CONFIDENTIAL
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OPERATING AGREEMENT
OF
TFM Group, L.L.C.
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Article I. FORMATION OF LIMITED LIABILITY COMPANY GENERAL PROVISIONS...........................................2
Section 1.01 Formation......................................................................................2
Section 1.02 Name...........................................................................................2
Section 1.03 Purpose........................................................................................2
Section 1.04 Offices........................................................................................2
Section 1.05 Nature of Partners' Interests, Non-Partition...................................................2
Section 1.06 Duration of Company............................................................................2
Section 1.07 Further Assurances.............................................................................2
Section 1.08 Classification for Tax Purposes................................................................2
Article II. MEMBERS, MEMBERSHIP INTERESTS AND CAPITAL CONTRIBUTIONS; LOANS......................................2
Section 2.01 Membership and Participation Percentages.......................................................2
Section 2.02 Initial Contributions..........................................................................2
(a) GRD Capital Contribution...............................................................................2
(b) SR Group Capital Contribution..........................................................................2
Section 2.03 Capital Accounts...............................................................................2
Section 2.04 Use of Capital Contributions and Loans.........................................................2
Section 2.05 Additional Capital Contributions / Members' Loans..............................................2
Section 2.06 Operating Deficits.............................................................................2
Section 2.07 Permitted Outside Activities...................................................................2
Section 2.08 Liability of Members...........................................................................2
Article III. MEETINGS OF MEMBERS.................................................................................2
Section 3.01 Annual Meetings; Special Meetings..............................................................2
Section 3.02 Place of Meetings..............................................................................2
Section 3.03 Notice of Meetings.............................................................................2
Section 3.04 Quorum of and Action by Members................................................................2
Section 3.05 Voting by Members..............................................................................2
Section 3.06 Action Without a Meeting; Telephone Meetings...................................................2
Article IV. MANAGEMENT..........................................................................................2
Section 4.01 Management.....................................................................................2
Section 4.02 Management Committee...........................................................................2
Section 4.03 Liability: Indemnification of the Members......................................................2
Section 4.04 Removal; Filling of Vacancies..................................................................2
Section 4.05 Place of Meetings..............................................................................2
Section 4.06 Annual Meetings; Regular Meetings; Special Meetings............................................2
Section 4.07 Quorum of and Action by Managers...............................................................2
Section 4.08 Action Without a Meeting; Telephone Meetings...................................................2
Section 4.09 Interested Managers and Officers...............................................................2
Section 4.10 Managers' Compensation and Reimbursement.......................................................2
Section 4.11 Time Devoted to Company........................................................................2
Section 4.12 Liability of Managers..........................................................................2
Article V. OFFICERS............................................................................................2
Section 5.01 Officers.......................................................................................2
Section 5.02 Compensation...................................................................................2
Section 5.03 Term of Office; Removal; Filling of Vacancies..................................................2
Section 5.04 Chairman.......................................................................................2
Section 5.05 President......................................................................................2
Section 5.06 Vice Presidents................................................................................2
Section 5.07 Secretary......................................................................................2
Section 5.08 Assistant Secretary............................................................................2
Section 5.09 Treasurer......................................................................................2
Section 5.10 Additional Powers and Duties...................................................................2
Article VI. ACCOUNTING AND TAX MATTERS; REPORTS; BANKING........................................................2
Section 6.01 Books and Records; Capital Accounts............................................................2
Section 6.02 Tax Returns....................................................................................2
Section 6.03 Tax Matters Person.............................................................................2
Section 6.04 Tax Elections..................................................................................2
Section 6.05 Bank Accounts; Investment of Company Funds.....................................................2
Article VII. TRANSFER OF COMPANY INTERESTS, WITHDRAWAL OF MEMBERS, BUY/SELL PROVISIONS........................2
Section 7.01 Assignment and Transfer........................................................................2
Section 7.02 Expenses.......................................................................................2
Section 7.03 Withdrawal of Members..........................................................................2
Section 7.04 Death, Legal Incapacity, Dissolution or Bankruptcy of a Member.................................2
Section 7.05 Status of Interests Transferred................................................................2
Section 7.06 Purchase Option................................................................................2
Article VIII. DISSOLUTION AND TERMINATION......................................................................2
Section 8.01 Dissolution....................................................................................2
Section 8.02 Appointment of Liquidating Member..............................................................2
Section 8.03 Distributions and Other Matters................................................................2
Section 8.04 Distributions of Property......................................................................2
Section 8.05 Action During Liquidation: Statements of Account...............................................2
Article IX. REPRESENTATIONS, WARRANTIES AND COVENANTS...........................................................2
Section 9.01 Representations and Warranties.................................................................2
Article X. AMENDMENTS..........................................................................................2
Section 10.01 Amendments......................................................................................2
Article XI. MISCELLANEOUS.......................................................................................2
Section 11.01 Manner of Giving Notice.........................................................................2
Section 11.02 Waiver of Notice................................................................................2
Section 11.03 No Company Seal.................................................................................2
Dated as of October 4, 2006
OPERATING AGREEMENT OF
TFM Group, L.L.C.
A Delaware Limited Liability Company
This Limited Liability Company Agreement of TFM Group, L.L.C. d/b/a TFM
GROUP (the "Company"), a limited liability company organized pursuant to the
State of Delaware Limited Liability Company Laws (the "Act"), made as of the 4th
day of October, 2006, is entered into by and between Global Realty Development
Corp (GRD), a Delaware corporation, and the Xxx Xxxxxxx Group (SR Group)
consisting of Xxx X. Xxxxxxx, (XXXXXXX) and Xxxxxxx Xxxxxx (XXXXXX) individuals
residing in the State of Florida.
Article I. FORMATION OF LIMITED LIABILITY
COMPANY GENERAL PROVISIONS
SECTION 1.01 FORMATION
GRD and the SR Group hereby intend to form and operate a limited liability
company under the Act and in accordance with the terms of this Agreement and the
Company's Articles of Organization. The Company shall exist under and be
governed by, and this Agreement shall be construed in accordance with, the laws
of the State of Delaware. Upon the effectiveness of this Agreement, GRD and the
SR Group shall be authorized to execute, and cause to be filed with the
Secretary of State of Delaware, the Certificate of Formation.
SECTION 1.02 NAME
The name of the Company shall be TFM Group, L.L.C., and all business of the
Company shall be conducted in such name or in such operational names as
determined, from time to time by the Managers.
SECTION 1.03 PURPOSE
GRD and the SR Group desire to form and operate the Company pursuant to
this Agreement and other related documents and instruments, as a limited
liability company under Delaware law. The purpose and character of the business
of the Company shall be to develop, implement and market television, film and
music products and services. The Company shall have all of the powers provided
for a limited liability company under the Act or any successor statute.
SECTION 1.04 OFFICES
The principal place of business of the Company shall be 00000 Xxxxx Xxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxxx, Xx. 00000 or such other principal place of
business as the Managers may from time to time determine. The Company may have,
in addition to such office, such other offices and places of business at such
locations, both within and without the State of Delaware, as the Managers may
from time to time determine or the business and affairs of the Company may
require.
SECTION 1.05 NATURE OF PARTNERS' INTERESTS, NON-PARTITION
The interests of the Members 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 owned by the Company as an entity, and no Member
individually shall have any ownership of such property, except (i) that all
know-how and other intellectual property owned by GRD and licensed by the
Company, shall be forever the "sole property" of GRD and (ii) that all products,
goods and services along with underlining systems and other intellectual
property pertaining to the creation and delivery of the products, goods and
services through XXXXXXX shall forever be the "sole property" of XXXXXXX and
(iii) that all products, goods and services along with underlining systems and
other intellectual property pertaining to the creation and delivery of the
products, goods and services through XXXXXX shall forever be the "sole property"
of XXXXXX . Except as otherwise stated and provided herein, no Member shall be
entitled to seek partition of any Company property. It is agreed that the sole
property of each party as described in this Section shall be hereby be conveyed
for use by the Company for the sole purposes of executing the intent of this
Agreement.
SECTION 1.06 DURATION OF COMPANY
The term of the Company shall begin upon the acceptance of the Certificate of
Formation with the Secretary of State of Delaware and shall continue in
existence unless terminated pursuant to any provisions of this Agreement or as
otherwise provided by law.
