SERIES LIMITED LIABILITY COMPANY AGREEMENT
FOR
VV MARKETS, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
TABLE OF CONTENTS
1.
Recitals
1
1.1
Headings & Definitions
1
2.
Formation of Company
1
2.1
Name of Company
2
2.2
Principal Place of Business
2
2.3
Registered Office and Registered Agent
2
2.4
Term
2
2.5
Founder Contributions and Compensation
2
3.
Series of the Company
3
3.1
Series Creation
3
3.2
Series Management
3
3.3
Series Membership
4
3.4
Subsidiaries of Series
4
3.5
Series Debt Liability; Books and Records
5
4.
Business Purpose
5
4.1
Business of Company, Its Series, and Their Subsidiaries
5
4.2
Affiliates of the Founder May Provide Services
6
5.
Members? Names and Addresses; Member Classes
5
5.1
Company and Series Members
5
5.2
Series Member Classes
6
6.
Rights and Duties of Management
6
6.1
Management of the Company and Series
6
6.2
Exclusive Authority of the Series Managers
7
6.3
Authority of the Series Members
8
6.4
Series Manager?s Liability for Certain Acts
9
6.5
Bank Accounts
9
6.6
Indemnity of the Series Managers, Employees and Other Agents
9
6.7
Salaries
10
6.8
Resignation
10
6.9
Removal
10
6.10
Vacancies
11
7.
Rights and Obligations of Members
11
7.1
Limitation of Liability
11
7.2
List of Members
12
7.3
Company Books
12
7.4
Priority and Return of Capital
12
7.5
Liability of a Series Member to the Company
12
8.
Meetings of Members
13
8.1
Meetings
13
8.2
Place of Meetings
13
8.3
Notice of Meetings
13
8.4
Meetings of All Voting Members
13
8.5
Record Date
13
8.6
Quorum
14
8.7
Manner of Acting
14
8.8
Proxies
14
8.9
Action by Members without a Meeting
14
8.10
Waiver of Notice
15
9.
Contributions to the Company and Capital Accounts
15
9.1
Capital Contributions
15
9.2
Voluntary Additional Capital Contributions
15
9.3
Time of Capital Contributions; Withdrawal Not Permitted
16
9.4
Loans
16
9.5
Company Interests
16
9.6
Voting Units
16
9.7
Series Ownership
17
9.8
Capital Accounts
17
10.
Distributions
17
10.1
Distributable Cash
17
10.2
Distribution Rules
17
10.3
Limitation upon Distributions
18
10.4
No Interest on Capital Contributions
18
11.
Books and Records, Bank Accounts, Tax Matters
18
11.1
Accounting Method
18
11.2
Records, Audits and Reports
18
11.3
Returns and Other Elections
19
12.
Voluntary Transfers; Additional and Substitute Members
19
12.1
Transfers Restricted
19
12.2
Percentage of Limitations or Transfers
20
12.3
Voluntary Withdrawal, Resignation or Disassociation Prohibited
20
12.4
Admission of Additional Series Members
20
12.5
Transfer Prohibited Except as Expressly Authorized Herein
20
12.6
Conditions for Permissible Voluntary Transfer
21
12.7
Substitution
21
12.8
Voluntary Transfer; Right of First Xxxxxxx
00
00.
Involuntary Transfer; Disassociation
24
13.1
Disassociation for Cause
24
13.2
Disassociation by Operation of Law
24
13.3
Effect of Disassociation
25
13.4
Sale and Valuation of a Disassociated Member?s Interest
26
13.5
Closing on a Disassociated Members? Interest
26
13.6
Payment for a Disassociated Member?s Interest
27
13.7
Transfer of Economic Interest; Rights of an Involuntary Transferee
27
14.
Dispute Resolution
28
14.1
Notice of Disputes
28
14.2
Negotiation of Disputes
28
14.3
Mandatory Alternative Dispute Resolution
29
14.4
Mediation
30
14.5
Arbitration
30
15.
Termination of Series and Company
31
15.1
Dissolution of the Company
31
15.2
Termination of a Series
32
15.3
Winding Up of a Series on Termination of Such Series
32
15.4
Winding Up On Dissolution of the Company
33
15.5
Certificate of Cancellation
33
15.6
Effect of Filing Certificate of Cancellation or Equivalent
33
15.7
Returns of Contributions Nonrecourse to Other Members
33
16.
Miscellaneous Provisions
34
16.1
Notices
34
16.2
Binding Effect
34
16.3
Governing Law
34
16.4
Waiver of Action for Partition
34
16.5
Amendments
33
16.6
Execution of Additional Instruments
35
16.7
Construction
35
16.8
Waivers
35
16.9
Severability
35
16.10
Creditors
36
16.11
Counterparts
36
16.12
Integration
36
17.
Signatures
36
Appendix A: Capital Accounts and Allocations
A-1
Appendix B: Definitions
B-1
C-1
SERIES LIMITED LIABILITY COMPANY AGREEMENT
FOR
VV MARKETS, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
THIS SERIES LIMITED LIABILITY COMPANY
AGREEMENT (Company Agreement) for VV Markets, LLC, a
Delaware limited liability company (the Company) is effective as
of the date executed below, and is the governing document by and
between the Company, its Founder (VinVesto, Inc., a Delaware
corporation), its Series, and the Series Managers and Series
Members.
1. Recitals
WHEREAS, the parties hereto desire to enter into this
Agreement; and
WHEREAS, it is intended by the parties hereto that
Underlying Asset(s) or Asset(s) shall be acquired by a Series of the
Company and that the debts, liabilities and obligations incurred,
contracted for or otherwise existing with respect to a particular
Series of the Company will be enforceable against the assets of
such Series only, and not against the assets of the Company
generally or any other Series thereof, and none of the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Company generally or any
other Series thereof shall be enforceable against the assets of such
Series; and
NOW, THEREFORE, in consideration of the mutual
promises and obligations contained herein, the parties, intending to
be legally bound, hereby agree as follows:
1.1 Headings & Definitions
The headings and subheadings in this Agreement are included for
convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement, a Series Agreement or any provision hereof.
Capitalized terms in this Agreement (and any associated Series
Agreements) are defined in Appendix B hereof.
2. Formation of Company
The Founder has executed and delivered a Certificate of Formation
to the Delaware Secretary of State in accordance with and pursuant
to the Delaware Limited Liability Company Act, as codified in the
Delaware Code, Title 6, Chapter 18 (the Act). Upon execution of
this Agreement, without the need for the consent or other action of
any Person or members of any Series, the Founder shall be
admitted as the sole Member of the Company not associated with
any Series.
The Founder (as the sole Member of the Company) hereby ratifies
and approves formation of the Company as a Delaware Series
limited liability company under and pursuant to the provisions of
the Act and agrees that the rights, duties and liabilities of the
Founder, Series Managers and Series Members shall be as
provided in the Act, except as otherwise provided herein. The
Company shall not acquire assets or incur liabilities or other
obligations unless they are acquired or incurred on behalf of a
Series and not with respect to the Company generally.
2.1 Name of Company
The name of the Company shall be VV Markets, LLC, a Delaware
Series limited liability company. The business of the Company
may be conducted in compliance with all applicable laws under the
Company or its Series? name, or such assumed name as may be
designated by the Founder or a Series Manager.
2.2 Principal Place of Business
The principal place of business of the Company and the Founder
is:
VV Markets, LLC
c/o Xxxxxxxx Xxxx
0000 Xxxxxxxxx Xxx
Xxxxxxxx, XX 00000
The Company and its Series may locate its place of business and
registered office at any other place as the Founder may from time-
to-time deem advisable. The Founder or Series Managers will
convey any changes in addresses after inception of the Company
by sending correspondence to all affected Persons.
2.3 Registered Office and Registered Agent
The Company shall maintain a registered agent in Delaware at all
times during operation of the Company or any Series. The Founder
may change the registered office and registered agent of the
Company at any time by filing the address of the new registered
office and/or the name of the new registered agent with the
Secretary of State of the State of Delaware pursuant to the Act.
2.4 Term
The Company and each of its Series shall have perpetual existence
unless the Company is earlier dissolved in accordance with the
provisions of this Agreement or the terms of a Series Agreement.
2.5 Founder Contributions and Compensation
The Founder, through its members, has made such Capital
Contributions to the Company as necessary for its formation. The
Founder does not plan to collect Fees or Distributions from any of
the Series on account of its role as the Founder, but it may receive
Fees or Distributions to the extent it or an Affiliate acts as a Series
Manager as described in a Series Agreement.
The Founder (except in its capacity as a Series Manager or Series
Member) shall not acquire assets for or incur liabilities or other
obligations with respect to the Company or any Series unless the
Founder (as a Series Manager) shall be deemed admitted as a
Member of a newly created Series upon its execution of a
counterpart signature page to a Series Agreement. As its capacity
as a Series Manager, VinVesto, Inc. will acquire assets and
subsequently sell those assets to the Company.
The Founder may be reimbursed pro rata from each Series for
common expenses such as accounting, insurance, office space,
asset managers or other employees who administer services to the
Series? on behalf of the Company. Additionally, the Founder may
grant Class B Interests in its Series to others who provide services
to the Company and/or a Series. The Founder may determine and
collect a pro-rata amount from each Series after considering the
actual time spent on behalf of each Series, the relative revenue
generated by a Series, or any other means the Founder deems fair
and reasonable.
3. Series of the Company
In accordance with this Agreement, the Founder may from time to
time form such Series of the Company as may be necessary to
meet the Company?s business objectives (See Article 4.1).
3.1 Series Creation
Each Series will have the following characteristics:
- A separate business purpose or investment objective;
- Series Members who will make Capital Contributions or
Non-Capital Contributions the Series to further its separate
business objectives (see Article 4.1);
- Separate rights, powers or duties with respect to
management, control, or disposition of Underlying Asset(s)
of a Series;
- Separate obligations or rights to share in Profits and Losses
associated with Underlying Asset(s) of a Series.
Each Series Agreement and its exhibits will describe the purpose,
Underlying Asset(s), characteristics, capital requirements, and
investment strategies for a Series.
3.2 Series Management
Management of each Series will automatically be vested in the
Founder (as the Series Manager) or an Affiliate of the Founder
(owned or controlled by the Founder or its members), as
designated by the Founder in a Series Agreement. The Founder has
the exclusive authority to designate itself as the Series Manager or
to designate a Series Manager, who may be an Affiliate of the
Founder, its members, or a Series Member.
The Founder may designate a Series Manager to accommodate:
- The request of a lender to include an additional loan
guarantor for an acquisition, refinance or other loan against
Underlying Asset(s) of the Series;
- Active participants who may participate in asset
procurement, asset management, fundraising or other
needed services on behalf of a Series; or
- For any other reason that the Founder, in its sole discretion,
deems appropriate or beneficial for a Series.
A Series Manager (or its members or Affiliates) may be a manager
of one or more Series and may make Capital or Non-Capital
Contributions to such Series in exchange for its Membership
Interests, management designation, Fees and/or Distributions.
3.3 Series Membership
An Investor who makes Capital Contributions or Non-Capital
Contributions to a Series and is accepted by the Series Manager
shall become a ?Series Member? of that Series, but not of the
Company generally, or of any other Series. A Series Member may
be a Member of one or more Series. A Series Member may earn
Distributions only from the Series to which it is admitted as a
Member.
The Founder shall maintain a list of all Series, the respective Series
Members, and the Series Managers. Each Series Agreement will
each identify all Series Members and the Series Manager. The
Founder shall periodically update such lists as necessary to update
the information contained therein, including, without limitation,
the establishment of additional Series, the admission or
Disassociation of Series Members, the respective Series Managers,
and all relevant contact information.
3.4 Subsidiaries of Series
The Founder may form single purpose limited liability companies
(Subsidiaries) on behalf of a Series as necessary to:
- Take title to Underlying Asset(s);
- Borrow money to finance the usually required by a lender;
- Execute a lease on a Underlying Asset(s) on behalf of a
Series (as the lessee);
- Execute a purchase option on a Underlying Asset(s) (as an
optionee).
Where such Subsidiaries are formed, the sole Member of the
Subsidiary will be a Series, unless the Series joint ventures with
another entity or Person to acquire the Underlying Asset(s). In any
case, the Founder or a designated Series Manager shall retain
management control of the Subsidiary on behalf of the Series and
its Members.
3.5 Series Debt Liability; Books and Records
No debt, liability or obligation of a Series shall be a debt, liability
or obligation of the Company or any other Series. The debts,
liabilities and obligations incurred, contracted for or otherwise
existing with respect to a Series shall be enforceable against the
assets of such Series or its Subsidiaries only and not against any
other assets of the Company generally or any other Series.
The Founder shall cause each Series to maintain separate and
distinct records for its Subsidiaries and Property. All assets or
liabilities associated with a Series shall be accounted for separately
from the other assets or liabilities of the Company, or any other
Series.
