OPERATING AGREEMENT
OF
ALL NIGHT AUTO OF BLOOMINGTON/NORMAL, LLC
A MICHIGAN LIMITED LIABILITY COMPANY
THIS AGREEMENT ("Operating Agreement") is made and adopted as
of October 1, 2006, with respect to ALL NIGHT AUTO OF BLOOMINGTON/NORMAL, LLC, a
Michigan limited liability company (the "Company"). The Members of the Company,
are those parties listed on EXHIBIT A attached hereto.
The Company's Manager is Xxxxxx Xxxxx (the "Manager").
The Company's Tax Matters Partner is Xxxxxx Xxxxx.
R E C I T A L S:
The Members, the Manager and the Company desire to enter into
this Agreement.
A. Midnight Auto Franchise Corp. ("MAFC"), a wholly-owned
subsidiary of Midnight Holdings Group, Inc. ("MHG"), owns certain property and
equipment and has leased certain locations that can be utilized in the operation
of auto repair service and retail centers and shall make available such property
and equipment and sublease such locations to the Company.
B. MAFC and MHG shall enter into a Management Agreement with
the Company in the form attached as Exhibit C and MAFC shall receive a Class B
Membership Interest in exchange therefore.
B. The parties have formed the Company to engage in the
business of operating auto repair service and retail centers.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, the parties agree as follows:
ARTICLE I
ORGANIZATION
1.1 FORMATION. The Company has been formed pursuant to the Michigan
Limited Liability Company Act, being Act No. 23, Public Acts of 1993, as amended
by Act No. 52, Public Acts of 1997 (the "Act"), by the filing of Articles of
Organization ("Articles").
1.2 NAME. The name of the Company is ALL NIGHT AUTO OF
BLOOMINGTON/NORMAL, LLC. The Company may also conduct its business under one or
more assumed names.
1.3 PURPOSE. The purpose of the Company is to engage in the business of
operating auto repair service and retail centers (the "Business"), and all
activities and transactions as may be necessary or desirable in connection with
the achievement of the foregoing purpose.
1.4 DURATION. The Company shall continue in existence indefinitely or
until the Company shall be sooner dissolved and its affairs wound up in
accordance with the Act or this Operating Agreement.
1.5 REGISTERED OFFICE AND RESIDENT AGENT. The "Registered Office" and
"Resident Agent" of the Company shall be as designated in the initial Articles
or any amendment thereof. The Registered Office and/or Resident Agent may be
changed from time to time, in accordance with the Act. If the Resident Agent
shall resign, the Company shall promptly appoint a successor.
1.6 INTENTION FOR COMPANY. The Company has been formed as a limited
liability company under and pursuant to the Act. The Members specifically intend
and agree that the Company is a limited liability company under and pursuant to
the Act.
ARTICLE II
DEFINITIONS
2.1 "AFFILIATE" shall mean, with respect to any Person, any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such Person, and shall include any member or
manager of the Company or any relative (by blood, marriage or adoption) of any
such member or manager. A Person shall be deemed to control another person if
such Person possesses directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities or other ownership interests, by contract or
otherwise.
2.2 "BUSINESS" shall have the meaning set forth in Section 1.3.
2.3 "BUSINESS PLAN / BUDGET" shall mean the Operating Pro Forma
attached hereto as Exhibit B.
2.4 "CAPITAL CONTRIBUTION" shall mean the amount of cash or property
contributed to the capital of the Company by a Member, increased by any
additional cash contributions made to the capital of the Company by such Member
and decreased by the amount of any distributions made by the Company to such
Member which constitutes a return of capital, pursuant to Section 4.1(b) hereof.
The Preferred Return Amount shall not be deemed a return of capital. Any
reference to the Capital Contribution of a Member shall include the Capital
Contribution made by a predecessor in interest of such Member.
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2.5 "CLASS A MEMBER(S)" AND "CLASS A MEMBERSHIP INTEREST(S)" shall mean
the Members and Membership Interests of the party or parties listed as Class A
Members on the attached Exhibit A.
2.6 "CLASS B MEMBER(S)" AND "CLASS B MEMBERSHIP INTEREST(S)" shall mean
the Members and Membership Interests of the party or parties listed as Class B
Members on the attached Exhibit A.
2.7 "CLASS C MEMBER(S)" AND "CLASS C MEMBERSHIP INTEREST(S)" shall mean
the Members and Membership Interests of the party or parties listed as Class C
Members on the attached Exhibit A.