SECTION 1.07 FURTHER ASSURANCES
The parties hereto will execute whatever certificates and documents, and will
file, record and publish such certificates and documents, which are required to
form and operate a limited liability company under the Act.
SECTION 1.08 CLASSIFICATION FOR TAX PURPOSES
The Members hereby acknowledge their intention that the Company be classified,
for federal and state income tax purposes, as a partnership and not as an
association taxable as a corporation, pursuant to Section 7701(a) (2) of the
Code, and agree that the provisions of this Agreement shall be construed in a
manner to give full effect to such intent. Upon the promulgation of final
Treasury Regulations pertaining to the classification of business entities in
accordance with Notice 95-14, 1995-1 C.B. 297, the Management Committee as
defined herein, shall, on behalf of the Company and with the advice of tax
counsel, elect to treat the Company as a "partnership" for federal income tax
purposes.
Article II. MEMBERS, MEMBERSHIP INTERESTS AND
CAPITAL CONTRIBUTIONS; LOANS
SECTION 2.01 MEMBERSHIP AND PARTICIPATION PERCENTAGES
The names, addresses and Participation Percentage of each of the Members are as
follows:
Names and Addresses Participation
Percentage
Global Realty Development Corp 51%
00000 Xxxxx Xxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxx, 00000.
Xxx Xxxxxxx 24.5%
Xxxxxxx Xxxxxx 24.5%
SECTION 2.02 INITIAL CONTRIBUTIONS
Simultaneously with the execution of this Agreement, except as otherwise
provided herein, each of the Members shall make their respective initial Capital
Contribution to the Company in the manner and as described by this Agreement.
(a) GRD Capital Contribution
Simultaneously with the execution and delivery hereof, or at such later
date as the Members may agree, GRD, as its initial Capital Contribution, shall
execute and deliver to the Company in the form of an affidavit or other legal
instrument stating that GRD, through its combined, complete and extensive
corporate operations and networks, will contribute and pledge the following
services as its initial Capital Contribution to the Company. Such payment by GRD
to the Company will constitute payment in full of GRD's initial Capital
Contribution as required under the terms of this Agreement.
(1) Issued to SR Group (or its assigns) 6,000,000 shares of GRD restricted
common stock, (GRD: OTC-BB) per the attached Stock Subscription
Agreement and 3,000,000 Warrants for a period of three years @ $1.00
per share for restricted stock.
(b) SR Group Capital Contribution
Simultaneously with the execution and delivery hereof, or at such later
date as the Members may agree, SR Group, as its initial Capital Contribution
shall execute and deliver to the Company, in the form of an affidavit or other
legal instrument stating that SR Group, through their combined, complete and
extensive personal and corporate operations and networks, will contribute and
pledge services of the personnel listed on Schedule "A" along with a loan
commitment for $1,500,000 in the form of a line of credit to be placed in an
interest bearing escrow account for operations. Such payment by SR Group to the
Company will constitute payment in full of SR Group's initial Capital
Contribution as required under the terms of this Agreement.
SECTION 2.03 CAPITAL ACCOUNTS.
(A) The Company shall establish and maintain a Capital Account for each
Member. The Capital Account of each Member shall be increased by (i) the amount
of the money or services contributed by the Member to the Company, (ii) the Net
Agreed Value of any property that is contributed by the Member to the Company,
(iii) allocations of income or gain to the Member by the Company, and shall be
reduced by the amount of money distributed to the Member by the Company, the Net
Agreed Value of any property distributed to the Member by the Company, and
allocations of deduction or loss to the Member by the Company.
(B) Upon a distribution in kind of Company property, the Capital Account of
each Member will be debited or credited with such Member's allocable share of
gain or loss which would have been recognized by the Company had the property
been sold for an amount equal to its fair market value immediately prior to such
distribution (to the extent that the gain or loss inherent in such distributed
property has not been previously reflected in the Capital Accounts).
(C) For purposes of computing the amount of any item of income, gain, loss
or deduction to be reflected in the Capital Accounts, the determination,
recognition and classification of each such item shall be the same as its
determination, recognition and classification for Federal income tax purposes,
provided that:
(1) Any deductions for depreciation, amortization or similar expense
attributable to Contributed Property shall be determined as if the
Adjusted Basis of such Company asset on the date it became Contributed
Property was equal to the Carrying Value of such Company asset as of
such date;
(2) Any income, gain or loss attributable to the taxable disposition of a
Contributed Property shall be determined by the Company as if the
Adjusted Basis of such property on the date of disposition was equal
to the Carrying Value of such property on such date;
(3) If the Company's Adjusted Basis in any "investment credit property" is
reduced pursuant to Section 50(c) of the Code, then the amount of such
reduction shall be treated as an expense for the year in which such
reduction occurs and shall be allocated to the Members in the ratio in
which the Adjusted Basis of such property is allocated to the Members
pursuant to Treasury Regulation Section 1.46-3(f)(i) (provided that
principles similar to Section 704(c) of the Code shall be taken into
account in the allocation of such basis); and any restoration of any
such reduction in Adjusted Basis shall be allocated to the Members in
the same proportion as the investment tax credit recapture with
respect to such "investment credit property" is shared among the
Members; and
(4) The computation of all items of income, gain, loss and deduction shall
be made without regard to any election that may be made by the Company
under Section 754 of the Code (except to the extent required by
Treasury Regulation Section 1.704-1(b)(2)(iv) (m) and, as to those
items described in Section 705(a)(1)(B) or Section 705(a)(2)(B) of the
Code (including items treated as Section 705(a)(2)(B) expenditures
under Treasury Regulation Section 1.704-1 (b)(2)(iv)(i)), shall be
made by treating such items as though they were, respectively,
including in income or currently deductible.
(D) It is the intent of the Company to maintain Capital Accounts and
allocations in accordance with Treasury Regulation Section 1.704-1 (b).
Accordingly, adjustments to conform to those Regulations (or to successor or
amended provisions) or to take into account unexpected events shall be made by
the Members if such adjustments would not materially alter the economic
substance of this Agreement as it applies to any Member.
(E) Except as otherwise required to satisfy Treasury Regulation Section
1.704-1 (b) in connection with a Code Section 708(b) (1) (B) termination, in the
event any interest in the Company is transferred in accordance with the terms of
this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to such transferred interest.
SECTION 2.04 USE OF CAPITAL CONTRIBUTIONS AND LOANS
The Capital Contributions of the Members, all proceeds of Company
borrowings, and any Additional Capital Contributions and Members' Loans made
pursuant to this Agreement shall be used and applied for any Company purpose as
determined by the Management Committee or as expressly provided for elsewhere
herein.
SECTION 2.05 ADDITIONAL CAPITAL CONTRIBUTIONS / MEMBERS' LOANS
(A) Other than as expressly set forth in this Article II, no Member shall
be required to make any Additional Capital Contributions or Members' Loans to
the Company.
(B) At any time and from time to time after the date hereof, any Member may
(but shall not be obligated to) make Additional Capital Contributions or
Members' Loans to the Company, if (1) in the opinion of the Management Committee
such contributions or loans are needed by the Company in furtherance of any
Company purpose, and (2) the Members unanimously approve in advance and in
including any such contribution or loan.
(C) If any Member advances any funds to the Company after the date of this
Agreement (except in the case of Additional Capital Contributions), such
advances will be treated as Members' Loans, will not increase such Members
Participation Percentage, and the amount thereof will be a debt due from the
Company to such Member, to be repaid with interest thereon accruing at the
fluctuating prime rate of interest announced from time to time by The Wall
Street Journal (or, if The Wall Street Journal is no longer published, the prime
rate published in a publication of national circulation selected by the
Management Committee) plus two percent (2%), or as otherwise set by the
Management Committee and unanimously approved by the Members.
SECTION 2.06 OPERATING DEFICITS
In the event that the Management Committee determines that the Company
requires additional funds to meet operating expenses or required capital
improvements, or for any other proper Company purpose (in any such case, an
"Operating Deficit'), the Management Committee may, with the prior unanimous
consent of the Members, either (1) request that the Members, pro rata in
accordance with their then respective Participation Percentages, advance funds
in the amount so required, but in no event will the Members be obligated to make
such an advance or (2) obtain loans on such terms as the Management Committee
deems reasonably satisfactory taking into consideration the circumstances of the
Company and market conditions then prevailing, (3) if loans are not available on
terms satisfactory to the Management Committee, obtain additional equity
participation in the Company by the admission of additional Members and the pro
rata reduction of the existing Members' Participation Percentages, or (4) take
such other actions, and explore and pursue such other financing options as the
Management Committee may deem appropriate under the circumstances.