3.6 Operating Expenses
Operating Expenses are costs and expenses attributable to the
activities of the Series (collectively, ?Operating Expenses?)
including:
- costs incurred in managing the Underlying Asset,
including, but not limited to storage, maintenance and
transportation costs (other than transportation costs
described in Acquisition Expenses);
- costs incurred in preparing any reports and accounts of the
Series, including any tax filings and any annual audit of the
accounts of the Series (if applicable) or costs payable to
any third-party registrar or transfer agent and any reports to
be filed with the Commission including periodic reports on
Forms 1-K, 1-SA and 1-U;
- any indemnification payments; and
- any and all insurance premiums or expenses in connection
with the Underlying Asset, including insurance required for
utilization at and transportation of the Underlying Asset to
events under Fan Club Experiences (as described in
?Description of the Business ? Business of the Company?)
(excluding any insurance taken out by a corporate sponsor
or individual paying to showcase an asset at an event but
including, if obtained, directors and officers insurance of
the directors and officers of the Manager or the Series
Manager).
4. Business Purpose
4.1 Business of Company, Its Series, and Their Subsidiaries
The business objectives of the Company and each of its Series, and
their Subsidiaries shall be:
- To acquire (by purchase, purchase option or installment
contract, or direct sourcing) collectible assets (wines), from
the Founder, for purposes of investment, management,
operation, and disposition by sale or lease/option to a third-
party or to an Affiliate of the Founder or its members.
- To transact any and all lawful business for which a limited
liability company may be formed under the Act in
furtherance of the business objectives stated in the
preceding paragraph; and
- To transact all business necessary, appropriate, advisable,
convenient or incidental to any of the foregoing provisions.
The Founder and each Series shall have the power to do any or all
of the acts necessary, appropriate, advisable, incidental or
convenient to or for the furtherance of the purposes and business
described herein and for the protection or benefit of the Company
and its Series. The Company and each Series shall have any or all
of the powers that may be exercised on behalf of the Company or
such Series by any Person in accordance with the Act.
4.2 Affiliates of the Founder May Provide Services
The Founder (or its members), or an Affiliate may provide or
participate in Asset-related services for the Series and their
Subsidiaries. So long as the rates a Series pays for such services
are commensurate with third-party rates, this shall not be
considered a conflict of interest, nor will contracts related to such
services require the consent of any Person other than the Series
Manager.
5. Members? Names and Addresses; Member Classes
5.1 Company and Series Members
The name and address of the Founder is provided in Article 2.2
hereof. The name of respective Series Members will be provided in
Appendices attached to the applicable Series Agreement.
5.2 Series Member Classes
On formation of a Series, the Founder will cause to be drafted a
Series Agreement, designating such Member Classes as may be
necessary, appropriate, or advantageous for operation of the Series
and meeting its specific business objectives. On creation of a
Series, the Founder may designate certain Member Classes having
preferential rights to compensation or a return of capital over other,
subordinate classes. Assignment of Series Member Classes may be
based on the amount, character (loan v. equity), or timing of an
investor?s Capital Contribution to a Series, as the Founder deems
appropriate when forming the Series.
6. Rights and Duties of Management
6.1 Management of the Company and Series
The Founder shall be vested with the authority to act as and on
behalf of the Company, and shall have the sole and exclusive
authority to appoint an initial Manager for each Series. The
business and affairs of a Series shall be vested in the Manager and
Members of that Series in accordance with its Series Agreement.
In the absence of a Series Manager, the Founder shall be vested
with the authority to act as and on behalf of the Series as its
Manager. A Series Manager need not be a member of that Series or
a member of the Company. Series Managers may receive
compensation in the form of Fees and/or Series Membership
Interests for which they may receive Distributions.
The Founder reserves the exclusive authority to enter into selling
or other agreements with FINRA registered selling agents or
brokers on behalf of the Company or its Series. The Company may
such pay finder?s fees or commissions, or issue subordinate (e.g.,
Class B Interests) in a Series to such Persons for introducing or
referring Investors who purchase Series Interests. The amount of
cash paid by the Company for finder?s fees or commissions paid to
such Persons, if any, may reduce the proceeds available for
investment in a Series, although Investors so referred will be given
full credit for the total amount of their Capital Contributions.
However, any right to Distributions granted by the Manager to
such Persons as compensation for Investor referrals will come
from the Series Manager?s allocation, and will not impact the
Distributions or dilute the Percentage Interests of Investors or their
Member Class.
6.2 Exclusive Authority of the Series Managers
A Series Manager, if one or more are designated by the Founder,
shall be vested with the authority to act as and on behalf of such
Series. The Series Manager(s) shall serve until each of its
successors are elected by the Members of that Series. Unless
otherwise specified in a Series Agreement, the Series Manager for
each Series will be VV Markets, LLC, a Delaware limited liability
company (or its Affiliates).
Without limiting the general authority of a Series Manager
provided in Article 6.2 a Series Manager shall have the sole power
and authority, on behalf of a Series to:
- Acquire title or management control of Underlying Asset(s)
(by purchase, lease, purchase option, installment contract)
from any Person as the Series Manager(s) may determine,
whether or not such Person is directly or indirectly
affiliated or connected with the Founder or any Series
Member;
- Borrow money for a Series (or their Subsidiaries) from
banks, other lending institutions, other Series Members, or
the Founder, on such terms as the Series Manager deems
appropriate, and in connection therewith, to hypothecate,
encumber and grant security Interests in the assets of a
Series to secure repayment of the borrowed sums. No debt
shall be contracted or liability incurred by or on behalf of
any Series except by the Series Manager(s), or, to the
extent permitted under the Act and this Agreement, by
agents or employees associated with a Series or the Series
Manager(s) expressly authorized by the Series Manager(s)
to contract such debt or incur such liability;
- Purchase liability and other insurance to protect the
property and business or the Company or Series, and/or
directors and officers for the assets of a Series, the Series
itself, the Series Manager, the Company, or its Founder;
- Hold, own and/or operate such assets in the name of a
Series or its Subsidiary, as appropriate;
- To joint venture with other companies to accomplish the
objectives of the Company or a Series;
- Form new, single purpose entities, e.g., limited liability
companies, limited partnerships, corporations, or trusts,
(Subsidiaries) to take title to or management control of a
specific Underlying Asset(s), so long as the Subsidiary is
managed by the Founder or an Affiliate;
- Sell or otherwise dispose of all or substantially all of the
assets of a Series as part of a single transaction or plan as
long as such disposition is not in violation of or a cause of a
default under any other agreement to which such Series
may be bound;
- Execute on behalf of a Series all instruments and
documents, including, without limitation, checks; drafts;
notes and other negotiable instruments; mortgages or deeds
of trust; security agreements; financing statements;
documents providing for the acquisition, mortgage or
disposition of such Series? property; assignments; bills of
sale; leases; and any other instruments or documents
necessary, appropriate, convenient, advisable or incidental
to the business of such Series;
- Employ accountants, legal counsel, managing agents or
other experts to perform services for the Company with
respect to a Series;
- Pay, collect, compromise, litigate, arbitrate, or otherwise
adjust or settle any and all other claims or demands of or
against such Series or to hold such proceeds against the
payment of contingent liabilities;
- Enter into any and all other agreements on behalf of the
Company with respect to a Series, as appropriate; and
- Do and perform all other acts as may be necessary,
appropriate, convenient, advisable or incidental to the
conduct of such Series? business.
Each Series Manager shall have the exclusive power and authority
to bind a Series on any matter described above, and shall be
deemed to be authorized by the Series Members to act as an agent
of the Company only with respect to such Series.
6.3 Authority of the Series Members
The Series Members shall have the authority to direct, manage and
control the business and affairs of their respective Series on such
matters, if any, on which they may be entitled to vote as described
in a Series Agreement. Such voting rights shall be exercised by the
Series Members in accordance with their Percentage Interests in
the Series (or their Member Class) as to the management and
conduct of that Series only (not generally with respect to the
Company or any other Series). Unless otherwise specified in a
Series Agreement, an affirmative vote of Series Members holding
a Majority of Interests in a Series shall control on all such matters
in which they are entitled to vote.
The affirmative vote of a Majority of Interests of all of the
Members associated with a Series shall be required for the
Company to merge or consolidate with or into, or convert into,
another entity, (but not to joint venture). Unless authorized to do so
by this Agreement or specifically by its Series Manager, no
attorney-in-fact, employee or other agent of the Company or such
Series shall have any power or authority to bind the Company or
such Series in any way, to pledge the Company?s or a Series?
credit or to render the Company or a Series liable for any purpose.
6.4 Series Manager?s Liability for Certain Acts
Each Series Manager shall perform its duties in good faith, in a
manner it reasonably believes to be in the best interests of the
Company and such Series, and with such care as an ordinarily
prudent person in a like position would use under similar
circumstances. A Series Manager shall not be liable to the
Company, the Series with which it is associated, or to any other
Series Member or Series for any loss or damage sustained by such
Series or Series Member, unless the loss or damage shall have been
the result of fraud, deceit, gross negligence, willful misconduct or
a wrongful taking by the Series Manager.
6.5 Bank Accounts
A Series Manager or the Founder may from time to time open bank
accounts in the name of the Company or such Series, or in the
name of a Subsidiary, as appropriate, and the Founder and Series
Manager shall be the only signatories thereon, unless such Series
Manager determines otherwise.
6.6 Indemnity of the Series Managers, Employees and Other
Agents
To the fullest extent permitted by applicable law, subject to
approval of each Series Manager or the Founder, all officers,
directors, shareholders, partners, members, employees,
representatives or agents of the Founder or a Series Manager, or
their respective affiliates, employees or agents (each, a ?Covered
Person?) shall be entitled to indemnification from such Series (and
the Company generally) for any loss, damage or claim incurred by
such Covered Person by reason of any act or omission performed
or omitted by such Covered Person in good faith on behalf of the
Founder or such Series and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by
this Agreement and any Series Agreement, except that no Covered
Person shall be entitled to be indemnified for any loss, damage or
claim incurred by such Covered Person by reason of fraud, deceit,
gross negligence, willful misconduct or a wrongful taking with
respect to such acts or omissions; provided, however, that any
indemnity under this Article 6.6 shall be provided out of and to the
extent of the assets of the such Series only, and no other Covered
Person or any other Series or the Company or the Founder shall
have any liability on account thereof. Such Covered Persons will
have no duty or obligation (fiduciary or otherwise) to give any
consideration to any interest of or factors affecting us or any of our
Members and will not be subject to any different standards
imposed by our operating agreement, the Delaware Limited
Liability Company Act or under any other law, rule or regulation
or in equity. These modifications of fiduciary duties are expressly
permitted by Delaware law.
To the fullest extent permitted by applicable law, subject to
approval of the Founder or a Series Manager, all expenses
(including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by such Series prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by
such Series of an undertaking by or on behalf of the Covered
Person to repay such amount if it shall be determined that the
Covered Person is not entitled to be indemnified as authorized in
this Article 6.6.
The Founder (on behalf of the Company as a whole) or a Series
may purchase and maintain insurance, to the extent and in such
amounts as its Series Manager(s) and/or the Founder shall deem
reasonable, on behalf of Covered Persons and such other Persons
as the Founder or Series Manager(s) shall determine, against any
liability that may be asserted against or expenses that may be
incurred by any such Person in connection with the activities of the
Company or a Series, or such indemnities in general, regardless of
whether a Series would have the power to indemnify such Person
against such liability under the provisions of this Agreement or a
Series Agreement.
The Founder (on behalf of the Company as a whole) or a Series
may enter into indemnity contracts with Covered Persons and such
other Persons as the Founder or a Series Manager shall determine
and may, but are not required to, adopt written procedures pursuant
to which arrangements are made for the advancement of expenses
and the funding of obligations under this Article 6.6 and containing
such other procedures regarding indemnification as are
appropriate.
6.7 Salaries
Neither the Founder nor any Series Manager is expected to earn a
salary. However, salaries, fees or other compensation (such as
Distributions on account of its Series Membership Interest) of a
Series Manager may be fixed from time to time, as specified in a
Series Agreement or other relevant agreement, or subsequently by
an affirmative vote of the Series Members holding at least a
Majority of Interests of such Series. This provision is expected to
accommodate the Series Members? need to hire a replacement
Series Manager (who may not be a Series Member or an Affiliate
of the Founder), in the unlikely event that the initial Series
Manager is removed or has resigned or is no longer able to serve as
the Series Manager and the Founder is unable or unwilling to serve
in its stead (see Articles 6.8 and 6.9 below).
6.8 Resignation
Any Series Manager may resign at any time by giving written
notice to the Series Members and the Founder. The resignation of a
Series Manager shall take effect upon receipt of notice thereof or at
such later time as shall be specified in such notice; and, unless
otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective. The resignation of a
Series Manager who is also a Member of a Series shall not affect
its Series Membership Interests and shall not constitute its
withdrawal as a Series Member.
6.9 Removal
At a meeting called expressly for that purpose, a Series Manager
may be removed at any time, for Good Cause, by the decision of
such Series Members owning more than seventy-five percent
(75%) of the Percentage Interests in that Series. Good Cause shall
include only the following:
- Committing any of the acts described in Article 6.4 hereof
(including fraud, deceit, gross negligence, willful
misconduct or a wrongful taking);
- A breach of a Series Manager?s duties or authority
hereunder;
- Bad faith;
- Death or disability wherein the Series Manager (or each of
the members of the Manager with authority to Manage the
Series) dies or becomes physically, mentally, or legally
incapacitated such that it can no longer effectively function
as the Series Manager or the dissolution, liquidation or
termination of any entity serving as a Series Manager and
no other member of the Series Manager is willing or able to
effectively perform the Series Manager?s duties;
- Disappearance wherein the Series Manager (or each of the
its members) fails to return phone calls and/or written
correspondence (including email) for more than thirty days
(30) without prior notice, or failure to provide the Series
Members with new contact information; or
- Issuance of a legal charging order and/or judgment by any
judgment creditor against the Manager?s Interest in Cash
Distributions or Fees from the Company.
