EXHIBIT 99.6
USCRE PROPERTIES, LLC
LIMITED LIABILITY COMPANY AGREEMENT
This limited liability company agreement ("Agreement") of USCRE
Properties, LLC, a Delaware limited liability company (the "Company"), is
entered into the 13th day of June, 2001, by the "Members" (as defined below).
Background
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WHEREAS, the Company has been formed as a limited liability company
pursuant to the filing of a certificate of formation (the "Certificate")
pursuant to the Delaware Limited Liability Company Act; and
WHEREAS, the Members desire to set forth in this Agreement the rights
and obligations of the Members with respect to the Company.
Agreement
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NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION 1
DEFINED TERMS; OPERATION OF COMPANY
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1.1 Defined Terms. When used in this Agreement, the following
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capitalized terms shall have the meanings set forth below:
"Act" means the Delaware Limited Liability Company Act.
"Adjusted Capital Account" means a Member's Capital Account,
adjusted as follows: (a) any deficit balance in a Members Capital Account shall
be reduced by any amount that the Member is obligated to restore to the Company,
or any amount the Member is treated as obligated to restore to the Company under
Regulation (S) 1.704-1(b)(2)(ii)(c), Regulation (S) 1.704-2(g) and Regulation
(S) 1.704-2(i)(5); and (b) a Member's Capital Account shall be adjusted for
items specified in subsections (4), (5), and (6) of Regulation (S) 1.704-
1(b)(2)(ii)(d) that, as of the end of the year, are reasonably expected to occur
with respect to the Member.
"Affiliate" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by, or under common control with
such Person, (ii) any Person owning or controlling ten percent (10%) or more of
the outstanding voting interests of such Person, (iii) any officer, director,
general partner, or manager of such Person, or (iv) any Person who is an
officer, director, general partner, manager, trustee, or holder of ten
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percent (10%) or more of the voting interests of any Person described in clauses
(i) through (iii) of this sentence. For purposes of this definition, "controls,"
"is controlled by," or "is under common control with" shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agreement" means this limited liability company agreement, as
the same may be amended from time to time.
"Bankruptcy" means, with respect to any Person, (i) the filing of
any petition or answer by such Person seeking to adjudicate it a bankrupt or
insolvent, or seeking for itself any liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of such Person or
such Person's debts under any law relating to bankruptcy, insolvency, or
reorganization or relief of debtors, or seeking, consenting to, or acquiescing
in the entry of an order for relief or the appointment of a receiver, trustee,
custodian, or other similar official for such Person for any substantial part of
its property, or (ii) without the consent or acquiescence of such Person, the
entering of an order for relief or approving a petition for relief or
reorganization or any other petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or other similar relief
under any bankruptcy, liquidation, dissolution, or other similar statute, law,
or regulation, or the filing of any such petition against such Person which
petition shall not be dismissed within ninety (90) days, or, without the consent
or acquiescence of such Person, the entering of an order appointing a trustee,
custodian, receiver, or liquidator of such Person or of all or any substantial
part of the property of such Person which order shall not be dismissed within
sixty (60) days.
"Book Value" means the adjusted basis of the Company's property
for federal income tax purposes, with the adjustments provided in Section 2.4.4
of this Agreement.
"Capital Account" means the account established and maintained
for each Member in accordance with Section 2.4 of this Agreement.
"Capital Contribution" means the amount of money and the Book
Value of any property contributed to the Company by a Member (net of any
liabilities to which such property is subject or that are assumed by the Company
in connection with such contribution). If any Unit is transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Capital
Contribution of the transferor to the extent it relates to the transferred Unit.
"Capital Event" means any disposition of all or any part of
Company property not in the ordinary course of business, including, without
limitation, a sale,
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exchange, condemnation, casualty, or grant of a long-termleasehold, or any
borrowing by the Company secured by Company property.
"Certificate" means the certificate of formation for the Company,
and any amendments thereto.
"Class" means Class A or Class B, or any other Class of Member
that may be established by the Managers (subject to the terms hereof), as the
context requires.