SECTION 2.07 PERMITTED OUTSIDE ACTIVITIES.
SR Group and GRD acknowledge that (a) the business of the Company may
involve business dealings with other businesses in which SR Group and GRD or
their affiliates have an interest, (b) SR Group and GRD and their affiliates may
maintain such other interests and activities, and (c) the Company, SR Group and
GRD each waives any rights it might otherwise have to share or participate in
such other interests or activities of SR Group and GRD or their affiliates.
SECTION 2.08 LIABILITY OF MEMBERS
No Member shall be liable for the debts, liabilities, contracts or other
obligations of the Company except to the extent of any unpaid Capital
Contributions it has agreed to make to the Company and its share of the assets
(including undistributed revenues) of the Company; no Member shall be required
to make any loans to the Company, except as may be agreed between a Member and
the Company, with approval of the Managers. The Company shall indemnify and hold
harmless a Member in the event a Member (a) becomes liable, notwithstanding the
preceding sentence, for any debt, liability, contract or other obligation of the
Company except to the extent expressly provided in the preceding sentence, or
(b) is directly or indirectly required to make any payments with respect
thereto.
Article III. MEETINGS OF MEMBERS
SECTION 3.01 ANNUAL MEETINGS; SPECIAL MEETINGS
An annual meeting of the Members, commencing with the year 2000, shall be
held within four months following the end of the fiscal year of the Company. At
such meeting, the Members shall elect the Managers and transact such other
business as may properly be brought before the meeting. Special meetings of the
Members, for any purpose or purposes, unless otherwise prescribed by statute,
may be called by a majority of the Managers or by any Member entitled to vote at
the proposed special meeting. Only business within the purpose or purposes
described in the notice of special meeting of Members may be conducted at the
meeting.
SECTION 3.02 PLACE OF MEETINGS
Meetings of Members shall be held at such places, within or without the
State of Nevada, as may from time to time be fixed by the Managers or as shall
be specified or fixed in the respective notices or waivers of notice thereof
SECTION 3.03 NOTICE OF MEETINGS
Written or printed notice stating the place, day and hour of each meeting
of the Members and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than five nor more than
45 days before the date of the meeting, either personally or by mail, telegram,
express courier or telefax or similar communication, by or at the direction of
the person(s) calling the meeting, to each Member entitled to vote at the
meeting.
SECTION 3.04 QUORUM OF AND ACTION BY MEMBERS
A majority of the membership interests of the Members, or if only two
Members, both are to be represented in person or by proxy, shall be requisite to
and shall constitute a quorum at each meeting of Members for the transaction of
business, except as otherwise provided by statute. With respect to any matter,
other than the election of Managers which is provided for in Section 4.4, the
majority vote, or if only two Members the unanimous vote of the Members shall be
required to constitute the act of the Members. The Members represented in person
or by proxy at a meeting of Members at which a quorum is not present may adjourn
the meeting until such time and to such place as may be determined by a majority
vote or if only two Members by unanimous vote of the Members represented in
person or by proxy at that meeting. At any such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted that
might have been transacted at the meeting as originally convened.
SECTION 3.05 VOTING BY MEMBERS
Except as may be otherwise indicated in this Agreement, all actions and
votes of the Members shall be by the majority in interest in the Company and not
on a per capita basis, or if only two Members, their unanimous vote. A Member
shall be entitled to a number of votes equal to the product of such Member's
membership interest (expressed as a percentage of 1.0) multiplied times 100, on
each matter submitted to a vote at a meeting of Members or otherwise. For
example, a 33.33% membership interest is entitled to 33.33 votes. At any meeting
of the Members, every Member having the right to vote shall be entitled to vote
either in person or by proxy executed in writing by such Member. A telegram,
telex, cablegram or similar transmission by the Member, or a photographic, photo
static, facsimile or similar reproduction of a writing executed by the Member,
shall be treated as an execution in writing for purposes of this Section 3.05.
No proxy shall be valid after eleven months from the date of its execution
unless otherwise provided in the proxy. Each proxy shall be revocable unless the
proxy form conspicuously states that the proxy is irrevocable and the proxy is
coupled with an interest. Each proxy shall be delivered to the Managers prior to
or at the time of the meeting.
SECTION 3.06 ACTION WITHOUT A MEETING; TELEPHONE MEETINGS
Any action required by the Act to be taken at any annual or special meeting
of Members, or any action which may be taken at any annual or special meeting of
Members, may be taken without a meeting, without prior notice, and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by all of the Members. A telegram, telex, cablegram or similar
transmission by a Member, or a photographic, photo static, facsimile or similar
reproduction of a writing signed by a Member, shall be regarded as signed by the
Member for purposes of this Section 3.06. Subject to the provisions of
applicable law and this Agreement regarding notice of meetings, Members may
participate in and hold a meeting by using conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a telephone meeting pursuant
to this Section 3.06 shall constitute presence in person at such meeting, except
when a person participates in the meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting was not
lawfully called or convened.
Article IV. MANAGEMENT
SECTION 4.01 MANAGEMENT
The day to day business and affairs of the Company shall be managed,
subject to the terms and conditions set forth herein, by a Management Committee,
consisting of three (3) Managers. Each Member having more than a 20% interest
will have the right to appoint one (1) representative to the Management
Committee. The Members may also appoint such others as the Members may deem
necessary from time to time and who shall serve at the pleasure of the Members.
The initial Management Committee members are Xxx X. Xxxxxxx, Xxxxxxx Xxxxxx and
Xxxxxx Xxxx. The Management Committee shall have full and complete authority,
power and discretion to manage and control the business, affairs and properties
of the Company, to make all decisions regarding those matters and to perform any
and all other acts or activities customary or incident to the management of the
Company's business, as further set forth in this Article IV hereof; provided
that anything herein to the contrary notwithstanding, the following major
decisions (each being a "Major Decision") of the Company shall require the prior
unanimous consent of the Members:
(a) amendment of the Certificate of Formation of the Company;
(b) amendment of this Operating Agreement;
(c) approval of the Annual Work Plan and Budget of the Company as prepared
by the Management Committee and submitted for the Members' approval;
(d) approval of a transfer of a Members interest or admission of a Member,
except as otherwise provided, and in accordance with, Article VII;
(e) agreement to continue the business of the Company after an event of
dissolution specified in Section VIII;
(f) creation, incidence, assumption, or guarantee of any indebtedness for
money borrowed, or an increase of the amount of any indebtedness
outstanding under any loan agreement, mortgage, or other borrowing
arrangement in excess of $50,000.00;
(g) assigning, transferring, pledging, compromising or releasing of any of
the claims of or debts due the Company except upon payment in full, or
arbitrating or consenting to the arbitration of any of the disputes or
controversies of the Company;
(h) any action which would cause the Company to become a surety, guarantor
or accommodation party to any obligation;
(i) any action which would cause the Company to grant a security interest
to any third party in any of the Company's assets; (j) making,
executing, or delivering any assignment for the benefit of creditors
or taking any action on behalf of the Company with respect to any
bankruptcy decisions, including, without limitation, initiating any
bankruptcy or insolvency proceedings, or liquidating, dissolving or
winding up the Company;
(k) acquiring or agreeing to acquire any equity interest in any entity or
any of such entity's assets or approval of a merger, consolidation or
other reorganization of the Company, including, without limitation,
entering into an operating agreement to form a separate legal entity
in which the Company will have an equity interest and whose other
equity participants may include providers of various systems of
Electronic Business, product data base management, other information
technology and investment recovery operations;
(l) making of, or entry into, any obligation on behalf of the Company for
a commitment, or making of any capital expenditure, in excess of
$50,000.00;
(m) lending funds belonging to the Company to any Member or any third
party or extend to any person, firm or corporation, credit on behalf
of the Company, except for the extension of credit in the ordinary
course of the Company's business to trade debtors up to $200,000 each;
(n) making, execution or delivery of any contract or other transaction
with the Management Committee or other related party of the Company,
including compensation of management;
(o) authorizing or approving a fundamental change in the business of the
Company, including a sale of all or substantially all of its assets;
(p) approving any other matter in which the approval of the Members is
expressly required by this Agreement or by the Act;
(q) entering into an agreement to do or effect any of the foregoing.