2.8 "CODE" shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding federal revenue laws.
2.9 "CONSENT OF THE MEMBERS", or any derivation thereof, shall mean the
consent of the majority in interest of the Class A Membership Interests only.
2.10 "MANAGER" shall mean the Person identified in the Preamble to this
Agreement, or such other Person appointed in accordance with the terms of this
Agreement.
2.11 "MEMBERSHIP INTEREST" shall mean, with respect to each Member,
such Member's entire rights and interest in the Company and the Company's
property, assets, capital and business, including, but not limited to, such
Member's right to receive distributions of the Company's assets and any right to
participate in the management of the Company's affairs, all as and to the extent
provided in this Agreement and the Act. Each Member's initial Membership
Interest is set forth on EXHIBIT A.
2.12 "NET CASH FLOW" shall mean all cash receipts of the Company from
whatever source, less all cash expenditures by the Company to persons other than
Members in their capacity as Members, and less normal and customary cash
reserves as determined by the Manager in his reasonable discretion.
2.13 "PERSON" shall mean any individual, trust, estate, partnership,
association, firm, company, corporation or other entity.
2.14 "PREFERRED RETURN AMOUNT" means with respect to each Membership
Interest for each fiscal year, an amount equal to the product of the Preferred
Return Rate times the weighted average balance of the Capital Contribution of
each Membership Interest during such year. The weighted average balance of the
Capital Contribution shall mean the amount obtained by adding the balances of
the Capital Contribution of each Membership Interest on each day of the fiscal
year and dividing the sum by the number of days in such fiscal year.
2.15 "PREFERRED RETURN RATE" means seventeen (17%) percent per annum.
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2.16 "SPONSORSHIP AGREEMENT" means that certain agreement executed
simultaneously herewith, by and between the Class B Member and Landlord &
Associates Management, Inc., a Delaware corporation and/or Eastland Mall, LLC, a
Delaware limited liability company governing the marketing and advertising of
the Company's and Class B Member's name and logo and retail and services
facilities.
2.17 "TAXABLE INCOME" and "TAXABLE LOSSES" shall mean, for each taxable
year of the Company or other period, an amount equal to the Company's federal
taxable income or loss (as is appropriate) for such year or other period, as
determined in accordance with Code Section 703(a) (including all items of
income, gain, loss or deduction required to be stated separately under Section
703(a)(1) of the Code).
2.18 "TAX MATTERS PARTNERS" shall mean the Person identified in the
Preamble to this Agreement, or any other Person appointed in accordance with the
terms of this Agreement.
2.19 "TREASURY REGULATIONS" shall mean and include proposed, temporary
and final regulations promulgated under the Code in effect as of the date of the
filing of the Articles of Organization and the corresponding sections of any
regulations subsequently issued that amend or supersede such regulations.
ARTICLE III
CAPITAL, PARTICIPATION IN PROPERTY AND LIABILITY
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3.1 MEMBERS' INITIAL CAPITAL CONTRIBUTIONS. In exchange for their
respective Membership Interest, each Member shall contribute to the Company's
Capital the amount set forth on Exhibit A attached hereto.
3.2 ADDITIONAL COMPANY FUNDS. In the event that it is determined by the
Manager that additional capital is necessary to fund the Company's operations,
the Manager shall request the Members to tender the required capital to the
Company on a pro rata basis in accordance with each Member's respective
Membership Interest in the Company ("Capital Call"). If any Member (referred to
for purposes of this Section 3.2 as a "Defaulting Member") fails for any reason
to contribute its share of the Capital Call by the date set by the Manager, the
non-defaulting Members shall have the right and option to provide the additional
capital not provided by the Defaulting Member, on a pro rata basis. In such
event, the interest of the Defaulting Member shall be diluted. The amount by
which a Defaulting Member's interest shall be reduced shall be that amount,
determined by the Manager in his reasonable discretion, required to be granted
to the non-defaulting Members in order to induce such Member(s) to make the
additional capital contribution. The Manager in exercising his reasonable
discretion may take into account the financial position of the Company, the lack
of marketability and free transferability of the interest, the market returns
required for similar investments and any other relevant facts as he shall
reasonably determine.
