LIMITED LIABILITY COMPANY AGREEMENT OF GK INVESTMENT PROPERTY HOLDINGS II, LLC A DELAWARE LIMITED LIABILITY COMPANY
Exhibit
2(b)
OF
GK INVESTMENT PROPERTY HOLDINGS II, LLC
A DELAWARE LIMITED LIABILITY COMPANY
This Limited Liability Company Agreement, is made
and entered into effective as of the 11th day
of July, 2019, by and among GK Investment Property Holdings II,
LLC, a Delaware limited liability company (the "Company"),
GK Development, Inc., an Illinois corporation (the
"Manager")
and the undersigned member of the Company (the "Member").
AGREEMENT
WHEREAS,
the Company, was formed on July 11, 2019, pursuant to the Delaware
Limited Liability Company Act (Title 6, Subtitle II,
Chapter 18), as amended from time to time.
NOW,
THEREFORE, in consideration of the mutual promises of the parties,
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company, the
Manager and the Member hereby agree as follows:
SECTION I
DEFINITIONS
1.1 Act means the Delaware Limited Liability Company
Act (Title 6, Subtitle II, Chapter 18), as amended from time
to time.
1.2 Accountant means
the certified public accounting firm selected by the Manager to
provide accounting services to the Company and its Affiliates
generally.
1.3 Adjustment Year
has the meaning set forth in Section
6225(d)(2) of the Code or comparable provisions of state, local or
non-U.S. law.
1.4 Affiliate means
any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, a Person. The term "control" (including the terms
"controlling," "controlled by," and "under common control with")
means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of the voting securities of such
Person, by contract or otherwise.
1.5 Agreement means
this Limited Liability Company Agreement, as it may be amended from
time to time, which the parties intend to constitute an operating
agreement within the meaning of the Act, and is further intended to
be the sole document to serve as such operating
agreement.
1.6 Capital
Account shall have the
meaning set forth in Section
6.2 of this
Agreement.
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1.7 Capital
Contribution means the
amount of money or other property that each Member contributes or
is deemed to have contributed to the Company from time to
time.
1.8 Certificate of
Formation means the
Company's Certificate of Formation, as filed with the State, as the
same may be amended from time to time.
1.9 Class A Member means any
holder of Class A Units who is admitted to the Company as a Class A
Member.
1.10 Class A Unit means a Unit
entitling the owner of such Unit, if admitted as a Class A Member,
to the respective rights, benefits and preferences of a Class A
Member of the Company. The aggregate number of authorized Class A
Units is 100.
1.11 Code means
the Internal Revenue Code of 1986, as amended.
1.12 Commission means
the United States Securities and Exchange
Commission.
1.13 Company has
the meaning set forth in the introductory paragraph
above.
1.14 Company Minimum
Gain shall have the same
meaning as the term "partnership minimum gain" set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the
Regulations.
1.15 Date of
Formation shall have the
meaning set forth in Section
2.1 of this
Agreement.
1.16 Depreciation means,
for each Fiscal Year or other period, an amount equal to the
depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Fiscal Year or other
period, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the
beginning of such Fiscal Year or other period, Depreciation shall
be an amount which bears the same ratio to such beginning Gross
Asset Value as the federal income tax depreciation, amortization or
other cost recovery deduction for such Fiscal Year or other period
bears to such beginning adjusted tax basis; provided, however, that
if the federal income tax depreciation, amortization or other cost
recovery deduction for such Fiscal Year or other period is zero,
Depreciation shall be determined with reference to such beginning
Gross Asset Value using any reasonable method selected by the
Manager.
1.17 Fiscal
Year shall have the
meaning set forth in Section
10.1 of this
Agreement.
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1.18 Gross Asset Value means, with respect to any
asset, the asset's adjusted basis for federal income tax purposes,
except as follows:
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(i)
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The initial Gross Asset Value of any asset contributed by a Member
to the Company shall be the gross fair market value of such asset,
as determined by the Manager;
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(ii)
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The Gross Asset Values of all Company assets shall be adjusted to
equal their respective gross fair market values, as determined by
the Manager, as of the following times: (i) the acquisition of an
additional interest in the Company by any new or existing Member in
exchange for more than a de minimis Capital Contribution, (ii) the
distribution by the Company to a Member of more than a de minimis
amount of Company property as consideration for an interest in the
Company; (iii) the liquidation of the Company within the meaning of
Regulations Section l.704-l (b)(2)(ii)(g), and (iv) the grant an
interest in the Company (other than a de minimis interest) as
consideration for the provision of services to or for the benefit
of the Company by an existing Member acting in a member capacity,
or by a new Member acting in a member capacity or in anticipation
of becoming a Member of the Company; provided, however, that an
adjustment described in clauses (i), (ii) or (iv) above shall be
made only if the Manager determines that such adjustment is
necessary or appropriate to reflect the relative economic interests
of the Members in the Company;
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(iii)
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The Gross Asset Value of any Company asset distributed to any
Member shall be adjusted to equal the gross fair market value
(taking Code Section 7701(g) into account) of such asset on the
date of distribution, as determined by the Manager;
and
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(iv)
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The Gross Asset Values of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 734(b) or Code Section 743(b), but
only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m) and subparagraph (vii) of the definition of
Net Profit and Net Loss or Section 8.2(f), provided, however, that
Gross Asset Values shall not be adjusted pursuant to this
subparagraph (iv) to the extent the Manager determines that an
adjustment pursuant to subparagraph (ii) is necessary or
appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this subparagraph
(iv).
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If
the Gross Asset Value of an asset has been determined or adjusted
pursuant to subparagraphs (i), (ii) or (iv) above, such Gross Asset
Value shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Net
Profit and Net Loss.
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1.19 Majority means,
with respect to the Members as a whole or a specific class of
Members, Members owning more than 50% of the Units then held by all
Members of the Company or of such class, entitled to vote or
consent on such matter.
1.20 Manager means
GK Development, Inc. and any subsequent Person elected pursuant
to Section
5.2(c) of this
Agreement.
1.21 Member Nonrecourse
Debt shall have the same
meaning as the term "partner nonrecourse debt" set forth in Section
l.704-2(b)(4) of the Regulations.
1.22 Member Nonrecourse
Debt Minimum Gain shall
have the same meaning as the term "partner nonrecourse debt minimum
gain" set forth in Section 1.704- 2(i)(2) of the Regulations and
shall be determined in accordance with Section 1.704-2(i)(3) of the
Regulations.
1.23 Member means any holder of Units who is admitted to
the Company as a Member.