SECTION 4.02 MANAGEMENT COMMITTEE.
A Management Committee shall be appointed in accordance with the provisions
of Section 4.01 hereof to determine and control the business of the Company. The
President of the Company shall serve as the chairman of the Management Committee
(the "Chairman"), and shall have the active responsibility of the executive
management of its operations. The President shall, in general, perform all
duties incident to the office of President and such other duties as may be
assigned by the Members. The Chairman of the Management Committee shall oversee
the operation of the Management Committee, preside at all meetings of the
Management Committee and shall perform such other duties as from time to time
may be assigned to him by the Members. Subject to the rights of the Members (and
any decision to the contrary by the Members) as set forth in Section 4.01 hereof
or elsewhere in this Agreement, and without limiting the generality of the
foregoing, it is hereby expressly declared that the Management Committee shall
have the following powers and responsibilities:
1. To conduct, manage and control the business and affairs of the
Company, and to make such rules and regulations therefor not
inconsistent with law or the Certificate of Formation or this
Agreement, as the Management Committee shall deem to be in the best
interests of the Company;
2. To determine whether any services benefiting the Company should be
performed by one of the Members, with the expense of providing such
service to be covered by the Company;
3. To approve the borrowing of money, whether on a secured or unsecured
basis, by the Company, and the refinancing, recasting, extension,
compromise and matters otherwise relating to any loan to the Company
and, in connection therewith, to cause to be executed and delivered
therefor, in the Company's name, promissory notes, bonds, debentures,
deeds of trusts, mortgages, pledges, hypothecation's, or other
evidences of debt and securities therefor;
4. To designate in the manner herein described the individuals who are to
serve on any committee, except the Management Committee and to
prescribe the manner in which proceedings of such committees shall be
conducted;
5. To approve the acquisition by the Company of real and personal
property, and to approve the entering into by the Company of contracts
and all other arrangements needed to effectuate the business and
affairs of the Company; and
6. To prepare and submit to the Members of the Company for their
unanimous approval and acceptance, as soon as available, and in any
event at least 60 days prior to the end of each fiscal year of the
Company, an Annual Work Plan and Budget of the Company for the
subsequent fiscal year, provided that any Member of the Company may,
at its option, request a revised Annual Work Plan and Budget, within
30 days of such request, be submitted to the Members of the Company
for approval and acceptance, or for required further revision until
such approval and acceptance by all of the Members of the Company is
obtained;
7. To furnish the statements and reports required to be prepared and
distributed by Article VI hereof;
8. To establish a presence or other business operations of the Company in
one or more jurisdictions.
The initial officers of the Management Committee shall be appointed by
unanimous consent of the Members and shall serve at the pleasure of the Members
for a one-year period. Each of the officer's of the Management Committee shall
continue to serve until his or her death, resignation or removal, with or
without cause, by any Member.
SECTION 4.03 LIABILITY: INDEMNIFICATION OF THE MEMBERS
The Company shall indemnify, defend and hold harmless each Member, each of
their officers and directors, the President and such other officers appointed to
the Management Committee by the Members, and any other person acting as an agent
of the Company to whom the Management Committee shall specifically and in
writing have conferred rights hereunder, against any loss, expense, damage,
claim, liability, obligation, judgment or injury suffered or sustained by him,
it, them or any of them by reason of any act, omission or alleged act or
omission by him, it, them or any of them arising out of his, its or their
activities on behalf of the Company or in furtherance of the interests of the
Company, including, without limitation, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened actions, proceedings or claims, all
costs of which shall be charged to and paid by the Company as incurred;
provided, however, that the acts, omissions or alleged acts or omissions upon
which such actual or threatened actions, proceedings or claims are based were
performed or omitted in good faith and within the scope of such person's
authority hereunder, and were not fraudulent, in bad faith or a result of wanton
and willful misconduct or gross negligence by the party to be indemnified,
defended and held harmless under this Section 4.
SECTION 4.04 REMOVAL; FILLING OF VACANCIES
A Manager may be removed, either for or without cause, at any meeting of
Members called expressly for that purpose, by the Member that selected such
Manager. Any vacancy occurring in the Management Committee resulting from the
death, resignation, retirement, disqualification or removal from office of any
Manager, as the result of an increase in the number of Managers, or otherwise,
shall be filled by selection at any annual or special meeting of Members called
for such purpose by the Member entitled to select such Manager. Each Member
agrees to consult with the other Members prior to its selection of such Manager.
A Manager selected to fill a vacancy shall be selected for the unexpired term of
his predecessor in office.
SECTION 4.05 PLACE OF MEETINGS
Meetings of the Managers, annual, regular or special, may be held either
within or without the State of Nevada.
SECTION 4.06 ANNUAL MEETINGS; REGULAR MEETINGS; SPECIAL MEETINGS
Annual meetings of the Managers, of which no notice shall be required,
shall be held on such date, at such time and at such place as shall be
determined by the Managers, for the purpose of designating officers and the
transaction of any other business as may properly be brought before the meeting.
Regular meetings of the Managers, of which no notice shall be necessary, shall
be held at such times and places as shall be determined by the Managers. Except
as otherwise provided by statute, any and all business may be transacted at any
regular meeting. Special meetings of the Managers may be called by any Manager
on not less than 72 hours notice to each Manager, either personally or by mail
(overnight service), telegram, telephone, telefax or similar communication. Only
business within the purpose or purposes described in the notice of special
meeting of Managers may be conducted and voted on at the meeting.
SECTION 4.07 QUORUM OF AND ACTION BY MANAGERS
At all meetings of the Managers, the presence of three Managers shall be
necessary to constitute a quorum for the transaction of business, except as
otherwise provided by statute. The act of a majority of the Managers present at
a meeting at which a quorum is present shall be the act of the Managers. If a
quorum shall not be present at any meeting of the Managers, the Managers present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. At any such
adjourned meeting any business may be transacted that might have been transacted
at the meeting as originally convened.
SECTION 4.08 ACTION WITHOUT A MEETING; TELEPHONE MEETINGS
Any action required or permitted to be taken at any meeting of the Managers
may be taken without a meeting, if all Managers consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the
Managers. Subject to the provisions of applicable law and this Agreement
regarding notice of meetings, the Managers may participate in and hold a meeting
of Managers by using conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section shall constitute presence in
person at such meeting, except when a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting was not lawfully called or convened.
SECTION 4.09 INTERESTED MANAGERS AND OFFICERS
No transaction between the Company and one or more of its Members, Managers
or officers or between the Company and any other business entity in which one or
more of its Members, Managers or officers have an interest shall be void or
voidable solely for this reason, or solely because the Manager or officer is
present at or participates in the meeting of the Managers which authorizes the
contract or transaction, or solely because his or their votes are counted for
such purpose, if (a) the material facts as to the transaction are disclosed or
are known to the Members entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the disinterested
Members; or (b) the transaction is fair as to the Company as of the time it is
authorized, approved or ratified by the Managers or the Members.
SECTION 4.10 MANAGERS' COMPENSATION AND REIMBURSEMENT
The compensation, if any, of the Managers shall be fixed from time to time
by the Managers. The reimbursement, if any, of the Managers for reasonable
expenses incurred in managing the Company may be allowed from time to time by
the Managers.
SECTION 4.11 TIME DEVOTED TO COMPANY
The Managers shall devote such time to Company business as they deem
necessary to manage and supervise Company business and affairs in an efficient
manner; but nothing in this Agreement shall preclude the employment of any
agent, third party or affiliate to manage or provide other services with respect
to the Company's assets or business as the Members shall determine.
SECTION 4.12 LIABILITY OF MANAGERS
No Manager shall be liable for the debts, liabilities, contracts or other
obligations of the Company; provided, however, that each Manager shall be liable
for any debts, liabilities, contracts or other obligations of the Company
incurred or agreed to by such Manager without authorization and in violation of
Section 4.02 of this Agreement.
