the Code.
ARTICLE
VIII
Tax
Matters
Section
8.01. Taxable
Year. If permitted by the Code, the taxable year of the
Company shall be the calendar year, unless otherwise determined by the
Members.
Section
8.02. Tax Matters
Partner. The Member having principal responsibility for
keeping the financial ac=counts of the Company (or in the absence of such
person, the Member acting as the chief executive officer of the Company) shall
have the sole and complete duty to collect, remit, or withhold all sales, use,
income, or other taxes payable by the Company, and shall be the "Tax Matters
Partner" (as defined in Section 6231 of the Code). The Tax Matters
Partner is authorized and required to represent the Company, at the Company's
expense, in connection with all examinations of the Company's affairs by tax
authorities, including resulting administrative and judicial
proceedings. Each Member agrees to cooperate with the Tax Matters
Partner, and to do or refrain from doing any or all things reasonably required
by the Tax Matters Partner to conduct such proceedings.
Section
8.03. Taxation as a
Partnership. No election shall be made by the Company or any
Member for the Company to be excluded from the application of any provision of
Sub-chapter K, Chapter 1 of Subtitle A of the Code or from any similar
provisions of any state tax laws.
ARTICLE
IX
Transfers
of Interests
Section
9.01. Restriction
On Transfer. A Member shall not transfer his interest in the
Company, in whole or in part, except by intestate succession or testamentary
disposition, through a decree or judgment from a court of competent
jurisdiction, or as permitted under Section 9.02. This restriction on
transfer shall not prohibit a Member from assigning some or all of his share of
distributions; provided, however, that such assignment shall not entitle the
Assignee to any of the other rights of the assigning Member until and unless the
Assignee is admitted as a Substitute Member of the Company.
Section
9.02. Transfer of
Interests by a Member; Substitute Members.
A. A
Member may transfer his interest under this Section upon satisfaction of the
following conditions:
(i) The
other Members consent to the Assignee's admission as a Substitute
Member. The consent shall be evidenced by a written instrument, dated
and signed by the other Members;
(ii) The
Assignee and the transferring Member shall execute and file with the Company all
documents evidencing the terms of the transfer; and
(iii) The
Assignee and the transferring Member shall have fulfilled all other requirements
of this Agreement.
B. Upon
a transfer or assignment by a Member other than by intestate succession or
testamentary disposition, or through a decree or judgment from a court of
competent jurisdiction, the transferor or assignor shall be presumed to have
given, unless otherwise stated in writing, the transferee or Assignee the right
to apply to become a Substitute Member. The admission of an Assignee as a
Substitute Member shall become effective on the date that the admission is
recorded in the books and records of the Company. Any Member who
purports to transfer all his interest in the Company shall cease to be a Member
only when the Assignee is admitted as a Substitute Member. Until that
time, the transferring Member shall continue to have all rights and obligations
of a Member, except those rights to distributions which were transferred or
assigned.
C. In
no event shall any interest be transferred to a minor or any incompetent except
by intestate succession or testamentary disposition, or through a decree or
judgment from a court of competent jurisdiction.
D. Any
holder of an interest, including a right to distributions or charging order,
shall be deemed conclusively to have agreed to comply with and be bound by all
terms and conditions of this Agreement, with the same effect as if such holder
had executed an express acknowledgment thereof, whether or not such holder in
fact has executed such an express acknowledgment.
E. Subject
to the provisions of subsection D, the holder of an interest acquired by
intestate succession or testamentary disposition, or through a decree or
judgment from a court of competent jurisdiction, shall become a Substitute
Member without the necessity of the Member's consent.
Section
9.03. Prohibited
Transfers and Assignments. No transfer or assignment shall be
made if the transfer or assignment (i) would violate applicable Federal and
state securities laws or regulations, (ii) would materially adversely affect the
classification of the Company as a partnership for Federal or state income tax
purposes or (iii) would affect the Company's qualification as a limited
liability company under the Act.
ARTICLE
X
Admission
and Expulsion of Members
Section
10.01. Admission of
Additional Members. The Company may admit an additional Member
by accepting Capital Contributions from such Member on such terms and conditions
as are approved by the Members. No Member shall have a preemptive or
other right to make a capital contribution unless authorized by contract or the
consent of the Members.
Section
10.02. Expulsion of
Members. Members may by majority vote expel a Member for cause
subject to the provisions of Section 11.01.