"Class A Member" means the Person designated as a Class A Member
on Exhibit "A" attached hereto, and any Person who is admitted as a Class A
Member in accordance with this Agreement.
"Class B Member" means the Person designated as a Class B Member
on Exhibit "A" attached hereto, and any Person who is admitted as a Class B
Member in accordance with this Agreement.
"Class A Unit" means any Unit designated as a Class A Unit
pursuant to Section 2.1 of this Agreement.
"Class B Unit" means any Unit designated as a Class B Unit
pursuant to Section 2.1 of this Agreement.
"Closing Date" means June 14, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the limited liability company formed and operated
pursuant to the terms of this Agreement.
"Company Minimum Gain" has the same meaning as "partnership
minimum gain" as set forth in Regulation (S) 1.704-2(b)(2) and 1.704-2(d).
"Depreciation" means the amount determined for each year or other
period as an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to any Company property for such year
or other period, except that, if the Book Value of any property differs from its
adjusted tax basis for federal income tax purposes at the beginning of such year
or other period, Depreciation shall be an amount that bears the same ratio to
such beginning Book Value as the federal income tax depreciation, amortization,
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the adjusted tax basis
of a property at the beginning of a year is zero, Depreciation shall be
determined for such property with reference to Book Value using any reasonable
method selected by the Managers.
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"Incapacity" means (a) with respect to a natural Person, the
Bankruptcy, death or determination of incompetency or insanity of such Person
and (b) with respect to any other Person, the Bankruptcy, liquidation or
dissolution of such Person.
"Indemnified Person" means any Member, any Manager or officer of
the Company, or any officer, director, shareholder, partner, member, manager,
employee, or agent of a Manager, Member or officer of the Company.
"Issuer Cap" means 25% of the amount by which the Company's Net
Ordinary Proceeds for the year exceeds distributions made pursuant to Section
3.1(a) for the year.
"Managers" means the Persons designated as managers of the
Company in accordance with Section 5 of this Agreement.
"Members" means the Class A Members and Class B Members, and any
Person subsequently admitted as a Member in accordance with the terms of this
Agreement.
"Member Nonrecourse Debt" has the same meaning as "partner
nonrecourse debt" as set forth in Regulation (S) 1.704-2(b)(4).
"Member Nonrecourse Debt Minimum Gain" has the same meaning as
"partner nonrecourse debt minimum gain" as set forth in Regulation (S) 1.704-
2(i)(3).
"Member Nonrecourse Deductions" has the same meaning as "partner
nonrecourse deductions" as set forth in Regulation (S) 1.704-2(i)(2).
"Net Capital Proceeds" means gross cash or property received by
the Company from all Capital Events, including reductions in Reserves that
reduced Net Capital Proceeds for prior periods, reduced by the portion used (i)
to pay Company expenses incurred in connection with such Capital Event, (ii) to
pay any Company indebtedness due in connection with such Capital Event, and
(iii) to fund Reserves.
"Net Ordinary Proceeds" means gross cash or property received by
the Company from all sources other than working capital changes, Capital
Contributions or Capital Events, including reductions in Reserves that reduced
Net Ordinary Proceeds for prior periods, reduced by the portion used (i) to pay
Company expenses, including debt service, and (ii) to fund Reserves.
"Nonrecourse Deductions" has the meaning set forth in Regulation
(S) 1.704-2(b)(1).
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"Percentage Interest" means the percentage determined under
Section 2.3 of this Agreement.
"Person" means any individual or any partnership, corporation,
trust, limited liability company or other legal entity.
"Preferred Return" means with respect to each outstanding Class A
Unit an amount equal to the par value of such Class A Unit multiplied by five 5%
per annum, which to the extent not paid shall accrue and compound annually.
"Profits" and "Losses" mean, for each year or other period, an
amount equal to the Company's taxable income or loss for such year or period,
determined in accordance with (S) 703(a) of the Code (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to (S) 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments:
(a) Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits and Losses
shall be added to such taxable income or loss.
(b) Any expenditures of the Company described in (S)
705(a)(2)(B) of the Code or treated as (S) 705(a)(2)(B) expenditures pursuant to
Regulation (S) 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in
computing Profits and Losses shall be subtracted from such taxable income or
loss.