Article V. OFFICERS
SECTION 5.01 OFFICERS
The Managers may designate one or more individuals (who may or may not be
Managers) to serve as officers of the Company. The Company shall have such
officers as the Managers may from time to time determine, which officers may
(but need not) include a Chairman, a President, one or more Vice Presidents (and
in case of each such Vice President, with such descriptive title, if any, as the
Managers shall deem appropriate), a Secretary, an Assistant Secretary and a
Treasurer. Any two or more offices may be held by the same person.
SECTION 5.02 COMPENSATION
The compensation, if any, of all officers of the Company shall be fixed
from time to time by the Managers.
SECTION 5.03 TERM OF OFFICE; REMOVAL; FILLING OF VACANCIES
Each officer of the Company shall hold office until his successor is chosen
and qualified in his stead or until his earlier death, resignation, retirement,
disqualification or removal from office. Any officer designated by the Managers
may be removed at any time by the Managers whenever in their judgment the best
interests of the Company will be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Designation of an officer shall not of itself create contract rights. If the
office of any officer becomes vacant for any reason, the vacancy may be filled
by the Managers.
SECTION 5.04 CHAIRMAN
The Chairman, if one is designated by the Managers, shall preside at
meetings of the Managers and the Members. He shall assist the Managers in the
formulation of policies of the Company, and shall be available to other officers
for consultation and advice.
SECTION 5.05 PRESIDENT
The President, if one is designated by the Managers, shall be the chief
executive officer of the Company and shall have general supervision of the
affairs of the Company and shall have such powers and perform such duties and
services as shall, from time to time, be presented and/or delegated to him by
the Management Committee.
SECTION 5.06 VICE PRESIDENTS
Each Vice President that is designated by the Managers shall generally
assist the President and shall have such powers and perform such duties and
services as shall from time to time be prescribed or delegated to him by the
President or the Managers.
SECTION 5.07 SECRETARY
The Secretary, if one is designated by the Managers, shall keep and account
for the records of the Company.
SECTION 5.08 ASSISTANT SECRETARY
The Assistant Secretary, if one is designated by the Managers, shall
generally assist the Secretary.
SECTION 5.09 TREASURER
The Treasurer, if one is designated by the Managers, shall be the chief
accounting and financial officer of the Company and shall have active control of
and shall be responsible for all matters pertaining to the accounts and finances
of the Company.
SECTION 5.10 ADDITIONAL POWERS AND DUTIES
In addition to the foregoing especially enumerated duties, services and
powers, the several officers of the Company shall perform such other duties and
services and exercise such further powers as may be provided by statute, the
Certificate of Formation or this Agreement, or as the Managers may from time to
time determine or as may be assigned to them by any competent superior officer.
In addition to the designation of officers and the enumeration of their
respective duties, services and powers, the Managers may xxxxx xxxxxx of
attorneys to individuals to act as agent for or on behalf of the Company, to do
any act which would be binding on the Company, to incur any expenditures on
behalf of or for the Company, or to execute, deliver and perform any agreements,
acts, transactions or other matters on behalf of the Company. Such powers of
attorney may be revoked or modified as deemed necessary by the Managers.
Article VI. ACCOUNTING AND TAX MATTERS; REPORTS; BANKING
SECTION 6.01 BOOKS AND RECORDS; CAPITAL ACCOUNTS
The Chief Financial Officer shall keep, or shall cause to be kept books of
account for the Company in accordance with generally accepted accounting
principles consistently applied in accordance with the terms of this Agreement
and the Act. An individual Capital Account shall be established and maintained
by the Company for each Member in accordance with the applicable provisions of
the Code and the Treasury Regulations, including ? 1.704-1(b)(2)(iv). The
Managers, after notice to the Members, are authorized to modify the manner in
which the capital accounts are maintained if the Managers determine that such
modification (a) is required or prudent to comply with the Treasury Regulations
and (b) is not likely to have a material effect on the amounts distributable to
any Member upon the dissolution of the Company.
SECTION 6.02 TAX RETURNS
The Managers shall prepare or cause to be prepared and timely file all
federal, state and local income and other tax returns and reports as may be
required as a result of the business of the Company.
SECTION 6.03 TAX MATTERS PERSON
The Chief Financial Officer shall be the initial tax matters person ("TMP")
under Section 6231 of the Code. A TMP may be removed, and a successor TMP be
selected, by the majority vote of the Members. The TMP shall not take any
actions (including without limitation extending the statute of limitations,
filing a request for administrative adjustment, filing suit concerning any
Company tax matter, or entering into a settlement agreement relating to any
Company tax matter), or execute or file any statements or forms, on behalf of
the Company unless and until the TMP is authorized to do so by the majority vote
of the Members.
SECTION 6.04 TAX ELECTIONS
The Chief Financial Officer shall make or cause to be made such accounting
and tax elections as directed by a majority in interest of the Members or by a
majority of the Managers.
SECTION 6.05 BANK ACCOUNTS; INVESTMENT OF COMPANY FUNDS
The Managers shall cause one or more accounts to be maintained in the name
of the Company in one or more banks, which accounts shall be used for the
payment of expenditures incurred in connection with the business of the Company
and in which shall be deposited any and all receipts of the Company. Each
account shall require two authorized signatures on any and all checks or other
withdrawals. Account receivable amounts shall be and remains the property of the
Company and shall be received, held and disbursed for the purposes specified in
this Agreement. There shall not be deposited in any of such accounts any funds
other than funds belonging to the Company, and no other funds shall in any way
be commingled with such funds. The Managers may invest the Company funds in any
manner which the Managers deem appropriate, in their discretion. Xxxxxx Xxxx and
Xxx X. Xxxxxxx will be the two signatories on the bank accounts.
Article VII. TRANSFER OF COMPANY INTERESTS, WITHDRAWAL
OF MEMBERS, BUY/SELL PROVISIONS
SECTION 7.01 ASSIGNMENT AND TRANSFER
A. No Participation Percentage or other interest of a Member in the Company
may be transferred or assigned (including any collateral assignment or pledge of
any interest in the Company), in whole or in part, by such Member, and no
transferee or assignee thereof may be admitted as a substituted Member of the
Company, unless and until, in each instance:
1. A duly executed and acknowledged instrument of assignment, setting
forth the intention of the assignor that the assignee become a
substituted Member in its place, is delivered to the remaining Member,
2. The assignor and assignee execute and acknowledge such other
instruments (if any) as the remaining Member reasonably may deem
necessary or desirable to effect such admission, which may include the
written acceptance and adoption by the assignee of the provisions of
this Agreement and the assumption of any unperformed obligation of the
assignor provided that such assignor shall not thereby be released
from any of its unperformed obligations that arose on or prior to the
date of the assignment, specifically including, without limitation,
its obligations hereunder to make Capital Contributions required prior
to the date of the assignment on the terms herein provided);
3. The written consent of the other Member(s) of the Company, which
consent may not be unreasonably withheld, shall have been obtained;
4. Such interest shall first be offered to the remaining Member(s) for a
period of thirty (30) days at a price (the "Offer Purchase Price")
equal to that intended to be offered by the selling Member to third
parties. If the remaining Member(s) elects to exercise the right of
first offer granted hereby, it must make an offer on the entire
interest intended to be offered by the selling Member. If the selling
Member has not received a written offer from the remaining Member(s)
on terms satisfactory to it within such thirty (30) day period, it
shall then be free, subject to the provisions of this Article VII, to
sell the interest offered to the remaining Member(s) on the terms of
the offer. If the selling Member receives any offer from a third
party, at a value less than that initially offered to the remaining
Member(s) and which is acceptable to the selling Member, then the
remaining Member(s) shall have a period of ten (10) days to make a
written offer to exercise its right to purchase the selling Member's
interest, at the then value being offered by the third party. If the
selling Member fails to so dispose of its interest within one hundred
eighty (180) days from its right to do so, the first offer procedure
established by this Section 7.01 shall be reinstated. In the event a
Member elects to exercise the right of first offer granted hereby, the
price shall be payable in the manner and on the terms of the third
party offer;
B. Notwithstanding anything to the contrary contained in this Article VII,
SR Group may from time to time transfer its interest in the Company, or any part
thereof, to an Affiliate or from such Affiliate back to SR Group provided,
however, that no such transferee shall be admitted as a substitute Member in the
Company unless and until SR Group complies with the notice and documentation
requirements of Section 7.01A (1, 2, 3), and the consent required of the other
Member(s) is obtained. Notwithstanding any such transfer, SR Group shall remain
obligated for all of its obligations hereunder arising both before and after
such transfer, and shall, as a condition of the transfer, expressly confirm its
obligations to the remaining Members at the time of the transfer.