1.24 Members are
the Class A Members and any other
Persons admitted to the Company as Members.
1.25 New Partnership Audit
Procedures means Subchapter C
of Chapter 63 of the Code, as modified by Section 1101 of the
Bipartisan Budget Act of 2015, Pub. L. No. 114-74, any amended or
successor version, Treasury Regulations promulgated thereunder,
official interpretations thereof, related notices, or other related
administrative guidance.
1.26 Net
Profits and Net
Losses means for each
Fiscal Year or other period, an amount equal to the Company's net
taxable income or loss for such year or period as determined for
federal tax purposes (including separately stated items) in
accordance with the accounting method and rules used by the Company
and in accordance with Section 703 of the Code with the following
adjustments:
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(i)
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Any items of income, gain, loss and deduction which are specially
allocated to a Member shall not be taken into account in computing
Net Profit or Net Loss under this Agreement;
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(ii)
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Any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Net Profit and
Net Loss (pursuant to this definition) shall be included in
determining Net Profit or Net Loss hereunder by adding such amount
of income to taxable income or taxable loss;
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(iii)
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Any expenditure of the Company described in Section 705(a)(2)(B) of
the Code or treated as Code Section 705(a)(2)(B) expenditures and
not otherwise taken into account in computing Net Profit and Net
Loss (pursuant to this definition) shall be including in
determining Net Profit or Net Loss hereunder by deducting such
expenditure from such taxable income or taxable loss;
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(iv)
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In the event of Gross Asset Value of any Company asset is adjusted
pursuant to subparagraphs (ii) or (iii) of the definition of Gross
Asset Value, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for
purposes of computing Net Profit and Net Loss;
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(v)
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Gain or loss resulting from the disposition of Company property
shall be computed by reference to the Gross Asset Value of such
property, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
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(vi)
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In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such
Fiscal Year, computed in accordance with the definition of
Depreciation; and
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(vii)
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To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Section 734(b) of the Code or Section
743(b) of the Code is require pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations to be taken into account
in determining Capital Accounts as a result of a distribution other
than in liquidation of a Percentage Interest, the amount of such
adjustment shall be treated as an item of gain (if the adjustment
increase the basis of the asset) or loss (if the adjustment
decreases the basis of the asset) from the disposition of the asset
and shall be taken into account for the purposes of computing Net
Profit or Net Loss.
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1.27 Notice shall
have the meaning set forth in Section
10.3 of this
Agreement.
1.28 Officers shall
have the meaning set forth in Section 5.5(a).
1.29 Percentage
Interest means, as
applicable, the interest of a Member in the Company, or in any
class or classes of the Company's Units, at any particular time,
expressed as a percentage and calculated by dividing the total
number of Units owned by the Member in the Company, or in the class
of Units in question, by the total number of Units of the Company,
or such applicable class, as are issued and outstanding as of the
date of calculation and then multiplying the quotient by 100. The
Percentage Interest of each Member is set forth
on Exhibit
A to this
Agreement.
1.30 Person means
and includes an individual, proprietorship, trust, estate,
partnership, joint venture, association, company, corporation,
limited liability company or other entity, regardless of the form
of organization and whether organized for profit or
otherwise.
1.31 Proceeding means
any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative or investigative and
whether formal or informal.
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1.32 Regulations mean
the final and temporary income tax regulations promulgated under
the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding
regulations).
1.33 Regulatory
Provisions shall have the
meaning set forth in Section
8.3 of this
Agreement.
1.34 Service means
the Internal Revenue Service.
1.35 State means
the State of Delaware.
1.36 Terminating Capital
Transaction means the
sale, exchange or other disposition of all or substantially all of
the assets of the Company with the intent to liquidate the
Company.
1.37 Transfer shall
have the meaning set forth in Section
9.1 of this
Agreement.
1.38 Transferee means
a Person to whom or which Units are transferred in accordance with
this Agreement.
1.39 Trustee means
UMB Bank and any successor as Trustee.
1.40 Units shall
mean, collectively and individually, Class A Units
or any other securities which are
issued by the Company from time to time.
SECTION II
FORMATION, NAME AND TERM
2.1 Formation. The
Member acknowledges the formation of the Company as a Delaware
limited liability company pursuant to the filing of the Certificate
of Formation with the Secretary of State of the State on July 11,
2019 ("Date of
Formation").
2.2 Name, Office and
Registered Agent. The name of
the Company shall be "GK Investment Holdings II, LLC." The
principal office and place of business of the Company shall be 000
Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000. The name
of the registered agent and the registered office of the Company,
for purposes of the Act is National Registered Agents, Inc., 000
Xxxxxxxxx Xxxxx, Xxxxx, Xxxxxxxx 00000. The Manager may at any time
change the location of the principal office or the registered
agent, provided the Manager gives Notice to all Members of any such
change.
2.3 Governing
Law. This Agreement and all
questions with respect to the rights and obligations of the
Members, its construction, enforcement, and interpretation, and the
formation, administration, and termination of the Company shall be
governed by the provisions of the Act and other applicable laws of
the State without regard to conflicts of law
rules.
2.4 Term.
The term of the Company commenced on the Date of Formation and
shall continue perpetually, unless sooner terminated as provided
in Section 2.5.
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2.5 Events of
Dissolution. The Company shall
be dissolved upon the occurrence of the following
events:
(a)
The determination in writing of the Manager and a Majority of the
Members to dissolve the Company; or
(b)
as otherwise required by the Act.
2.6 Conclusion of
Affairs. Upon the dissolution
of the Company for any reason, if the Company is not continued as
permitted by this Agreement, the Manager shall proceed promptly to
wind up the affairs of the Company. Except as otherwise provided in
this Agreement, the Members and their successors in interest shall
continue to share distributions during the period of winding up in
the same manner as before the dissolution. The Manager shall
determine the time, manner, and terms of any sale or sales of
Company assets pursuant to such winding up.
2.7 Termination.
Upon completion of the winding up of the Company and the
distribution of all Company assets to the Members, pro rata, in
accordance with their Percentage Interests, the Company shall
terminate, and the Members shall execute and record a Certificate
of Cancellation of the Company, as well as any and all other
documents required to effectuate the dissolution and termination of
the Company.
SECTION III
BUSINESS OF THE COMPANY
The
Company is formed with the intent to acquire, own, redevelop,
and operate commercial real estate. Notwithstanding the
aforementioned intended purpose, the Company is permitted to
transact any lawful business not required to be stated specifically
in this Agreement and for which limited liability companies may be
formed under the Act.
