Major Decisions. (a) Notwithstanding anything to the contrary set forth herein, without prior written Member Consent in each instance (each, a “Major Decision”), none of the Company, the Managing Member or the Operating Member shall: (i) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement; (ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget; (iii) authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property; (iv) subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases; (v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest; (vi) voluntarily dissolve or liquidate the Company; (vii) authorize or effect a merger or consolidation of the Company with or into one or more entities; (viii) make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV; (ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement; (x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company; (xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors; (xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose; (xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity; (xiv) commingle Company funds with the funds of any other Person; (xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement; (xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member; (xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2; (xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing; (xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect; (xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims; (xxi) remove or appoint accountants in connection with any Company business; (xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement; (xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company; (xxiv) change the name under which the Company conducts its business; or (xxv) determine whether the Company shall exercise the Option. (b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall: (i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget; (ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses; (iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and (iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing. (c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting. (d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows: (i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party. (ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member. (iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 2 contracts
Samples: Limited Liability Company Agreement, Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following such reallocation or allocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeCrescent’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Select any Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under to propose to the CNL Property Management Agreement or any other Manager for a sub property management agreement for the management of the Property; provided, however, it being acknowledged that if the Company shall enter into a property management agreement with the REIT Property Manager is Bainbridge or an Affiliate of Bainbridge and is which has entered into a sub property management agreement with the CNL Property Manager, as set forth in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.9;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Crescent or any of the Bainbridge PrincipalsCrescent Affiliate, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to pursue, obtain and close and consummate from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to so long as the Company. It replacement Company Financing (a) is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose does not require prepayment penalty in excess of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose greater of yield maintenance or one percent (1%) of the Property nor require the Company to pay principal amount outstanding and (b) in respect of which if guaranties are required, such guaranties are provided by Crescent or a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;Crescent Affiliate.
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify Modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL and/or Crescent may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or.
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(iixxvi) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iiixxvii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(ivxxviii) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamTampa, North Carolina Florida market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(cb) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(dc) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any other Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (Global Growth Trust, Inc.), Limited Liability Company Agreement (Global Growth Trust, Inc.)
Major Decisions. (a) Notwithstanding anything to any other provisions of this Agreement, the contrary set forth hereinCompany and/or the Managing Member may not, without prior written the approval of the Non-Managing Member Consent in each instance of the Company take any of the following actions or cause Mezz LLC or Property Owner to take any of the following actions (each, a “Major Decision”), none of the Company, the Managing Member or the Operating Member shall:):
(i) adoptborrow money (whether on a secured or unsecured basis, modify and whether senior, on par or supplement subordinate to the Plans Loans, but excluding trade debt or amend the terms and Specificationsconditions of any financing of the Company or any of its Subsidiaries, including the Loans, in any material respect or make elections with respect to interest periods, interest rates or other material provisions under any such financing;
(ii) lend money (whether on a secured or unsecured basis, but excluding trade debt);
(iii) grant any mortgage, security interest or any other lien on any Property or any other assets of the Company or any of its Subsidiaries;;
(iv) subject all or any part of any Property to a condominium statute or convert any Property to condominium or cooperative form of ownership;
(v) except as otherwise provided herein, sell all or any portion of any Property;
(vi) seek or consent to any change in the zoning or other land use regulations affecting any Property or any permits or approvals granted thereunder if such change will materially adversely affect the value of the Property or the rights, interests or obligations of the parties under this Agreement;
(vii) rebuild or reconstruct the improvements on the Property if they are substantially damaged by a fire or other casualty, except to the extent permitted without the Company’s consent under Company or any of its Subsidiaries is required to do so pursuant to the Development Agreement including, without limitation, Section 2.15 of Loan Documents or except to the Development Agreementextent that the cost to rebuild or reconstruct the improvements is less than $1,000,000;
(viii) acquire any real property (other than the Property), any direct or indirect interest in real property, or any interest in any Person other than the Subsidiaries;
(ix) adopt the annual operating budget of the Company and its Subsidiaries, which must be submitted to the Non-Managing Member for its Approval by November 30 of the preceding year (each such annual budget, as Approved, an “Approved Budget”);
(x) incur any single capital expenditure in excess of $50,000, other than capital expenditures which are (i) set forth in an Approved Budget, or (ii) otherwise specifically Approved by the Non-Managing Member;
(xi) assign, transfer, pledge, compromise or release any of the claims of or debts or insurance or condemnation proceeds due the Company exceeding $50,000 except in connection with the receipt by the Company of payment in full of such claims or debts;
(xii) enter into any contract lease for a portion of the Property in excess of 25,000 square feet;
(xiii) change the Company’s or transaction withany Subsidiaries’ accounting method, either for financial or tax reporting purposes or otherwise;
(xiv) dissolve the Company or any Subsidiary;
(xv) effect any merger, consolidation or restructuring of the Company or any Subsidiary;
(xvi) purchase or redeem all or any portion of the limited liability company interest of any Member in the Company, except as provided herein with respect to permitted transfers;
(xvii) form, directly or indirectly, any subsidiary other than the Subsidiaries;
(xviii) other than in connection with the Loans, sell, assign, transfer, pledge, hypothecate or otherwise dispose of or encumber all or any portion of any of the Company’s interest in any Subsidiary or permit any Subsidiary to sell, assign, transfer, pledge, hypothecate or otherwise dispose of or encumber all or any portion of its assets or cause or permit any additional equity interests to be issued by or new members to be admitted to any Subsidiary;
(xix) amend or otherwise modify any of the organizational documents of the Company or any Subsidiary in any material respect or take any action which would result in the Company not being able to manage or exercise control over any Subsidiary;
(xx) enter into or conduct any business or operations other than in connection with the business of the Company as contemplated by Section 7 hereof or otherwise herein, or pay take any amount to, action which would cause the Company or any Subsidiary to cease being a “special purpose” entity as provided in Section 9(d) above;
(xxi) employ any Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred any Member on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget any Subsidiary or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of otherwise deal with the Company that is unrelated or any Subsidiary (whether as a buyer, seller, lessor, lessee, manager, broker, agent, furnisher of services, lender or otherwise) and pay to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of receive from the Company, except in the case its Subsidiaries, any Member and any of (i) the sale of personal property which is not necessary for the operation of the Property (their Affiliates any compensation, price, fee, commission or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily dissolve or liquidate the Company;
(vii) authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make any call for capital contributions from the Membersother payment therefore, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part contemplated by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company businessset forth on Schedule D hereto;
(xxii) determine employ any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which accountants for the Company is partyor any attorneys for the Company (except that the Members specifically approve Xxxxxxx, other than a default under this AgreementXxxxxxxxx LLP and Cozen X’Xxxxxx being retained as attorneys for the Company and Amper, Politziner, Xxxxxx and/or Xxxxxxxxxx XxXxxx Group being retained as accountants for the Company);
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for settle any casualty loss (except to the deposit extent fully covered by insurance less any deductible) or condemnation claim in excess of funds of the Company$250,000;
(xxiv) change settle any material litigation or threatened litigation, including without limitation that certain litigation regarding the name under which sub-leasehold interest in the Company conducts its business; orProperty;
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member enter into any material contract or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budgetamendment;
(iixxvi) modify issue additional equity interests in itself or any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into accountSubsidiary; and
(ivxxvii) enter into take any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; providedother actions which, however, that subject pursuant to the other provisions terms of Section 6.2(a) and 6.2(b)this Agreement, such restriction shall not restrict the authority require Approval of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 2 contracts
Samples: Limited Liability Company Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Limited Liability Company Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Major Decisions. (a) Notwithstanding anything to Section 5.2, or any power or authority granted the contrary set forth hereinManaging Member under the Act, without prior written Member Consent in each instance the Manager may not make any decision, take any action, or intentionally permit occurrence of an event specified below (each, a “Major Decision”), none ) without first obtaining the written consent of the Companyother Members, the Managing Member which consent shall not be unreasonably withheld or the Operating Member shalldelayed:
(i) adoptamend or modify this Agreement the result of which is to adversely affect and/or impair SG DEV’s rights, modify or supplement the Plans benefits and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreementinterests hereunder;
(ii) enter into initiate or conduct any contract non-budgeted or transaction withnon-ordinary course expenses, capital or pay any amount to, a Member or any Affiliate emergency costs in excess of a Member$50,000 in cost per occurrence, except for Out-of-Pocket Costs incurred (i) repairs which if not made promptly could reasonably be expected to result in material damage to the Project or harm to health, safety or welfare of occupants, guests or the public and (ii) repairs resulting from a casualty whereby the repairs are fully covered by insurance (except for normal and customary deductibles) and are substantially in accordance with the original plans and specifications for the Project, except as adjusted to comply with requirements of law and any loan documents;
(iii) cause or permit the Company or any of its respective Affiliates to engage in any activity with respect to the Company, the Project, and/or the Company Business that is not consistent with the purpose of the Company as set forth in Section 3.1;