The amount by which a Defaulting Member's Membership Interest is
reduced shall be allocated to the Members who provided the additional capital in
accordance with the respective capital contributed by the non-defaulting
Member(s) in the place of the Defaulting Member. In the
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event any option to reduce a Member's Membership Interest is exercised as set
forth in this Section 3.2, the Manager is granted the irrevocable power of
attorney to execute and deliver on behalf of any Defaulting Member any and all
instruments, documents or writings as may be necessary, proper or convenient to
consummate the reduction of any such Defaulting Member's Membership Interest
herein. In the event no existing Member desires to make the additional capital
contribution on behalf of the Defaulting Member the manager may admit a new
Member or Members to provide such additional capital.
3.3 COMPANY CAPITAL. The capital of the Company shall be the aggregate
amount of the Capital Contributions made by the Members and the Capital Accounts
as they stand on the Company books.
3.4 LOANS TO THE COMPANY. The Company may obtain one or more loans,
including purchase order financing, from time to time (on a secured or unsecured
basis) as determined by the Manager in his reasonable discretion.
3.5 RESTRICTIONS RELATING TO CAPITAL. Except as otherwise specifically
provided in this Agreement, no Member shall have the right to withdraw or reduce
his Capital Contribution and no Member shall have the right to receive property
other than cash, if any, in return for his Capital Contribution.
3.6 NO THIRD PARTY RIGHTS. Nothing contained in this Article III is
intended for the benefit of any creditor or other person (other than a Member in
his capacity as such) to whom the Company owes any debts, liabilities or
obligations or who otherwise has any claim against the Company, and no third
party shall have any rights by virtue of the provisions of this Article III.
ARTICLE IV
DISTRIBUTION OF CASH AND
ALLOCATIONS OF TAXABLE INCOME AND TAXABLE LOSSES
4.1 DISTRIBUTIONS.
(a) REQUIRED TAX DISTRIBUTION. Before any distribution is made
hereunder, the Company shall distribute to each Member, cash in an
amount equal to such Member's Required Tax Distribution, such cash to
be distributed annually based on the amount of Taxable Income earned by
the Company during the taxable year just completed and to be allocated
to such Member.
As used herein, the "Required Tax Distribution" means, for
each Member who was allocated a share of Taxable Income or gain under
Section 4.2 for the immediately preceding fiscal year of the Company,
an amount of cash equal to the product of:
(1) the sum of the maximum marginal federal
individual income tax rate (including any surtax) and
two-thirds of the maximum marginal individual income tax rate
for the State of Michigan (collectively the "Tax Rate"); and
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(2) the amount of Taxable Income allocated to such
Member.
To the extent that the Taxable Income described in
the preceding sentence with respect to any Member for a fiscal year is
attributable to capital gains allocated to such Member for such fiscal
year, the maximum rate of federal income tax on capital gains shall be
used in lieu of the maximum marginal individual income tax rate.
(b) DISTRIBUTIONS OF NET CASH FLOW. The Company shall
distribute quarterly (or more frequently as the Manager shall
determine), the Company's Net Cash Flow as follows:
(1) FIRST, to each Class A Member an amount equal to
such Member's accrued but unpaid Preferred Return Amount;
(2) SECOND, to the Class A Member to repay its
Capital Contribution;
(3) THIRD, to the Class B Member an amount equal to
such Member's accrued but unpaid Preferred Return Amount;
(4) FOURTH, to the Class B Member to repay its
Capital Contribution.
(5) FIFTH, to all of the Members, pro-rata, in
accordance with their Membership Interests.
4.2 TAXABLE INCOME AND TAXABLE LOSSES. Taxable Income and Losses shall
be allocated to the Members pro rata in accordance with each Members' Membership
Interests; provided, however, that an equivalent amount of Taxable Income shall
first be allocated to those Members receiving distributions pursuant to Section
4.1 and no Member shall be allocated any Taxable Loss, or item of expense or
loss, to the extent that any such allocation would create or increase a deficit
in such Member's Capital Account. In that event, losses shall first be allocated
to those Members having positive Capital Account Balances until all such Capital
Account Balances are zero then to the Members in accordance with their
Membership Interests.
4.3 TAX MATTERS PARTNER. The Person identified in the definitions to
this Agreement is hereby designated as the "Tax Matters Partner" of the Company,
as such term is defined in the Code. Such tax matters partner shall have all of
the powers and duties provided to the Tax Matters Partner under the Code,
including the right to decide whether to make any election under Code Section
754 in connection with any transfer of an Interest in the Company and in the
event of any administrative or judicial proceeding involving the tax treatment
of any item.