6.10 Vacancies
A Series Manager?s vacancy shall be filled by:
- The Founder or its designee, unless the Founder is the
Series Manager is the subject of the removal action.
- In that event the replacement Series Manager will be
elected by a vote of a Majority of Interests of such Series
Members at either a special meeting or by written consent.
A Series Manager elected to fill a vacancy shall be elected for the
un-expired term of its predecessor in office and shall hold office
until expiration of such term and until its successor shall be elected
and shall qualify or until its, resignation or removal.
7. Rights and Obligations of Members
7.1 Limitation of Liability
7.1.1 Limitation of Liability of the Company
Except as otherwise provided in this Agreement, or the Act, the
debts, obligations and liabilities of the Company where such
liabilities are incurred in its own name and not with respect to a
Series, whether arising in contract, torts or otherwise, shall be
solely the debts, obligations and liabilities only of the Company,
and no Series, Series Member or Series Manager shall be obligated
personally for any such debt, obligation or liability of the
Company solely by reason of being a Series Member or Series
Manager.
7.1.2 Limitation of Liability of a Series
Except as otherwise provided in its Series Agreement, or the Act,
the debts, obligations and liabilities of a Series, where such
liabilities are incurred in its own name and not generally with
respect to the Company, whether arising in contract, torts or
otherwise, shall be solely the debts, obligations and liabilities only
of that Series, and neither the Members or Manager of that Series
(nor any other Series or its Members or Manager), shall be
obligated personally for any such debt, obligation or liability solely
by reason of being a Member or Manager of either the Series that
is the subject of the liability or another Series of the Company.
Each Series Member shall nevertheless be liable for its obligations
to make Capital Contributions pursuant to Articles 9.1 and 9.2.
7.2 List of Members
Upon the written request of any Series Member for any purpose
reasonably related to such Member?s Interest in such Series, the
Series Manager shall provide to such Member a list showing the
names, and Membership Interests of all Series Members. The
Series Manager will maintain as confidential all Members? contact
information to the extent provided by the Act and other applicable
law.
7.3 Company Books
The Founder shall maintain and preserve, during the existence of
such Series, the accounts, books and other relevant Series
documents described in Article 11 at the Founder?s place of
business. Notwithstanding anything in this Agreement to the
contrary, the Founder, in concert with each Series Manager will be
responsible for maintaining separate and distinct records for each
and every Series, and the assets associated with each Series shall
be held and accounted for separately from the other assets of the
Company or of any other Series.
Upon reasonable written request stating the reason for the request,
a Series Member shall have the right, at a time during ordinary
business hours, as reasonably determined by such Series
Manager(s), to inspect and copy, at the requesting Series
Member?s expense, the books and records for such Series and its
Subsidiaries for a business purpose reasonably related to such
Series Member?s Interest with respect to such Series. The Series
Manager may choose to provide the requested information
electronically, at its option.
No Series Member or Series Manager will have the right to inspect
and copy the books and records of any other Series of which it is
not a Member or a Manager, nor of the Company generally, unless
specifically required by the Act.
The Company, Founder, and Series Managers will maintain
confidentiality of the Series Members contact information to the
extent allowed under the Act.
7.4 Priority and Return of Capital
No Series Member shall have priority over any other Series
Member either as to the return of Capital Contributions or as to
allocation of Profits, Losses or Distributions; provided that this
Article 7.4 shall not apply to loans made to the Company by the
Founder, a Series Manager or Series Member with respect to a
Series, unless Member Classes specifically having such priority are
provided in a Series Agreement.
7.5 Liability of a Series Member to the Company
A Series Member who receives a Distribution from the Company
with respect to a Series is liable to the Company with respect to
such Series or to others only to the extent provided by the Act and
other applicable law.
8. Meetings of Members
8.1 Meetings
Meetings of Series Members, for any purpose or purposes, may be
called by any Series Manager, or by the Series Members holding at
least twenty-five percent (25%) of the Percentage Interests of such
Series on notice to the Series Manager, but there shall be no
requirement that there be an annual meeting.
8.2 Place of Meetings
A Series Manager may designate any place, either within or
outside the State of Delaware, as the place of meeting for any
meeting of the Series Members. If a designation is not made, or if a
special meeting is otherwise called, the place of meeting shall be
the principal place of business of the Company. Any meeting of
Series Members may also take place by teleconferencing as long as
a quorum (as defined in Article 8.6 below) participate in the same.
8.3 Notice of Meetings
Except as provided in Article 8.4, written notice stating the place,
day and hour of the meeting and the purpose or purposes for which
the meeting is called shall be delivered not less than three (3) nor
more than thirty (30) days before the date of the meeting, either
personally, by email, or by mail, by or at the direction of a Series
Manager or Person calling the meeting, to each Member entitled to
vote at such meeting. If email, such notice shall be deemed
delivered one (1) business day after being sent, and if mailed, such
notice shall be deemed to be delivered two (2) business days after
being deposited in the United States mail, addressed to the
Member at its address as it appears on the books of the Company,
with postage thereon prepaid.
8.4 Meetings of All Voting Members
If all Members of a Series shall meet at any time and place, either
within or outside the State of Delaware, or participate in a
teleconference meeting, and consent to the holding of a meeting at
such time and place or by teleconference, such meeting shall be
valid without call or notice, and at such meeting lawful action may
be taken.
8.5 Record Date
Unless otherwise stated in a Series Agreement, for the purpose of
determining Series Members entitled to notice of or to vote at any
meeting of Series Members or any adjournment thereof, or Series
Members entitled to receive payment of any Distribution, or in
order to make a determination of Series Members on a specific
date for any other purpose, the day immediately prior to the date
on which notice of the meeting is mailed or the day immediately
prior to the latest date on which the such Distribution will be
calculated (i.e., the day before the Distribution is made), as the
case may be, shall be the record date for such determination of
Series Members. When a determination of Series Members entitled
to vote at any meeting of Series Members has been made as
provided in this Article 8.5, such determination shall apply to any
adjournment thereof.
8.6 Quorum
Series Members holding at least two-thirds (2/3) of all Percentage
Interests of such Series, represented in person or by proxy, shall
constitute a quorum at any meeting of Series Members. In the
absence of a quorum at any such meeting, Series Members holding
a majority of the Percentage Interests so represented may adjourn
the meeting from time to time for a period not to exceed sixty (60)
days without further notice. However, if the adjournment is for
more than sixty (60) days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each Series Member of record entitled to
vote at the meeting. If a quorum is present or represented at such
adjourned meeting, any business may be transacted which might
have been transacted at the meeting as originally noticed. The
Series Members present at a duly noticed meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal during such meeting of that number of Percentage
Interests whose absence would cause less than a quorum.
8.7 Manner of Acting
If a quorum is present, the affirmative vote of Series Members
holding a Majority Interest in a Series shall be the act of the Series
Members, unless the vote of a greater or lesser proportion or
number is otherwise required by the Act or expressly by this
Agreement or a Series Agreement. Only the Series Members of
each specific Series may vote or consent upon any matter
concerning that Series, and their vote or consent, as the case may
be, shall be counted in the determination of whether the matter was
approved by the Series Members.
8.8 Proxies
At all meetings of Series Members, a Series Member may vote in
person or by proxy executed in writing by the Member or by a duly
authorized attorney-in-fact. Such proxy shall be filed with the
Manager before or at the time of the meeting. No proxy shall be
valid after eleven months from the date of its execution, unless
otherwise provided in the proxy. A proxy may only be given
verbally during a meeting taking place by teleconferencing and
shall expire at the termination of said teleconference.
8.9 Action by Members without a Meeting
Action required or permitted to be taken at a meeting of Series
Members may be taken without a meeting and without prior notice
if consents, whether oral or written, of Series Members are
received in writing (by email originating from a Members? email
account, or mail) representing the minimum number of votes that
would be necessary to authorize or take such action at a meeting at
which all Members of such Series were present and voted, and all
Series Members entitled to vote were notified of the meeting.
8.10 Waiver of Notice
When any notice is required to be given to any Member, a waiver
thereof in writing signed by the Member entitled to such notice,
whether before, at, or after the time stated therein, or the
participation in a teleconference meeting, shall be equivalent to the
giving of such notice.
9. Contributions to the Company and Capital Accounts
9.1 Capital Contributions
The Founder may raise Capital Contributions for each Series by
the sale of Units in each Series via the Company?s Private
Placement Memorandum. The Founder will determine the
minimum or maximum number of Units to be sold on behalf of a
Series, and the minimum investment amount required of an
individual Investor in a Series. Each Series Member shall
contribute to such Series in the amount set forth in a Series
Agreement as its Initial Capital Contribution to the Company with
respect to such Series. The Founder will accept or reject the
Subscription after making a determination of whether the Investor
meets the suitability standards established by the Founder to invest
in the Company. Each Series Member?s holdings of Units may but
are not required to be evidenced by a certificate or receipt in a
form approved by the Founder.
9.2 Voluntary Additional Capital Contributions
No Series Member will be required to make Additional Capital
Contributions. If a Series? funds are insufficient to meet the needs
of the Series, the Series Manager shall notify the Series Members
of the need for additional capital and the Series Members may be
permitted, but not required, to make Additional Capital
Contributions to the Series on a pro-rata basis. In the event all
Series Members do not make Additional Capital Contributions
proportionate to their previous Series Percentage Interests, the
Series Manager will recalculate the Percentage Interests of the
Series Members after collection of the Additional Capital
Contributions by: a) calculating the sum of each Series Member?s
initial Capital Contributions plus their Additional Capital
Contributions, and b) dividing this amount by the sum of the total
Capital Contributions and Additional Capital Contributions of all
Series Members. If the Series Members make disproportionate
Additional Capital Contributions, the Percentage Interests of the
Series Members who made Additional Capital Contributions will
be increased and the Percentage Interests of the Series Members
who did not make Additional Capital Contributions will be
decreased.
In the event the existing Series Members do not voluntarily make
Additional Capital Contributions in amounts sufficient to meet a
Series? need; the Series Manager may request that the Founder
seek the needed capital from other sources, which may include a
loan from the Founder, a Series Manager, a Series Member,
another Series (or its Members or Manager), a third-party; or the
sale of additional Interests in such Series to new Series Members.
The Series Members hereby acknowledge and agree that
noncontributing Members? Percentage Interests in a Series may be
reduced: a) as a result of Additional Capital Contributions made by
contributing Series Members, or b) by the sale of additional
Interests to new Series Members, and that the Series Manager or
Founder, as applicable, is authorized to take either action on behalf
of a Series if additional funds are needed to meet the Series?
business objectives.
9.3 Time of Capital Contributions; Withdrawal Not Permitted
Capital Contributions shall be made by Series Members in full on
admission to a Series. No portion of the capital of a Series may be
withdrawn until dissolution of a Series or the Company, except as
otherwise expressly provided in this Agreement or a Series
Agreement.
9.4 Loans
Nothing in this Agreement shall prevent any Series Member from
making secured or unsecured loans to a Series or its Subsidiary by
agreement approved by such Series Manager, as the case may be.
9.5 Company Interests
Subject to the other provisions of this Agreement or a Series
Agreement, each Series Interest shall have the rights, and be
subject to the obligations, identical to those of every other Interest
of the same Member Class in a Series.
The Founder retains the sole and exclusive right to establish Series,
Series Member Classes, the quantity and value of Units in a Series
to be sold in exchange for Capital Contributions to each Series as
may be necessary to accomplish the objectives of the Series or the
Company. The voting rights, if any associated with the Units will
be specified in a Series Agreement.
If any non-voting Interests are issued by a Series, the non-voting
Interest holders although Series Members, shall be passive, shall
not have any power to vote, except as otherwise provided in such
Series Agreement or by law, and shall only obtain a purely
Economic Interest in the particular Series.
Initial Interest Allocation for Interests Issued by the Company to
its Founder:
VinVesto, Inc.: 100%
9.6 Voting Units
Subject to the other provisions of this Agreement, each voting Unit
in a Series shall have the rights, and be subject to the obligations,
identical to those of each other voting Unit of the same Member
Class in the Series. The holders of voting Units shall be entitled to
one vote for each voting Unit held at all meetings of voting Series
Members (and written actions in lieu of meetings), with no right to
cumulative voting.
9.7 Series Ownership
Membership Interests sold by the Company on behalf of a Series
may be denominated in Units where one Unit equals an investment
of One Thousand Dollars ($1,000), or such other increments or
amounts as may be described in the Series Agreement. Each Unit
shall have the rights, and be subject to the obligations, identical to
those of other Units of the same Member Class within such Series.
9.8 Capital Accounts
See Appendix A for Capital Accounts and Allocations.
10. Distributions
This Article 10 pertains to Cash Distributions made to Series
Members only. The Founder of the Company does not expect to
receive any Distributions from the Company, and will only share
in Distributions in accordance with its membership in a Series, or
for management of a Series, in accordance with the Series
Agreement for each such Series.