SECTION IV
RIGHTS AND OBLIGATIONS OF MEMBERS
4.1 Members.
The Members of the Company are those Persons set forth
on Exhibit
A to this
Agreement.
4.2 Other
Activities. Except as otherwise
expressly provided in this Agreement or in any exhibit hereto, any
Member may engage in, or possess any interest in, another business
or venture of any nature and description, independently or with
others, and neither the Company nor any Member shall have any
rights in, or to, any such independent ventures or the income or
profits derived therefrom.
4.3 No Right to
Withdraw. Except as otherwise
set forth in this Agreement, no Member shall have any right to
withdraw voluntarily from the Company.
4.4 Places of
Meetings. All meetings of the
Members shall be held at such place, either within or without the
State, as from time to time may be fixed by the Manager. A Member
may attend in person or by conference call or other means where
each participant can hear and be heard. For purposes of this
Agreement, such telephonic attendance shall be deemed in person
attendance at any such meeting.
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4.5 Meetings.
A meeting of the Members for any purpose or purposes may be called
at any time by the Manager. Member(s) in the aggregate owning not
less than 20% of the Units may request in writing that the Manager
call a meeting. Any such request shall include the purpose of the
special meeting and a proposed time and date for the meeting. The
Manager, in its sole discretion, may call any meeting so requested.
At a meeting, no business shall be transacted and no action shall
be taken other than that stated in the Notice of the
meeting.
4.6 Notice of
Meetings.
(a) When
calling a meeting, the Manager shall provide all Members with
Notice at least ten (10) calendar days and at most sixty (60)
calendar days before the date of the meeting to each Member
entitled to vote at the meeting, which Notice may be waived in
writing by any Member.
(b) Any Notice of a meeting of the Members
shall be given in accordance with the provisions
of Section
10.3 of this
Agreement.
4.7 Voting. Except
as otherwise provided in this Agreement or the Act, or as otherwise
required by law:
(a) At any meeting, each Member shall be entitled
to cast one vote for each Unit such Member owns. The failure of a
Member to vote in person at a meeting or to timely deliver such
Member's proxy on or before the commencement of such meeting, shall
be deemed to constitute the consent and approval by such Member to
all business transacted at the applicable meeting. The Members
neither shall take part in the management of the Company, nor
transact any business for the Company in their capacity as Members;
neither shall they have power to sign for, or to bind, the
Company; provided,
however, that the Members shall
have the right as provided in this Agreement to approve or consent
to certain matters.
(b)
A Majority of Members at the time of any meeting shall constitute a
quorum for the transaction of business.
(c)
The affirmative vote of a Majority of the Members represented at a
meeting and entitled to vote shall be the act of the Members,
unless a greater or lesser vote is required by the Act or this
Agreement.
(d) Except as otherwise provided in this
Agreement, upon approval by the Manager and recommendation to the
Members, a Majority of the Members, either present and voting at a
meeting duly called and held or acting by written consent pursuant
to Section
4.8 shall be required to
approve the following actions with respect to the
Company:
(i) Amendment of the Certificate of Formation
or, subject to Section 10.13,
this Agreement;
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(ii)
Merger, equity interest exchange, business combination or
consolidation with any other Person, except a wholly-owned
subsidiary, in which the Company is not the surviving
entity;
(iii)
A Terminating Capital Transaction;
(iv) A decision to file a voluntary petition
or otherwise initiate proceedings to have the Company adjudicated
insolvent, or seeking an order for relief of the Company as debtor
under the United States Bankruptcy Code (11 U.S.C. §§
101 et
seq.); to file any petition
seeking any composition, reorganization, readjustment, liquidation,
dissolution or similar relief under the present or any future
federal bankruptcy laws or any other present or future applicable
federal, state or other statute or law relative to bankruptcy,
insolvency, or other relief for debtors with respect to the
Company; or to seek the appointment of any trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or
other similar official) of the Company or of all or any substantial
part of the assets of the Company, or to make any general
assignment for the benefit of creditors of the Company, or to admit
in writing the inability of the Company to pay its debts generally
as they become due, or to declare or effect a moratorium on the
Company's debt or to take any action in furtherance of any of the
above proscribed actions.
(v) Any
decision to dissolve or liquidate the Company, except as
specifically set forth in this Agreement.
4.8 Action Without a
Meeting. Any action required to
be taken at a meeting of the Members, or any action which may be
taken at a meeting of the Members, may be taken without a meeting
with a written consent. Such consent shall set forth the action so
taken with the signature of the requisite Members required to act,
whether before or after such action. Such consent shall have the
same force and effect as a requisite vote of the Members, and the
Manager may so describe it as such in any article or document filed
with the Secretary of State of the State or otherwise. The Manager
shall be promptly provided with a copy of any written consent of
the Members and shall maintain such written consent at its
principle place of business.
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SECTION V
MANAGER
5.1 Power and Authority of the
Manager. Except for those
matters specifically requiring approval of the Members as set forth
in Section 4.7(d),
the Manager shall have complete and exclusive control of the
management of the Company's business and affairs (including tax and
accounting elections), and the Members shall have no right to
participate in the management or the conduct of the Company's
business and affairs nor any power or authority to act for, or on
behalf of, the Company in any respect whatsoever. Except as
otherwise specifically provided in the Certificate of Formation,
this Agreement or the Act, the Manager shall have the right, power,
and authority on behalf of the Company and in its name to exercise
all of the rights, powers, and authority of the Company under the
Act. The Manager shall direct, manage, and control the business of
the Company to the best of its ability and shall have full and
complete authority, power, and discretion to make any and all
decisions and to do any and all things that the Manager shall deem
to be reasonably required to accomplish the business and objectives
of the Company. The Manager shall act in good faith and in a manner
that the Manager reasonably believes to be in the best interests of
the Company. In addition to, and not as a limitation
upon, Section 5.6,
but subject to Section 18-1011 of the Act, any loss or damage
incurred by the Manager by reason of any act or omission performed
or omitted by it or its agents and employees in good faith on
behalf of the Company and in a manner reasonably believed to be
within the scope of the authority granted to it by this Agreement
and in the best interests of the Company (but not, in any event,
any loss or damage incurred by the Manager by reason of gross
negligence, willful misconduct, fraud or any breach of his
fiduciary duty as the Manager with respect to such acts or
omissions) shall be paid from Company assets to the extent
available (but no Member shall have any personal liability to the
Manager under any circumstances on account of any such loss or
damage incurred by the Manager or on account of the payment
thereof). To the extent that the Act allows this Agreement to
define the fiduciary standard of the Manager, that standard shall
be met unless the error or omission of the Manager constituted
gross negligence, willful misconduct, or fraud.