(iv) enter into purchase and sale or other transaction agreements on behalf of the Company to make or as expressly provided in this Agreementdispose of the Project, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf assets of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms or merger or effect another form of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leasescorporate transaction;
(v) modify the Project Budget, provided it shall not be cause or permit a Major Decision to (i) reallocate amounts change to the extent permitted under tax or accounting methodology utilized by the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestCompany;
(vi) voluntarily dissolve modify or liquidate waive any provision of the annual Budget of the Company;
(vii) authorize cause a distribution of property other than cash to the Members;
(viii) cause the Company to pay the Manager a fee for its services as Manager of the Company;
(ix) merge, consolidate, convert, or effect a merger or consolidation of otherwise reorganize the Company with or into one or more entities;
(viii) make any call for capital contributions from the Membersanother Person, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amendre-domesticate, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amendchange the state or other jurisdiction where the Company is organized, modify, supplement or grant enter into any material consents share or waivers under the terms of the Property Management Agreementunit exchange (or similar transaction);
(x) cause the Company to incur hypothecate, pledge, encumber or grant any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing security interest in at least the amount a material portion of the outstanding balance assets of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against convert or reorganize the Company in excess of $50,000, file into another entity form (including a corporation) or fail cause the Company to contest any bankruptcy, seek or determine not to contest be taxed as a receivership, make an assignment corporation for the benefit of creditors or take any similar action for the benefit of creditorsfederal income tax purposes;
(xii) possess any Company property or assign the rights of the Company except as otherwise provided in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan enter into, amend, restate, substitute, or modify, or make any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection decision with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation ofrespect to, any Requirement or material agreement to which the Company is partycontract, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Companyagreement, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consenttransaction, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on arrangement between the Company and the Members for all matters. Upon the request Manager or any Member (or any Affiliate of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of Manager or any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), in a manner that is not pursuant to terms and conditions that are substantially the Operating same as those that would be available on an arms-length basis with third parties other than the Manager, Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.Affiliate;
Appears in 2 contracts
Samples: Operating Agreement (Safe & Green Development Corp), Operating Agreement (Sg Blocks, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeWoodfield’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Select any Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms management of the Property Property, and approve any Management Agreement, only the consent of CNL shall be required subject to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.10;
(x) Except for the Acquisition Loan and the Construction Loan (which Construction Loan shall be a CNL Decision as set forth in Section 6.2(b)(iv)), cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Acquisition Loan or the Construction Loan matures (whether at its their stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Acquisition Loan or Construction Loan, as applicable; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Acquisition Loan, Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Woodfield or any of the Bainbridge Woodfield Principals, if new Company Financing, the proceeds of which will be used to repay the Acquisition Loan, the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Acquisition Loan or Construction Loan, as applicable, or such other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member Woodfield and/or any of the principals of the Operating Member Woodfield Principals shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate Modify the Development Agreement or replace the DeveloperFee, modify the Development Fee or otherwise amend, amend or modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required subject to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development AgreementSection 6.10;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its CNL’s interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiiixxiv) designate Exercise the Company’s right under the ROFO Agreement to acquire any portion of the ROFO Property; or
(xxv) Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained hereincontrary, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, Company and the Managing Member or shall not, and the Managing Member shall not authorize the Operating Member shallto:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(ii) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter Enter into the Construction Loan or any other contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b)) other than with respect to the Construction Loan, such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements that are only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden rental apartment community in the DurhamHanover, North Carolina Maryland market. CNL will use good faith efforts to consult with Bainbridge Woodfield on matters constituting CNL Decisions. Notwithstanding anything ; provided, however that CNL shall have no obligation to the contrary contained herein, in no event shall implement or otherwise be subject to any CNL Decision, if made without Bainbridge Consent, information or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given input offered by Bainbridge of any of its Affiliates Woodfield in connection with the Construction Loan or any other Company Financingtherewith.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth herein, without prior written Member Consent in each instance (each, a “Major Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily dissolve or liquidate the Company;
(vii) authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, the Managing Member will not permit or cause the Company or any of its Subsidiaries to, directly or indirectly any of the following actions without prior CNL Consent the approval of Flag (if the Class A Preferred Distribution has not been paid in each instance full:
(each, a “CNL Decision”), none a) alter the business and purpose of the Company, ;
(b) do any act in contravention of the Managing Member Certificate of Formation or this Agreement which would make it impossible to carry on the Operating Member shall:purpose and business of the Company;
(c) enter into any transaction with any Affiliate of the Company (except to the extent that (i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company receives the written fairness opinion as to incur the fairness of any expense not provided for in an Operating Budget such transaction to the Members from a nationally-recognized investment banking firm or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, similar institution and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expensesis on an arm’s length third-party market transaction basis);
(iiid) modify commence any Capital Budgetcase, except proceeding or other action on behalf of the Company under any existing or future law of any jurisdiction relating to allow an annual aggregate variance not in excess bankruptcy, insolvency, reorganization or relief of $50,000 in debtors; or institute proceedings to have the aggregate after taking all line item variances into accountLEGAL_US_E # 76491121.3 09887.00007 Company adjudicated bankrupt or insolvent; andor consent to, or acquiesce in, the institution of bankruptcy or insolvency proceedings against the Company; or file a petition or consent to the filing of a petition seeking reorganization, arrangement, adjustment, or other relief on behalf of the Company of its debts under federal or state law relating to bankruptcy; or seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestor, custodian or any similar official for the Company or a substantial portion of the Company’s assets; or make any assignment for the benefit of the Company’s creditors;
(ive) enter into any contract (i) add or agreement that obligates admit new or substitute Members to the Company to pay more than $50,000 or that is not terminable on no more than thirty (30ii) days’ notice without penalty redeem or charge; repurchase any portion or all of the Membership Interests of any Member (provided, however, that subject clause (i) of this consent right shall not be applicable to Flag to the other provisions extent that following the date hereof the gross proceeds received by the Company from the admission of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member new or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that substitute members hereunder does not reasonably permit such advance notice, adversely affect the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, rights with respect to CNL, the Class A Preferred Distribution under Section 8.1 and unless such proposed CNL Decision, described in such advance notice shall be deemed proceeds are used to not have given its consent to such proposed Major Decision satisfy the Company’s payment obligations under Section 8.1 (b) or CNL Decision. Member Consent or CNL Consent(c), as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.;
Appears in 1 contract
Samples: Limited Liability Company Operating Agreement (FX Real Estate & Entertainment Inc.)
Major Decisions. (a) Notwithstanding anything to All Major Decisions shall be made upon the contrary set forth herein, without prior written Member Consent in each instance (each, a “Major Decision”), none recommendation of the Company, the Managing Member and shall require the approval of Xxxxxx, which approval, except as otherwise expressly set forth with respect to such Major Decision, shall not be unreasonably withheld, conditioned or delayed. Xxxxxx shall appoint an individual to act as its Authorized Representative for all purposes, including the Operating Member shallgranting of approval. Xxxxxx hereby appoints Xxxxx X. Xxxxxx as its initial Authorized Representative, and may at any time, upon prior written notice to the Managing Member, appoint Xxxxx X. Xxxxxxxx as a successor Authorized Representative. Except as provided in the preceding sentence, Xxxxxx shall not replace its Authorized Representative without the prior written consent of the Managing Member. Major Decisions (“Major Decisions”) shall be comprised exclusively of the following:
(i) adopt, modify or supplement the Plans and Specifications, except subject to the extent permitted without the Company’s consent under the Development Agreement includingterms set forth in Article VIII hereof, without limitationentering into an agreement or option to sell, Section 2.15 transfer, assign or otherwise dispose of all or any part of the Development AgreementProperty, the Company Assets and/or any Subsidiary’s assets (except, in each case, immaterial items of personal property sold in the ordinary course of business), or entering into any amendment, renegotiation, modification, supplement or extension of any agreement or option to sell, transfer, assign or otherwise dispose of all or any portion of any Company Asset and/or any Subsidiary’s assets (except, in each case, immaterial items of personal property sold in the ordinary course of business);
(ii) enter into approving capital expenditures in excess of $500,000 in any contract Fiscal Year which are not expressly reflected in the Capital Plan by a specific line item or transaction withother specific designation, or pay any amount to, a Member or any Affiliate other than Emergency Expenditures and/or Non-Controllable Expenditures which may be incurred without the approval of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital BudgetXxxxxx;
(iii) authorize refinancing any existing mortgage or creating or incurring any indebtedness, encumbrance, lien, security interest or charge of any kind on any Company Assets, or any assets of any Subsidiary; provided, that the Managing Member may, without the approval of Xxxxxx, cause the Company or any Subsidiary to enter into any agreementa Qualified Refinancing; and provided, transaction or action on behalf further, trade payables incurred in accordance with the Approved Budget that remain outstanding for not more than one-hundred and eighty (180) days shall not require the approval of Xxxxxx, and the Managing Member may, without the approval of Xxxxxx, cause the Company that is unrelated or any Subsidiary to its purpose set forth incur indebtedness on commercially reasonable terms in Section 2.3, including acquiring the ordinary course of business in an amount not to exceed $150,000 (increased annually based on the percentage increase in the CPI Index over the prior year) in any additional real propertyFiscal Year;
(iv) subject causing the Company and/or any Subsidiary to file or consent to or acquiesce in any petition with respect to the terms Company and/or any Subsidiary under any chapter of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset Title 11 of the CompanyUnited States Bankruptcy Code or any similar law or regulation, except in seeking the case appointment of (i) the sale a custodian, receiver or trustee of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily dissolve or liquidate the Company;