10.1 Distributable Cash
Except as otherwise provided in Article 15 hereof (relating to the
dissolution of the Company), any Distribution of the Distributable
Cash of a Series during any Fiscal Year shall: (a) be made to the
Series Members in proportion to such Series Members? respective
Percentage Interests in a Series, prioritized by Member Class, if
applicable, or (b) in any other manner described in an applicable
Series Agreement.
10.2 Distribution Rules
All Distributions to Series Members pursuant to Article 10.1 shall
made be at such times and in such amounts as shall be determined
solely by the Series Manager; provided, however, that the Series
Manager shall use its best efforts to cause the Series to distribute to
such Series Members an amount of Distributable Cash sufficient to
enable the Series Members to pay their federal and state income-
tax liabilities attributable to their respective distributive Interests of
the taxable income of a Series, as applicable.
All amounts withheld pursuant to the Code or any provision of any
state or local tax law with respect to any payment, Distribution or
allocation to Series Members shall be treated as amounts
distributed to the Series Members pursuant to this Article 10 for all
purposes of this Agreement and the Series Agreements.
A Series Manager is authorized to withhold from Distributions, or
with respect to allocations, to the respective Series Members and to
pay over to any federal, state or local government any amounts
required to be so withheld pursuant to the Code or any provision of
any other federal, state or local law and shall allocate such amounts
to those Series Members with respect to which such amounts were
withheld.
10.3 Limitation upon Distributions
Notwithstanding any provision to the contrary contained in this
Agreement, a Series shall not make any Distribution to any Person
on account of its Interest in the Company with respect to such
Series if such Distribution would violate the Act or other
applicable law.
The Series Manager may base a determination that a Distribution
or return of a Series Member?s Capital Contribution may be made
under Article 10.1 in good-faith reliance upon a balance sheet and
profit and loss statement of such Series represented to be correct
by the Person having charge of its books of account or by an
independent public or certified public accountant or firm of
accountants to fairly reflect the financial condition of such Series.
10.4 No Interest on Capital Contributions
No Series Member shall be entitled to interest on its Capital
Contributions or to return of their Capital Contributions.
11. Books and Records, Bank Accounts, Tax Matters
11.1 Accounting Method
11.2 The Company, for accounting and income tax purposes, shall
operate on a Fiscal Year ending December 31 of each year, and
shall make such income tax elections and use such methods of
depreciation as shall be determined by the Manager. The books
and records of the Company will be kept on a GAAP basis in
accordance with sound accounting practices to reflect all income
and expenses of the Company. Records, Audits and Reports
At the expense of the Company or the relevant Series, each Series
Manager shall maintain separate and distinct records and accounts
of the operations and expenditures of the Company and each Series
during the term of the Company or each such Series, and for seven
(7) years thereafter. At a minimum, the Company and each Series
shall keep at the principal place of business of the Company the
following records:
- True and full information regarding the status of the
business and financial condition of such Series and the
Company;
- Promptly after becoming available, a copy of the
Company?s federal, state and local income tax returns for
each year;
- The current list of the name and last known business,
residence or mailing address of each Series Member;
- A copy of this Agreement, Series Agreements, and the
Certificate of Formation of the Company;
- True and full information regarding the amount of cash and
a description and statement of the Gross Asset Value of any
other property or services contributed by each Series
Member to the Company with respect to such Series and
which each Series Member has agreed to contribute in the
future, and the date on which each became a Series
Member;
- Minutes of every meeting held, if any;
- Any written consents obtained from Series Members for
actions taken by such Members without a meeting; and
- Unless contained in the Certificate of Formation or this
Agreement, a writing prepared by each Series Manager
setting out the following:
- The times at which or events on the happening of which
any Additional Capital Contributions agreed to be made by
each Series Member are to be made; and
- Any right of a Series Member to receive Distributions that
include a return of all or any part of the Series Member?s
contributions.
11.3 Returns and Other Elections
The Founder and/or Series Managers, as applicable, shall cause the
preparation and timely filing of all tax returns required to be filed
by the Company or its Series, pursuant to the Code and all other
tax returns deemed necessary and required in each jurisdiction in
which the Company does business. Copies of such returns, or
pertinent information therefrom, shall be furnished to the
respective Series Members within a reasonable time after the end
of the Company?s Fiscal Year. All elections permitted to be made
by the Company under federal or state laws shall be made by the
Series Managers and/or Founder in its sole discretion.
12. Voluntary Transfers; Additional and Substitute Members
The Founder, as the issuer of Interests in the Company and its
Series, shall have the sole and exclusive authority to grant, convey,
sell, transfer, hypothecate, disassociate or otherwise dispose of all
or a portion of the Series? Interests without input or vote of the
Series Members or Series Managers consistent with the Series
Agreement.
Once interests in a Series have been sold, the Series Manager may
only affect a change in the Membership Interests of a Series
Member by following the procedures described below:
12.1 Transfers Restricted
No Series Member shall voluntarily transfer all or any part of its
Economic Interest in a Series, except as provided in this Article 12.
In the event a Series Member or a Transferee of a Series Member
violates any of the provisions of this Article, such transfer shall be
null and void and of no force or effect.
12.2 Percentage of Limitations or Transfers
Notwithstanding any other provision of this Agreement to the
contrary, the Company or a Series Manager shall not be required to
recognize any transfer of an Interest in a Series if the transfer,
when considered with other transfers of the Interests in a Series
made within the period of twelve (12) consecutive calendar months
prior thereto, would constitute a sale or exchange of fifty percent
(50%) or more of the total Series? Interest and result in the tax
termination of the Company under article 708(b) of the Internal
Revenue Code of 1986, as amended.
12.3 Voluntary Withdrawal, Resignation or Disassociation
Prohibited
No Series Member may withdraw, resign or voluntarily
disassociate from a Series, unless such Series Member complies
with the transfer provisions set forth in this Article. The provisions
of this Article shall apply to all Voluntary Transfers of a Series
Member?s Interests in a Series. Involuntary Transfers are
addressed in Article 13.
Unless otherwise approved by a Series Manager, a Series Member
who resigns as a Series Member (a ?Resigning Member?),
regardless of whether such termination was the result of a
voluntary act by such Series Member, shall not be entitled to
receive any further Distributions from the Company with respect to
such Series. Damages for breach of this Article 12.3 shall be
monetary damages only (and not specific performance), and such
damages may be offset against Distributions by such Series to
which the Resigning Member would otherwise be entitled.
12.4 Admission of Additional Series Members
Only the Founder may sell Interests in a Series or admit Series
Members. Once the Company closes the offering period for the
sale of Interests in a Series, no additional Interests in the Series
may be sold, or any Additional Series Members admitted, unless:
a) the admission of an Additional Series Member is approved by
the Founder. The Founder reserves the exclusive right to sell
additional Interests in a Series to new or existing Series Members,
and to admit new Series Members whose Interests may be equal or
senior to the existing Interests in a Series as necessary to raise
needed capital for a Series.
12.5 Transfer Prohibited Except as Expressly Authorized Herein
No Series Member may voluntarily, involuntarily, or by operation
of law assign, transfer, sell, pledge, hypothecate, or otherwise
dispose of (collectively transfer) all or part of its Interest in the
Company or a Series, except as is specifically permitted by this
Agreement or a Series Agreement. In no event shall any Voluntary
Transfer be made to a trust (including grantor trusts), a partnership,
a disregarder entity, or any other Person whose Membership would
preclude the Company from continuing to operate under the opt-
out provisions of the BBA audit procedures pursuant to section of
6221(b) of the Code. Any Voluntary Transfer made in violation of
this Article shall be void and of no legal effect.
Further, in no event shall any Voluntary Transfer be made within
one (1) year of the initial sale of the Interests proposed for transfer
unless the Transferor provides a letter from an attorney, acceptable
to the Series Manager, stating that in the opinion of such attorney,
the proposed transfer is exempt from registration under the
Securities Act and under all applicable state securities laws or is
otherwise compliant with Rule 144 under the Securities Act of
1933. The Series Manager is legally obligated to refuse to honor
any transfer made in violation of this provision.
12.6 Conditions for Permissible Voluntary Transfer
Notwithstanding anything contained in this Agreement or a Series
Agreement to the contrary, Series Manager shall,
- On written request of a Series Member, transfer all or any
part of its Interest with respect to a Series to another Series
Member or to a transferee that bears one of the following
relationships to the transferring Series Member: a spouse, a
lineal descendant or a trust created for the exclusive benefit
of the transferring Series Member, the transferring Series
Member's spouse and/or the transferring Series Member's
lineal descendant(s), or an Affiliate as a Substitute
Member, or
- At the request of an IRA custodian or the Series Member,
transfer all or any part of a Company or Series interest to
the Series Member or another XXX Custodian.
Approval of Substitute Membership shall not be unreasonably
withheld on delivery of all requested documents to the Series
Manager necessary to accomplish such transfer. However, any
subsequent conveyance or transfer of ownership Interests within
the Affiliate so that it no longer meets the definition of an Affiliate
with respect to the original Series Member, shall make its
membership in a Series subject to revocation or Disassociation (per
Article 13) by the Series Manager. Unless the Affiliate requests
and is approved by the Series Manager as a Substitute Member, an
unauthorized Affiliate shall have only the Economic Interest of the
former Series Member.
12.7 Substitution
A permitted transfer of any Series Member?s Interest shall only be
granted as to that Member?s Economic Interest unless the Series
Manager accepts a permitted transferee (Transferee) as a Substitute
Member. A permitted Transferee shall become a Substitute
Member only on satisfaction of all of the following conditions:
- Filing of a duly executed and acknowledged written
instrument of assignment in a form approved by the Series
Manager specifying the Member?s Percentage Interest
being assigned and setting forth the intention of the
assignor that the permitted assignee succeed to the
assignor?s Economic Interest (or the portion thereof) and/or
its Interest as a Series Member;
- Execution, acknowledgment and delivery by the assignor
and assignee of any other instruments reasonably required
by the Series Manager including an agreement of the
permitted assignee to be bound by the provisions of this
Agreement and the Series Agreement; and
- The Series Manager?s approval of the Transferee?s or
assignee?s admission to the Series as a Substitute Member
and concurrent and complete Disassociation of all of the
Membership and Economic Interests of the Transferor with
respect to such Series.
12.8 Voluntary Transfer; Right of First Refusal
- Notice of Sale. In the event any Series Member (a Selling
Member) wishes to sell its Interest a Series, it must first
present its offer to sell and proposed price (terms and
conditions) in a Notice of Sale submitted in writing to the
Series Manager. The Series Manager and/or the Series
Members (Purchasing Members) shall have thirty (30) days
to elect to purchase the entire Selling Member?s Interest,
which shall be offered to each in the order of priority
described below:
- First, the Series Manager (or its members) may elect to
purchase the entire Interest proposed for sale on the same
terms and conditions as contained in the Notice of Sale, but
if they don?t; then
- Second, all or part of the Series Members may purchase the
entire Selling Member?s Interest on the same terms and
conditions as contained in the Notice of Sale; the
Purchasing Members will be given priority to purchase in
the same ratio as their existing Percentage Interest before
allowing existing Series Members to purchase
disproportionate amounts;
- Third, if the Series Members elect to purchase less than the
entire Interest proposed for sale, the Series Manager (or its
members) and/or Founder may combine in any ratio to
purchase the remaining Interest, providing the overall
purchase is of the entire Selling Member?s Interest and on
the same terms and conditions as contained in the Notice of
Sale; and
- Fourth, in the event the Series Members and/or Series
Manager or the Founder fail to respond within thirty (30)
days of the Selling Member?s Notice of Sale, or if the
Series Manager and/or Members expressly elect not to
purchase the entire Selling Member?s Interest, the Selling
Member shall have the right to sell its Interest to the third-
party on the same terms and conditions contained in the
original Notice of Sale.
- Fifth, in the event the Selling Member receives or obtains a
bona fide offer from a third-party to purchase all or any
portion of its Interest in the Company or a Series, which
offer it desires to accept, then prior to accepting such offer,
the Selling Member shall give written notice (the Notice of
Sale) of such offer to the Series Manager. The Notice of
Sale shall set forth the material terms of such offer,
including without limitation the identity of the third-party,
and the purchase price and terms of payment.
- Sixth, if the terms are different than the original Notice of
Sale offered to the Series Manager, the Selling Member
must comply again with the terms of this Article (giving the
Series Manager, the Series Members and/or the Founder
the first right to purchase its Interest on the same terms and
conditions offered by the third-party) with respect to the
existing offer and all subsequent third-party offers.
- If a Series Manager and the Founder approves the sale to
the third-party, it must be completed within three (3)
months. If the sale to the third-party is not consummated on
the terms contained in the approved Notice of Sale within
three (3) months following the date of the Notice of Sale,
then the Selling Member must seek a renewed approval
from the Series Manager and Founder, who may require
that the Selling Member again comply with the first right of
refusal provisions of this Article.
In any purchase by the Series Members, Series Manager, or
Founder as described above, the Series Manager will automatically
adjust the Membership Interests of the Purchasing Members and
Selling Members to reflect the respective number and class of
Units or Interests transferred, and the Series Manager shall update
the list of Series Members and their Percentage Interests in the
Series Agreement as appropriate to reflect such transfer.