5.2 Managers; Removal;
Resignation; Election.
(a) Number of
Managers. GK Development,
Inc. shall be the sole Manager of the Company until its replacement
pursuant to Section
5.2(c) hereof.
(b) Qualification. The
Manager need not be a Member of the Company.
(c) Removal; Resignation; Death;
Election.
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(i) Removal. The Manager may only be removed by a
Majority of the Members if it has made a decision to file a
voluntary petition or otherwise initiate proceedings to have the
Manager adjudicated insolvent, or to seek an order for relief of
the Manager as debtor under the United States Bankruptcy Code (11
U.S.C. §§ 101 et seq.); to file any petition seeking any composition,
reorganization, readjustment, liquidation, dissolution or similar
relief under the present or any future federal bankruptcy laws or
any other present or future applicable federal, state or other
statute or law relative to bankruptcy, insolvency, or other relief
for debtors with respect to the Manager; to seek the appointment of
any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of the Company or
of all or any substantial part of the assets of the Company, to
make any general assignment for the benefit of creditors of the
Company, to admit in writing the inability of the Company to pay
its debts generally as they become due, or to declare or effect a
moratorium on the Company's debt or to take any action in
furtherance of any of the above proscribed
actions.
(ii) Resignation. The Manager may resign upon the earlier of
180 days written Notice to the Company or upon the election of a
replacement Manager.
(iii) Dissolution. The Manager shall cease to be the manager upon
its dissolution.
(iii) Election. Upon the dissolution, removal or resignation
of the Manager, a replacement Manager shall be elected by a
Majority of the Members at the meeting called for such
purpose.
5.3 Reserved
Powers.
(a)
Notwithstanding any provision to the contrary contained herein, the
approval of the Manager shall be required for the following actions
with respect to the Company:
(i) Amendment
of the Certificate of Formation or this Agreement;
(ii) The
conversion of the Company to another type of entity organized
within or without the State, including without limitation, a
limited partnership;
(iii)
Merger, equity interest exchange, business combination or
consolidation with any other Person, excepting a wholly-owned
subsidiary;
(iv) Creating
or authorizing any new class or series of Units or equity, or
selling, issuing or granting additional Units;
(v) A decision to file a voluntary petition
or otherwise initiate proceedings to have the Company adjudicated
insolvent, or seeking an order for relief of the Company as debtor
under the United States Bankruptcy Code (11 U.S.C. §§
101 et
seq.); to file any petition
seeking any composition, reorganization, readjustment, liquidation,
dissolution or similar relief under the present or any future
federal bankruptcy laws or any other present or future applicable
federal, state or other statute or law relative to bankruptcy,
insolvency, or other relief for debtors with respect to the
Company; or to seek the appointment of any trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or
other similar official) of the Company or of all or any substantial
part of the assets of the Company, or to make any general
assignment for the benefit of creditors of the Company, or to admit
in writing the inability of the Company to pay its debts generally
as they become due, or to declare or effect a moratorium on the
Company's debt or to take any action in furtherance of any of the
above proscribed actions;
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(vi)
Any decision to dissolve or liquidate the Company, except as
specifically set forth in this Agreement;
(vii) Approving
any budget or strategic or business plan for the Company or any of
its Affiliates;
(viii) Except
with respect to an Affiliate of the Company, making any investment
in any Person;
(ix) Encumbering
all of the assets of the Company or any Affiliate of the Company;
and
(x) Making
any distributions of Company cash or other property except as
specifically provided in this Agreement.
5.4 Action Without a
Meeting. Notwithstanding any
other provision of this Agreement, any action required to be taken,
or which may be taken, by the Manager, may be taken by consent in
writing, setting forth the action so taken, shall be signed before
or after such action by the Manager. The Manager shall maintain a
copy of any written consent at its principle place of
business.
5.5 Officers.
(a) Designation and Election of
Officers; Terms. The Manager,
at its discretion, may elect and appoint officers (the
"Officers"),
whose titles may be specified by the Manager. All Officers shall
hold office until removed by the Manager. Any two or more offices
may be held by the same person.
(b) Removal of Officers;
Vacancies. Any Officer may be
removed summarily with or without cause, at any time, by the
Manager. Vacancies, including a vacancy caused by the death,
disability, resignation, or removal of any Officer or Officers, may
be filled by the Manager.
(c) Duties. The Officers shall have such powers and duties
as from time to time shall be conferred upon them by the Manager.
The Manager shall have the power to delegate any of its authority
hereunder to any Officer or Officers.
(d) Limitation on Liability of
Officers. In acting in the
capacity as an Officer, each Officer shall only be liable to the
extent that, and shall be indemnified as, the Manager would be
under Section 5.6 had
the Manager taken the action delegated to the
Officer.
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5.6
Indemnification.
(a) Nature of
Indemnity. Subject
to Section
5.1, the Manager and its agents
and employees who was or is made a party (or is threatened to be
made a party) to or is involved in any Proceeding by reason of the
fact that he, or a Person of whom he is the legal representative,
is or was, or has agreed to be, the Manager, or is or was serving
at the request of the Company as the Manager, employee, trustee,
fiduciary, or agent of, or in any other capacity with another
Person, including without limitation any Affiliate of the Company,
shall be indemnified and held harmless by the Company, unless
prohibited from doing so by the Act (but, in the case of any
amendment of the Act, only to the extent that such amendment
permits the Company to provide broader indemnification rights than
the Act permitted the Company to provide prior to such amendment)
from and against all expense, liability and loss (including
attorneys' fees actually and reasonably incurred by such Person in
connection with such Proceeding) and such indemnification shall
inure to the benefit of his heirs, legatees, devisees, executors,
administrators, trustees, personal representatives, successors and
assigns; provided,
however, that, except as
provided in Section 5.6(b),
the Company shall indemnify any such Person seeking indemnification
in connection with a Proceeding initiated by such Person only if
such Proceeding was authorized by the Manager. The right to
indemnification conferred in this Section 5.6(a),
subject to Sections 5.6(b) and (d),
shall include the right to be paid by the Company the expenses
incurred in defending any such Proceeding in advance of its final
disposition. The Company may, by action of the Manager, provide
indemnification to employees and agents of the Company with the
same scope and effect as the foregoing indemnification of any other
such Person contemplated in this Section
5.6(a). Notwithstanding the
foregoing or any provision to the contrary contained in this
Agreement, the Manager and its agents and employees shall have no
right to indemnification pursuant to this Section
5.6 for any loss or damage
incurred by such Person by reason of the gross negligence, willful
misconduct or fraud of such Person or any breach of such Person's
fiduciary duty.