(c) If the Book Value of any Company property is adjusted
pursuant to Section 2.4.4(b) of this Agreement, the amount of such adjustment
shall be taken into account as Profit or Loss from the disposition of such
property for purposes of computing and allocating Profits or Losses.
(d) Gain or loss resulting from any disposition of
Company property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Book Value of the
asset disposed of, notwithstanding that the adjusted tax basis of such asset
differs from its Book Value.
(e) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such year or other
period as determined in accordance with this Agreement.
(f) To the extent adjustment to the adjusted tax basis of
any Company asset pursuant to (S) 734(b) or (S) 743(b) of the Code is required,
pursuant to
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Regulations (S) 1.704-1(b)(2)(iv)(m), to be taken into account indetermining
Capital Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis) and such gain or loss shall be
allocated to the Members in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such section of the
Regulations.
(g) Items of income, gain, loss or deduction specially
allocated pursuant to Section 4.2 of this Agreement shall be excluded from
Profits and Losses.
"Regulations" means the income tax regulations promulgated under
the Code, as such regulations may be amended from time to time.
"Reserves" means amounts set aside to pay future costs or
expenses that are anticipated to exceed cash available to pay such costs or
expenses when due, as determined in the sole discretion of the Managers.
"Tax Matters Member" means the person designated to serve as the
"tax matters partner" under (S) 6231(a)(7) of the Code, as provided in Section
6.4 of this Agreement.
"Unit" means an ownership interest in the Company, including all
of the rights and obligations in connection therewith under this Agreement and
the Act.
"Unpaid Preferred Return" means the Preferred Return to the date
for which the Unpaid Preferred Return is being determined, reduced (but accrued
not below zero) by all prior distributions pursuant to Sections 3.1(a) and
3.2(a) and amounts treated as payments with respect to the Unpaid Preferred
Return pursuant to Section 2.5.
1.2 Continuation; Name. The Company shall be continued by the
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Members as a limited liability company pursuant to the Act and the terms of this
Agreement. Whenever the terms of this Agreement conflict with the Act, the
terms of this Agreement shall control, except with respect to any matters
contained in the Act that cannot be modified or waived by a limited liability
company agreement. The Company shall be operated under the name USCRE
Properties, LLC." The Managers shall file such certificates and documents as
are necessary to continue the Company as a limited liability company and to
qualify the Company to conduct business in any jurisdiction in which the Company
conducts business.
1.3 Registered Agent and Office; Principal Office. The registered
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agent and office of the Company required under the Act shall be as designated in
the Certificate, and may be changed by the Managers in accordance with the Act.
The principal business office
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of the Company shall be located at 00000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000, or
such other address as shall be designated by the Managers with written notice to
the Members.
1.4 Purpose. The purpose and business of the Company is to engage in
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any business activity that may be lawfully carried on by a limited liability
company. The Company is authorized to do any and all acts and things necessary,
appropriate, advisable, incidental to, or convenient for the furtherance and
accomplishment of its purposes, and for the protection and benefit of the
Company.
1.5 Term. The term of the Company commenced on the date of filing of
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the Certificate, and the Company shall continue until the Company is terminated
in accordance with Section 8.1 of this Agreement.
1.6 Title to Property. All real and personal property owned by the
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Company shall be owned by the Company as an entity and no Member shall have any
ownership interest in such property in the Member's individual name or right,
and each Member's Units shall be personal property for all purposes. The
Company shall hold all of its real and personal property in the name of the
Company and not in the name of any Member.
1.7 Waiver of Partition. No Member shall either directly or
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indirectly take any action to require partition or appraisement of the Company
or of any of its assets or properties or cause the sale of any Company property,
and notwithstanding any provisions of applicable law to the contrary, each
Member hereby irrevocably waives any and all right to maintain any action for
partition or to compel any sale with respect to such Member's Units, or with
respect to any assets or properties of the Company, except as expressly provided
in this Agreement.
1.8 No State-Law Partnership. The Members intend that the Company
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not be a partnership, and that no Member be a partner of any other Member, for
any purposes other than federal and state tax purposes, and this Agreement shall
not be construed to suggest otherwise.