- Costs of Conveyance for Voluntary Transfer. In the event
that the Series Manager, the Series Members, and/or the
Founder elect to purchase as provided this Article, the cost
of such transaction, including without limitation, recording
fees, escrow fees, if any, and other fees, (excluding
attorneys? fees which shall be the sole expense of the party
who retained them) shall be borne by the Selling Member.
The Selling Member shall deliver all appropriate
documents of transfer for approval by the Series Manager
at least three (3) days prior to the closing of such sale for its
review and approval. The Series Manager may deduct its
costs of sale from the Capital Account of the Transferring
Member, unless other reimbursement is received.
- Indemnification of Parties. From and after the date of such
closing, whether the sale is made to the Series Manager, the
Series Members, the Founder, or the third-party, the Selling
Member shall have no further Interest in the Assets or
income of the Series or the Company and, as a condition of
the sale, the Person(s) or entities purchasing the Interests
shall indemnify and hold harmless the Selling Member
from and against any claim, demand, loss, liability, damage
or expense, including without limitation, attorney?s fees
arising from the subsequent operation of the Company or
Series, and the Selling Member shall indemnify and hold
harmless the Purchasing Members from and against any
claim, demand, loss, liability, damage or expense, including
without limitation, attorney?s fees arising from the
subsequent operation of the Company or Series.
- Indemnification by Transferring Member. Any Member
that Transfers all or any portion of its Membership Interest
shall in each case as Indemnitor indemnify, defend, and
hold harmless the Company and each other Member as
Indemnitees to the fullest extent permitted by applicable
law against all Losses of those Indemnitees caused by,
resulting from, or arising out of (i) any failure by the
Indemnitor to comply with any federal, state, local, or
foreign securities, antitrust, or other laws or regulations
applicable to such transfer (including those relating to
payment of transfer taxes), (ii) any breach, default, or
violation of any existing financing or future financing
caused by or attributable to such transfer, or (iii) any
federal or state income or other tax obligations attributable
to such transferring Member (whether due to non-payment
of taxes by the Member, deficiency determined upon audit
or others) or to such Transfer.
- Rights and Interests of Voluntary Transferee; Adjustment of
Voting Rights. If a Series Member transfers its Interest to a
third-party Transferee pursuant to this Article, such
Transferee shall only succeed to the Series Member?s
Economic Interest unless and until it complies with the
provisions of Article 12.4 and is approved by the Series
Manager as a Substitute Member. Until such time, if ever,
that the third-party Transferee becomes a Substitute
Member, the voting Interests of the Remaining Members
(i.e., all Members, other than the Selling Member) will be
increased proportionate with their Percentage Interests in
the Series as if they had purchased the Selling Member?s
Interest.
The obligations, rights and Interests of the Selling, purchasing, and
any Substitute Members shall inure to and be binding upon the
heirs, successors and permitted assignees of such Transferee
subject to the restrictions of this Article. A third-party Transferee
shall have no right of action against the Company, a Series (its
Manager or Members), or the Founder for not being accepted as a
Substitute Member.
13. Involuntary Transfer; Disassociation
13.1 Disassociation for Cause
A Series Member may be disassociated (i.e., expelled) from the
Series: a) pursuant to a judicial determination, or b) on application
by the Series Manager, another Member of the same Series, or c)
the Founder, for Cause (defined in the bullets below); upon a
written finding by the Series Manager or applicable judicial body
that such Series Member:
- Engaged in wrongful conduct that adversely and materially
affected the business of a Series and/or the Company;
- Willfully or persistently committed a material breach of
this Agreement;
- Engaged in conduct relating to the Series? business, which
makes it not reasonably practicable to carry on the business
with the Series Member; or
- Engaged in willful misconduct related to its Membership in
the Series.
13.2 Disassociation by Operation of Law
Additionally, a Series Member may be disassociated by operation
of law, affected solely by action of the Series Manager or Founder,
upon the occurrence of any of the following triggering events:
- Upon Voluntary or Involuntary Transfer of all or part of a
Member's Economic Interest with respect to a Series;
- Dissolution, suspension, or failure to maintain the legal
operating status of a corporation, partnership or limited
liability company that is a Member of a Series; or
- Any Series Member who meets the definition of a "covered
person" and becomes subject to a "disqualifying event" at
any time during operation of the Company (as those terms
are defined in Regulation D, Rule 506(d)) may
automatically, by action of the Founder: a) be
disassociated, or b) be stripped of its voting rights, if any,
as appropriate and necessary to preserve the Company's
securities exemption under Regulation D, Rule 506.
- In the case of a Series Member that is a legal entity, the
Member's:
o Becoming a debtor in Bankruptcy;
o Executing an assignment of all or substantially all
of its Economic Interest for the benefit of creditors;
o The appointment of a trustee, receiver, or liquidator
of the Member or of all or substantially all of the
Member's property including its Interest in the
Company pursuant to an action related to the
Member?s insolvency; or
o
- In the case of a Member who is an individual:
o The Member's death;
o Becoming a debtor in Bankruptcy;
o The appointment of a guardian or conservator of the
property of the Member; or
o A judicial determination of incapacity or other such
determination indicating that the Member has
become incapable of performing its duties under
this Agreement or the Series Agreement;
- In the case of a Member that is a trust or trustee of a trust,
distribution of the trust's entire rights to receive
Distributions from a Series, but not merely by reason of the
substitution of a successor trustee;
- In the case of a Member that is an estate or personal
representative of an estate, distribution of the estate's entire
rights to receive Distributions from a Series, but not merely
the substitution of a successor personal representative; or
- Termination of the existence of a Member if the Member is
not an individual, estate, or trust, other than a business
trust.
13.3 Effect of Disassociation
Immediately on mailing of a notice of Disassociation sent by the
Series Manager to a Series Member?s last known address, unless
the reason for Disassociation can be and is cured within sixty (60)
days, a Person will cease to be a Member of the Series and shall
henceforth be known as a Disassociated Member. Any successor in
Interest who succeeds to a Series Member?s Interest by operation
of law (per Article 13.2) shall henceforth be known as an
Involuntary Transferee.
Subsequently, the Disassociated Member?s right to vote or
participate in management decisions will be automatically
terminated. A Disassociated Member (or its legal successor) will
continue to receive only the Disassociated Member?s Economic
Interest in the Series, unless the Disassociated Member/Involuntary
Transferee elects to sell its Interest following the procedures
described in Article 12.8; and/or a Voluntary or Involuntary
Transferee seeks admission and is approved by the Series Manager
as a Substitute Member (per Article 12.7).
Until such time, if ever, that the Series Manager approves the
transfer of the entire Disassociated Member?s Interest to the
Purchasing Members or a Substitute Member, the voting Interests
of the Remaining Members will be proportionately increased as
necessary to absorb the Disassociated Member?s voting Interests.
If a Member objects to Disassociation, they will be bound to
resolve the dispute in accordance with the Internal Dispute
Resolution Procedure described in Article 14, unless the reason for
the Disassociation can be resolved within sixty (60) days to the
satisfaction of the Series Manager, in which case their full
Membership Interest will be reinstated. If there is no Involuntary
Transferee, and no third-party buyer is found and the Series
Manager or Remaining Members do not wish to purchase the
Disassociated Member?s Interest, the Disassociated Member will
only be entitled to receive its Economic Interest (no voting rights),
indefinitely, until such time as the Company or such Series is
dissolved.
13.4 Sale and Valuation of a Disassociated Member?s Interest
If no outside buyers can be found and the Disassociated Member
still desires to sell its Interest, which the Remaining Members
and/or Series Manager or Founder (Purchasing Members) wish to
purchase, the buyout price for the Disassociated Member?s Interest
may be determined using one of the following methods:
- Negotiated Price: If the Purchasing Members or legal
representative of the Disassociated Member can agree on a
negotiated price for the Interest, then that price will be
used; if not,
- Estimated Market Value within 3 Months: The Series
Manager may quarterly determine the Estimated Market
Value of the Company and/or its Series and report it to the
Series Members. An Estimated Market Value calculated by
the Series Manager in any commercially accepted manner
within the last three (3) months shall conclusively be used
to determine the value of a Disassociated Member?s
Interest. The purchase price of shall be the product of the
Disassociated Member?s Percentage Interest in a Series and
the Estimated Market Value of the Series adjusted for the
Member Class, if applicable.
- Appraisal Method: If both of the above methods fail, the
price for a Disassociated Member?s Interest shall be
determined by appraisal of the Disassociated Member?s
Interests by one or more independent, certified commercial
business appraisers currently operating in the business of
the Underlying Asset(s), as follows:
- The Disassociated Member shall hire and pay the first
appraiser, who shall provide an Estimated Market Value for
the Series. If acceptable to the parties, this Estimated
Market Value will be used to calculate the value of the
Disassociated Member?s Interest.
- If the first appraiser?s valuation is unacceptable, the
Purchasing Members may hire their own appraiser and the
average of the two appraisals (if within twenty percent
(20%)) may be used to determine the value of the Series on
which the purchase price will be based. If the two
appraisals differ by more than twenty percent (20%) and
the parties still cannot agree on the value, then,
- A third appraisal may be obtained (at the option of either
party), the cost of which will be split between the
Purchasing Members and the Disassociated Member. The
average of the two appraisals closest in value will be
conclusively used to establish the Estimated Market Value
of the Series on which the value of the Interest will be
based.
13.5 Closing on a Disassociated Members? Interest
Unless other terms have been agreed between the Disassociated
and Purchasing Members, the following terms shall apply to
closing of a Disassociated Member?s Interest. After determining
value (per Article 12.8 or 13.4 above), the Purchasing Members
shall give written notice fixing the time and date for the closing.
The closing shall be conducted at the principal office of the
Company or other agreed location on the date not less than thirty
(30) days nor more than sixty (60) days after the date of such
notice, or in the event of Bankruptcy, any request for an extension
by any Bankruptcy Court having jurisdiction.
13.6 Payment for a Disassociated Member?s Interest
At closing, the Purchasing Members shall pay to the Disassociated
Member by certified or bank check an amount equal to the
determined value of the Disassociated Member?s Interest, or, if
such value shall be determined to be zero or another amount
pursuant to an agreement of the Members, shall deliver an
executed copy of such agreement or a copy of such appraisal
report(s), or a memorandum of the negotiated value (per Article
12.8 above) as applicable.
Notwithstanding the foregoing, at the option of the Purchasing
Members, the purchase price may be paid by the delivery of its
promissory note in the principal amount of the purchase price,
bearing interest at eight percent (8%), repayable early without
penalty, in eight (8) equal quarterly installments, or other
agreement between the parties. Simultaneously therewith the
Disassociated Member shall execute, acknowledge and deliver to
the Purchasing Members such instruments of conveyance,
assignment and releases as shall be necessary or reasonably
desirable to convey all of the right, title and Interest of the Member
and the Assets thereof.
Because of the unique and distinct nature of an Interest in a Series
of the Company, it is agreed that the Purchasing Members?
damages would not be readily ascertainable if they elect to
purchase the Disassociated Member?s Interest as aforesaid and the
conveyance thereof were not consummated, and, therefore, in such
case the Purchasing Members shall be entitled to the remedy of
specific performance in addition to any other remedies that may be
available to them in law or in equity.
13.7 Transfer of Economic Interest; Rights of an Involuntary
Transferee
If the Purchasing Members do not elect to purchase the Interest of
a Disassociated Member as provided in Articles 13.4 through 13.6,
or if by operation of law the Economic Interest of the
Disassociated Member transfers to an Involuntary Transferee, the
Series Manager shall hereby be granted power of attorney by the
Disassociated Member to execute such documents as may be
necessary and requisite to evidence and cause the transfer only of
the Disassociated Member?s Economic Interest to the Involuntary
Transferee, as applicable and appropriate for the circumstances.
An Involuntary Transferee shall not be deemed a Series Member
until such time if ever, that they seek admission and are approved
as a Substitute Member(s) of a Series. Until then, they shall only
succeed to the Economic Interest of the Disassociated Member,
including the right to any Distributions and a return of the
Disassociated Member?s Unreturned Capital Contributions, if
applicable, which shall be distributed only if and when such
Distributions or return of Capital Contributions shall become due
per the terms of the applicable Series Agreement. Any
Distributions that may be due a Disassociated Member shall be
held in trust by the Series Manager and no Distributions shall be
made to an Involuntary Transferee until it produces and executes
such documentation as the Series Manager deems necessary to
evidence the Transfer of the Disassociated Member?s Economic
Interest, and to indemnify the Company, the Series Manager or
Members for any liability related to making Distributions directly
to the holder of the Economic Interest.
Any further assignment of the Disassociated Member?s Economic
or Membership Interest, or any request of an Involuntary
Transferee to succeed to the Disassociated Member?s full
Membership Interest (i.e., to become a Substituted Member in a
Series of the Company), shall be subject to approval of the Series
Manager.
14. Dispute Resolution
The dispute resolution process provisions do not apply to claims
under the federal securities laws. By agreeing to the dispute
resolution process, including mandatory arbitration, investors will
not be deemed to have waived the Company?s or Series?
compliance with the federal securities laws and the rules and
regulations thereunder. Further, the waiver of jury trial provision
does not apply to claims under the federal securities laws.