(b) Procedure for
Indemnification. Any
indemnification of a Manager or its agents and employees
under Section 5.6(a) or
advance of expenses under Section 5.6(d) shall
be made promptly, and in any event within thirty (30) days after
the Company's approval of the written request of such Person
seeking indemnification. If the Company is required under the terms
of this Agreement to make a determination as to whether the Manager
or its agents and employees is entitled to indemnification pursuant
to this Section 5.6 and
the Company fails to make such determination within thirty (30)
days from receipt by the Company of a written request from such
Person seeking indemnification, the Company shall be deemed to have
approved the request.
(c) Section Not
Exclusive. The rights to
indemnification and the payment of expenses incurred in defending a
Proceeding in advance of its final disposition conferred in
this Section 5.6 shall
not be exclusive of any other right which the Manager and its
agents and employees may have or hereafter acquire under the Act or
other applicable law, provisions of the Certificate of Formation,
this Agreement, or otherwise.
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(d) Expenses. Expenses incurred by the Manager or its agents
and employees described in Section 5.6(a) in
defending a Proceeding shall be paid by the Company in advance of
such Proceeding's final disposition unless otherwise determined by
the Manager upon receipt of a written undertaking by or on behalf
of such Person to repay such amount if ultimately it shall be
determined that he is not entitled to be indemnified by the
Company. Such expenses incurred by other employees and agents may
be so paid upon such terms and conditions, if any, as the Manager
deems appropriate.
(e) Employees and
Agents. Persons who are not
covered by the foregoing provisions of
this Section 5.6 and
who are or were employees or agents of the Company or the Manager,
or who are or were serving at the request of the Company as
employees or agents of an Affiliate, may be indemnified to the
extent authorized at any time or from time to time by the
Manager.
(f) Contract
Rights. The provisions of
this Section 5.6 shall
be deemed to be a contract right between the Company and the
Manager (or any other Person entitled to indemnification under the
terms contained in, and in accordance with,
this Section
5.6), who serves in any such
capacity at any time while this Section 5.6,
the Certificate of Formation or the relevant provisions of the Act
or other applicable law are in effect, and any repeal or
modification of this Section 5.6,
the Certificate of Formation or any such law shall not affect any
rights or obligations then existing with respect to any state of
facts or Proceeding then existing.
5.7 Transactions with the
Manager and Affiliates. The
Manager may appoint, employ, contract, or otherwise deal with any
Person, including without limitation the Manager or its respective
Affiliates, and with Persons, who or which have a financial
interest in the Manager or in which the Manager has a financial
interest, for transacting the Company's or any of its subsidiaries'
or other Affiliates' businesses; provided,
however, that the fees or other
payments to any such Persons shall not be in excess of prevailing
competitive rates for the transaction in question and the terms of
which shall be at least as favorable to the Company as the terms
available to the Company from an independent third-party in an
arms-length transaction.
5.8 No Exclusive Duty to
Company. The Manager shall
not be required to manage the Company as the Manager's sole and
exclusive function and the Manager may have other business
interests and may engage in other activities in addition to those
relating to the Company. Neither the Company nor any Member shall
have any right, by virtue of this Agreement, to share or
participate in such other investments or activities of the Manager
or to the income or proceeds derived therefrom. The Manager shall
incur no liability to the Company or to any of the Members as a
result of engaging in any other business or
ventures.
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SECTION VI
CAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS,
UNITS ANDFINANCIAL OBLIGATIONS OF MEMBERS
6.1 Capital
Contributions. Members shall
make the Capital Contributions listed on Exhibit
A to this
Agreement.
6.2 Capital
Accounts. A capital account
(the "Capital Account") shall be established for each Member on the
books and records of the Company and shall be maintained in
accordance with the rules for determining and maintaining capital
accounts set forth in Regulations Section 1.704-l(b)(2)(iv), as
amended from time to time, or any successor provision. No interest
shall be paid or accrued at any time on a Member's Capital Account
or on any Capital Contribution. Each Member shall have a single
Capital Account reflecting its entire Percentage Interest,
regardless of the time or times and the manner in which the
Percentage Interests were acquired by the Member. The Capital
Accounts of the Members may be adjusted at the discretion of the
Manager pursuant to, in accordance with, and upon the occurrence of
the events set forth in Regulations Section 1.704-1(b)(2)(iv)(f) to
reflect revaluations of Company property (as provided in the
definition of Gross Asset Value) and, in such event, the Capital
Accounts of the Members shall be adjusted in accordance with
Regulations Section 1.704-l(b)(2)(iv)(g) for allocations of
depreciation, depletion, amortization and gain or loss, as computed
for book purposes, with respect to such property. A transferee of a
Percentage Interest (or portion thereof) will succeed to the
Capital Account of the transferor to the extent it relates to the
Percentage Interest (or portion thereof) transferred. The foregoing
provisions, and other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and
applied in a manner consistent with such Regulations. If the
Manager determines that it is prudent to modify the manner in which
Capital Accounts, or any debits or credits thereto, are computed in
order to comply with those Regulations, the Manager may make such
modification upon written notice to all Members of such proposed
modification, provided that such modification is not likely to have
a material effect on the amount distributable to any Member upon
dissolution of the Company. Any such modification shall not require
an amendment to this Agreement.
6.3 Classes of
Units. There shall be
only one class of Units, Class A Units. Members shall receive and be deemed holders of the
class of Units specified on Exhibit
A to this
Agreement.
6.4 No Interest on
Contributions. Except as
provided in this Agreement, no Member shall be entitled to interest
on his, her or its Capital Contribution.
6.5 Return of Capital
Contributions. Except as
otherwise provided in this Agreement, no Member shall be entitled
to a return of any part of his, her or its Capital Contribution or
to receive any distribution from the Company, and there shall be no
obligation to return to any Member any part of such Member's
Capital Contribution for so long as the Company continues in
existence.
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6.6 No
Liability. No Member, as such,
shall be liable for any of the debts of the Company or be required
to contribute any additional capital to the Company, each Member's
liability being limited to its Capital Contribution.
Notwithstanding the foregoing or any provision to the contrary
contained herein, all agreements and instruments executed by
Members assuming or guaranteeing obligations of the Company shall
be valid and enforceable in accordance with their
terms.