ARTICLE
XI
Dissolution
and Liquidation
Section
11.01. Dissociation
of Member. Upon the death or withdrawal (an "Event of
Dissolution") of a Member holding ten percent or more of the capital or Income
interests (such Member sometimes called a "Dissociated Member"), the Company
shall dissolve and its affairs shall be wound up. The Company shall
thereafter conduct only activities necessary to wind up its affairs, unless one
or more Members remain, and the Member or those Members agree to continue the
Company within 60 days after the Event of Dissolution. If an election
to continue the Company is made, the Company shall continue and the Dissociated
Member or the successor to the interest of the Dissociated Member shall have the
rights of any Assignee, and:
A. The
remaining Members may elect, within 30 days of the decision to continue the
Company, to purchase the Dissociated Member's interest on such terms and
conditions as the remaining Members and the Dissociated Member or the legal
representative of the Dissociated Member may agree. If the remaining
Members and the Dissociated Member (or such legal representative) do not agree,
the remaining Members shall purchase the interest for a cash purchase price
determined by the Company based on the value of the Capital Account of the
Dissociated Member, as of the end of the calendar month preceding the Event of
Dissolution, adjusted as if: (i) all Company Property were sold at
fair market value; (ii) all liabilities of the Company were paid; (iii) the
Company was liquidated in accordance with the provisions of Section 11.02; and
(iv) any reasonable damages suffered by the Company because of the withdrawal or
wrongful acts of a Dissociated Member were reduced to judgment and charged
against the Dissociated Member's Capital Account. If the parties
cannot agree on the fair market value of the interest of the Dissociated Member,
then the parties shall use a business appraiser to evaluate the fair market
value of the interest. The fair market value shall be paid within 90 days of the
date of withdrawal or expulsion, except as otherwise provided in Article 3.04
for withdrawing members.
B. The
Company shall continue until the expiration of the term for which it was formed
or until another Event of Dissolution, in which event any remaining Member or
Members shall again elect whether to continue the Company pursuant to this
Section 11.01.
Section
11.02. Dissolution
and Liquidation. The Company shall be dissolved and its
affairs shall be wound up when: (i) the term of the Company stated in the
Articles of Organization expires; (ii) if, after an Event of Dissolution, the
remaining Member or Members fail to continue the Company pursuant to Section
11.01; or (iii) the Members vote to dissolve the Company.
Section
11.03. Method of
Winding Up. Upon dissolution of the Company pursuant to
Section 11.02, the Company shall liquidate and wind up its
affairs. The Members shall continue to share profits and losses
during the period of liquidation and winding up in the same proportion as before
commencement of winding up and dissolution. The proceeds from the
liquidation and winding up shall be applied in the following order of
priority:
A. To
creditors, including Members who are creditors, to the extent permitted by law,
in satisfaction of liabilities of the Company other than liabilities to Members
on account of their Capital Contributions or on account of a Member's withdrawal
from the Company or pursuant to a withdrawal of capital; and
B. The
balance, to Members in accordance with this Agreement.
Unless
the Members shall determine otherwise, all distributions will be made in cash,
and none of the Company Property will be distributed in kind to the
Members.
Section
11.04. Filing
Articles of Dissolution. When an event set forth in Section
11.02 occurs, the Company shall file Articles of Dissolution as required by the
Act, and shall take whatever other action may be advisable or proper to carry
out the liquidation and winding up of the Company.
Section
11.05. Return of
Capital. The return of Capital Contributions shall be made
solely from Company Property.
ARTICLE
XII
Action
By Members; Meetings; Consents
Section
12.01. Action By
Members. Whenever this Agreement references an action to be
taken by the Members, such reference presumes that the vote or consent of
Members having a Majority Interest is sufficient to take such action, unless a
greater vote is specifically required by this Agreement. With the
vote or consent of a Majority Interest, the Members may amend this Agreement,
unless the provision to be amended requires action by a greater vote, in which
case the same greater vote shall be required to amend that
provision.
Section
12.02. Meetings. Meetings
may be called by any Member or a Manager, by giving at least five days' prior
notice of the time, place and purpose of the meeting to all
Members.
Section
12.03. Adjournment. When
a meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place are announced at the meeting at which
the adjournment is taken, and such adjournment does not extend for more than 45
days. At the adjourned meeting, the Company may transact any business
which might have been transacted at the original meeting. If the
adjournment is for more than 45 days, a notice of the adjourned meeting shall be
given in accordance with this Section 12.04.