Because the nature of the Company and its Series is to generate
Profits that it can share with its Series Members, it is imperative
that one Series Member?s dispute with the Company, a Series
Manager and/or other Series Members is not allowed to diminish
the Profits available to other Series Members or resources
necessary to operate the Company or assets of such Series.
Litigation could require diversion of Company or Series Profits to
pay attorney?s fees or could tie up Company funds necessary for
operation of the Company or the affected Series, its Subsidiary or
its assets, impacting the profitability of the investment for all such
Series Members. The only way to prevent such needless expense is
to have a comprehensive Internal Dispute Resolution Procedure
(Procedure) in place, to which each of the Series Members have
specifically agreed in advance of membership in the Company or
in a Series. The Procedure described below requires an aggrieved
party to take a series of steps designed to amicably resolve a
dispute on terms that will preserve the interests of the Company or
Series, and the other non-disputing Series Members, before
invoking a costly remedy, such as arbitration.
In the event of a dispute, claim, question, or disagreement between
Series Members or between a Series Manager or the Founder
and/or one or more Series Members arising from or relating to this
Agreement, the Series Agreement, the breach thereof, or any
associated transaction, or to interpret or enforce any rights or
duties under the Act (hereinafter Dispute), all Series Managers and
Series Members hereby agree to resolve such Dispute by strictly
adhering to the Procedure provided below. The following
Procedure has been adapted for purposes of this Agreement from
guidelines and rules published by the American Arbitration
Association (AAA):
14.1 Notice of Disputes
Written notice of a Dispute must be sent to the Series Manager or
Series Member by the aggrieved party as described in the notice
requirements of Article 16.1 below.
14.2 Negotiation of Disputes
The parties hereto shall use their best efforts to settle any Dispute
through negotiation before resorting to any other means of
resolution. To this effect, they shall consult and negotiate with
each other in good faith and, recognizing their mutual Interests,
attempt to reach a just and equitable solution satisfactory to all
parties. If, within a period of sixty (60) days after written notice of
such Dispute has been served by either party on the other, the
parties have not reached a negotiated solution, then upon further
notice by either party, the Dispute shall be submitted to mediation
administered by the AAA in accordance with the provisions of its
Commercial Mediation Rules. The onus is on the complaining
party to initiate each next step in this Procedure as provided below.
14.3 Mandatory Alternative Dispute Resolution
On failure of negotiation provided above; mediation, and as a last
resort, binding arbitration shall be used to ultimately settle the
Dispute. The following provisions of this Article 14 shall apply to
any subsequent mediation or arbitration.
Exception: On unanimous consent of all parties to a Dispute, the
disputing party may initiate a small claims action or litigation in
lieu of mandatory mediation and arbitration provided the parties
shall further unanimously determine jurisdiction and venue. In any
small claims action or litigation, the local rules of court shall apply
in lieu of the remaining provisions of this Article.
- Preliminary Relief. Any party to the Dispute may seek
preliminary relief at any time after negotiation has failed,
but prior to arbitration, in accordance with the Optional
Rules for Emergency Measures of Protection of the AAA
Commercial Arbitration Rules and Mediation Procedures.
The AAA case manager may appoint an arbitrator who will
hear only the preliminary relief issues without going
through the arbitrator selection process described in Article
14.5.1.
- Consolidation. Identical or sufficiently similar Disputes
presented by more than one Series Member may, at the
option of the Series Manager or Founder, be consolidated
into a single Procedure.
- Location of Mediation or Arbitration. Any mediation or
arbitration shall be in State of Delaware and each party to
such mediation or arbitration must attend in person.
- Attorney?s Fees and Costs. Each party shall bear its own
costs and expenses (including their own attorney?s fees)
and an equal share of the mediator or arbitrators? fees and
any administrative fees, regardless of the outcome;
however, if a Series Manager or the Founder is a party,
their legal fees shall be paid by the Series (per the
indemnification provision described in Article 6.6).
Exception: A Series may reimburse a Series Member for
attorney?s fees and costs in any legal action against the Series
Manager or the Company in which the Series Member is awarded
such fees and costs as part of a legal action.
- Maximum Award. The maximum amount a party may seek
during mediation or be awarded by an arbitrator is the
amount equal to the party?s Unreturned Capital
Contributions and any Cash Distributions or Interest to
which the party may be entitled. An arbitrator will have no
authority to award punitive or other damages.
- AAA Commercial Mediation or Arbitration Rules. Any
Dispute submitted for mediation or arbitration shall be
subject to the AAA?s Commercial Mediation or Arbitration
Rules. If there is a conflict between the Rules and this
Article, the Article shall be controlling.
14.4 Mediation
Any Dispute that cannot be settled through negotiation as
described in Article 14.2, may proceed to mediation. The parties
shall try in good faith to settle the Dispute by mediation, which
each of the parties to the Dispute must attend in person, before
resorting to arbitration. If, after no less than three (3) face-to-face
mediation sessions, mediation proves unsuccessful at resolving the
Dispute, the parties may then, and only then, resort to binding
arbitration as described in Article 14.5.
- Selection of Mediator. The complaining party shall submit
a Request for Mediation to the AAA. The AAA will
appoint a qualified mediator to serve on the case. The
preferred mediator shall have specialized knowledge of
securities law, unless the Dispute pertains to financial
accounting issues, in which case the arbitrator shall be a
C.P.A., or if no such person is available, shall be generally
familiar with the subject matter involved in the Dispute. If
the parties are unable to agree on the mediator within thirty
(30) days of the Request for Mediation, the AAA case
manager will make an appointment.
If the initial mediation(s) does not completely resolve the Dispute,
any party may request a different mediator for subsequent
mediation(s) by serving notice of the request to the other party(ies)
for approval, and subject to qualification per the requirements
stated above.
14.5 Arbitration
Any Dispute that remains unresolved after good faith negotiation
and three (3) failed mediation sessions shall be settled by binding
arbitration. Judgment on the award rendered by the arbitrator(s)
shall be final and may be entered in any court having jurisdiction
thereof.
14.5.1 Selection of Arbitrator.
Prior to arbitration, the complaining party shall cause the
appointment of an AAA case manager by filing of a claim with the
AAA along with the appropriate filing fee, and serving it on the
defending party. The AAA case manager shall provide each party
with a list of proposed arbitrators who meet the qualifications
described below, or if no such person is available, who are
generally familiar with the subject matter involved in the Dispute.
Each side will have fourteen (14) days to strike any unacceptable
names, number the remaining names in order of preference, and
return the list to the AAA. The case manager shall then invite
persons to serve from the names remaining on the list, in the
designated order of mutual preference. Should this selection
procedure fail for any reason, the AAA case manager shall appoint
an arbitrator as provided in the applicable AAA Commercial
Arbitration Rules.
14.5.2 Qualifications of Arbitrator.
The selected or appointed arbitrator shall be selected from
available candidates in Delaware and shall have specialized
knowledge of securities law, unless the Dispute pertains to
financial accounting issues, in which case the arbitrator shall be a
C.P.A. Further, the selected arbitrator must agree to sign a
certification stating that they have read all of the documents
relevant to the Member?s subscription to the Series, including the
Private Placement Memorandum, the Agreement, the subject
Series Agreement, and the Subscription Booklet in their entirety,
including and any relevant Appendices or Exhibits.
14.5.3 Limited Discovery.
Discovery shall be limited to only those documents pertaining to
the Member?s Subscription to the Series (and any relevant
Appendices or Exhibits), the Subscription Booklet, any written
correspondence between the parties, and any other documents
specifically requested by the Arbitrator as necessary to facilitate
his/her understanding of the Dispute. The parties may produce
witnesses for live testimony at the arbitration hearing at their own
expense. A list of all such witnesses and complete copies of any
documents to be submitted to the arbitrator shall be served on the
arbitrator and all other parties within forty-five (45) days of the
arbitration hearing, at the submitting party?s expense.
14.5.4 Findings of Arbitrator
If, in any action against a Series Manager, the Company, or the
Founder, the selected or appointed arbitrator, or judge (if
applicable) makes a specific finding that the Series Manager,
Founder or Company has violated Securities laws, or has otherwise
engaged in any of the actions described in Article 6.4 for which the
Series Manager or Company will not be indemnified, the Series
Manager, Founder, or Company must bear the cost of its own legal
defense. In such case, the Series Manager must reimburse the
Company for any such costs previously paid by the Company.
Until the Company has been fully reimbursed, the Series Manager
will not be entitled to receive any fees or Distributions it may
otherwise be due.
15. Termination of Series and Company
15.1 Dissolution of the Company
The Company shall be dissolved upon the occurrence of either of
the following events:
- By sale of all or substantially of the Series? Underlying
Asset(s) and dissolution of all Subsidiaries;
- By the unanimous written agreement of all Series Managers
and the Founder; or
- Upon the entry of decree of judicial dissolution.
The death, retirement, resignation, expulsion, bankruptcy or
dissolution of any Series Manager or Series Member or the
occurrence of any event that terminates the continued membership
of any Series Member in a Series shall not in and of itself cause the
dissolution of the Company.
If a Series Member who is an individual dies or a court of
competent jurisdiction adjudges him to be incompetent to manage
its person or property. The Series Member?s executor,
administrator, guardian, conservator, or other legal representative
may exercise all of the Series Member?s rights for the purpose of
settling the Member?s estate or administering its property. If a
Series Member is an entity and is dissolved or terminated, the
powers of that Series Member may be exercised by its legal
representative or successor.
15.2 Termination of a Series
A Series shall be terminated upon the occurrence of any of the
following events:
- Upon dissolution of the Company;
- On sale or disposition of all of the Underlying Asset(s) and
dissolution of its Subsidiaries; or
- At the time in which there are no Series Members in a
Series;
- Upon the entry of a decree of judicial termination.
Other than in connection with a transfer of Membership Interests in
accordance with this Agreement, a Series Member shall not take
any voluntary action (including, without limitation, resignation)
that directly causes it to cease to be a Series Member.
The termination and winding up of a Series shall not cause the
dissolution of the Company (even if there are no remaining Series
so long as the Founder is still a Member); nor shall it cause the
termination of any other Series. The termination of a Series shall
not affect the limitation on liabilities of such Series or any other
Series formed by the Founder as provided in this Agreement and
consistent with the Act.
15.3 Winding Up of a Series on Termination of Such Series
Upon termination of a Series, an accounting shall be made of the
accounts of the Company with respect to such Series and of the
assets, liabilities and operations associated with such Series and its
Subsidiaries, from the date of the last previous accounting until the
date of termination. The Series Manager(s) shall immediately
proceed to wind up the affairs of such Series.
If a Series is terminated and its affairs are to be wound up, the
Series Manager shall:
- Sell or otherwise liquidate all of the assets of such Series as
promptly as practicable (except to the extent such Series
Manager(s) may determine to distribute any assets to the
Series Members in kind);
- Dissolve its Subsidiaries in accordance with the limited
liability act of the state in which the Subsidiaries are
formed;
- Allocate any Profits or Losses resulting from such sales to
the respective Capital Accounts of the Series Members in
accordance with Article 10 and Appendix A hereof;
- Satisfy (whether by payment or reasonable provision for
payment thereof) all liabilities of the Company with respect
to such Series, including liabilities to the Founder, Series
Managers, or Series Members who are creditors to the
Series, to the extent otherwise permitted by law, other than
liabilities to Series Members for Distributions (for purposes
of determining the Capital Accounts of the Series
Members, the amounts of any Reserves created in
connection with the liquidation of such Series shall be
deemed to be an expense of the Company with respect to
such Series); and
- Distribute the remaining assets of such Series to the Series
Members in accordance with their Capital Account
balances after giving effect to all contributions,
Distributions, and allocations for all periods, as further
specified in the Series Agreement associated with such
Series.
Notwithstanding anything to the contrary in this Agreement, if
upon the termination and liquidation of any Series, any Series
Member has a deficit balance in its Capital Account with respect to
with such Series (after giving effect to all contributions,
Distributions, allocations and other Capital Account adjustments
for all taxable years, including the year during which such
termination and liquidation occurs), such Series Member shall
have no obligation to make any Capital Contribution, or otherwise
restore the deficit balance in such Series Member?s Capital
Account, and such deficit Capital Account balance shall not be
considered a debt owed by such Series Member to the Company
with respect to such Series or otherwise, to any other Series
Member or to any other Person for any purpose whatsoever.
The Founder, Series Managers and Series Members, as applicable,
shall comply with all requirements of applicable law pertaining to
the winding up of the affairs of the Company with respect to such
Series and the final disposition of its assets.
15.4 Winding Up On Dissolution of the Company
Upon the dissolution of the Company pursuant to Article 15.1, the
Company shall be wound up by winding up each Series in the
manner contemplated by Article 15.3, except that, for purposes of
Article 15.3, paragraph 3, the separate Capital Accounts of each
Member associated with more than one Series shall be combined
into a single Capital Account of such Member.
15.5 Certificate of Cancellation
If a dissolution of the Company occurs and all debts, liabilities and
obligations of the Company, whether or not associated with any
Series, have been satisfied (whether by payment or reasonable
provision for payment) and all of the remaining property and assets
of the Company, whether or not associated with any Series, have
been distributed, a certificate of cancellation as required by the Act
shall be jointly executed and filed by the members of the
Company, as authorized persons, within the meaning of the Act,
with the Delaware Secretary of State.