SECTION VII
DISTRIBUTIONS
7.1 Distributions to
Members. The Manager shall
cause the Company to make distributions to the then Members in such
amounts and at such times as the Manager shall determine, in its
sole and absolute discretion. If elected by the Manager,
distributions to the then Members shall be made pro rata, in
accordance with their Percentage Interests.
7.2 Tax
Witholding. If the Company
incurs a withholding tax obligation with respect to the share of
income allocated to any Member: (a) any amount which is (i)
actually withheld from a distribution that would otherwise have
been made to such Member and (ii) paid over in satisfaction of such
withholding tax obligation shall be treated for all purposes under
this Agreement as if such amount had been distributed to such
Member; and (b) any amount which is so paid over by the Company,
but which exceeds the amount, if any, actually withheld from a
distribution which would otherwise have been made to such Member,
shall be treated as an interest free advance (subject to the other
provisions of this Section 7.2)
to such Member. Amounts treated as advanced to any Member pursuant
to this Section 7.2 shall
be repaid by such Member to the Company within thirty (30) days
after the Manager gives notice to such Member making demand
therefor. Any amounts so advanced and not timely repaid shall bear
interest, commencing on the expiration of said thirty (30) day
period, compounded monthly on unpaid balances, at an annual rate of
eight percent (8.00%). The Company shall collect any unpaid advance
amounts from any future distributions that would otherwise be made
to such Member.
SECTION VIII
TAX CONSIDERATIONS
8.1 Net Profit and Net Loss.
(a) Allocation. Subject to the provisions
of Section
8.2 hereof, the Net Profit
and Net Loss, as the case may be, as of the end of any Fiscal Year
shall be allocated among the Members in accordance with their
Percentage Interests.
(b) Changes in Percentage
Interests. Upon any change
in the relative Percentage Interests, whether by reason of the
admission or withdrawal of a Member, a Transfer or otherwise, the
Members' shares of Net Profit, Net Loss and all other Company items
shall be determined by taking into account their varying Percentage
Interests using any permissible method under Code Section 706 and
the Regulations, as determined by the Manager.
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8.2 Special Income Tax
Allocations. During any
Fiscal Year of the Company, the following special allocations shall
be made in the following order and priority:
(a) Minimum Gain
Chargeback. Except as
otherwise provided in Regulations Section l.704-2(f),
notwithstanding any other provision of
this Article VIII,
if there is a net decrease in Company Minimum Gain during any
Fiscal Year or other period, each Member shall be specially
allocated items of Company income and gain for such year or other
period (and, if necessary, subsequent years) in an amount equal to
such Member's share of the net decrease in Company Minimum Gain,
determined in accordance with Section 1.704-2(g) of the
Regulations. Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be
allocated to the various Members pursuant thereto. The items to be
so allocated shall be determined in accordance with Sections
l.704-2(f)(6) and 1.704(j)(2) of the Regulations. This Section
4.3(a) is intended to comply with the minimum gain chargeback
requirement in Section l.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(b) Member Minimum Gain
Chargeback. Except as
otherwise provided in Regulations Section l.704-2(i)(4),
notwithstanding any other provision of
this Article VIII,
if there is a net decrease in Member Nonrecourse Debt Minimum Gain
attributable to a Member Nonrecourse Debt during any Fiscal Year or
other period, each Member with a share of the Member Nonrecourse
Debt Minimum Gain attributable to such Member Nonrecourse Debt,
determined in accordance with Section 1.704-2(i)(5) of the
Regulations shall be specially allocated items of Company income
and gain for such year or other period (and, if necessary,
subsequent years) in an amount equal to such Member's share of the
net decrease in Member Nonrecourse Debt Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with
Section l.704-2(i)(4) of the Regulations. Allocations pursuant to
the previous sentence shall be made in proportion to the respective
amounts required to be allocated to the various Members pursuant
thereto. The items to be so allocated shall be determined in
accordance with Sections 1.704-2(i)(4) and 1.704-20)(2) of the
Regulations. This Section
8.2(b) is intended to
comply with the minimum gain chargeback requirement in Section
l.704-2(i)(4) of the Regulations and shall be interpreted
consistently therewith.
(c) Qualified Income
Offset. If a Member
unexpectedly receives an adjustment, allocation, or distribution
described in Regulations Section l.704-l(b)(2)(ii)(d)(4), (5) or
(6), any of which causes or increases a deficit in such Member's
Capital Account, then such Member will be specially allocated items
of income and gain in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the deficit in such
Member's Capital Account as quickly as possible; provided, however,
an allocation pursuant to this Section 8.2(c) will
be made if and only to the extent that such Member would have a
Capital Account deficit after all other allocations provided for in
this Article VIII have
been tentatively made as if this Section 8.2(c) were
not in this Agreement. This Section 8.2(c) is
intended to constitute a "qualified income offset" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(d)(3) and shall be
interpreted consistently therewith.
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(d) Gross Income
Allocation. In the event
any Member has a deficit Capital Account at the close of any Fiscal
Year which is in excess of the amount such Member is obligated to
restore under this Agreement or is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations
Sections l.704-2(g)(l) and 1.704-2(i)(5), such Member shall be
specially allocated items of gross income or gain in the amount of
such excess as quickly as possible, provided that an allocation
pursuant to this Section 8.2(d) shall
be made only if and to the extent that such Member would have a
deficit Capital Account in excess of such sum after all other
allocations provided for in this Article VIII have
been tentatively made as if Section 8.2(c) and
this Section 8.2(d) were
not in this Agreement.
(e) Nonrecourse Deductions and
Member Nonrecourse Deductions. Nonrecourse Deductions as defined in Section
l.704-2(b)(l) and Section 1.704-2(c) of the Regulations shall be
allocated to the Members in accordance with and on the same basis
as the allocation of Net Losses. Notwithstanding any provision
hereof to the contrary, "partner nonrecourse deductions" as defined
in the Regulations Section 1.704-2(i)(1) and Section 1.704-2(i)(2)
for any Fiscal Year or other period shall be specially allocated to
the Members who bear the economic risk of loss for the "partner
nonrecourse debt" to which such "partner nonrecourse deductions"
are attributable, as provided in Regulations Section
l.704-2(i)(l).