Section
12.04. Waiver of
Notice; Consent to Meeting. The action taken at any meeting,
however called and noticed, and whenever held, are as valid as though the action
was taken at a meeting duly held, if a quorum is present either in person or by
proxy, and if, either before or after the meeting, each Member entitled to vote,
but not present in person or by proxy, approves by signing a written waiver of
notice or an approval to the holding of the meeting or an approval of the
minutes thereof. All waivers, consents, and approvals shall be filed
with the Company records or made a part of the minutes of the
meeting. A Member’s attendance at a meeting shall constitute a waiver
of notice of the meeting, except when such Member objects, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened; and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters required to be
included in the notice of the meeting, but not so included, if the objection is
expressly made at the meeting.
Section
12.05. Quorum. Members
having a Majority Interest, represented in person or by proxy, shall constitute
a quorum at a meeting of Members. In the absence of a quorum, any
meeting of Members may be adjourned from time to time by the Members represented
either in person or by proxy, but no other matters may be proposed, approved or
disapproved, except as provided in Section 12.03.
Section
12.06. Action
Without a Meeting. Any action that may be taken at a meeting
of the Members may be taken without a meeting if a consent to such action is
signed by those Members sufficient in number to have taken action at a
meeting. Prompt notice of the taking of any action without a meeting
shall be given to those Members who have not consented in writing.
ARTICLE
XIII
General
Provisions
Section
13.01. Notices. Any
notice, demand, request or report required or permitted to be given or made to a
Member under this Agreement shall be in writing and shall be deemed given or
made when delivered in person or when sent by first class mail, overnight
delivery, facsimile transmission, or other suitable means to the Member to the
address shown on the records of the Company. Any notice, payment, or
report to be given or sent to a Member shall be deemed conclusively to have been
given or sent, upon posting or transmitting of such notice, payment, or report
to the address shown on the records of the Company, regardless of any claim of
any Person who may have an interest by reason of an assignment or
otherwise.
Section
13.02. Resolutions
of Controversies and Claims. In the event of any controversy
or claim, whether based on contract, tort, statute, or other legal or equitable
theory (including any claim of fraud, misrepresentation, or fraudulent
inducement), arising out of or related to the corporate contract between and
among the Company, its Members, Managers, employees, or agents (as the contract
is embodied under this Agreement, any resolutions, the Act and the common law at
the time of the acts giving rise to the controversy or claim) (the “Dispute”),
the parties agree as follows:
(i)
Mediation. If the
Dispute cannot be resolved by negotiation, the parties agree to submit the
Dispute to mediation by a mediator mutually selected by the
parties. If the parties are unable to agree upon a mediator, the
American Arbitration Association shall appointed the mediator. In any
event, the mediation shall take place within 30 days of the date that a party
gives the other party written notice of its desire to mediate the
Dispute.
(ii)
Arbitration.
A. If
not resolved by mediation, the parties shall resolve the Dispute by arbitration
pursuant to this Section and the then-current rules and supervision of the
American Arbitration Association. The arbitration shall be held in New York
City, New York, before a single arbitrator who is knowledgeable about the
subject matter of the disputed issue or issues. The arbitrator may order the
parties to exchange xxxxx of non-rebuttal exhibits and copies of witness lists
in advance of the arbitration hearing. The arbitrator shall, however,
have no other power to order discovery or depositions unless and then only to
the extent that all parties otherwise agree in writing. The
arbitrator’s decision and award shall be final and binding and may be entered in
any court having jurisdiction. The arbitrator shall not have the
power to award, and no one subject to this Section shall seek, an award of,
punitive, exemplary, or consequential damages, or any damages excluded by or in
excess of any damage limitations expressed in this Agreement or any subsequent
agreement between the parties. To prevent irreparable harm, the arbitrator may
grant temporary or permanent injunctive or other equitable relief.
B. Issues
of arbitrability shall be determined in accordance with the Federal substantive
and procedural laws relating to arbitration. All other aspects of the
Agreement shall be interpreted in accordance with, and the arbitrator shall
apply and be bound to follow, the substantive laws of the State of New
York. Each party shall bear its own attorneys’ fees associated with
negotiation, mediation, and arbitration, and other costs and expenses shall be
borne as provided by the rules of the American Arbitration
Association. If court proceedings to stay litigation or compel
arbitration are necessary, the party who unsuccessfully opposes such proceedings
shall pay all associated costs, expenses, and attorneys’ fees reasonably
incurred by the other party.