15.6 Effect of Filing Certificate of Cancellation or Equivalent
Upon the filing of a certificate of cancellation or equivalent with
the Delaware Secretary of State, pursuant to Article 15.5, the
existence of the Company shall cease.
15.7 Returns of Contributions Nonrecourse to Other Members
Except as otherwise provided by applicable laws, upon termination
of a Series, the Series Member shall look solely to the assets of
such Series for the return of their Capital Contributions to such
Series, and if the assets of such Series remaining after payment of
or due provision for the debts and liabilities of the Company with
respect to such Series are insufficient to return such Capital
Contributions, such Series Members shall have no recourse against
any other Series, the Company or any other Series Member, except
as otherwise provided by law.
16. Miscellaneous Provisions
16.1 Notices
All notices provided for by this Agreement shall be made in
writing and deemed received (i) twenty-four (24) hours after
emailing to the party entitled thereto, or (ii) on the mailing of the
notice in the U.S. mail at the last known address of the party
entitled thereto, certified mail, return receipt requested.
16.2 Binding Effect
This Agreement and the Series Agreements are binding upon and
inure to the benefit of the Series Members, and, to the extent
permitted by this Agreement, their respective legal representatives,
successors and assigns.
16.3 Governing Law
This Agreement, Series Agreements, and the rights of the parties
hereunder, shall be construed pursuant to the laws of the State of
Delaware (without regard to conflict of laws principles).
16.4 Waiver of Action for Partition
Each Member irrevocably waives during the term of the Company
and any Series for which it is a Member, any right that it may have
to maintain any action for partition with respect to the property of
the Company or any Series.
16.5 Amendments
This Agreement may not be amended except in writing except by
unanimous consent of all Series Managers. A Series Agreement
may only be modified by an affirmative vote of Series Members
holding a Majority of Interests in the affected Series.
However, notwithstanding anything to the contrary herein, the
Founder may amend this Agreement, a Series Agreement, or a
Subsidiary Company Agreement in a manner not materially
inconsistent with the principles set forth in this Agreement, without
the approval or vote of the Series Members, including without
limitation:
- To issue non-substantive amendment to this Agreement or
a Series Agreement to correct minor technical errors;
- To accommodate a lender?s request with respect to a Series
Agreement or a Subsidiary Company Agreement;
- To cure any ambiguity or to correct or supplement any
provision therein which may be inconsistent with any other
provision therein or in any associated document, or to add
any other provisions with respect to matters or questions
arising under this Agreement which will not be materially
inconsistent with the provisions of this Agreement; and
- To take such steps as the Founder or a Series Manager
deems advisable to preserve the tax status of the Company
or a Series or to otherwise specify the tax status of a Series
or the Company;
- To delete or add any provisions to this Agreement, a Series
Agreement, or a Subsidiary Company Agreement as
requested by the Securities and Exchange Commission,
state securities officials which is deemed by such
regulatory agency or official to be for the benefit or
protection Company, its Members or the Series Members;
or
- To make amendments similar to the foregoing so long as
such action shall not materially and adversely affect the
Interests or returns to the Series Members.
16.6 Execution of Additional Instruments
Each Series Member hereby agrees to execute such other and
further statements of Interest and holdings, designations and other
instruments necessary to comply with any laws, rules or
regulations, or reasonable requests of the Company, the Founder,
or a Series Manager.
16.7 Construction
Whenever the singular number is used in this Agreement or a
Series Agreement and when required by the context, the same shall
include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa.
16.8 Waivers
The failure of any party hereto to seek redress for default of or to
insist upon the strict performance of any covenant or condition of
this Agreement or a Series Agreement shall not prevent a
subsequent act, which would have originally constituted a default,
from having the effect of an original default.
16.9 Severability
Every provision of this Agreement and the Series Agreements are
intended to be severable. If any phrase, sentence, paragraph, or
provision of this Agreement or a Series Agreement or its
application thereof to any Person or circumstance is unenforceable,
invalid, the affected phrase, sentence, paragraph, or provision shall
be limited, construed, and applied in a manner that is valid and
enforceable. If the conflict was with a non-waivable provision of
the Act, phrase, sentence, paragraph, or provision, it shall be
modified to conform to the Act. In any event, the remaining
provisions of this Agreement, the Series Agreement, or Subsidiary
Agreement shall be given their full effect without the invalid
provision or application. If any term or provision hereof is illegal
or invalid for any reason whatsoever, such legality or invalidity
shall not affect the validity or legality of the remainder of this
Agreement, the Series Agreement or the Subsidiary Agreement.
16.10 Creditors
None of the provisions of this Agreement or a Series Agreement
shall be for the benefit of or enforceable by any creditors of (i) the
Company, (ii) any Series of the Company, (iii) any Series Member,
(iv) any Series Manager, or (v) the Founder.
16.11 Counterparts
This Agreement and any associated Series Agreements may be
signed in multiple counterparts, all of which should be deemed an
original and shall constitute one instrument.
16.12 Integration
This Series Limited Liability Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject
matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
17. Signatures
IN WITNESS WHEREOF, the parties hereto, whose names
and contact information follows, have caused their signatures or
the signatures of their duly authorized representatives and seals to
be set forth below as of the day and year first above written.
Dated: August 12, 2020 By: VV Markets, LLC
A Delaware Series Limited liability company
By: Its Manager,
VinVesto, Inc.,
A Delaware Corporation
_______/s/ Xxxxxxxx King________________
By: Its CEO,
Xxxxxxxx Xxxx
Appendix A: Capital Accounts and Allocations
1. Capital Accounts
An individual Capital Account shall be maintained solely for the
convenience of the Manager. Since the Company is treated as a
corporation for U.S. federal and state tax purposes, the earnings
and profits of the corporation are paid solely in conjunction with
the Member?s Interests, and Capital Accounts do not serve a
purpose for U.S. federal or state tax purposes.
2. Division of Profits and Losses for Income Tax Purposes
As an entity electing to be treated as a corporation for U.S. federal
and state tax purposes, the Company will be responsible for
accounting for its profit and loss in accordance with U.S. tax law
prior to the distribution of cash.
3. Treatment of Distributions of Cash for Tax Purposes
3.1 Distributions of Cash
In the event that the Company generates Distributable Cash from
Capital Transactions, the Company will make Cash Distributions
to the Members as described in Article 4 of the Agreement.
3.2 In-Kind Distribution
Except as otherwise expressly provided herein, without the prior
approval of the Manager, Assets of the Company, other than cash,
shall not be distributed in-kind to the Members. If any Assets of
the Company are distributed to the Members in-kind for purposes
of this Agreement, such Assets shall be valued on the basis of the
Gross Asset Value thereof (without taking into account section
7701(g) of the Code) on the date of Distribution; and any Member
entitled to any Interest in such Assets shall receive such Interest as
a tenant-in-common with the other Member(s) so entitled with an
undivided Interest in such Assets in the amount and to the extent
provided for in Articles 4 and 2.2 of the Agreement.
Upon such Distribution, the earnings and profits of the
Company shall be
adjusted for any gain or loss pursuant to section 311(b) of the
Code.
3.3 Prohibited Distribution; Duty to Return
A Distribution to any Member may not be made if it would cause
the Company?s total liabilities to exceed the fair value of the
Company?s total Assets. A Member receiving a Distribution in
violation of this provision is required to return it, if the Member
had knowledge of the violation.
4. Other Tax Matters
4.1 Company Tax Returns and Payment
The Manager shall use its best efforts to cause the Company?s tax
return to be prepared prior to March 1 of each year. As an entity
electing to be treated as a Corporation, the Company will be
required to account for items of profit and loss on its own account
and remit corporate tax due resulting from such calculation. This
corporate tax will be viewed as an expense of the Company which
will reduce Distributable Cash.
5. Tax Matters Related to Foreign Investors
5.1 Non-U.S. Investors
The discussion below is applicable solely to Non-U.S. Persons
investing directly with the Company.
The Company will be required to withhold U.S. Federal income
tax at the rate of up to thirty percent (30%), or lower treaty rate, if
applicable on payments of fixed, determinable and periodic income
to shareholders and debt obligation holders (including but not
limited to dividends, interest, rents, royalties, etc.) to a Non-U.S.
Person. Documentation is required by the Manager before the
Company can apply a lower tax treaty rate.
The Company is authorized to withhold and pay over any such
withholding taxes and treat such withholding as a payment to the
Non-U.S. Person if the withholding was required. Such payment
will be treated as a Distribution to the extent that the Non-U.S.
Person is then entitled to receive a Distribution. To the extent that
the aggregate of such payments to a Non-U.S. Person for any
period exceeds the Distributions to which they are entitled for such
period, the Company will notify the Non-U.S. Person as to the
amount of such excess and the amount of such excess will be
treated as a loan by the Company to the Non-U.S. Person. If a
Non-U.S. Person owns a Membership Interest directly on the date
of death, its estate could be further subject to U.S. estate tax with
respect to such Interest.
It is intended that the holders of the Company?s debt obligations
will qualify for the portfolio interest exemption contained in
section 871(h) of the Code so long as their voting interest in the
Company is less than 10 percent.
5.2 Foreign Person Withholding
The Company shall comply with all reporting and withholding
requirements imposed with respect to Non-U.S. Persons, as
defined in the Code, and any Member that is a Non-U.S. Person
shall be obligated to contribute to the Company any funds
necessary to enable the Company (to the extent not available out of
such Member?s share of Distributable Cash or Net Proceeds of
Capital Transactions) to satisfy any such withholding obligations.
In the event any Member shall fail to contribute to the Company
any funds necessary to enable the Company to satisfy any
withholding obligation, the Manager shall have the right to offset
against any payments due and owing to such Member, or its
Affiliates, the amounts necessary to satisfy such withholding
obligation, or, in the event the Company shall be required to
borrow funds to satisfy any withholding obligation by reason of a
Member?s failure to contribute such funds to the Company, the
Manager shall have the right to offset against said Member?s
present and future Distributions, an amount equal to the amount so
borrowed plus the greater of (i) the Company?s actual cost of
borrowing such funds, or (ii) the amount borrowed, multiplied by
fifteen percent (15%).
5.3 Non-U.S. Taxes
The Company may be subject to withholding and other taxes
imposed by, and the Non-U.S. Person might be subject to, taxation
and reporting requirements in non-U.S. jurisdictions. It is possible
that tax conventions between such countries and the U.S. (or
another jurisdiction in which a non-U.S. Member is a resident)
might reduce or eliminate certain of such taxes. It is also possible
that in some cases, if the Non-U.S. Person is a taxable Member, it
might be entitled to claim U.S. tax credits or deductions with
respect to such taxes, subject to certain limitations under applicable
law. The Company will treat any such tax withheld from or
otherwise payable with respect to income allocated to the
Company as cash the Company received and will treat the Non-
U.S. Person as receiving a payment equal to the portion of such tax
that is attributable to it. Similar provisions would apply in the case
of taxes the Company is required to withhold.
Appendix B: Definitions
Defined terms are capitalized in this Agreement and may also
appear in the Series Agreement. The singular form of any term
defined below shall include the plural form and the plural form
shall include the singular. Whenever they appear capitalized in this
Agreement, the following terms shall have the meanings set forth
below unless the context clearly requires a different interpretation:
Act shall mean the Delaware Limited Liability Company Act, as
codified in the Delaware Code, Title 6, Chapter 18, as may be
amended from time to time, unless a superseding Act governing
limited liability companies is enacted by the state legislature and
given retroactive effect or repeals this Act in such a manner that it
can no longer be applied to interpret the Agreement or Series
Agreement, in which case ?Act? shall automatically refer to the
new Act, where applicable, to the extent such re-interpretation is
not contrary to the express provisions of the Agreement or a Series
Agreement.
Additional Capital Contribution shall mean any voluntary
contribution to the capital of a Series in cash, property, or services
by a Member made subsequent to the Member?s initial Capital
Contribution in response to a Series Manager?s requires for
voluntary Additional Capital Contributions.
Additional Member shall mean any Person admitted to the
Company or a Series as a new or additional member, subsequent to
the sale of Units or Interests in a Series in exchange for initial
Capital Contributions of the Series Members.
Affiliate or Affiliated shall mean any Person controlling or
controlled by or under common control with the Founder (or its
members), a Member of the Company or a Series wherein the
Manager or Member retains greater than fifty percent (50%)
control of the Affiliate if an entity.
Article when capitalized and followed by a number refers the
provision of this Company Agreement and its Appendices or to
provisions of a Series Agreement.
Capital Account shall mean the capital account maintained for
each Member in accordance with the provisions of Article 9.8 and
in Appendix A hereto. A separate Capital Account shall be
maintained for each Series Member's Interest in a Series.
Capital Contribution shall mean, with respect to any Member, any
contribution to the Company or a Series in cash or other property
(at such other property's initial Gross Asset Value) by such
Member whenever made. ?Initial Capital Contribution? shall
mean, with respect to any Member, the initial contribution by such
Member to the Company or a Series pursuant to this Agreement.
?Unreturned Capital Contribution? shall mean, with respect to any
Member, the initial contribution by such Member to the Company
or a Series pursuant to this Agreement, less any returned capital
specified as such, that is not classified by the Manager as a return
on investment.