(vii) authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member Assets and/or any of the principals of the Operating Member shall also be deemed favorableSubsidiary’s assets, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make making an assignment for the benefit of creditors creditors, or take admitting on behalf of ACTIVE 203377426v.6 the Company and/or any similar action for Subsidiary that the benefit of creditorsCompany and/or any Subsidiary is insolvent or unable to pay its or their debts as they come due; Xxxxxx’x approval with respect to this clause (iv) may be granted or withheld in its sole discretion;
(xiiv) possess approving or disapproving a creditors’ plan, the filing of an involuntary petition of bankruptcy or the dismissal or discharge of a claim of bankruptcy in connection with bankruptcy proceedings involving any Company property or assign the rights of Person contracting with the Company and/or any Subsidiary; Xxxxxx’x approval with respect to this clause (v) may be granted or withheld in specific Company property for other than a Company purposeits sole discretion;
(xiiivi) cause except as expressly provided or permitted in this Agreement, (a) admitting any Person as a Member of the Company, or admitting any Person as partner, member, shareholder, trustee, or beneficiary of any Subsidiary, as applicable, (b) issuing or selling any interests in the Company to loan funds to and/or in any Person Subsidiary, or issue (c) causing or permitting a Transfer of Interest in the Company and/or the interests in any guaranty or indemnity;Subsidiary; and
(xivvii) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend amending this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Rouse Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeWoodfield’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Select any Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under to propose to the CNL Property Management Agreement or any other Manager for a sub property management agreement for the management of the Property; provided, however, it being acknowledged that if the Company shall enter into a property management agreement with the REIT Property Manager is Bainbridge or an Affiliate of Bainbridge and is which has entered into a sub property management agreement with the CNL Property Manager, as set forth in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.9;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Woodfield or any of the Bainbridge Woodfield Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member Woodfield and/or any of the principals of the Operating Member Woodfield Principals shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate Modify the Development Agreement or replace the DeveloperFee, modify the Development Construction Management Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its CNL’s interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything any thing to the contrary contained hereincontrary, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, Company and the Managing Member or shall not, and the Managing Member shall not authorize the Operating Member shallto:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(ii) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamCharlotte, North Carolina market. CNL will use good faith efforts to consult with Bainbridge Woodfield on matters constituting CNL Decisions. Notwithstanding anything ; provided, however that CNL shall have no obligation to the contrary contained herein, in no event shall implement or otherwise be subject to any CNL Decision, if made without Bainbridge Consent, information or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given input offered by Bainbridge of any of its Affiliates Woodfield in connection with the Construction Loan or any other Company Financingtherewith.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2.(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Global Growth Trust, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereinprovisions of Section 6.1, without prior written Member Consent the unanimous vote of the Management Committee in each instance (each, a “Major Decision”), none of the Company, the Managing Member or the Operating Member shallCompany shall not:
(ia) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumbertransfer, assign, convey, exchange or otherwise dispose ofof the Properties or the Company Assets (other than personal property at the Properties which may be disposed of or replaced due to wear and tear or obsolescence or otherwise in the ordinary course of business and other than Leases, in each case directly or indirectly, which are governed by Section 6.3(e));
(b) purchase any interest in any asset additional properties;
(c) borrow money on behalf of the Company, except whether on a secured or unsecured basis, refinance, recast, extend, compromise or otherwise materially amend any such loan, and in connection therewith, issue evidences of indebtedness and secure the same by mortgages, deeds of trust, security agreements or other similar documents encumbering assets of the Company (other than (i) trade receivables in the case ordinary course of business or (ii) equipment financing);
(d) approve the annual Business Plan for the operation, management, improvement and development of the Properties, or the acquisition of new Properties, including approval of the following components of the Business Plan: (i) the sale of personal property which is not necessary for the operation of the Property (or if necessaryBudget, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted the Leasing and Property Guidelines, (iii) the Development Budgets, (iv) the Development Plans and Specifications and (v) the Development Schedules; or material modifications of any of the above (subject to the provisions of this Agreement, including without limitation “Material” changes pursuant to Section 6.5(a), (b) or (c) or “Material” variances pursuant to Section 7.6); nor shall the Company make expenditures not set forth in an approved Budget or Development Budget or as otherwise expressly authorized by this Agreement.
(e) approve Major Leases, or any Leases which materially deviate from the parameters of the Leasing and Property Guidelines;
(vf) modify institute or settle any major litigation or dispute (i.e., where the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents amount in controversy exceeds $500,000 relating to any of the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestProperties);
(vig) voluntarily dissolve approve the terms of the insurance program for the Company or liquidate any modification thereof; provided, however that in all cases the Managing Member shall use commercially reasonable efforts to comply with all insurance requirements of the Loan and all future lenders and provided, further, that in the event that the Management Committee cannot agree on an insurance program the insurance program for the prior Fiscal Year shall be continued;
(h) select or change the auditor for the Company;
(viii) authorize or effect a merger or consolidation approve any agreements between the Members and any Affiliates of the Company with Members or into one any modifications thereto, including the terms of the Property Management Agreements and/or the Development Agreements or more entitiesany modifications thereto, or the termination thereof in the event of a default by the Manager or the elective termination of the Manager under any of the Property Management Agreements, or a default by the Developer or the elective termination of the Developer under any of the Development Agreements, as the case may be, unless any of the Property Management Agreements or the Development Agreements are terminated following the removal of the Managing Member pursuant to Section 6.14;
(viiij) make approve the terms of any call for capital contributions from construction contracts, construction management agreements, or subcontracts relating to the Membersconstruction and/or development of the Properties under Development or the Undeveloped Properties, except as expressly authorized pursuant in each case where the dollar amount covered thereby is in excess of $1,000,000 with respect to Article IV;
(ix) terminate the Property Management Agreement base building construction or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property$750,000 with respect to tenant improvement work; provided, however, that if the Property Manager is Bainbridge or an Affiliate Management Committee has not responded to a request for approval of Bainbridge and is in default beyond any applicable cure period under a construction related contract requiring approval within five (5) Business Days after a request for approval by the terms of the Property Management AgreementManaging Member, only the consent of CNL then such construction related contract shall be required deemed to terminate be approved by the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementCommittee;
(xk) cause approve any proposed material changes to the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount zoning of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any Properties other then-existing Company Financing that than has been guaranteed in whole or in part expressly contemplated by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into accountBusiness Plan; and
(ivl) enter into any contract financing agreement or agreement commitment that obligates the Company to pay more than $50,000 or that is not terminable would impose any personal liability on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing any Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge beneficial owner of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
Member (c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice exclusive of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, transferee liability with respect to CNLthe receipt by any Member of loan proceeds, such proposed CNL Decisionif any, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meetingthat might exist under applicable law).
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Carramerica Realty Corp)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeDaniel’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate Select any Property Manager for the management of the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant and approve any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; Agreement, subject to Section 6.10, provided, however, that if the Members acknowledge and agree that the initial Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amendXxxxxx Realty Services, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementL.L.C.;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Xxxxxx or any of the Bainbridge Xxxxxx Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member Xxxxxx and/or any of the principals of the Operating Member Xxxxxx Principals shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify Modify the Development Fee or otherwise modify or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required subject to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development AgreementSection 6.10;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its CNL’s interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained hereincontrary, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, Company and the Managing Member or shall not, and the Managing Member shall not authorize the Operating Member shallto:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(ii) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements that are only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamGreenville, North South Carolina marketmarket area. CNL will use good faith efforts to consult with Bainbridge Xxxxxx on matters constituting CNL Decisions. Notwithstanding anything ; provided, however that CNL shall have no obligation to the contrary contained herein, in no event shall implement or otherwise be subject to any CNL Decision, if made without Bainbridge Consent, information or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given input offered by Bainbridge of any of its Affiliates Xxxxxx in connection with the Construction Loan or any other Company Financingtherewith.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following such reallocation or allocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeCrescent’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) Select any Property Manager for the management of the Property or, for so long as the Property Manager is not in default beyond any applicable cure period under the terms of the Management Agreement, terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the PropertyAgreement; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge Crescent and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or and replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Crescent or any of the Bainbridge PrincipalsCrescent Affiliate, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to pursue, obtain and close and consummate from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to so long as the Company. It replacement Company Financing (a) is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose does not require prepayment penalty in excess of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose greater of yield maintenance or one percent (1%) of the Property nor require the Company to pay principal amount outstanding and (b) in respect of which if guaranties are required, such guaranties are provided by Crescent or a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;Crescent Affiliate.
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify Modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL and/or Crescent may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or.