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SECTION 2
CAPITAL CONTRIBUTIONS; UNITS; CAPITAL ACCOUNTS
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2.1 Capital Contributions and Units. The Class B Member has made its
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Capital Contribution in cash in the amount set forth on Exhibit "A" attached
hereto. The Class A Member has made its Capital Contribution in property with an
agreed fair market value set forth on Exhibit "A" attached hereto. The Class B
Member has been issued Ten Thousand (10,000) Class B Units with no par value in
exchange for its Capital Contribution, and the Class A Member shall be issued
Ten Thousand (1,000) Class A Units, par value One Hundred Dollars ($100) per
Class A Unit in exchange for its Capital Contribution. The Managers may cause
the Company to issue additional Class B Units or any new Class of Units, with
such terms and conditions as shall be determined by the Managers, provided that
no such Units shall have any rights to distributions or "put" rights that are
equal or preferential to the rights of the Class A Units or the Class B Units
(including, but not necessarily limited to the "Put" rights set forth in Section
2.5 hereinafter) without the consent of the holders of a majority of the
Percentage Interests of the Class A Units or Class B Units, as the case may be.
2.2 Additional Capital Contributions. No Member shall be obligated
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to make any additional Capital Contributions to the Company.
2.3 Percentage Interests. Each Member's Percentage Interest shall be
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determined separately with respect to each Class of Units, and shall be the
percentage determined by dividing the number of Units within the Class owned by
the Member by the total number of Units within the Class issued and outstanding.
2.4 Capital Accounts. A Capital Account shall be maintained and
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adjusted for each Member in accordance with the following provisions:
2.4.1 Additions to Capital Accounts. To each Member's Capital
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Account there shall be added the Member's Capital Contributions and the Member's
distributive share of Profits and any items of income or gain which are
allocated separately from Profits under Section 4.2.
2.4.2 Subtractions from Capital Accounts. From each Member's
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Capital Account there shall be subtracted the amount of money and the Book Value
of any Company property distributed to the Member (net of any liabilities to
which the property is subject or that are assumed by the Member in connection
with the distribution), and the Member's distributive share of Losses and any
items of expenses or losses which are allocated separately from Losses under
Section 4.2.
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2.4.3 Transfers. If any Unit is transferred in accordance with
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the terms of this Agreement, the transferee shall succeed to the Capital Account
of the transferor to the extent it relates to the transferred Unit.
2.4.4 Book Values. For purposes of determining a Member's
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Capital Contributions and Capital Account, property held by the Company shall be
taken into account in accordance with the following provisions:
(a) The Book Value of any property contributed by a
Member to the Company initially shall be the gross fair market value of the
property.
(b) The Book Value of all Company property shall be
adjusted to equal the respective gross fair market values of the property as of
the following times: (i) the acquisition of additional Units by any new or
existing Member in exchange for services or more than a de minimis Capital
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Contribution; (ii) the distribution by the Company to a Member of more than a de
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minimis amount of Company property as consideration for any Units; or (iii) the
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liquidation of the Company within the meaning of Regulation (S) 1.704-
1(b)(2)(ii)(g). The Book Value of any Company property that is distributed to a
Member shall be adjusted to equal the gross fair market value of such property
immediately before such distribution.
(c) The Book Values of Company property shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such property pursuant to (S) 734(b) or (S) 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulation (S) 1.704-1(b)(2)(iv)(m).
(d) The Book Value of Company property shall be adjusted
by the Depreciation taken into account with respect to such property.
2.4.5 Compliance with Regulations. The foregoing provisions of
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this Agreement relating to the maintenance of Capital Accounts are intended to
comply with (S) 704(b) of the Code and the Regulations issued thereunder, and
shall be interpreted and applied in a manner consistent with such Regulations.
If the Managers determine that it is appropriate to modify the manner in which
the Capital Accounts are computed in order to comply with such Regulations, the
Managers may make such modification, provided that such modification shall not
have a material effect on the amounts distributable to any Member upon the
dissolution of the Company.