C. Notwithstanding anything to the contrary contained in this Article VII,
GRD may from time to time transfer its interest in the Company, or any part
thereof, to any entity which is owned or controlled by it or from such entity
back to GRD provided, however, that no such transferee shall be admitted as
substitute Member in the Company unless and until GRD complies with the notice
and documentation requirements of Section 7.01A(1,2,3), and the consent required
of the other Member(s) is obtained. Notwithstanding any such transfer, GRD shall
remain obligated for all of its obligations hereunder arising both before and
after such transfer, and shall, as a condition of the transfer, expressly
confirm its obligations to the remaining Member at the time of the transfer.
SECTION 7.02 EXPENSES
Expenses of the Company or of any Member occasioned by transfers of
interests held by Members shall be reimbursed to the Company or Member, as the
case may be, by the transferring Member. Expenses of the transferring Member and
taxes incurred by any non-transferring Member are not included within the
foregoing reimbursement.
SECTION 7.03 WITHDRAWAL OF MEMBERS
No Member may voluntarily withdraw or retire from the Company except upon the
assignment of its entire interest in the Company (if and as permitted by this
Article VII) or upon the surrender, abandonment or other voiding of its interest
pursuant to the next succeeding sentence hereof. Any Member may, by at least
thirty (30) days prior written notice delivered to the remaining Member,
renounce its interest in all current and future profits, losses and
distributions of the Company, and abandon to the Company its Capital
Contributions; provided, however, that any such surrender, abandonment or other
voiding shall not in any case affect the withdrawing Members obligations
hereunder, including specifically, but without limitation, each Members'
respective obligations under Article II hereof to continue to make Additional
Capital Contributions or Members' Loans as and to the extent called for or
otherwise required thereunder.
SECTION 7.04 DEATH, LEGAL INCAPACITY, DISSOLUTION OR BANKRUPTCY
OF A MEMBER
Upon the death, legal incapacity, dissolution or bankruptcy of a Member,
subject to the terms, conditions and rights provided for under Section VII
hereof, its successor or assign will have all the rights of the Member for the
purpose of settling or managing its estate, and such power as the deceased,
incapacitated, dissolved or bankrupt Member possessed to constitute a successor
as an assignee of its interest in the Company and to join with such assignee in
making application to substitute such assignee as a substituted member.
SECTION 7.05 STATUS OF INTERESTS TRANSFERRED
In any transfer, assignment or conveyance (or retransfer, reassignment or
reconveyance) of any Participation Percentage herein by a Member to the other
Member or other Person, permitted by the express terms of this Agreement or by
operation of law, the transferee or assignee shall succeed to the same share of
profits and losses of the Company and the same Participation Percentages,
distribution priorities and ownership rights as were incident to the interest so
transferred, assigned or conveyed.
SECTION 7.06 PURCHASE OPTION
A. For purposes of this Section 7.06., the term "Triggering Event' shall
mean, as respects any Member, the occurrence of any one or more of the
following:
1. an Event of Deadlock in which the Members can not decide on any issue
after a minimum three meetings to discuss and vote on same;
2. any Covered Transaction, which is defined as the sale, transfer (by
lease, license, or conveyance of the beneficial interest), conveyance
or other disposition in one transaction or a related series of
transactions, of all or substantially all of the assets of any Member,
other than to an affiliate; or any transaction or series of
transactions in which at least fifty percent (50%) of the equity
interest in any Member (including voting interests) is acquired by any
person or persons who together constitute a "group" for purposes of
Section 13(D) of the Securities Exchange Act of 1934, other than any
person or persons who, as of the date hereof, individually or as a
"group" hold greater than a ten percent (10%) equity interest in that
Member
3. the voluntary filing of a notice or petition with, or the voluntary
commencement of an action or proceeding in, the applicable court or
other governmental authority to liquidate or dissolve that Member, or
the institution against that Member of an action to liquidate or
dissolve which is not dismissed within sixty (60) days; and
4. the bankruptcy of that Member within the meaning thereof set forth in
Section 8.1(b) hereof;
B. Upon the occurrence of an Event of Deadlock as specified in Section 7.06
above, each Member of the Company (the "Offeror') shall thereupon have the right
and option to declare a Deadlock by delivery to the other Member(s) (the
"Offeree(s)") written notice of such Event of Deadlock, together with a fixed
cash purchase price at which the Offeror is willing to sell all of the Offeror's
Participation Percentage in the Company or to purchase the Offeree's
Participation Percentage in the Company ("Deadlock Buy/Sell Notice') at any time
prior to the expiration of sixty (60) days after the date of the occurrence of
such Triggering Event. Upon receipt of such Deadlock Buy/Sell Notice, the
Offeree(s) shall have the right and option to elect either to sell all of the
Offeree's Participation Percentage or to purchase all of the Offeror's
Participation Percentage at the purchase price so specified in the Deadlock
Buy/Sell Notice (the "Deadlock Buy/Sell Right'). Such Deadlock Buy/Sell Right
shall be exercisable by the Offeree by delivery of written notice of election
(the "Deadlock Notice of Election") to the Offeror, provided, however, that if
the Offeree fails to provide the Offeror with such Deadlock Notice of Election
within thirty (30) days of the date of such Deadlock Buy/Sell Notice, the
Offeree shall be deemed to have elected to sell all of the Offeree's
Participation Percentage to the Offeror.
C. (1) Upon the occurrence of a Triggering Event specified in Sections 7.06
above, the other Member(s) of the Company shall thereupon have the right and
option to purchase all or a portion of, as herein provided, the Participation
Percentage then held in the Company by the Member responsible for the Triggering
Event. Such right and option shall be exercisable by delivery of written notice
of election (the "Non-Deadlock Notice of Election") to the Member with respect
to whom the Triggering Event occurred at any time prior to the expiration of
sixty (60) days after the date of the occurrence of the Triggering Event,
provided, however, that in the event that the occurrence of the Triggering Event
is concealed or not otherwise readily apparent, such period shall be extended
for a time co-extensive with the time of concealment or until a date sixty (60)
days after the time upon which the occurrence of the Triggering Event became
readily apparent. (2) The purchase price payable for a Member's Participation
Percentage with respect to a purchase and sale effected pursuant to this Section
7.06 above shall be negotiated at the time of such occurrence, based on the
Company's then value as determined by its market penetration and an independent
third party evaluation. The purchase price, as so adjusted, shall be determined
ten (10) business days prior to closing and shall be subject to such
post-closing adjustments as the circumstances may require.
D. The purchase price payable for a Member's Participation Percentage with
respect to a purchase and sale effected pursuant to this Section 7.06 shall be
paid at the selling Member's option in cash, by certified check to the order of
the selling Member, or by a transfer of immediately available funds to the
selling Member's account at the time of Closing. In the event that there shall
be at the time of the purchase one or more outstanding Member's Loans by the
selling Member to the Company, such Member's Loans, including interest thereon
accrued and unpaid, shall be purchased at par by the purchasing Member for the
principal amount thereof and accrued and unpaid interest thereon as a condition
precedent to such sale. The purchase price for such Member's Loans shall be
paid, at the selling Member's option, in cash, by certified check drawn to the
order of the selling Member, or by wire transfer of immediately available funds
to the selling Member's account. At the Closing, the selling Member shall
deliver to the purchasing Member each note and bond evidencing such Member's
Loans and all documents securing the same and an assignment or satisfaction, at
the purchasing Member's option, in form acceptable to the purchasing Member.
E. The purchase and sale of the Participation Percentages as described by
this Section VII shall be consummated at a closing (the "Closing") which will
occur at the date, time and place designated by the purchasing Member of the
Participation Percentages in the Deadlock Notice of Election or Non-Deadlock
Notice of Election, as the case may be, or otherwise, provided that, such
Closing shall in any event be a day which is a business day (i) not less than
thirty (30) nor more than sixty (60) days after delivery of the Deadlock Notice
of Election or the NonDeadlock Notice of Election, or (ii) not less than sixty
(60) nor more than ninety (90) days after delivery of the Deadlock Buy/Sell
Notice, if no Deadlock Notice of Election is given.