ARTICLE V
MANAGEMENT
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5.1 MANAGEMENT OF BUSINESS. The Company shall be managed by the
Manager, who shall serve in such capacity until her resignation or removal. In
the event the Manager resigns or is
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removed, his successor shall be appointed by the majority in interest of the
Class A Member(s). Thereafter the Class A Member(s) shall have sole authority to
remove and replace the Manager.
5.2 GENERAL POWERS OF MANAGER. Except as required by the Act or in this
Operating Agreement, the Manager shall have the exclusive right to manage the
business of the Company. The Manager is authorized and empowered to carry out
and implement any and all purposes of the Company. The Manager is authorized to
execute and deliver, for and on behalf of the Company, all agreements, documents
and instruments to take any actions on behalf of the Company in the ordinary
course of the Company's business. Without limiting the generality of the
foregoing, the Manager has the power (subject to the limitations in Section 5.3)
to:
(a) purchase, lease or otherwise acquire machinery, equipment
and inventory;
(b) open one or more depository accounts and make deposits
into and checks and withdrawals against such accounts;
(c) borrow money and incur liabilities or other obligations;
(d) engage employees and agents, define their respective
duties, and establish their compensation or remuneration;
(e) obtain insurance covering the business of the Company, its
property and the lives and well being of its employees and agents (if
any); and
(f) prosecute or defend any proceeding in the Company's name.
(g) perform or engage in any and all other actions, functions
or activities that the manager believes to be necessary or in the best
interests of the Company.
5.3 LIMITATION ON POWERS. Notwithstanding anything to the contrary
contained in the Act or this Operating Agreement, the Manager may take any of
the following actions but only with the prior written consent of the Class A
Membership Interests:
(a) enter into any merger, sale, or other transaction or joint
venture;
(b) liquidate, dissolve, merge or acquire another Person;
(c) file any petition in bankruptcy, state court receivership
or assignment for the benefit of creditors;
(d) sell, transfer or otherwise dispose of all or
substantially all of the assets of the Company in one transaction or
series of transactions;
(e) pledge any portion of the Company's assets, including the
assignment of any material agreement;
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(f) amend the Articles of Organization or the Operating
Agreement for the Company.
5.4 STANDARD OF CARE; LIABILITY. The Manager shall discharge the
Manager's duties described in this Article V in good faith, with the care an
ordinarily prudent person in a like position would exercise under similar
circumstances, and in a manner the Manager reasonably believes to be in the best
interests of the Company. The Manager shall not be liable for any monetary
damages to the Company for any breach of such duties that arise out of any act
or omission performed or omitted by the Manager in good faith on behalf of the
Company except for:
(a) receipt of a financial benefit to which the Manager is not
entitled;
(b) consenting to a distribution or expenditure knowingly in
violation of this Operating Agreement or the Act; and
(c) a knowing violation of the law.
Notwithstanding any other provision of this Agreement, the Members and
their Affiliates may engage in and own interests in other business ventures of
any nature, whether or not competitive with the Company, and neither the Company
nor any Member shall have any right under this Agreement in any such venture or
the profits therefrom.
5.5 INDEMNIFICATION OF MANAGER AND OFFICERS. The Company shall, to the
fullest extent permitted by law, indemnify and hold harmless the Manager, and,
his successors, heirs and assigns, from and against any and all losses,
liabilities, obligations, claims, causes of action, demands, costs, and expenses
(including reasonable attorney fees) incurred by the Manager with respect to any
act or omission performed by the Manager within the scope Officer of the
authority conferred upon him by this Operating Agreement, provided that the
Manager acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Company.
5.6 COMPENSATION OF MANAGER. The Manager shall not be entitled to
receive compensation for rendering services to the Company. All reasonable
expenses incurred by a Manager in connection with the operation of the Company's
business shall be reimbursed in full by the Company upon presentation of
evidence of the payment of such expense.
5.7 NATURE OF MEMBERS' INTEREST. The Membership Interest in the Company
shall be personal property for all purposes. All property owned by the Company,
whether real or personal, tangible or intangible, shall be deemed to be owned by
the Company as an entity. The Members shall not have, nor be deemed to have,
individual ownership of such property.
5.8 BANK ACCOUNTS. The bank account or accounts of the Company shall be
maintained in the banking institution or institutions selected by the Manager.
All funds of the Company shall be deposited into account(s) of the Company and
any and all checks or other instruments used to draw funds of the Company shall
require the signature of an officer of the Company.