2.5 Class A Unit Put Rights. At each anniversary of the Closing Date,
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subject to any restrictions and terms or conditions imposed upon the Company
pursuant to any senior or subordinated loan agreements, any holder of Class A
Units may elect to require the Company to purchase from such holder up to the
lesser of (i) 200 Class A Units, or (ii) the
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number of whole Class A Units that may be purchased for the purchase price set
forth herein without exceeding the Issuer Cap. The put right conferred by this
Section 2.5 shall not be cumulative, so the failure to exercise the put right in
any year shall not increase the number of Class A Units that may be put to the
Company in any subsequent year. The amount paid by the Company to redeem a
Class A Unit pursuant to the exercise of the put right shall be the par value of
the Class A Unit, plus payment of the Unpaid Preferred Return allocable to the
Class A Unit. Any election pursuant to this Section 2.5 shall be made by
providing written notice delivered to the Company within twenty (20) days after
the anniversary of the Closing Date. The Class A Units purchased pursuant to
the election shall be surrendered free and clear of all liens and encumbrances
and canceled effective as of the last day of the calendar year, and the Company
shall pay the purchase price for the surrendered Class A Units on the effective
date of such purchase.
2.6 No Deficit Make-Up. No Member shall be obligated to the Company
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or to any other Member solely because of a deficit balance in such Member's
Capital Account.
SECTION 3
DISTRIBUTIONS
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3.1 Distributions of Net Ordinary Proceeds. Net Ordinary Proceeds
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shall be distributed as follows:
(a) First, among the holders of the Class A Units until the
Unpaid Preferred Return has been reduced to zero;
(b) Then to Members in accordance with Section 3.6;
(c) Then, among the holders of the Class B Units.
3.2 Distributions of Net Capital Proceeds. Net Capital Proceeds will
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be distributed as follows:
(a) First, among the holders of the Class A Units until the
Unpaid Preferred Return has been reduced to zero;
(b) Then to the Members as required by Section 3.6;
(c) Then, among the holders of the Class A Units until they have
received distributions pursuant to this Section 3.2(b) equal to the par value of
their outstanding Class A Units (and each holder of Class A Units shall
surrender to the Company the number of Class A Units determined by dividing the
amount of the distribution received by such holder pursuant to this Section
3.2(b) by the par value of the Class A Units);
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(c) Then, among the holders of the Class B Units.
3.3 Amounts Withheld. The Company is authorized to withhold from
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distributions or with respect to allocations and pay over to any federal, state,
local, or foreign government any amounts required to be withheld pursuant to any
provisions of federal, state, local, or foreign law. All amounts so paid shall
be treated as amounts distributed to the Members pursuant to this Agreement. To
the extent any amount withheld with respect to a Member pursuant to this Section
3.3 for any year exceeds the amount distributable to such Member for such year,
such Member shall repay such excess to the Company within ten (10) days after
such Member receives written notice from the Company of the amount of such
excess.
3.4 Sharing of Distributions Among Class Members. All amounts
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distributed to the Class B Members shall be allocated among the Class B Members
in accordance with their Percentage Interests, and all amounts distributed to
the Class A Members shall be allocated among the Class A Members in accordance
with their Percentage Interests.
3.5 Distributions in Kind. The Managers may authorize the
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distribution to the Members of property other than cash upon consent of the
receiving Members. All such distributions shall be made based upon the fair
market value of such property at the time of distribution.
3.6 Tax Distributions to Members. The Managers shall use all
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reasonable efforts, subject to applicable covenants and restrictions contained
in the Company loan agreements and other agreements or obligations to which the
Company or its properties are subject, to cause the Company to distribute to the
Members in respect of each Fiscal Year of the Company, an amount of cash which
in the good faith judgment of the Managers equals (i) the amount of net Profits
allocable to the Members in respect of such Fiscal Year, multiplied by (ii) the
combined maximum federal, state and local income tax rate attributable to such
Profits (including in the computation of such income tax rate, taxes based on
income whether or not denominated as an "income tax" and taking into account the
deductibility of state income taxes for federal income tax purposes). Such
distributions shall be allocated among the Members in proportion to their
respective Percentage Interest and between Class B and Class A on a pro rata
basis in accordance with the number of Membership Units represented by each
class. Such distribution shall be made on a quarterly or other basis as shall be
determined by the Managers in their sole discretion.