F. On payment of the purchase price for the Participation Percentage, the
purchasing Member shall, at its option, either (i) obtain a release of the
selling Member from all liability, direct or contingent, by all holders of
Company debt, obligations or claims against the Company for which such Member is
or may be personally liable, except for any debts, obligations or claims which
are fully insured by the public liability insurers, or (ii) cause all such
debts, obligations or claims to be paid in full at Closing, or (iii) deliver to
the selling Member an agreement in form and substance satisfactory to the
selling Member to defend, indemnify and save the selling Member harmless from
actions, claims or loss arising from any debt, obligation or claim of the
Company arising prior to the date of sale.
G. In connection with and pending any transfer contemplated by this Section
VII, each Member shall be entitled to any distributions of Net Cash Flow from
the Company until full and final consummation of the transfer.
H. At the closing on the sale of the Participation Percentage of a Member
as described by Section VII hereof, unless otherwise agreed, each selling Member
shall execute an assignment of its interest in the Company, free and clear of
all liens, encumbrances and adverse claims, which assignment shall be in form
and substance reasonably satisfactory to the purchasing Member, and such other
instruments as the purchasing Member shall reasonably require to assign the
Participation Percentage of the selling Member to such person or entity. For any
sale or transfer under Section VII hereof the purchasing Member may designate
the assignee of the Participation Percentage, which may be, but not need to be,
an affiliate of the purchasing Member.
I. It is the intent of the parties to this Agreement that the requirements
or obligations arising hereunder of one Member to sell its Participation
Percentage to or as directed by the other Member shall be enforceable by an
action for a specific performance and shall be enforceable by an action for
specific performance of a contract, and each of the Members does hereby
acknowledge their respective Participation Percentages to be unique and an
appropriate subject of an action for specific performance. In the event that any
Member shall create or has suffered any unauthorized lien, encumbrance or other
adverse interest against the selling Member's interest in the Company, the
purchasing Member shall be entitled either to an action for specific performance
to compel the Member to have such defects removed, in which case the closing may
be adjourned for such purpose, or, at the enforcing Member's option, to an
appropriate offset against the purchase price, which offset shall include all
reasonable costs associated with enforcement under this Section VII.
J. At the election of the Member purchasing the participation Percentage,
the purchase and sale of the Participation Percentage will be structured to
avoid, if possible, a termination of the Company for federal tax purposes and/or
under the Act.
Article VIII. DISSOLUTION AND TERMINATION
SECTION 8.01 DISSOLUTION
A. The Company will be dissolved:
1. upon the withdrawal, removal, bankruptcy or dissolution of a Member,
as provided herein or otherwise by the Act, unless the remaining
Member(s) unanimously agree to continue the business of the Company
(if more than one Member remains) within ninety (90) days after the
occurrence of such event;
2. if, at any time subsequent to, 2008, the Company has failed to achieve
a level of successful and profitable results previously agreed to by
the Members; and,
3. provided however, that the Company shall not terminate until its
affairs have been wound up and its assets distributed as provided
herein or as otherwise provided herein.
B. The Company will be dissolved at the option of the SR Group:
1. if GRD is de-listed from the Bulletin Board;
2. if GRD has a change of control of more than 50%; and
3. Xxxxxx Xxxx is terminated
If any of the above three events shall occur, then SR Group at its option can
dissolve the Company and all assets, rights and licenses shall be turned over to
the SR Group.
C. As used in Section VIII hereof, the term bankruptcy shall mean (i) the
commencement of a Member of a voluntary case under any Chapter of the Bankruptcy
Code (Title 11 of the United States Code), as now or hereafter in effect, or the
taking by a Member of any equivalent or similar action by the filing of a
petition or otherwise under any other federal or state law in effect at the time
relating to bankruptcy or insolvency, (ii) the filing of a petition against a
Member under any Chapter of the Bankruptcy Code (Title 11 of the United States
Code), as now or hereafter in effect, or the filing of a petition seeking any
equivalent or similar relief against a Member under any other federal or state
law in effect as of the time relating to bankruptcy or insolvency, and in either
case the failure by such Member to secure the discharge of any other such
petition within sixty (60) consecutive days from the date of filing, (iii) the
making by a Member of a general assignment for the benefit of his, its or any of
their creditors, (iv) the appointment of a receiver, trustee, custodian or
similar officer for a Member or for the property of a Member and the failure by
such Member to secure the discharge of such receiver, trustee, custodian or
similar officer within sixty (60) consecutive days from the date of appointment,
or (v) the admission in writing by a Member of any inability to pay debts
generally as they become due.
SECTION 8.02 APPOINTMENT OF LIQUIDATING MEMBER
Upon the dissolution of the Company, if the Company's business is not
continued pursuant to this Section VIII, subject in any event to the rights of
any Member under Section VII hereof, the Management Committee or its designee
shall liquidate the assets and wind up the affairs of the Company on the terms
hereinafter set forth.
SECTION 8.03 DISTRIBUTIONS AND OTHER MATTERS
Promptly upon the dissolution of the Company, if the Company's business is
not continued pursuant to Section VIl hereof, and in any event subject to the
rights of any Member under Section VII hereof, the Management Committee will
cause the assets of the Company to be liquidated. After proper adjustment to the
Capital Accounts pursuant to Section II (giving effect to all contributions,
distributions, and allocations for all taxable years, including the taxable year
during which such liquidation occurs), the proceeds of the liquidation of the
Company shall be applied and distributed in the following order: (i) to the
discharge of all of the Company's debts and liabilities (whether by payment or
the making of reasonable provision for payment thereto, other than those to any
of the Members, including expenses of liquidation, (ii) to the setting up of any
reserves which the liquidator may deem reasonably necessary for any contingent
liabilities or obligations of the Company, (iii) to the payment and discharge of
any debts and liabilities of the Company to any of the Members, and (iv) to the
Members to the extent of their positive Capital Accounts.
SECTION 8.04 DISTRIBUTIONS OF PROPERTY
A. Upon liquidation, the Members may demand or receive property other than
cash in return for their respective contributions, loans or advances or upon
dissolution as provided herein, but only upon the written approval of the
Management Committee.
B. In the event that property is distributed (or deemed distributed
pursuant to the provisions of Code Section 708) by the Company to a Member, the
following special rules shall apply:
1. the Capital Accounts of the Members shall be adjusted as provided in
Treasury Regulations Section 1.704-1(b)(2)(iv)(e) to reflect the
manner in which the unrealized income, gain, loss and deduction
inherent in such property (that has not already been reflected in the
Members' Capital Accounts) would be allocated to such Member if there
were a taxable disposition of such property for its fair market value
on the date of distribution; and
2. the Capital Account of the Member who is receiving the distribution of
property from the Company shall be charged with the fair market value
of the property at the time of distribution (net of liabilities
secured by such distributed property that such Member is considered to
assume or take subject to under Code Section 752).
SECTION 8.05 ACTION DURING LIQUIDATION: STATEMENTS OF ACCOUNT
A. A reasonable time shall be allowed for the winding up of the affairs of
the Company in order to minimize any losses otherwise attendant upon such a
winding up. The Management Committee shall make final distributions in
liquidation of the Company in the manner set forth above before the later of (1)
the end of the taxable year in which the date of the liquidation of the Company
occurs, or (ii) 90 days after the date of the liquidation of the Company. For
this purpose, the date of the liquidation of the company shall be the date on
which the Company has ceased to be a going concern (within the meaning of
Treasury Regulation Section 1.704-1 (b)(2)(ii)(g).
B. During the period of liquidation, the Management Committee, as trustee
for the benefit of all Members as tenants in common, will take any and all
action necessary or appropriate to complete such liquidation and distribution as
provided in this Article, having for such purpose all of the powers enumerated
in Article IV of this Agreement necessary or appropriate to accomplish the same.
C. The Management Committee will prepare or cause to be prepared a final
statement of the accounts of the Company as of the date of termination, and, as
promptly as possible thereafter, a copy thereof will be furnished to each
Member. Such statement will set forth the actual or contemplated application and
distribution of the assets of the Company. Upon completion of distribution as
required hereby, a further statement for the period of liquidation will be so
prepared by the Management Committee and furnished to each Member.