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5.9 ACTIVITY OF THE MANAGER. The Manager shall devote such time and
attention as necessary for the conduct of the Company's business and the
performance of the Manager's responsibilities under Section 5.2 above.
ARTICLE VI
RESTRICTIONS ON TRANSFER OF
MEMBERSHIP INTERESTS; WITHDRAWAL
6.1 RESTRICTIONS ON TRANSFER AND ASSIGNMENT.
(a) Except as expressly provided in this Article VI of this
Agreement, no Member shall sell, directly or indirectly, assign,
transfer, convey, pledge or otherwise encumber all or any portion of
its Membership Interest, (including, without limitation, by
transferring ownership interests in direct or indirect Members of the
Company) without obtaining the Consent of the Members as provided
herein. Any attempted disposition of a Membership Interest in violation
of this Section 6.1 shall be void and of no effect.
(b) A Member may, without obtaining the consent of the other
Members, assign his Membership Interest to another Member, to a trust
for the benefit of the transferor Member, the income of which is
taxable to the Settlor under section 677 of the Code, and the sole
trustee of which during the Member's lifetime (unless the Member is
mentally disabled) is the Member himself, or to an Affiliate.
(c) The assignment of a Membership Interest does not entitle
the assignee to participate in the management and affairs of the
Company or to become or exercise any rights of a Member, including the
right to vote on any matter requiring a vote of the Members, unless and
until such assignee is admitted as a substitute Member in accordance
with Section 6.2 below. Unless an assignee is admitted as a substitute
Member in accordance with the provisions of Section 6.2 below, such
assignee shall only be entitled to receive, to the extent assigned, the
distributions to which the assignor would be entitled.
(d) In the event of an assignment that does not result in the
admission of the assignee as a substitute Member, the assignor/Member
shall be entitled to continue to exercise the rights of a Member under
this Agreement, and such assignor Member and his assignee shall be
jointly and severally liable to the Company for such Member's
obligations to the Company hereunder or under the Act, and in the event
of default, such Membership Interest shall be subject to all of the
remedies and options otherwise available to the Company.
(e) Provided, there is no uncured event of default under this
Agreement or under the Guaranty or Option Agreement attached hereto as
Exhibits D and E respectively, and further provided the Management
Agreement attached hereto as Exhibit C has not been terminated by the
Company, then neither the Class A or Class C member shall transfer its
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Membership Interest to a person, business or entity that sells or
provides auto repair retail products or services, or manages franchises
that sell such retail products or services, or is otherwise a
competitor of the Company.
6.2 ADMISSION OF SUBSTITUTE MEMBERS. An assignee of a Membership
Interest shall not be admitted as a substitute Member, unless all of the
following conditions are satisfied:
(a) the Consent of the Members, except as provided in Section
3.2, is obtained prior to the admission of such assignee as a
substitute Member, except that Member consent is not required in
connection with an assignment made pursuant to Section 6.1(b);
(b) the assignor and assignee execute and deliver to the
Members a copy of the written assignment that gives the assignee the
right to become a substitute Member;
(c) if requested by the non-assigning Class A Members, the
assignor provides to the Company an opinion of counsel, in form and
substance satisfactory to the Class A Members, that neither the
offering nor assignment of the Membership Interest violates any
provisions of federal or state securities laws; and
(d) the assignee executes and delivers to the Company a
written agreement to be bound by all of the terms and provisions of
this Agreement and to assume all of the obligations of the assignor
Member.
An assignee who is admitted as a substitute Member in
accordance with the foregoing provisions shall have the rights and powers, and
shall be subject to all of the restrictions, obligations and liabilities of a
Member under this Agreement and the Act.
6.3 WITHDRAWAL. Unless a Member has assigned and transferred his entire
Membership Interest to another Member or other assignee who has been admitted as
a substitute Member and except to the extent permitted hereunder, a Member may
not withdraw from the Company except with the unanimous written consent of the
other Members. Any Member who withdraws in violation of the provisions of this
Section 6.3 shall not be entitled to any distributions under this Agreement and
shall be liable to the Company and the remaining Members for any damages
incurred by the Company or such remaining Members as a result of the withdrawing
Member's breach of the provisions of this Section 6.3.