Certificate of Formation shall mean the Certificate of Formation of
the Company and any and all amendments thereto and restatements
thereof filed on behalf of the Company with the office of the
Secretary of State of the State of Delaware pursuant to the Act.
Code shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any superseding federal tax law. A reference
herein to a specific Code section refers, not only to such specific
section, but also to any corresponding provision of any superseding
federal tax statute, as such specific section or such corresponding
provision is in effect on the date of application of the provisions of
this Agreement containing such reference.
Company shall refer to VV Markets, LLC, formed and continued
under and pursuant to the Act and this Agreement.
Company Agreement or Agreement shall mean the Series Limited
liability company Agreement, as amended, modified,
supplemented or restated from time to time.
Company Minimum Gain has the meaning set forth in sections
1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.
Covered Person, when capitalized, shall have the meaning as set
forth in Article 6.6 hereof.
Depreciation shall mean, with respect to a Series, and 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 associated with such Series for such Fiscal Year
or other period; provided, however, that if the Gross Asset Value
of an asset associated with such Series 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 that
bears the same ratio to such beginning Gross Asset Value as the
federal income-tax depreciation, amortization or other cost
recovery deduction with respect to such asset for such Fiscal Year
or other period bears to such beginning adjusted tax basis; and
provided further, 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 Series Manager or Founder.
Disassociated Member shall mean a Member who has been
involuntarily disassociated from the Company or a Series by one of
the actions described in Article 13.1 or 13.2, or by Voluntary
Transfer of its Membership Interest to a Voluntary Transferee as
described in Articles 12.3 through 12.8.
Disassociation shall mean an action of the Series Manager of a
Series to remove a Series Member?s right to participate in
management of the Series (i.e., removal of its voting Interest) for
cause (per Article 13.1) or by operation of law (per Article 13.2).
Dispute, when capitalized, shall have the meaning set forth in
Article 14 hereof
Distributable Cash shall mean all cash, revenues and funds
received by a Series from operation of its Subsidiaries and its
Underlying Asset(s), less the sum of the following to the extent
paid or set aside by the Series: (i) all principal and interest
payments on indebtedness of the Subsidiary of the Series and all
other sums paid to lenders with respect to the Series; (ii) all cash
expenditures incurred in the normal operation of the Series
business; and (iii) such Reserves as the Founder deem reasonably
necessary for the proper operation of the Series? business.
Distribution or Distributions shall mean the cash paid to Series
Members on account of their Series Membership Interests.
Economic Interest shall mean a Person?s right to share in the
income, gains, losses, deductions, credit, or similar items of, and to
receive Distributions from a Series, but does not include any other
rights of a Series Member, including, without limitation, the right
to vote or to participate in management, and any right to
information concerning the business and affairs of the Series in
which it is a Member.
Estimated Market Value shall mean the estimated market value of
the Underlying Asset(s) owned by a Subsidiary of a Series, which
shall be determined annually by the Manager of such Series and
reported to the Members of such Series.
Fees refers to compensation received by a Series Manager for
services provided to Series as a Series Manager.
Fiscal Year shall mean (i) the period commencing upon the
formation of the Company and ending on December 31, (ii) any
subsequent twelve (12) month period commencing on May 15 and
ending on December 31, or (iii) any portion of the period described
in Clause (ii) of this sentence for which the Company is required to
allocate Profits, Losses and other items of a Series? income, gain,
loss or deduction pursuant to Article 9 and Appendix A hereof.
Founder shall initially mean VinVesto, Inc. a Delaware
corporation, which is the initial and sole Member of the Company
not associated with any Series.
Free Cash Flow is the net income (as determined under U.S.
generally accepted accounting principles (?GAAP?)) generated by
the Series plus any change in net working capital and depreciation
and amortization (and any other non-cash Operating Expenses) and
less any capital expenditures related to the Underlying Asset
(?Free Cash Flow.?) The Manager may maintain Free Cash Flow
funds in a deposit account or an investment account for the benefit
of the Series.
Gross Asset Value shall mean, with respect to any asset associated
with a Series, such asset's adjusted basis for federal income-tax
purposes, except as follows:
- The initial Gross Asset Value of any asset contributed by a
Member to a Series shall be the gross fair market value of
such asset, as agreed to by the manager of such Series;
- The Gross Asset Value of all assets of a Series shall be
adjusted to equal their respective gross fair market values,
as determined by the Series Manager, as of the following
times: (a) the acquisition of an additional Interest in such
Series by any new or existing Member in exchange for
more than a de minimis Capital Contribution; (b) the
distribution to a Member of such Series of more than a de
minimis amount of Series assets as consideration for an
Interest in the Series; and (c) the liquidation of the assets of
a Series within the meaning of Treasury Regulation ?1.704-
1(b)(2)(ii)(g); provided, however, that adjustments pursuant
to Clause (a) and Clause (b) of this sentence shall be made
only if the Series Manager of such Series reasonably
determines that such adjustments are necessary or
appropriate to reflect the relative Economic Interests of the
Members in such Series; and
- The Gross Asset Value of any Series asset that is
distributed to any Series Member shall be the gross fair
market value of such asset on the date of Distribution, as
determined by the Manager of such Series, which shall be
determined by any commercially reasonable method.
- If the Gross Asset Value of an asset has been determined or
adjusted pursuant to Paragraph (a) or Paragraph (b) above,
such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset
for purposes of computing Series Profits and Losses.
Interest or Membership Interest shall mean a Member?s rights in
the Company (with respect to the Founder), or a Series (with
respect to Series Members), including the Member?s Economic
Interest in the Company of a Series, plus any additional right to
vote or participate in management of the Company or Series, and
any right to information concerning the business and affairs of the
Company or Series provided by the Act and/or described in the
Company Agreement or a Series Agreement.
Investor shall mean Persons who make Capital Contributions to a
Series of the Company in exchange for Membership Interests in
such Series.
Involuntary Transfer shall mean any transfer not specifically
authorized under Article 12.
Involuntary Transferee shall mean a Series Member?s heirs, estate,
or creditors that have taken by foreclosure, receivership, or
inheritance and not as a result of a Voluntary Transfer.
Majority of Interests shall mean, with respect to a Series, the vote
of Membership Interests of one or more Series Members that in the
aggregate exceed fifty percent (50%) of all voting Percentage
Interests owned by Members of that Series entitled to vote. Except
as otherwise provided in a Series Agreement; non-voting Series
Members, if applicable, shall have no voting rights.
Member Class shall mean a separate class of interests in a Series as
described in Article 5.2 whose rights and duties are separate and
distinct from other Members in a Series.
Member or Company Member, with respect to the Company, shall
include VinVesto, Inc. a Delaware corporation, as the Founder of
the Company. Member or Series Member shall include Persons
later admitted as Members of a Series, who shall be admitted in
accordance with this Agreement. Upon being admitted as a
Member of a Series, unless otherwise specified such Series
Agreement, such Series Member shall not be considered admitted
as a Member of the Company or any other Series.
Member Nonrecourse Debt has the meaning set forth in section
1.704-2(b)(4) of the Treasury Regulations.
Member Nonrecourse Debt Minimum Gain means an amount, with
respect to each Member Nonrecourse Debt, equal to the Company
Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in
accordance with section 1.704-2(i)(3) of the Treasury Regulations.
Member Nonrecourse Deductions has the meaning set forth in
Treasury Regulation section 1.704-2(i)(2). For any Fiscal Year of
the Company, the amount of Member Nonrecourse Deductions
with respect to a Member Nonrecourse Debt equals the net
increase during that Fiscal Year in Member Nonrecourse Debt
Minimum Gain attributable to such Member Nonrecourse Debt
during that Fiscal Year, reduced (but not below zero) by the
amount of any Distributions during such year to the Member
bearing the economic risk of loss for such Member Nonrecourse
Debt if such Distributions are both from the proceeds of such
Member Nonrecourse Debt and are allocable to an increase in
Member Nonrecourse Debt Minimum Gain attributable to such
Member Nonrecourse Debt, all as determined according to the
provisions of Treasury Regulation section 1.704-2(i)(2). In
determining Member Nonrecourse Deductions, the ordering rules
of Treasury Regulation section 1.704-2(j) shall be followed.
Non-Capital Contributions shall mean the contributions made by
Members of the Company or a Series other than cash.
Nonrecourse Deductions has the meaning set forth in Treasury
Regulation section 1.704-2(c). The amount of Nonrecourse
Deductions for a Company Fiscal Year equals the net increase in
the amount of Company Minimum Gain during that Fiscal Year,
reduced (but not below zero) by the aggregate amount of any
Distributions during that Fiscal Year of proceeds of a Nonrecourse
Liability that are allocable to an increase in Company Minimum
Gain.
Nonrecourse Liability has the meaning set forth in section 1.704-
2(b)(3) of the Treasury Regulations.
Notice of Sale shall have the meaning set forth in Article 12.8,
pertaining to a Voluntary Transfer of a Series Member?s Interest.
Percentage Interest or Series Percentage Interest shall mean, for
any Member associated with a Series, such Member?s Percentage
Interest in such Series, as set forth herein or in a Series Agreement.
Person or Persons shall mean any individual or legal entity, their
heirs, executors, administrators, legal representatives, successors,
and assigns of such individual or entity where the context so
permits.
Profits and Losses shall mean, with respect to a Series, and for
each Fiscal Year, an amount equal to the Series? taxable income or
loss associated with such Series for a Fiscal Year, determined in
accordance with ?703(a) of the Code (but including in taxable
income or loss, for this purpose, all items of income, gain, loss or
deduction associated with such Series that are required to be stated
separately pursuant to ?703(a)(1) of the Code), with the following
adjustments:
- Any income of a Series that is exempt from federal income
tax and not otherwise taken into account in computing
Profits or Losses pursuant to this definition shall be added
to such taxable income or loss;
- Any expenditures of such Series that are described in
?705(a)(2)(B) of the Code (or treated as expenditures
described in ?705(a)(2)(B) of the Code pursuant to
Treasury Regulation ?1.704-1(b)(2)(iv)(i)) and not
otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be subtracted from such
taxable income or loss;
- In the event the Gross Asset Value of any asset associated
with such Series is adjusted in accordance with Paragraph
(ii) or Paragraph (iii) of the definition of ?Gross Asset
Value? above, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses;
- Gain or loss resulting from any disposition of any asset of
such Series with respect to which gain or loss is recognized
for federal income-tax purposes shall be computed by
reference to the Gross Asset Value of the asset disposed of,
notwithstanding that the adjusted tax basis of such asset
differs from its Gross Asset Value; and
- 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 associated with such Series for such Fiscal
Year or other period, computed in accordance with the
definition of ?Depreciation? above.
Purchasing Member shall mean any current Series Member, Series
Manager or Founder that agrees to purchase a selling Series
Members Interest with respect to a Series, including the Series
Member?s Economic Interest and/or voting rights referenced in
Articles 12 and 13.
Remaining Members shall have the meaning set forth in Articles
12 and 13 hereof.
Reserves shall mean, with respect to a Series, funds set aside or
amounts allocated to reserves that shall be maintained in amounts
deemed sufficient by the Series Manager of such Series for
working capital and to pay taxes, insurance, debt service or other
costs or expenses incident to the ownership or operation of the
business of the Company with respect to such Series, or incident to
the liquidation of such Series pursuant to Article 15.3.
Section, when capitalized and followed by a number, refers the
sections of the Appendices to this Company Agreement.
Selling Member shall mean any Series Member that sells, assigns,
hypothecates, pledges, or otherwise transfers all or any portion of
its rights of membership in a Series, including its Economic
Interest and/or voting rights.
Series shall mean a designated Series with separate Members,
Managers or Interests established in accordance with this
Agreement, the Act, and a Series Agreement having separate
rights, powers or duties with respect to Underlying Asset(s) or
obligations or profits and losses associated with Underlying
Asset(s) or obligations and, to the extent provided in this
Agreement or a Series Agreement.
Series Agreement shall mean a separate, abbreviated Agreement
(including amendments) establishing a Series, and executed by the
Founder and Series Managers and adopted (via their Subscription
Booklets) by the Series Members. To the extent that a Series
Agreement conflicts with the Company Agreement, the Series
Agreement shall control.
Series Manager shall mean a Person appointed by the Founder of
the Company to manage a Series of the Company, or such Person
as may be subsequently elected by the Series Members.
Series Member shall mean a Person who has made a Capital
Contribution to the Company in exchange for Membership
Interests in a Series of the Company.
Subsidiary or Subsidiaries shall mean the single purpose limited
liability companies formed by the Founder to take title to
individual Properties.
Substitute Member shall mean any Person or entity admitted to a
Series as a Member of the Series, on approval by the Series
Manager, with all the rights of a Series Member pursuant to Article
7 of this Agreement.
Transferee when capitalized, shall have the meaning set forth in
Article 12 hereof.
Treasury Regulations shall mean the income-tax regulations,
including temporary regulations, promulgated under the Code, as
such regulations may be amended from time to time (including
corresponding provisions of superseding regulations).
Underlying Asset(s) or Asset shall mean those assets that an
individual Series acquires to advance the purpose of the Company.
The Company, via individual Series, intends to acquire assets such
as fine and vintage wines. Underlying Assets shall be specified in
separate Series Agreements.
Voluntary Transfer shall have the meaning set forth in Article 12.
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