(f) Code Section 754
Adjustments. To the extent that
an adjustment to the adjusted tax basis of any Company asset
pursuant to Code Section 734(b) or Code Section 743(b) is required,
pursuant to Regulations Section l.704-l(b)(2)(iv)(m)(2) or
Regulations Section 1.704-l(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 its Percentage
Interest, the amount of such adjustment to the 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 such
basis), and such gain or loss shall be specially allocated to the
Members in accordance with their Percentage Interest the event that
Regulations Section 1.704-l(b)(2)(iv)(m)(2) applies, or to the
Member to whom such distribution was made in the event that
Regulations Section 1.704-l(b)(2)(iv)(m)(4)
applies.
8.3 Curative
Allocations. The
allocations set forth in Section 8.2 (collectively,
the "Regulatory
Provisions") are intended to
comply with certain requirements of the Regulations. It is the
intent of the Members that, to the extent possible, all allocations
pursuant to the Regulatory Provisions shall be offset either with
other allocations pursuant to the Regulatory Provisions or, if
necessary, with curative allocations of other items of income,
gain, loss or deduction pursuant to this Section 8.3.
Therefore, notwithstanding any other provision of this Agreement,
other than the Regulatory Provisions, allocations pursuant to the
Regulatory Provisions shall be taken into account in allocating
other items of income, gain, expense or loss among the Members so
that, to the extent possible, the net amount of such allocations of
other items and the allocations pursuant to the Regulatory
Provisions to each Member are equal to the net amount that would
have been allocated to such Member if the Regulatory Provisions
were not part of this Agreement.
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8.4 Section 704(c)
Allocations. In accordance
with Code Section 704(c) and the Regulations thereunder, income,
gain, loss, and deduction (including depreciation) with respect to
any property contributed to the capital of the Company by a Member
shall, solely for tax purposes, be allocated so as to take into
account any variation between the adjusted basis of such property
to the Company for federal income tax purposes and its initial
Gross Asset Value at the time it was contributed to the Company
(computed in accordance with subparagraph (i) of the definition of
Gross Asset Value). In the event the Gross Asset Value of any
Company asset is adjusted, pursuant to subparagraph (ii) of the
definition of Gross Asset Value, subsequent allocations of income,
gain, loss and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset
for federal income tax purposes and its Gross Asset Value in the
same manner as required under Section 704(c) of the Code and the
Regulations thereunder. Allocations pursuant to
this Section 8.4 are
solely for purposes of federal, state, and local taxes and shall
not affect, or in any way be taken into account in computing, any
Member's Capital Account or share of allocations or distributions
pursuant to any provision of this Agreement.
SECTION IX
TRANSFERS AND THE ADDITION, SUBSTITUTION AND
WITHDRAWAL OF MEMBERS
9.1 Restrictions on Transfer; General Provisions Respecting
Transfers.
(a) Units may be, in whole or in part, and
directly or indirectly, sold, pledged, encumbered, mortgaged,
donated, bequeathed, assigned or otherwise transferred (whether
voluntarily or by operation of law) (each, a "Transfer")
in accordance with the terms of this Agreement, including without
limitation, this Section 9.1.
A Member seeking to Transfer Units shall provide the Manager (at
the Company's principal place of business) with Notice of its
intent to Transfer his, her or its Units, including without
limitation a description of the proposed Transferee. The Manager
shall have sole power to consent to the requested Transfer and no
such consent shall be given unless in writing.
(b)
Each Transferee (i) shall be admitted to the Company as a Member
with respect to the Units so transferred to such Person when any
such Transfer is reflected in the books and records of the Company
and such Member becomes the Record Holder of the Units so
transferred, (ii) shall become bound, and shall be deemed to have
agreed to be bound, by the terms of this Agreement, (iii) shall be
deemed to represent that he, she or it has the capacity, power and
authority to enter into this Agreement and (iv) makes the consents,
acknowledgements and waivers contained in this Agreement, all with
or without execution of this Agreement by such Person. A Person may
become a Member without the consent or approval of any of the other
Members. A Person may not become a Member without acquiring Units
and until such Person is reflected in the books and records of the
Company as the Record Holder of such Units.
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(c)
Any Member who has transferred his, her or its Units shall cease to
be a Member upon the Transfer of all of the Member's Units and
thereafter shall have no further powers, rights, and privileges as
a Member hereunder but shall, unless otherwise relieved of such
obligations by written agreement of the Manager or by operation of
law, remain liable for all obligations and duties incurred as a
Member.
(d)
Notwithstanding the provisions above, a Transferee who becomes a
substitute Member is liable for any obligations of his, her or its
transferor to make Capital Contributions as provided in this
Agreement or in the Act.
(e) Notwithstanding Section
10.13, upon the occurrence of
any Transfer, or any change to the Percentage Interests of any
Member, the Manager may amend Exhibit
A to this Agreement to
reflect such change.
SECTION X
MISCELLANEOUS
10.1 Fiscal
Year. The fiscal year of the
Company shall be from January 1st through December
31st of
each year ("Fiscal
Year"), with the first Fiscal
Year of the Company ending on December 31,
2019.
10.2
Reports. As soon as
practicable, but in no event later than one hundred twenty (120)
days after the close of each Fiscal Year of the Company, the
Manager shall cause to be mailed or made available, by any
reasonable means, to each Member as of a date selected by the
Manager, an annual report containing financial statements of the
Company for such Fiscal Year of the Company, presented in
accordance with GAAP, including a balance sheet and statements of
operations, Company equity and cash flows, with such statements
having been audited by the Accountant selected by the Manager. The
Manager shall be deemed to have made a report available to each
Member as required by this Section
10.2 if it has either (i)
filed such report with the Commission via its Electronic Data
Gathering, Analysis and Retrieval system and such report is
publicly available on such system or (ii) made such report
available on any website maintained by the Company and available
for viewing by the Members.
10.3
Notices. Unless otherwise
set forth in this Agreement, any notice required under this
Agreement ("Notice")
shall be given in writing, either personally or by mail or other
means of written communication, including facsimile, charges
prepaid, addressed to the Member at the address of the Member
appearing on the books of the Company or given by the Member to the
Company for the purpose of notice or to the Company at its
principal place of business. Any Member may designate a different
address for notice by a Notice to the Company in accordance with
the provisions of this Section
10.3. The Company (in care of
the Manager), if it is not the party to which Notice is being
given, shall be sent a copy of all Notices related to this
Agreement by any method permitted by this Section
10.3 for the giving of
Notice. Any Notice shall be deemed given at the time when delivered
personally, or deposited in the mail or sent by other means of
written communication, including facsimile.