(iii)
Confidentiality. Neither
a party, witness, or the arbitrator may disclose the facts of the underlying
dispute or the contents or results of any negotiation, mediation, or arbitration
without the prior written consent of all parties, except as necessary (and then
only to the extent required) to enforce or challenge the settlement agreement or
the arbitration award or to comply with legal, financial or tax reporting
requirements.
(iv)
Limitations on
Actions. No party may bring a claim or action, regardless of
form, arising out of or related to this Agreement, including any claim of fraud,
misrepresentation, or fraudulent inducement, more than one year after the cause
of action accrues, unless the injured party could not have reasonably
discovered, and did not discover, the basic facts supporting the claim within
one year.
(v)
Covered
Parties. The duties to mediate and arbitrate shall extend to
any director, officer, employee, shareholder, principal agent, trustee in
bankruptcy or otherwise, affiliate, subsidiary, third-party beneficiary, or
guarantor of a party making or defending a claim that would otherwise be subject
to this Section. Unless the context otherwise requires, references to
party or parties within this Section shall include the foregoing persons,
provided, however, that the specific provisions regarding the allocation of
costs in paragraph (ii).B. shall not preclude any rights to indemnification,
reimbursement, contribution or other similar benefits held by the foregoing
persons.
(vi)
Severability. If
any part of this Section is held to be unenforceable, it shall be severed and
shall not affect either the duties to mediate and arbitrate or any other part of
this Section.
Section
13.03. Captions. All
article and section captions in this Agreement are for convenience
only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any
provisions. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this
Agreement.
Section
13.04. Pronouns and
Plurals. Whenever the context may require, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa.
Section
13.05. Further
Actions. The parties to this Agreement shall execute and
deliver all documents, provide all information and take or refrain from taking
action as may be necessary or appropriate to achieve the purposes of this
Agreement.
Section
13.06. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their heirs, executors, administrators, successors,
legal representatives and permitted assignees.
Section
13.07. Integration. This
Agreement constitutes the entire agreement among the parties pertaining to the
subject matter of this Agreement and supersedes all prior agreements and
understandings pertaining to this Agreement.
Section
13.08. Waiver. No failure
by any party to insist upon the strict performance of any covenants, duty,
agreement or condition of this Agreement or to exercise any right or remedy
arising from a breach shall constitute waiver of any such breach or any other
covenant, duty, agreement or condition.
Section
13.09. Counterparts. This
Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties, notwithstanding that all
such parties are not signatories to the original or the same
counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature, independently of the signature of any
other party.
Section
13.10. Applicable
Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, without regard to its principles
of conflict of laws.
Section
13.11. Invalidity
of Provisions. If any provision of this Agreement is or
becomes invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions shall not be
affected.
The
Members sign this Agreement as of the above date by execution of the attached
signature pages.
XXXXX
X. XXXXXXXX
|
SUBSCRIPTION
SIGNATURE PAGE
This
subscription is made by and between FORWARD PROFIT INVESTING LLC , an New York
limited liability company (the "Company"), and the undersigned. In
consideration of the Company's agreement to accept the undersigned as a Member
of the Company upon the terms and conditions set forth in the Company's
Operating Agreement, the undersigned agrees and represents as
follows:
1. The
undersigned is contributing to the Company capital in the amount (and if other
than cash, in the nature) set forth on Exhibit A.
2. The
undersigned represents and warrants to, and agrees with the Company, as
follows:
(a) The
undersigned is acquiring an interest in the Company for his own account and not
for the account of any other person, and not with a view to distribution,
assignment or resale to others or to fractionalization in whole or in
part. No other person has or will have a direct or indirect
beneficial interest in such interest and the undersigned will not sell,
hypothecate or otherwise transfer his interest except in accordance with the
Operating Agreement.
(b) The
undersigned has been furnished with and has carefully read the Operating
Agreement and fully understands the rights and obligations associated with
ownership of these interests.
(c) The
Company has made available to the undersigned all documents and information that
the undersigned has requested relating to the interests.
(d) The
undersigned has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the interests in the
Company and of making an informed decision.
4. This
Subscription Agreement and the Operating Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede any and all prior or contemporaneous representations, warranties,
agreements and understandings in connection therewith. This agreement may be
amended only by a writing executed by all parties.
EXHIBIT
A
Name
of Member
|
Ownership
|
Capital
Contribution
|
Date
|
XXXXX
X. XXXXXXXX
|
100%
|
$1,000.00
|
MARCH
19, 2009
|
MANAGING
MEMBER
|