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(iixxvi) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iiixxvii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(ivxxviii) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamOrlando, North Carolina Florida market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(cb) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(dc) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any other Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent as permitted without the Company’s consent under the Development this Agreement including, without limitation, Section 2.15 of and under the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item that is solely for CNL’s the benefit of TRG or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestany of its Affiliates;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Select any Property Manager or amendfor the management of the Property, modify, supplement, assign or grant any material consents or waivers under it being acknowledged that the Property Management Agreement or any other Company initially shall enter into a property management agreement for the Property; providedwith Alliance Communities, howeverLLC, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is as set forth in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.9;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon within six months’ prior to the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge TRG or any of the Bainbridge Principalsits Affiliates or Xxxxx, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member TRG shall also be deemed favorable; provided, it being agreed by the Members that the foregoing however, TRG shall not be the only terms which constitute financing that is favorable have no obligation to provide any guaranties other than as otherwise set forth in Section 6.8 and pursuant to the CompanyConstruction Loan or any agreements relating to the Construction Loan;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate Modify the Development Agreement or replace the DeveloperFee, modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members each of CNL and HRI may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest their respective interests in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained hereincontrary, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, Company and the Managing Member or shall not, and the Managing Member shall not authorize the Operating Member shallto:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(ii) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate; provided, provided however, that the foregoing limitations shall not be applicable if Operating Member may make expenditures for real estate taxes, scheduled debt service payments, insurance premiums for insurance maintained in accordance with the same are required terms of this Agreement, common area expenses, fulfillment of obligations to be exceeded tenants under Permitted Leases and utilities, regardless of the amounts permitted therefore in order to pay Necessary Expensesthe Operating Budget as provided in Section 6.4;
(iii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamLewisville, North Carolina marketTexas market area. CNL will use good faith efforts to consult with Bainbridge TRG on matters constituting CNL Decisions. Notwithstanding anything ; provided, however that CNL shall have no obligation to the contrary contained herein, in no event shall implement or otherwise be subject to any CNL Decision, if made without Bainbridge Consent, information or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given input offered by Bainbridge of any of its Affiliates TRG in connection with the Construction Loan or any other Company Financingtherewith.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance noticepresents and immediate risk of harm to property or persons, the Operating Member may call upon provide notice to the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within as soon as is reasonably possibly under the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decisioncircumstances. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Global Growth Trust, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth herein, without prior written Member Consent in each instance (each, a “Major Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily dissolve or liquidate the Company;
(vii) authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, the Managing Member will not permit or cause the Company or any of its Subsidiaries to, directly or indirectly any of the following actions without prior CNL Consent the approval of Flag (if the Class A Preferred Distribution has not been paid in each instance full:
(each, a “CNL Decision”), none a) alter the business and purpose of the Company, ;
(b) do any act in contravention of the Managing Member Certificate of Formation or this Agreement which would make it impossible to carry on the Operating Member shall:purpose and business of the Company;
(c) enter into any transaction with any Affiliate of the Company (except to the extent that (i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company receives the written fairness opinion as to incur the fairness of any expense not provided for in an Operating Budget such transaction to the Members from a nationally-recognized investment banking firm or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, similar institution and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expensesis on an arm’s length third-party market transaction basis);
(iiid) modify commence any Capital Budgetcase, except proceeding or other action on behalf of the Company under any existing or future law of any jurisdiction relating to allow an annual aggregate variance not in excess bankruptcy, insolvency, reorganization or relief of $50,000 in debtors; or institute proceedings to have the aggregate after taking all line item variances into accountCompany adjudicated bankrupt or insolvent; andor consent to, or acquiesce in, the institution of bankruptcy or insolvency proceedings against the Company; or file a petition or consent to the filing of a petition seeking reorganization, arrangement, adjustment, or other relief on behalf of the Company of its debts under federal or state law relating to bankruptcy; or seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestor, custodian or any similar official for the Company or a substantial portion of the Company’s assets; or make any assignment for the benefit of the Company’s creditors;
(ive) enter into any contract (i) add or agreement that obligates admit new or substitute Members to the Company to pay more than $50,000 or that is not terminable on no more than thirty (30ii) days’ notice without penalty redeem or charge; repurchase any portion or all of the Membership Interests of any Member (provided, however, that subject clause (i) of this consent right shall not be applicable to Flag to the other provisions extent that following the date hereof the gross proceeds received by the Company from the admission of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member new or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that substitute members hereunder does not reasonably permit such advance notice, adversely affect the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, rights with respect to CNL, the Class A Preferred Distribution under Section 8.1 and unless such proposed CNL Decision, described in such advance notice shall be deemed proceeds are used to not have given its consent to such proposed Major Decision satisfy the Company’s payment obligations under Section 8.1 (b) or CNL Decision. Member Consent or CNL Consent(c), as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.;
Appears in 1 contract
Samples: Limited Liability Company Operating Agreement (FX Real Estate & Entertainment Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeWoodfield’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (vii) and (viii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(vii) Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate;
(viii) Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 after taking all line item variances into account;
(ix) Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge;
(x) Voluntarily dissolve or liquidate the Company;
(viixi) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viiixii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ixxiii) terminate the Property Management Agreement or replace the Select any Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under to propose to the CNL Property Management Agreement or any other Manager for a sub property management agreement for the management of the Property; provided, however, it being acknowledged that if the Company shall enter into a property management agreement with the REIT Property Manager is Bainbridge or an Affiliate of Bainbridge and is which has entered into a sub property management agreement with the CNL Property Manager, as set forth in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.9;
(xxiv) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Woodfield or any of the Bainbridge Woodfield Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member Woodfield and/or any of the principals of the Operating Member Woodfield Principals shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xixv) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xiixvi) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiiixvii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xivxviii) commingle Commingle Company funds with the funds of any other Person;
(xvxix) terminate Modify the Development Agreement or replace the DeveloperFee, modify the Development Construction Management Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvixx) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xviixxi) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its CNL’s interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviiixxii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xixxxiii) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xxiv) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxv) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxvi) remove Remove or appoint accountants in connection with any Company business;
(xxiixxvii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxviii) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(dc) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(ix), the Operating Member shall have the authority to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community, on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Mount Pleasant, South Carolina market.
(ii) With respect to Section 6.2.(a)(xxiv), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(iiiii) With respect to Section 6.26.2(a)(xxv), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxv), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iiiiv) With respect to Section 6.2(a)(xxiii6.2(a)(xxviii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Global Growth Trust, Inc.)
Major Decisions. (a) Notwithstanding anything to any other provisions of this Agreement, the contrary set forth hereinCompany and/or the Managing Member may not, without prior written Member Consent in each instance the approval of REIT OP take any of the following actions (each, a “Major Decision”), none of the Company, the Managing Member or the Operating Member shall:):
(i) adoptborrow money (whether on a secured or unsecured basis, modify on par or supplement subordinate to that certain loan in the Plans original principal amount of $23,800,000 pursuant to that Loan Agreement, dated as of September 28, 2005, by and Specificationsbetween the Company and Countrywide Commercial Real Estate Finance, Inc., as may be amended, modified, or supplemented (the “Loan”), but excluding trade debt or amend any of the material terms and conditions of any financing of the Company;
(ii) grant any mortgage, security interest or any other lien on any of the Properties or any other assets of the Company or any of its subsidiaries, other than the mortgage securing the Loan;
(iii) except as otherwise provided herein, sell all or any portion of any of the Properties;
(iv) seek or consent to any change in the zoning or other land use regulations affecting any of the Properties or any permits or approvals granted thereunder if such change will materially adversely affect the value of the Properties or the rights, interests or obligations of the parties under this Agreement;
(v) rebuild or reconstruct the improvements on the Properties if they are substantially damaged by a fire or other casualty, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of the Company that its Subsidiaries is unrelated required to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject do so pursuant to the terms of Article 10, sell, lease, encumber, assign, convey, exchange Loan or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under that the Development Agreement and under cost to rebuild or reconstruct the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestimprovements is less than $1,000,000;
(vi) voluntarily dissolve acquire any real property (other than the Properties), any direct or liquidate indirect interest in real property, or any interest in any Person other than the subsidiaries of the Company;
(vii) authorize incur any single capital expenditure in excess of $250,000, other than capital expenditures which are (i) set forth in a budget approved by the Members, or effect a merger or consolidation of the Company with or into one or more entities(ii) otherwise specifically approved by REIT OP;
(viii) make assign, transfer, pledge, compromise or release any call for capital contributions from of the Members, claims of or debts of the Company or insurance or condemnation proceeds due the Company exceeding $50,000 except as expressly authorized pursuant to Article IVin connection with the receipt by the Company of payment in full of such claims or debts;
(ix) terminate except for leases consistent with the Property Management Agreement or replace leasing guidelines in the Property Manager or amendBudget, modify, supplement, assign or grant enter into any material consents or waivers under the Property Management Agreement or any other property management agreement lease for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms a portion of the Property Management Agreement, only the consent Properties in excess of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement15,000 square feet;
(x) cause change the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Company’s or any of the Bainbridge Principalsits subsidiaries’ accounting method, if new Company Financing, the proceeds of which will be used to repay the Construction Loan either for financial or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan tax reporting purposes or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to otherwise;
(xi) dissolve the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess effect any Company property merger, consolidation or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds restructuring of the Company;