Article IX. REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 9.01 REPRESENTATIONS AND WARRANTIES.
A. GRD represents and warrants to RS Group and its successors and
assigns as follows:
1. GRD is a publicly traded (OTC: BB) company, duly organized, validity
existing and in good standing under the laws of the State of Delaware.
2. This Agreement has been duly and validly executed and delivered by GRD
and constitutes its legal, valid and binding obligation, enforceable
in accordance with the terms hereof, and no authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any
governmental body or agency is or will be necessary or advisable in
connection with the execution and delivery by GRD of this Agreement.
3. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein described, nor the performance
of or compliance with the terms and conditions hereof, will conflict
with or result in a material breach of or default under any agreement
or instrument to which GRD, is a party or by which it or its
properties may be subject or bound.
4. There is no pending or, to its knowledge , threatened proceeding by or
before any court or governmental agency against or affecting GRD
which, if adversely decided, would have a material adverse affect on
the business, operations or conditions, financial or otherwise, of the
Company, or on the ability of GRD to perform its obligations hereunder
or otherwise contemplated hereby, and no proceeding is pending or, to
its knowledge, threatened against GRD under any Federal or State
bankruptcy or insolvency law.
5. GRD has filed all federal, state, local and foreign income, franchise,
real and personal property, and other tax returns, estimates and
statements which were required to be filed, has paid all taxes
(whether income, sales, use, property, unemployment, social security,
import duties, export duties and/or other) as shown on said returns,
estimates and statements, and has made appropriate provision for the
payment of all such taxes where returns, estimates and statements are
not yet required to be filed. All said tax returns and statements
correctly set forth and report the entire liability of GRD for such
taxes.
6. GRD has no knowledge of any intention of any of its key employees to
sever employment arrangements with GRD, and has no knowledge of any
plan or intention of any of its principal customers to cancel
presently existing contracts or other material business arrangements
or relationship with GRD, or to take any other action which would
adversely affect the business, operation or anticipated earnings of
GRD.
7. There are no controversies pending or to its knowledge, threatened
between GRD and any of its employees and GRD has not taken or failed
to take any action, which would provide a reasonable basis for any
such controversy. GRD has complied with all laws relating to the
employment of labor, including any provisions thereof relating to
wages, hours, collective bargaining and the payment of social security
and similar taxes.
8. GRD has and expects to continue to have the authority and resources to
fully consummate in a timely fashion the transactions described by
this Agreement and the other documents, instruments and agreements to
be executed by and between GRD and the Company concurrent with the
execution and delivery of this Agreement.
None of the information and documents furnished by GRD or its
representatives to the Company or any other Member of the Company in connection
with the execution and delivery of this Agreement contains any material
misstatement of fact or omits to state a material fact required to be stated to
make the statements therein not misleading.
B. SR Group represents and warrants to GRD, and its successors and assigns
as follows:
1. SR Group members are US citizens and residents in good standing of the
State of Florida and State of California.
2. This Agreement has been duly and validly executed and delivered by SR
GROUP and constitutes its legal, valid and binding obligation,
enforceable in accordance with the terms hereof, and no authorization,
consent, approval, license, exemption or other action by, and no
registration, qualification, designation, declaration or filing with,
any governmental body or agency is or will be necessary or advisable
in connection with the execution and delivery by SR GROUP of this
Agreement.
3. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein described, nor the performance
of or compliance with the terms and conditions hereof, will conflict
with or result in a material breach of or default under any agreement
or instrument to which SR GROUP, is a party or by which it or its may
be subject or bound.
4. There is no pending or to his knowledge, threatened proceeding by or
before any court or governmental agency against or affecting SR GROUP
which, if adversely decided, would have an material adverse affect on
the business, operations or conditions, financial or otherwise, of the
Company, or on the ability of SR GROUP to perform its obligations
hereunder, and no proceeding is pending or, to its knowledge
threatened against SR GROUP under any Federal or State bankruptcy or
insolvency law.
5. SR GROUP has filed all federal, state, local and foreign income,
franchise, real and personal property, and other tax returns,
estimates and statements which were required to be filed, has paid all
taxes (whether income, sales, use, property, unemployment, social
security, import duties, export duties and/or other) as shown on said
returns, estimates and statements, and has made appropriate provision
for the payment of all such taxes where returns, estimates and
statements are not yet required to be filed. All said tax returns and
statements correctly set forth and report the entire liability of SR
GROUP for such taxes.
6. SR GROUP has no knowledge of any intention of any of his key
associates to sever arrangements with SR GROUP, and has no knowledge
of any plan or intention of any of his principal customers to cancel
presently existing contracts or other material business arrangements
or relationship with SR GROUP, or to take any other action which would
adversely affect the business, operation or anticipated earnings of SR
GROUP.
7. The assets to be contributed by SR GROUP pursuant to this Agreement
include and constitute the identified operational know-how, assets,
properties, licenses and other agreements which are presently being
used or are related to the operation by SR GROUP of its existing
business relating to development and marketing of financial, insurance
and other generalized business products and services and are as
identified in the attached Schedule ____.
8. SR GROUP has and expects to continue to have the authority and
resources to fully consummate in a timely fashion the transactions as
described by this Agreement and the other documents, instruments and
agreements to be executed by and between SR GROUP and the Company
concurrent with the execution and delivery of this Agreement.
None of the information and documents furnished by SR GROUP or its
representatives to the Company or any other Member of the Company in connection
with the execution and delivery of this Agreement omits to state a material fact
required to be stated to make the statements therein not misleading.
Article X. AMENDMENTS
SECTION 10.01 AMENDMENTS
The power to adopt, alter, amend or repeal this Agreement is vested solely
in the Members. This Agreement may be altered, amended or repealed, or a new
limited liability company agreement may be adopted, only by the unanimous vote
or consent of the Members. The Managers may not adopt, alter, amend or repeal
any provision of this Agreement.
Article XI. MISCELLANEOUS
SECTION 11.01 MANNER OF GIVING NOTICE
Except as otherwise expressly provided in this Agreement, all notices,
demands, requests, or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be given either (a) in
person upon an executive officer, (b) by mail, certified or registered, return
receipt requested, postage prepaid, (c) by prepaid telegram, telex, cable,
telecopy, or similar means (with signed confirmed copy to follow by mail in the
same manner as prescribed by clause (b) above) or (d) by expedited delivery
service (charges prepaid) with proof of delivery. For purposes of the foregoing,
any notice required or permitted to be given shall be deemed to be delivered and
given on the date actually delivered to the address specified in Section II
above.
SECTION 11.02 WAIVER OF NOTICE
Whenever any notice is required to be given to any Member or Manager of the
Company under the provisions of the Act, the Certificate of Formation or this
Agreement, a waiver thereof in writing signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance of a Manager at a meeting of
the Managers shall constitute a waiver of notice of such meeting, except where a
Manager attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
SECTION 11.03 NO COMPANY SEAL
The Company shall not have a Company seal, and no agreement, instrument or
other document executed on behalf of the Company that would otherwise be valid
and binding on the Company shall be invalid or not binding on the Company solely
because no Company seal is affixed thereto.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
day and year first above written.
GLOBAL REALTY DEVELOPMENT CORP
By: /s/ XXXXXX XXXX
----------------
XXXXXX XXXX, CEO
By: /s/ XXX XXXXXXX
-------------------------
XXX XXXXXXX, INDIVIDUALLY
By: /s/ XXXXXXX XXXXXX
----------------------------
XXXXXXX XXXXXX, INDIVIDUALLY
ADDENDUM
1. 6,000,000 shares of Global Realty Development Corp Common Stock ("GRD").
2. A 51% member interest in the TFM Group L.L.C.
3. 3,000,000 Warrants @ $1.00 per share for three years from the date of
execution of the agreement
4. Bonus shares: Schedule Attached
5. Deal Structure: Schedule Attached
--------------------------------------------------------------------------------
GLOBAL REALTY DEVELOPMENT CORP
By: /s/ XXXXXX XXXX
---------------
XXXXXX XXXX, CEO
By: /s/ XXX XXXXXXX
-------------------------
XXX XXXXXXX, INDIVIDUALLY
By: /s/ XXXXXXX XXXXXX
----------------------------
XXXXXXX XXXXXX, INDIVIDUALLY