6.4 REGISTRATION OF MEMBERSHIP INTERESTS.
(a) The Members acknowledge that the Membership Interests have
not been registered under the Securities Act of 1933, as amended, or
under the securities laws of any state in reliance upon the exemptions
under said laws. The Members hereby covenant, represent and warrant
that they are acquiring their respective Membership Interests in the
Company solely for investment purposes and not with a view to the
distribution or resale thereof. Each Member and each person holding an
equity interest in a Member which is an entity, hereby represents and
warrants to the Company that it is an "accredited investor" as
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that term is defined under State and Federal Securities laws. Each
Member hereby indemnifies and holds the Company and every other Member
harmless from and against all costs, expenses and damages, including
reasonable attorneys' fees incurred by the Company or any other Member
as a result of a breach hereof by such Member; and
(b) Notwithstanding any provision contained in this Agreement
to the contrary, no Member's Membership Interest may be offered or sold
and no transfer of such Membership Interest will be made by any Member
unless (at the expense of the transferring Member) such Membership
Interest is registered under the Securities Act of 1933 and/or any
applicable state securities laws; or an opinion of counsel reasonably
acceptable to the Manager is obtained to the effect that such
registration is not necessary.
6.5 PUT OF CLASS A MEMBERSHIP INTEREST. The parties' intention is that
at any time on or after the Company incurs a cumulative net operating loss of
$150,000.00 or more, or where the Class B Member has defaulted under the Sponsor
Agreement, the Class A Member can cause the Class B Member to buyout some or all
of the Class A Member's Membership Interest in the Company.
Accordingly, the Class B Member hereby grants to the Class A Member the
right and option to sell to the Class B Member all, or any part thereof, of the
Class A Member's Membership Interest in the Company free of all liens, claims
and encumbrances on or after the date on which the Company incurs a cumulative
net operation loss of $150,000.00 or more or defaults under the Sponsorship
Agreement (the "Exercise Date").
6.6 EXERCISE OF PUT. The Class A Member shall exercise the Put Right on
or after the Exercise Date, if at all, by sending written notice to the Class B
Member of the Class A Member's intent to exercise its option on or after the
Exercise Date and the portion of its Membership Interest it is electing to sell.
In the event the Class A Member elects any time to sell less than all of its
Membership Interest, it may, at its discretion, elect to sell some or all of its
remaining Membership Interest pursuant to the terms of sections 6.5 through6.8
hereof at a future date.
6.7 PUT PURCHASE PRICE. The Put Purchase Price (which shall be prorated
in the event of a sale of less than all of the Class A Member's Membership
Interest) shall be equal to the sum of the Class A Member's original Capital
Contribution (reduced by any prior return of capital to the Class A Member
pursuant to Section 4.1(b)(2) hereinabove) and any accrued but unpaid Preferred
Return Amount.
6.8 PAYMENT OF PUT PURCHASE PRICE AND DELIVERY OF CLASS A MEMBERSHIP
INTEREST. Upon the Class A Member's exercise of its Put Right, the Class B
Member shall immediately pay the Put Purchase Price to the Class A Member in a
single lump sum cash payment. In the event the Class B member does not
immediately pay some or all of the Put Purchase Price, such amount shall be paid
by MHG, Xxxxxxxx Xxxxx, or Xxxxxxx Xxxxxxx (the foregoing collectively the
"Guarantors"). The Guarantors shall execute guaranty's in favor of the Class A
Member in the form attached hereto as Exhibits X-0, X-0 and D-3. Upon the Class
A Member's receipt of the Put Purchase Price, it shall deliver its Membership
Interest (or the applicable portion thereof) in the Company to the Class B
Member free and clear of all liens, claims and other encumbrances.
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6.9 COVENANT NOT TO COMPETE. MHG, MAFC and their related parties and
affiliates agree that they will not either directly or indirectly compete with
the Company during any period in which Bloomington Center Associates, LLC or BCA
Class C Investors, LLC are Members of the Company. For purposes of the foregoing
any auto repair retail or service store operated directly or indirectly by MHG,
MAFC or their related parties or affiliates within a thirty (30) mile radius of
any store operated by the Company shall be deemed a competitive business.
ARTICLE VII
DISSOLUTION AND WINDING UP
7.1 DISSOLUTION. The Company shall dissolve, the Articles shall be
canceled and the Company's affairs shall be wound up on the first to occur of
the following events:
(a) the sale or other disposition by the Company of all or
substantially all of the Property;
(b) upon the written agreement of the Manager and Class A
Members pursuant to Section 5.3; or
(c) upon the entry of a final judgment, order or decree of
judicial dissolution, and the expiration of any applicable appeal
period in which to appeal therefrom.