(xxivxiii) change purchase or redeem all or any portion of the name under which limited liability company interest of any Member in the Company conducts its business; orCompany, except as provided herein with respect to permitted transfers;
(xxvxiv) determine whether other than in connection with the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent Loan and except as provided in each instance (each, a “CNL Decision”Section 4.4(c)(ix), none sell, assign, transfer, pledge, hypothecate or otherwise dispose of or encumber all or any portion of any of the Company's interest in any subsidiary or permit any subsidiary to sell, the Managing Member assign, transfer, pledge, hypothecate or the Operating Member shall:
(i) adopt an Operating Budget otherwise dispose of or a Capital Budget or, except for the reimbursement encumber all or any portion of Out-of-Pocket Costs its assets or as expressly provided below in items (ii) and (iii) immediately below, cause the Company or permit any additional equity interests to incur be issued by or new members to be admitted to any expense not provided for in an Operating Budget or a Capital Budgetsubsidiary;
(iixv) amend or otherwise modify any Operating Budget, except to allow annual variances of the organizational documents of the Company or any subsidiary in line items that do not exceed any material respect or take any action which would result in the aggregate in Company not being able to manage or exercise control over any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expensessubsidiary;
(iiixvi) modify employ any Capital Budgetmanagement company for the Company, except that the Members specifically approve The Lightstone Group (“Lightstone”) as the property manager pursuant to allow an that certain Property Management Agreement, dated as of September 12, 2005, by and among the Company and Lightstone;
(xvii) approve annual aggregate variance not in excess budgets of $50,000 in the aggregate after taking all line item variances into accountCompany;
(xviii) make distributions pursuant to Section 3.3 above; and
(ivxix) enter into take any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; providedother actions which, however, that subject pursuant to the other provisions terms of Section 6.2(a) and 6.2(b)this Agreement, such restriction shall not restrict the authority require approval of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Operating Agreement (Lightstone Value Plus Real Estate Investment Trust Ii Inc)
Major Decisions. (a) Notwithstanding anything to Neither the contrary set forth hereinManager nor any Representative, without prior written Member Consent in each instance (eachnor any officer, a “Major Decision”), none of the Company, the Managing Member employee or the Operating Member shall:
(i) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf agent of the Company or as expressly provided in this Agreementthe Manager, the Project Budget, an Operating Budget shall have any authority to bind or a Capital Budget;
(iii) authorize or enter into take any agreement, transaction or action on behalf of the Company with respect to any Major Decision unless such Major Decision has been consented to or approved by the Management Committee in accordance with this Section 5.2. Each of the following matters shall constitute a "Major Decision": The following are sample "Major Decisions":
(i) approval of a Program and Budget (other than the Initial Program and Budget), and any Amendment to any Program and Budget (including the Initial Program and Budget) in accordance with Article VI; provided, that is unrelated cost overruns of a Program and Budget that do not exceed ten percent (10%) and expenditures with respect to its purpose set forth in emergencies under Section 2.36.10 shall be deemed to automatically amend such Program and Budget;
(ii) decisions to cease production for a period greater than three (3) months for reasons other than regular maintenance or a Force Majeure Event;
(iii) acquisition or disposition of significant mineral rights or claims, other real property or water rights (including acquiring any additional real propertyacquisition or disposition of significant patented and unpatented mining claims under Section 5.3(k)) outside of the ordinary course of business;
(iv) subject a decision to the terms of Article 10, sell, lease, encumber, assign, convey, exchange undertake Development or otherwise dispose of, in each case directly Mining on all or indirectly, any interest in any asset portion of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted LeasesProperties;
(v) modify the Project Budget, provided it shall not be a Major Decision decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be undertake a Major Decision to reallocate any savings in the Project Budget line item for CNL’s Pre-Feasibility Study or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interesta Feasibility Study;
(vi) voluntarily dissolve other than purchase money security interests or liquidate other security interests in Company equipment to finance the acquisition or lease of Company equipment used in Operations, the proposal or consummation of a Project Financing or the incurrence by the Company of any indebtedness for borrowed money that requires any of the following as security for the obligations arising under or with respect to such indebtedness: (A) an Encumbrance on all or any material portion of the Company's Assets, (B) the pledge by any Member of all or any portion of its Interest, or (C) the guaranty by any Member or any Affiliate of any Member of any obligations of the Company; provided, that nothing in this clause (vi) shall be deemed to prohibit or restrict the right of a Member to create any Permitted Interest Encumbrance;
(vii) authorize except as specifically contemplated in this Agreement, the redemption of all or effect a merger or consolidation any portion of the Company with or into one or more entitiesan Interest;
(viii) make the issuance of an Interest or other equity interest in the Company, or the admission of any call for capital contributions from Person as a new Member of the MembersCompany other than in accordance with Section 8.7(c); provided, except as expressly authorized pursuant that this clause (viii) shall not be deemed to Article IVprohibit or restrict the adjustment of Interests under Section 3.1;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or a decision to grant any material consents or waivers under the Property Management Agreement or any other property management agreement authorization for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur file a petition for relief under any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount chapter of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration United States Bankruptcy Code or otherwise) of the Construction Loan or to consent to such relief in any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment involuntary petition filed against the Company by any third party, or to admit in excess of $50,000, file or fail to contest writing any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights insolvency of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company or inability to loan funds pay its debts as they become due or to consent to any Person receivership (or issue any guaranty or indemnity;
(xivsimilar proceeding) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxivx) change the name under which merger or amalgamation of the Company conducts its business; orinto or with any other entity;
(xxvxi) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none sale of all or substantially all of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget's Assets;
(iixii) modify except as specifically or generally authorized in this Agreement, any Operating Budgetcontract, except to allow annual variances in line items that do not exceed in agreement or undertaking between the aggregate in any Fiscal Year Company, on the greater of (i) $50,000 in the aggregateone hand, and (ii) ten percent (10%) any Member, Manager or Affiliate of a Member or Manager, on the line item and thatother hand, when taken together with all other variances in or any Operating Budget in amendment, modification or termination of, or waiver of any right under, any such Fiscal Yearcontract, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into accountagreement or undertaking; and
(ivxiii) enter into making any contract other decision or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall taking any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on specifically requires the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each approval of the Members within seven (7) days after or the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by Management Committee under this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement
Major Decisions. (a) Notwithstanding anything the provisions of Section 6.1 but subject to the contrary set forth hereinexpress terms of Section 6.3, Section 6.7, Section 6.8 and Article VIII of this Agreement, without the prior written Member Consent consent, of all Members in each instance (each, a “Major Decision”), none the Company shall not, and shall not allow any Subsidiary Entity to:
(a) Transfer the Property or the Company Assets (other than personal property at the Property which may be disposed of or replaced due to wear and tear or obsolescence or otherwise in the ordinary course of business) or any part thereof or interest therein;
(b) acquire other real property, or any interest therein on behalf of the CompanyCompany or any Subsidiary Entity, either directly or indirectly;
(c) borrow money on behalf of the Managing Member Company or any Subsidiary Entity other than the Operating Member shall:First Mortgage Loan, whether on a secured or unsecured basis, prepay, in whole or in part, refinance, recast, modify, extend or compromise any debt for borrowed money, issue evidences of indebtedness for borrowed money or secure the same by mortgages, deeds of trust, security agreements or other similar documents or assert or make a claim that any debt (including, without limitation, any construction loan) violates applicable law (including, without limitation, usury laws) or to amend, modify or terminate such arrangement;
(d) (i) adopt, modify amend, modify, alter or supplement change the Plans and Specifications, except to Approved Lease or the extent permitted without the Company’s consent under the Development Approved Tenant Representative Agreement including, without limitation, Section 2.15 of the Development Agreement;
or (ii) enter into any contract or transaction withproperty management, brokerage, leasing, finder’s fee, or pay any amount tocommission agreement or cancel, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily dissolve or liquidate the Company;
(vii) authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager extend or otherwise amend, modify, supplement alter or grant change in any material consents respect any such property management, brokerage, leasing, finder’s fee or waivers under the terms of the Property Management Agreementcommission agreement, in each case excluding any (A) Approved Tenant Representative Agreement or (B) Approved Leases;
(xe) cause the Company to incur engage in any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in transaction between the Company or admit any Person as an additional member in Subsidiary Entity on the Company, provided, that one hand and the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation ofManaging Member, any Requirement general partner or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds managing member of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained hereinManaging Member, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority Affiliate of the Managing Member or any Affiliate of any general partner or managing member of the Operating Managing Member to enter into such contracts or agreements only with non-on the other hand (other than the Managing Member Affiliate third parties in Agreements approved by the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consentother Member), or other action that is taken without Bainbridge Consentamend, (A) result in an obligation on modify or terminate any Managing Member Affiliate Agreement, permit the part assignment of Bainbridge to fund Additional Initial Capital any Managing Member Affiliate Agreement, release any party from any liability arising from any Managing Member Affiliate Agreement, waive any material rights or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or exercise any of its Affiliates, rights under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Managing Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of Affiliate Agreement that will have an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding adverse effect on the Company and or any Subsidiary Entity or upon the Members for all matters. Upon the request of any value, use, development, renovation or financeability of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.Property;
Appears in 1 contract
Samples: Limited Liability Company Agreement (REITPlus, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereinprovisions of Section 6.1, without prior written Member Consent the unanimous vote of the Management Committee in each instance (each, a “"Major Decision”"), none of the Company, the Managing Member or the Operating Member shallCompany shall not:
(ia) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumbertransfer, assign, convey, exchange or otherwise dispose ofof the Properties or the Company Assets (other than personal property at the Properties which may be disposed of or replaced due to wear and tear or obsolescence or otherwise in the ordinary course of business and other than Leases, in each case directly or indirectly, which are governed by Section 6.3(e));
(b) purchase any interest in any asset additional properties;
(c) borrow money on behalf of the Company, except whether on a secured or unsecured basis, refinance, recast, extend, compromise or otherwise materially amend any such loan, and in connection therewith, issue evidences of indebtedness and secure the same by mortgages, deeds of trust, security agreements or other similar documents encumbering assets of the Company (other than (i) trade receivables in the case ordinary course of business or (ii) equipment financing);
(d) approve the annual Business Plan for the operation, management, improvement and development of the Properties, or the acquisition of new Properties, including approval of the following components of the Business Plan: (i) the sale of personal property which is not necessary for the operation of the Property (or if necessaryBudget, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted the Leasing and Property Guidelines, (iii) the Development Budgets, (iv) the Development Plans and Specifications and (v) the Development Schedules; or material modifications of any of the above (subject to the provisions of this Agreement, including without limitation "Material" changes pursuant to Section 6.5(a), (b) or (c) or "Material" variances pursuant to Section 7.6); nor shall the Company make expenditures not set forth in an approved Budget or Development Budget or as otherwise expressly authorized by this Agreement.