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10.4 Binding
Effect. Subject in all respects
to the limitations concerning the Transfer of Units in the Company
contained in this Agreement, and except as otherwise herein
expressly provided, the provisions of this Agreement shall be
binding upon and inure to the benefit of the Company, the Members,
and their respective heirs, legatees, devisees, executors,
trustees, administrators, personal representatives and successors
and assigns. This Agreement shall not be construed to provide any
rights to third parties, including without limitation the creditors
of the Company or of the Members, it being the intent of the
parties to this Agreement that there shall be no third-party
beneficiaries of this Agreement.
10.5
Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall
for all purposes constitute one agreement, which is binding on the
Company and all of the Members.
10.6 Section
Headings. Section titles or
captions contained in this Agreement are inserted as a matter of
convenience and for reference only and shall not be construed in
any way to define, limit, or extend or describe the scope of this
Agreement or the intention of its provisions.
10.7
Exhibits. The terms of the
Exhibits to this Agreement are made a part of this Agreement by
reference as though such Exhibits were fully set forth in this
Agreement.
10.8 Variation in
Pronouns. All pronouns shall be
deemed to refer to masculine, feminine, neuter, singular or plural,
as the identity of the Person or Persons to which they refer may
require.
10.9
Severability. Each provision of
this Agreement is intended to be severable, and the invalidity or
illegality of any portion of this Agreement shall not affect the
validity or legality of the remainder.
10.10 Qualification in Other
States. If the business of the
Company is carried on or conducted in states in addition to
Delaware, then the Members severally agree to execute such other
and further documents as may be required or requested by the
Manager to qualify the Company in such states.
10.11 Entire
Agreement. This Agreement
constitutes the entire agreement of the parties concerning the
matters set forth in this Agreement and supersedes any
understanding or agreement, oral or written, made before this
Agreement.
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10.12 Forum. Any action by one or more Members against the
Company or the Manager or any of their respective Affiliates or by
the Company or the Manager or any of their respective Affiliates
against one or more Members or their respective Affiliates, which
arises under, or in any way relates to this Agreement, including
without limitation transactions permitted hereunder, or otherwise
related in any way to the Company, the Manager, the Members or the
Affiliates of any of them, shall be brought only in the United
States District Court for the County of Xxxx, Illinois or in the
courts of record of the State for the County of Xxxx, Illinois, and
each party hereto hereby irrevocably waives any right that it may
have to challenge such jurisdiction or the laying of venue in any
such courts or the right to assert any inconvenience of the forum
in connection with any such proceeding. The losing party shall bear
any fees and expenses of the other parties to such action,
including reasonable attorney's fees, any costs of producing
witnesses and any other reasonable costs or expenses incurred by
the prevailing party. If the losing party is a Member and such
Member does not reimburse the prevailing party or parties in such
action within thirty (30) days after the disposition of the action
at issue, the Company may apply any distributions payable to such
Member to the Member's reimbursement obligation to the prevailing
party or parties. The foregoing shall not limit the remedies which
a prevailing party may have hereunder or at law. EACH PARTY HERETO ALSO
IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH
ANY SUCH ACTION.
10.13
Amendments. This Agreement may
not be amended, except with the consent of a Majority of the
Members; provided,
however, that no Member shall
be required without his, her or its prior written consent to make
any Capital Contribution in excess of the amount set forth in this
Agreement or its Exhibits. All amendments of this Agreement shall
be in writing, copies of which shall be kept at the principal place
of business of the Company. Notwithstanding the foregoing or
anything to the contrary contained in this Agreement, the Manager
may amend this Agreement, without the consent of the consent of any
Member, to the extent that such amendment is permitted under any
other Section of this Agreement or otherwise reflects a result that
is reasonably contemplated under this Agreement (including, without
limitation, any one or more amendments permitted
under Section
9.1 or any amendment that
the Manager determines to be necessary to accurately reflect any
Transfer permitted under this Agreement).
10.14 Tax
Matters. Xxxx Xxxxxxxxx shall
be designated as the “partnership representative”
(within the meaning of Section 6223 of the New Partnership Audit
Procedures (the “Partnership Representative”). The
Partnership Representative is authorized and required to represent
the Company in connection with all examinations of the
Company’s affairs by tax authorities, including any resulting
administrative and judicial proceedings. Under Section 6225 of the
New Partnership Audit Procedures, in the case of any adjustment by
the IRS in the amount of any item of income, gain, loss, deduction,
or credit of the Company’ s or any Member’s
distributive share thereof (“ IRS Adjustment” ), the
Company may pay an imputed underpayment as calculated under Section
6225(b) of the New Partnership Audit Procedures with respect to the
IRS Adjustment, including interest and penalties (“ Imputed
Tax Underpayment” ) in the Adjustment Year or otherwise take
the IRS Adjustment into account in the Adjustment Year. Each Member
shall indemnify and hold harmless the Company, the Manager (in its
capacity as such) and the Partnership Representative (in its
capacity as such) from and against any liability with respect to
the indemnifying Member’s proportionate share of any Imputed
Tax Underpayment or other IRS Adjustment resulting in liability of
the Company , regardless of whether such indemnifying Member is a
Member in the Company in an Adjustment Year, with such
proportionate share as reasonably determined by the Partnership
Representative, including the Partnership Representative’ s
reasonable discretion to consider (i) each Member’s interest
in the Company in the reviewed year, (ii) each Member’s
status under Section 6225(c) of the Code and (iii) a Member’s
timely provision of information necessary to reduce the amount of
Imputed Tax Underpayment set forth in Section 6225(c) of the New
Partnership Audit Procedures. The foregoing obligation shall
survive a Member ceasing to be a member of the Company or the
termination, dissolution, liquidation and winding up of the
Company. The Partnership Representative may in its sole discretion
elect under Section 6226 of the New Partnership Audit Procedures to
cause the Company to issue adjusted Internal Revenue Service
Schedules K-1 (or such other form as applicable) reflecting a
Member’s shares of any IRS Adjustment for the Adjustment Year
as an alternative to the Company’ s payment of an Imputed Tax
Underpayment for any tax year.
[Signature Pages Follow]
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IN
WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
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MANAGER:
GK Development, Inc.
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By:
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/s/ Xxxx Xxxxxxxxx
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Name:
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Xxxx Xxxxxxxxx
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Title:
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Sole Director
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MEMBER:
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By:
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/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx, an individual
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23
Exhibit A
Member Name/Address
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Class A Units
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CapitalContribution
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PercentageInterest
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Xxxx
Xxxxxxxxx
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100
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$100
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100%
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Total
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100
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$100
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100%
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