7.2 DISTRIBUTION ON LIQUIDATION. Upon the dissolution of the Company,
the Manager shall proceed to liquidate the assets of the Company and wind up its
affairs. A reasonable time shall be allowed for the orderly liquidation of the
Company's assets and the payment of its liabilities so as to enable the Manager
to minimize the normal losses attendant upon liquidation. The provisions of
Article IV relating to the allocation of Taxable Income and Taxable Losses of
the Company shall be applicable during the period of liquidation. Proceeds of
liquidation shall be applied and distributed in the following order of priority:
(a) To the payment of any debts and liabilities of the
Company;
(b) To the establishment of any reserves which the Manager
deems necessary to provide for any debts or liabilities of the Company.
At the expiration of a reasonable period of time as the Manager deems
advisable, the balance of such reserve funds remaining after payment of
any such debts, liabilities or contingencies, shall be distributed in
accordance with subparagraph (c) below;
(c) To the Members, in accordance with Section 4.1(b) hereof;
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ARTICLE VIII
BOOKS, RECORDS AND ACCOUNTING
8.1 BOOKS AND RECORDS. The Company shall maintain complete and accurate
books and records of the Company's business and affairs as required by the Act
and such books and records shall be kept at the Company's Registered Office.
8.2 ACCOUNTING. The Company shall maintain proper books and records in
accordance with generally accepted accounting principles. The fiscal and taxable
year of the Company shall be the calendar year. The Members shall have the right
to inspect the Company's books and records at any time upon reasonable notice.
8.3 ACCESS TO BOOKS AND RECORDS. Any Member shall have full and
complete access to the Company's books and records during normal business hours
at the Company's Registered Office. In addition, the Company's Manager (and its
officers, if any) shall promptly respond to inquiries made from time to time by
the Members to questions concerning the Company's business operations and
prospects.
8.4 REPORTS. The Manager shall provide to the Members reports
concerning the financial condition and results of operation of the Company and
the Capital Accounts of the Members. Such reports shall be provided at least
annually as soon as practicable after the end of each calendar year and shall
include a statement of each Member's share of profits and other items of income,
gain, loss deduction and credit.
ARTICLE IX
MISCELLANEOUS PROVISIONS
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9.1 BINDING EFFECT. Subject to the provisions of this Operating
Agreement relating to assignment and transferability, this Operating Agreement
shall be binding upon and shall inure to the benefit of the parties, and their
respective distributees, heirs, successors and assigns.
9.2 CERTIFICATES. The Members shall promptly execute and file Articles
of Organization and all other legally required fictitious names or other
applications, registrations, publications, certificates and affidavits required
to be filed with governmental authorities.
9.3 AMENDMENT. This Operating Agreement may be amended or revoked at
any time by a written agreement executed by all of the Members. No change or
modification to this Operating Agreement shall be valid unless in writing and
signed by all of the Members.
9.4 NOTICES. Any notice permitted or required under this Operating
Agreement shall be conveyed to the party at the address reflected in the books
and records of the Company and will be deemed to have been given, when deposited
in the United States mail, postage paid, or when delivered in person, or by
courier or by facsimile transmission.
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9.5 SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Operating Agreement shall not affect the other provisions
hereof, and this Operating Agreement shall be construed in all respects as if
such invalid or unenforceable provisions were omitted.
9.6 CHOICE OF LAW AND FORUM SELECTION. This Operating Agreement shall
be interpreted and construed in accordance with the laws of the State of
Michigan. All actions arising directly or indirectly out of this Operating
Agreement shall be litigated only in the United States District Court for the
Eastern District of Michigan, Southern Division, or the Oakland County, Michigan
Circuit Court, and the parties hereby irrevocably consent to the personal
jurisdiction and venue of those courts over the parties to this Operating
Agreement.
9.7 TERMS. Nouns and pronouns will be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the identity of the person or persons,
firm or Company may in the context require.
9.8 HEADINGS. The titles of the sections have been inserted as a matter
of convenience for reference only and shall not control or affect the meaning or
construction of any of the terms or provisions of this Operating Agreement.