(e) approve Major Leases, or any Leases which materially deviate from the parameters of the Leasing and Property Guidelines;
(vf) modify institute or settle any major litigation or dispute (i.e., where the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents amount in controversy exceeds $500,000 relating to any of the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestProperties);
(vig) voluntarily dissolve approve the terms of the insurance program for the Company or liquidate any modification thereof; provided, however that in all cases the Managing Member shall use commercially reasonable efforts to comply with all insurance requirements of the Loan and all future lenders and provided, further, that in the event that the Management Committee cannot agree on an insurance program the insurance program for the prior Fiscal Year shall be continued;
(h) select or change the auditor for the Company;
(viii) authorize or effect a merger or consolidation approve any agreements between the Members and any Affiliates of the Company with Members or into one any modifications thereto, including the terms of the Property Management Agreements and/or the Development Agreements or more entitiesany modifications thereto, or the termination thereof in the event of a default by the Manager or the elective termination of the Manager under any of the Property Management Agreements, or a default by the Developer or the elective termination of the Developer under any of the Development Agreements, as the case may be, unless any of the Property Management Agreements or the Development Agreements are terminated following the removal of the Managing Member pursuant to Section 6.14;
(viiij) make approve the terms of any call for capital contributions from construction contracts, construction management agreements, or subcontracts relating to the Membersconstruction and/or development of the Properties under Development or the Undeveloped Properties, except as expressly authorized pursuant in each case where the dollar amount covered thereby is in excess of $1,000,000 with respect to Article IV;
(ix) terminate the Property Management Agreement base building construction or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property$750,000 with respect to tenant improvement work; provided, however, that if the Property Manager is Bainbridge or an Affiliate Management Committee has not responded to a request for approval of Bainbridge and is in default beyond any applicable cure period under a construction related contract requiring approval within five (5) Business Days after a request for approval by the terms of the Property Management AgreementManaging Member, only the consent of CNL then such construction related contract shall be required deemed to terminate be approved by the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementCommittee;
(xk) cause approve any proposed material changes to the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount zoning of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any Properties other then-existing Company Financing that than has been guaranteed in whole or in part expressly contemplated by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into accountBusiness Plan; and
(ivl) enter into any contract financing agreement or agreement commitment that obligates the Company to pay more than $50,000 or that is not terminable would impose any personal liability on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing any Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge beneficial owner of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
Member (c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice exclusive of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, transferee liability with respect to CNLthe receipt by any Member of loan proceeds, such proposed CNL Decisionif any, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meetingthat might exist under applicable law).
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Carramerica Realty Corp)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent as permitted without the Company’s consent under the Development this Agreement including, without limitation, Section 2.15 of and under the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item that is solely for CNL’s the benefit of TRG or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestany of its Affiliates;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate Select any Property Manager for the management of the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant and approve any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required subject to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.10;
(x) cause Cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon within six months’ prior to the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge TRG or any of the Bainbridge Principalsits Affiliates or Xxxxx, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member TRG shall also be deemed favorable; provided, it being agreed by the Members that the foregoing however, TRG shall not be the only terms which constitute financing that is favorable have no obligation to provide any guaranties other than as otherwise set forth in Section 6.8 and pursuant to the CompanyConstruction Loan or any agreements relating to the Construction Loan;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate Modify the Development Agreement or replace the DeveloperFee, modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of amend the Development Agreement, only the consent of CNL shall be required subject to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development AgreementSection 6.10;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members each of CNL and ASR may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest their respective interests in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained hereincontrary, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, Company and the Managing Member or shall not, and the Managing Member shall not authorize the Operating Member shallto:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(ii) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate; provided, provided however, that the foregoing limitations shall not be applicable if Operating Member may make expenditures for real estate taxes, scheduled debt service payments, insurance premiums for insurance maintained in accordance with the same are required terms of this Agreement, common area expenses, fulfillment of obligations to be exceeded tenants under Permitted Leases and utilities, regardless of the amounts permitted therefore in order to pay Necessary Expensesthe Operating Budget as provided in Section 6.4;
(iii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter Enter into the Construction Loan or any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), other than with respect to the Construction Loan, such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements that are only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamSan Antonio, North Carolina marketTexas market area. CNL will use good faith efforts to consult with Bainbridge TRG on matters constituting CNL Decisions. Notwithstanding anything ; provided, however that CNL shall have no obligation to the contrary contained herein, in no event shall implement or otherwise be subject to any CNL Decision, if made without Bainbridge Consent, information or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given input offered by Bainbridge of any of its Affiliates TRG in connection with the Construction Loan or any other Company Financingtherewith.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance noticepresents and immediate risk of harm to property or persons, the Operating Member may call upon provide notice to the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within as soon as is reasonably possibly under the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decisioncircumstances. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything The affirmative vote of the TCR Member and the BR Member shall be required to the contrary set forth herein, without prior written Member Consent in each instance approve these actions (each, a “Major Decision”), none ):
(a) do any act in contravention of the Company’s Certificate of Formation or this Limited Liability Company Agreement, the Managing Member or the Operating Member shall:
(i) adopt, modify or supplement the Plans and Specifications, except to the extent permitted without amend the Company’s consent under the Development Agreement including, without limitation, Section 2.15 Certificate of the Development Formation or this Limited Liability Company Agreement;
(iib) enter into do any contract act not specifically authorized herein which would make it impossible or transaction with, impractical to own or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, develop the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize or enter into any agreement, transaction or action to otherwise carry on behalf the ordinary business of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify the Project Budget, provided it shall not be a Major Decision to (i) reallocate amounts to the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily dissolve or liquidate the Company;
(vii) authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xiic) possess any Company property of the Company, or assign the rights of the Company in any specific Company property of the Company, for other than a Company purpose;
(xiiid) change or reorganize the Company into any other legal form or cause any merger or consolidation of the Company with another entity;
(e) commence, respond to or settle any litigation involving the Company, the Property or the Project, except commencement, response to or settlement of any litigation involving a claim (including a mechanic’s lien or similar claim) arising out of development or construction of the Project if approved by the TCR Member;
(f) filing or initiating a Company Bankruptcy;
(g) permit or cause the Company to loan funds to any Person purchase or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any invest in real property other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of than its interest in the Company to Property and the extent permitted in Section 10.1 or Section 10.2Project;
(xviiih) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of make loans using funds of the Company;
(xxivi) change except as expressly provided in Sections 12.2 and 12.3, the name under which admission of additional Members to the Company conducts its business; orCompany;
(xxvj) determine whether take any action which would reasonably be expected to expose the Company shall exercise TCR Member, the Option.
(b) Notwithstanding anything BR Member or any Affiliate thereof to the contrary contained herein, without prior CNL Consent in each instance (each, liability under any Loan Guaranty or any other guaranty or indemnity agreement for a “CNL Decision”), none of loan to the Company, unless the Managing Member or the Operating Member shall:action is approved by such Person;
(ik) adopt an enter into any transaction with a Member and/or any Affiliate thereof (except as expressly authorized herein);
(l) incur any indebtedness for borrowed money or grant a security interest in the Company’s property, in either case, except as provided in Section 6.5;
(m) approve any modifications to the Total Project Budget, except as provided in Section 5.14.1;
(n) approve any Operating Budget or a Capital Budget ormake any modifications thereto, except for including without limitation changes with regard to leasing strategy and rental rates included in the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(iio) modify make any expenditure or incur any obligation that varies from the Total Project Budget (unless the expenditure is approved by the TCR Member) or the applicable Operating Budget, except as applicable;
(p) subject to allow annual variances in line items that do not exceed Sections 6.5.3 and 12.6, any sale, refinance or similar transaction with regard to the Project;
(q) in the aggregate event of a fire, other casualty or partial condemnation of the Project after Substantial Completion, a determination whether to construct or reconstruct the improvements located on the Property, where such construction or reconstruction would cost in excess of $100,000 and is not required under the terms and provisions of any Fiscal Year lease (including the greater Ground Lease), mortgage or deed of trust affecting the damaged or condemned portion of the Project in question;
(r) approve any general contractor or co-developer for the Property, or any agreement with such Person, except (i) $50,000 as provided in Section 5.12 or (ii) engagement of a replacement general contractor or developer if the aggregateTCR Member is removed as a Manager pursuant to Section 5.9;
(s) adoption of or modifications to the Plans, including, without limitation, any Discretionary Changes, except for (i) government-mandated changes, (ii) supplemental instructions and clarifications issued by the Project architect, (iii) changes required by a Lender, and (iiiv) ten percent (10%) of changes deemed appropriate by the line item and thatTCR Member that individually do not increase or decrease Hard Costs by more than $75,000 and, when taken together with all other variances in any Operating Budget in such Fiscal Yearchange orders that are not either approved by the Members or required by governmental authorities or a Lender, do not increase the total amount provided in the applicable Operating Budget or decrease Hard Costs, on a net basis, by more than one hundred ten percent (110%) $200,000 in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iiit) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in hiring the aggregate after taking all line item variances initial Management Company (i.e. on or about the Substantial Completion) and the entry into accountthe associated Management Agreement for the Project; and
(ivu) enter into any contract material amendments to, modifications of, or agreement that obligates exercise of any applicable options (other than an option to terminate the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject Ground Lease prior to the other provisions purchase of Section 6.2(abuilding permits for the Project) and 6.2(b)under, such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina marketGround Lease. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything In addition to the contrary contained herein, in no event shall any CNL Decisionforegoing, if made without Bainbridge Consentany Management Company is terminated by the Management Committee, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part replacement Management Company shall be selected by the BR Member from a list of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty three proposed replacement Management Companies provided by the TCR Member (30) days’ advance notice and for the avoidance of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNLdoubt, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, decisions of the matter being considered shall be binding on the Company TCR Member and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any BR Member, provided such authority shall respectively, will be limited as follows:
(i) With respect to Section 6.2(a)(xix“Major Decisions”), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (Bluerock Residential Growth REIT, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent as permitted without the Company’s consent under the Development this Agreement including, without limitation, Section 2.15 of and under the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item that is solely for CNL’s the benefit of TRG or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestany of its Affiliates;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate the Property Management Agreement or replace the Select any Property Manager or amendfor the management of the Property, modify, supplement, assign or grant any material consents or waivers under it being acknowledged that the Property Management Agreement or any other Company initially shall enter into a property management agreement for the Property; providedwith Alliance Communities, howeverLLC, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is as set forth in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management AgreementSection 6.9;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon within six months’ prior to the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge TRG or any of the Bainbridge Principalsits Affiliates or Xxxxx, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member TRG shall also be deemed favorable; provided, it being agreed by the Members that the foregoing however, TRG shall not be the only terms which constitute financing that is favorable have no obligation to provide any guaranties other than as otherwise set forth in Section 6.8 and pursuant to the CompanyConstruction Loan or any agreements relating to the Construction Loan;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate Modify the Development Agreement or replace the DeveloperFee, modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest interests in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained hereincontrary, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, Company and the Managing Member or shall not, and the Managing Member shall not authorize the Operating Member shallto:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(ii) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate; provided, provided however, that the foregoing limitations shall not be applicable if Operating Member may make expenditures for real estate taxes, scheduled debt service payments, insurance premiums for insurance maintained in accordance with the same are required terms of this Agreement, common area expenses, fulfillment of obligations to be exceeded tenants under Permitted Leases and utilities, regardless of the amounts permitted therefore in order to pay Necessary Expensesthe Operating Budget as provided in Section 6.4;
(iii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.and
Appears in 1 contract
Samples: Limited Liability Company Agreement (Global Growth Trust, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following such reallocation or allocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeCrescent’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) Select any Property Manager for the management of the Property or, for so long as the Property Manager is not in default beyond any applicable cure period under the terms of the Management Agreement, terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the PropertyAgreement; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge Crescent and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or and replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge Crescent or any of the Bainbridge PrincipalsCrescent Affiliate, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to pursue, obtain and close and consummate from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to so long as the Company. It replacement Company Financing (a) is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose does not require prepayment penalty in excess of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose greater of yield maintenance or one percent (1%) of the Property nor require the Company to pay principal amount outstanding and (b) in respect of which if guaranties are required, such guaranties are provided by Crescent or a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;Crescent Affiliate.
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify Modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL and/or Crescent may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or.
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(iixxvi) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iiixxvii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(ivxxviii) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the DurhamFranklin, North Carolina Tennessee market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(cb) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(dc) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any other Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following such reallocation or allocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or BainbridgeLMI’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) Select any Property Manager for the management of the Property or, for so long as the Property Manager is not in default beyond any applicable cure period under the terms of the Management Agreement, terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the PropertyAgreement; provided, however, that if the Property Manager is Bainbridge LMI or an Affiliate of Bainbridge LMI and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or and replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge LMI or any of the Bainbridge PrincipalsLMI Affiliate, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to pursue, obtain and close and consummate from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to so long as the Company. It replacement Company Financing (a) is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose does not require prepayment penalty in excess of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose greater of yield maintenance or one percent (1%) of the Property nor require the Company to pay principal amount outstanding and (b) in respect of which if guaranties are required, such guaranties are provided by LMI or a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the CompanyLMI Affiliate;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify Modify the Development Fee or otherwise amend, modify, supplement, assign modify or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of amend the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL and/or LMI may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(a);
(xx) Fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, Agreement or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;; or
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or.
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt Adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in the Project Budget, an Operating Budget or a Capital Budget;
(iixxvi) modify Modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate50,000, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iiixxvii) modify Modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(ivxxviii) enter Enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durhammetropolitan Atlanta, North Carolina Georgia market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(cb) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall may be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(dc) Notwithstanding anything to To the contrary set forth herein, extent that the Operating Member shall have the authority to cause the following any Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix6.2(a)(xx), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.26.2(a)(xxi), neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writingthreaten, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx6.2(a)(xxi), to threaten in writingthreaten, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii6.2(a)(xxiv), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the CompanyCompany and Managing Member shall not, and the Managing Member or shall not authorize the Operating Member shallto:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget or a Capital Budget;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real property;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (i) the sale of personal property which is not necessary for the operation of the Property (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (ii) Permitted Leases;
(v) modify Modify the Project Budget, provided it other than to reallocate demonstrated line item savings to demonstrated line item overruns, so long as each Member shall not be a Major Decision to (i) reallocate given notice thereof promptly following reallocation of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consentcontingency line item. Notwithstanding the foregoing, it shall be a Major Decision to reallocate any savings in the Project Budget line item for CNLAHC’s or BainbridgeCNL’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interest;
(vi) voluntarily Voluntarily dissolve or liquidate the Company;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV;
(ix) terminate Terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge AHC or an Affiliate of Bainbridge AHC and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;.
(x) Except for the Construction Loan, cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge AHC or any of the Bainbridge PrincipalsAHC Principals or any Affiliate thereof, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, then the Operating Member shall be authorized, without Member Consent, to obtain pursue from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member AHC and/or any of the principals of the Operating Member AHC Principals shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess Confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest permit a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess Possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause Cause the Company to loan funds to any Person or issue any guaranty or indemnity, except pursuant to Company Financing;
(xiv) commingle Commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify Modify the Development Fee or otherwise modify or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge AHC or an Affiliate of Bainbridge AHC and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend Amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue Issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members CNL may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its CNL’s interest in the Company to the extent permitted as set forth in Section 10.1 or Section 10.210.1;