9.9 ARBITRATION. Except for the provisions allowing an aggrieved party
equitable relief, disputes over which shall be resolved at the option of the
aggrieved party through court litigation and not arbitration, and also except
for any dispute concerning any valuation agreed upon in accordance with the
terms hereof which valuation shall be binding on the parties hereto and not
subject to arbitration, any dispute between the parties regarding any other
provision in this Agreement shall be resolved by binding arbitration before the
American Arbitration Association in Southfield, Michigan according to its rules
of commercial arbitration. Judgment upon the award of the arbitrators may be
entered by any court of competent jurisdiction. Notwithstanding the foregoing,
if the parties can agree upon an arbitrator and a location for such arbitration,
they need not retain the services of the American Arbitration Association, but
may use such agreed upon private arbitrator and facilities to conduct an
arbitration, which shall be conducted in accord with the American Arbitration
Association Rules of Commercial Arbitration.
9.10 AGREEMENT DRAFTED BY ATTORNEYS FOR THE CLASS A MEMBER. THE PARTIES
EACH ACKNOWLEDGE THAT SEYBURN, KAHN, XXXX, XXXX AND XXXXXX, P.C. ("SKG"), THE
ATTORNEYS FOR THE CLASS A MEMBER PREPARED THIS AGREEMENT ON BEHALF OF THE CLASS
A MEMBER AND NOT ON BEHALF OF THE OTHER PARTIES. THE PARTIES ACKNOWLEDGE AND
AGREE AS FOLLOWS:
(a) THEY ARE ADVISED THAT A CONFLICT MAY EXIST BETWEEN THEIR
RESPECTIVE INTERESTS AND THOSE OF THE CLASS A MEMBER AND OTHER MEMBERS
AND THEY HEREBY WAIVE ANY SUCH CONFLICTS ARISING AS A CONSEQUENCE OF
SKG'S PARTICIPATION IN THE PREPARATION OF THIS AGREEMENT;
(b) THEY HAVE BEEN ADVISED BY SKG COUNSEL TO SEEK THE ADVICE
OF THEIR OWN INDEPENDENT COUNSEL AND THEY HAVE DONE SO; AND
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(c) THEY HAVE EACH HAD AN OPPORTUNITY TO SEEK THE ADVICE OF
THEIR OWN INDEPENDENT COUNSEL REGARDING THE ECONOMIC, LEGAL AND TAX
CONSEQUENCE OF THIS AGREEMENT.
9.11 CONSENT. Anytime the consent of a Member is required to an action,
unless provided expressly to the contrary, such consent shall not be
unreasonably withheld, conditioned, or delayed.
9.12 INTERPRETATION. This Section and other headings contained in this
Agreement are for references purposes only and shall not effect in any way the
meaning or interpretation of this Agreement. Words used in this Agreement in the
singular number shall include the plural and vice versa, unless the context
requires otherwise. Words of gender used in this Agreement may be read as
masculine, feminine or neuter as the context may require.
9.13 ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement
and understanding of the parties with respect to the transactions contemplated
hereby and supercedes all prior agreements, arrangements and understandings
related to the subject matter hereof.
9.14 AMBIGUITY. Each of the parties acknowledge that they and their
counsel have reviewed this Agreement and suggested changes to its language.
Therefore, any rule of construction that any ambiguity shall be construed
against the drafter of this Agreement shall not apply in interpreting the
provisions of this Agreement.
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The Company, Members and the Manager have executed this Operating
Agreement as of the date set forth above.
"COMPANY"
ALL NIGHT AUTO OF BLOOMINGTON/NORMAL,
LLC, A MICHIGAN LIMITED LIABILITY
COMPANY
By: /s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
Its: Manager
"CLASS A MEMBER"
BLOOMINGTON CENTER ASSOCIATES, LLC,
A MICHIGAN LIMITED LIABILITY COMPANY
By: /s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
Its: Manager
"CLASS B MEMBER"
MIDNIGHT AUTO FRANCHISE CORP,
A MICHIGAN CORPORATION
By: /s/ Xxxxxxxx Xxxxx
--------------------------------
Xxxxxxxx Xxxxx
Its: President
"CLASS C MEMBER"
BCA CLASS C INVESTORS, LLC
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxx
Its: Manager
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EXHIBIT A
MEMBERSHIP INTERESTS
INITIAL CAPITAL MEMBERSHIP
CLASS A MEMBER CONTRIBUTION INTEREST
Bloomington Center Associates, LLC $475,000 51.26%
CLASS B MEMBER
Midnight Auto Franchise
Corporation $200,000 20.74%
CLASS C MEMBER
BCA Class C Investors, LLC -0- 29.00%
-------- ------
$675,000 100.00%
======== ======
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