(xviii) determine Determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail Appoint any substitute Managing Member or delegate any responsibilities of Managing Member other than as set forth in Section 6.1(b);
(xx) Fail to carry insurance required by this Agreement, or the Construction Loan or any other Company FinancingLoan, or modify any such insurance in any material and adverse respectinsurance;
(xxxxi) threaten in writingThreaten, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxixxii) remove Remove or appoint accountants in connection with any Company business;
(xxiixxiii) determine Determine any actions to be taken to cure any material default under, under or material violation of, of any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiiixxiv) designate Designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change , except as required under the name under which the Company conducts its businessConstruction Loan; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
Major Decisions. (a) Notwithstanding anything to the contrary set forth hereincontrary, without prior written Member Consent in each instance (each, a “Major Decision”), none of the Company, the Managing Member or and the Operating Member shallshall not:
(i) adoptAdopt, modify or supplement the Plans and Specifications, except to the extent for Minor Field Changes and Code Compliance Changes as permitted without the Company’s consent under the Development Agreement including, without limitation, Section 2.15 of the Development Agreement;
(ii) enter Enter into any contract or transaction with, or pay any amount to, a Member or any Affiliate of a Member, except for Out-of-Pocket Costs incurred on behalf of the Company or as expressly provided in this Agreement, the Project Budget, an Operating Budget Development Agreement or a Capital Budgetthe Construction Contract;
(iii) authorize Authorize or enter into any agreement, transaction or action on behalf of the Company that is unrelated to its purpose set forth in Section 2.3, including acquiring any additional real propertyproperty other than the Project and easements and similar interests necessary for the Project;
(iv) subject Subject to the terms of Article 10, sell, lease, encumber, assign, convey, exchange or otherwise dispose of, in each case directly or indirectly, any interest in any asset of the Company, except in the case of (iA) the sale of personal property which is not necessary for the operation of the Property Project (or if necessary, which is replaced by sufficient substitute property) for a sales price of not more than $25,000, or (iiB) Permitted Leases, (C) easements and similar encumbrances necessary to provide services to the Project or (D) liens for a replacement Company Financing proposed by MCR in accordance with paragraph (x) below;
(v) modify Modify the Project Budget, provided it shall not be a Major Decision other than to (i) reallocate demonstrated line item savings to demonstrated line item overruns or to provide for use of amounts to from the extent permitted under the Development Agreement and under the loan documents relating to the Construction Loan without having to obtain the lender’s consent. Notwithstanding the foregoingcontingency line item, it so long as each Member shall be a Major Decision to reallocate any savings in the Project Budget line item for CNL’s or Bainbridge’s legal and third party costs and expenses, for marketing and initial leasing expenses or for loan interestgiven notice thereof promptly following such action;
(vi) voluntarily Voluntarily dissolve or liquidate the Company, except as provided for in this Agreement;
(vii) authorize Authorize or effect a merger or consolidation of the Company with or into one or more entities, redomicile the Company, or convert the form of the Company to other than a limited liability company;
(viii) make Make any call for capital contributions from the Members, except as expressly authorized pursuant to Article IV4;
(ix) terminate the Property Management Agreement or replace the Property Manager or amend, modify, supplement, assign or grant any material consents or waivers under the Property Management Agreement or any other property management agreement for the Property; provided, however, that if the Property Manager is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Property Management Agreement, only the consent of CNL shall be required to terminate the Property Management Agreement or replace the Property Manager or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Property Management Agreement;
(x) cause the Company to incur any Company Financing except for the Construction Loan or modify, supplement or refinance the Construction Loan or any other Company Financing, provided that when the Construction Loan matures (whether at its stated maturity, upon acceleration or otherwise), the Operating Member with Member Consent shall have the authority to affirmatively cause the Company to obtain or attempt to obtain replacement financing in at least the amount of the outstanding balance of the Construction Loan; provided, however that upon the maturity (whether at its stated maturity, upon acceleration or otherwise) of the Construction Loan or any other then-existing Company Financing that has been guaranteed in whole or in part by Bainbridge or any of the Bainbridge Principals, if new Company Financing, the proceeds of which will be used to repay the Construction Loan or such other guaranteed matured Company Financing in full, has been presented, in good faith, by the Operating Member and is not approved by Member Consent, then, so long as the Operating Member is Bainbridge, the Operating Member shall be authorized, without Member Consent, to obtain from a third-party lender such replacement Company Financing, in an amount equal to the then-outstanding principal of the Construction Loan or other matured Company Financing, on commercially reasonable prevailing market terms favorable to the Company. It is understood that non-recourse financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium shall be deemed most favorable, and financing which would neither adversely affect the Company’s ability to dispose of the Property nor require the Company to pay a prepayment premium and which requires guaranties solely from the Operating Member and/or any of the principals of the Operating Member shall also be deemed favorable, it being agreed by the Members that the foregoing shall not be the only terms which constitute financing that is favorable to the Company;
(xi) confess a judgment against the Company in excess of $50,000, file or fail to contest any bankruptcy, seek or determine not to contest a receivership, make an assignment for the benefit of creditors or take any similar action for the benefit of creditors;
(xii) possess any Company property or assign the rights of the Company in specific Company property for other than a Company purpose;
(xiii) cause the Company to loan funds to any Person or issue any guaranty or indemnity;
(xiv) commingle Company funds with the funds of any other Person;
(xv) terminate the Development Agreement or replace the Developer, modify the Development Fee or otherwise amend, modify, supplement, assign or grant any material consents or waivers under the Development Agreement or any other development agreement for the Property; provided, however, that if the Developer is Bainbridge or an Affiliate of Bainbridge and is in default beyond any applicable cure period under the terms of the Development Agreement, only the consent of CNL shall be required to terminate the Development Agreement, replace or permit the replacement of the Developer or otherwise amend, modify, supplement or grant any material consents or waivers under the terms of the Development Agreement;
(xvi) amend this Agreement or the Certificate of Formation, except that the Certificate of Formation may be amended by the Managing Member to the extent required by law or to effect changes solely of a ministerial nature which do not adversely affect the rights or increase the obligations of a Member;
(xvii) issue any interest in the Company or admit any Person as an additional member in the Company, provided, that the Members may effectuate any direct or indirect sale, assignment, gift, pledge, hypothecation, encumbrance or other transfer of its interest in the Company to the extent permitted in Section 10.1 or Section 10.2;
(xviii) determine whether and to what extent the Property should be repaired or restored following casualty or condemnation, other than as required by Company Financing;
(xix) fail to carry insurance required by this Agreement, the Construction Loan or any other Company Financing, or modify any such insurance in any material and adverse respect;
(xx) threaten in writing, file or settle any claim involving the Company, other than eviction proceedings in the ordinary course of business, insured tort claims and claims involving amounts less than $25,000, individually or in the aggregate for related claims;
(xxi) remove or appoint accountants in connection with any Company business;
(xxii) determine any actions to be taken to cure any material default under, or material violation of, any Requirement or material agreement to which the Company is party, other than a default under this Agreement;
(xxiii) designate a bank other than First-Citizens Bank & Trust Company, a North Carolina banking corporation, for the deposit of funds of the Company;
(xxiv) change the name under which the Company conducts its business; or
(xxv) determine whether the Company shall exercise the Option.
(b) Notwithstanding anything to the contrary contained herein, without prior CNL Consent in each instance (each, a “CNL Decision”), none of the Company, the Managing Member or the Operating Member shall:
(i) adopt an Operating Budget or a Capital Budget or, except for the reimbursement of Out-of-Pocket Costs or as expressly provided below in items (ii) and (iii) immediately below, cause the Company to incur any expense not provided for in an Operating Budget or a Capital Budget;
(ii) modify any Operating Budget, except to allow annual variances in line items that do not exceed in the aggregate in any Fiscal Year the greater of (i) $50,000 in the aggregate, and (ii) ten percent (10%) of the line item and that, when taken together with all other variances in any Operating Budget in such Fiscal Year, do not increase the total amount provided in the applicable Operating Budget by more than one hundred ten percent (110%) in the aggregate, provided that the foregoing limitations shall not be applicable if the same are required to be exceeded in order to pay Necessary Expenses;
(iii) modify any Capital Budget, except to allow an annual aggregate variance not in excess of $50,000 in the aggregate after taking all line item variances into account; and
(iv) enter into any contract or agreement that obligates the Company to pay more than $50,000 or that is not terminable on no more than thirty (30) days’ notice without penalty or charge; provided, however, that subject to the other provisions of Section 6.2(a) and 6.2(b), such restriction shall not restrict the authority of the Managing Member or the Operating Member to enter into such contracts or agreements only with non-Affiliate third parties in the ordinary course of business of operating the Project as an apartment community on such terms as are commercially reasonable in the context of a “Class A” garden apartment community in the Durham, North Carolina market. CNL will use good faith efforts to consult with Bainbridge on matters constituting CNL Decisions. Notwithstanding anything to the contrary contained herein, in no event shall any CNL Decision, if made without Bainbridge Consent, or other action that is taken without Bainbridge Consent, (A) result in an obligation on the part of Bainbridge to fund Additional Initial Capital or Additional Capital or make a Member Loan or (B) increase the exposure or liability, whether contingent or not, of Bainbridge or any of its Affiliates, under any guaranty given by Bainbridge of any of its Affiliates in connection with the Construction Loan or any other Company Financing.
(c) The Operating Member shall use good faith efforts to provide each other Member with not less than thirty (30) days’ advance notice of any proposed Major Decision or CNL Decision, provided, however, in the event of an emergency or other circumstance that does not reasonably permit such advance notice, the Operating Member may call upon the Members to respond within a shorter, reasonable period of time (but in no event less than two (2) Business Days’ advance notice). Any Member that does not respond within the applicable time period required to respond to a proposed Major Decision or CNL Decision by granting or withholding its consent to such proposed Major Decision, or, with respect to CNL, such proposed CNL Decision, described in such advance notice shall be deemed to not have given its consent to such proposed Major Decision or CNL Decision. Member Consent or CNL Consent, as applicable, shall be made by written consent or may occur pursuant to a meeting by conference call with the results confirmed in writing, and such written consent or written confirmation may be delivered in the form of facsimile, electronic mail, telex, telecopy or telegraph. An agenda for each meeting shall be prepared in advance by the Members in consultation with each other. Approval by Member Consent or CNL Consent, as applicable, of the matter being considered shall be binding on the Company and the Members for all matters. Upon the request of any of the Members, the Operating Member shall cause written minutes to be prepared of all actions taken by such members at meetings and shall deliver a copy thereof to each of the Members within seven (7) days after the date of the meeting.
(d) Notwithstanding anything to the contrary set forth herein, the Operating Member shall have the authority to cause the following Major Decisions to occur and be implemented without the consent of any Member, provided such authority shall be limited as follows:
(i) With respect to Section 6.2(a)(xix), the Operating Member shall have the authority to modify the insurance carried by the Company but shall not have the authority to cause the Company to fail to carry any insurance required by this Agreement, applicable law or any Company Financing, loan document or other agreement to which the Company is a party.
(ii) With respect to Section 6.2, neither the Managing Member nor the Operating Member shall have the authority without the consent of the other Member to threaten in writing, file or settle any claim involving the other Member, but each shall have the authority, subject to the provisions of Section 6.2(a)(xx), to threaten in writing, file or settle any claim involving such Member that does not involve the other Member.
(iii) With respect to Section 6.2(a)(xxiii), the Operating Member’s authority to designate a bank for the deposit of Company funds shall be subject to Section 6.3 below.
Appears in 1 contract
Samples: Limited Liability Company Agreement (CNL Growth Properties, Inc.)