SECTION 4
PROFITS AND LOSSES
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4.1 General Allocation of Profits and Losses. After taking into
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account any special allocations pursuant to Section 4.2 and subject to any
limitations contained therein, Profits or Losses for each year shall be
allocated among the Members in accordance with this Section 4.1.
4.1.1 Profits. Profits shall be allocated among the Members as
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follows:
(a) First, Profits shall be allocated in the reverse
order that Losses have been allocated pursuant to Section 4.1.2 until the
Members have been allocated cumulative Profits for all years pursuant to this
Section 4.1.1(a) equal to the cumulative Losses allocated pursuant to Section
4.1.2 for all such years;
(b) Then, Profits shall be allocated to the Class A
Members until the Class A Members have been allocated cumulative Profits for all
years pursuant to this Section 4.1.1(b) equal to the Preferred Return paid or
accrued for such years;
(c) Thereafter, Profits shall be allocated to the Class B
Members.
4.1.2 Losses. Losses shall be allocated among the Members as
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follows:
(a) First, Losses shall be allocated to the Class B
Members until the Class B Members' Capital Account balances have been reduced to
zero;
(b) Then, Losses shall be allocated to the Class A
Members until the Class A Members' Capital Account Balances have been reduced to
zero;
(c) Thereafter, Losses shall be allocated to the Class B
Members.
4.2 Special Allocations.
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4.2.1 Limitation on Allocation of Items of Loss or Deduction. No
Company items of loss or deduction may be allocated to any Member to the extent
such allocation would result in an Adjusted Capital Account deficit balance for
such Member. Any items of loss or deduction that are prohibited to be allocated
to a Member under the preceding sentence shall be reallocated among the other
Members to whom such limitation does not apply in accordance with their relative
Percentage Interests. If, at the end of a year, any Member has an Adjusted
Capital Account deficit balance, such Member shall be allocated items of gross
income and gain to the extent necessary to eliminate such deficit balance.
4.2.2 Nonrecourse Deductions and Company Minimum Gain
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Chargeback. Nonrecourse Deductions shall be allocated among the Class B Members
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in
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accordance with their Percentage Interests. If there is a net decrease in
Company Minimum Gain for any year, each Member shall be allocated the next
available items of income and gain for such year (and for subsequent years if
necessary) equal to such Member's share of the net decrease in Company Minimum
Gain as determined in accordance with Regulation (S) 1.704-2(g) and the "minimum
gain chargeback" requirement of Regulation (S) 1.704-2(f).
4.2.3 Member Nonrecourse Deductions and Chargeback. Member
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Nonrecourse Deductions for any year shall be allocated to the Member who bears
the economic risk of loss with respect to the Member Nonrecourse Debt to which
such Member Nonrecourse Deductions are attributable as determined under
Regulation (S) 1.704-2(i). If there is a net decrease in Member Nonrecourse
Debt Minimum Gain in any year, each Member shall be allocated items of income
and gain for such year (and for subsequent years if necessary) equal to such
Member's share of the net decrease in Member Nonrecourse Debt Minimum Gain in
accordance with Regulation (S) 1.704-2(i)(4).
4.2.4 Qualified Income Offset. Any Member who unexpectedly
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receives, with respect to the Company, an adjustment, allocation, or
distribution of any item described in subsections (4), (5), or (6) of Regulation
(S) 1.704-1(b)(2)(ii)(d) shall be allocated items of income and gain in an
amount sufficient to eliminate such Member's Adjusted Capital Account deficit
balance arising thereby as quickly as possible, in accordance with the
"qualified income offset" rule of Regulation (S) 1.704-1(b)(2)(ii)(d)(3).
4.2.5 Curative Allocations. The special allocations set forth in
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this Section 4.2 are intended to comply with the requirements of the Regulations
under (S) 1.704(b) of the Code. It is the intent of the Members that all such
special allocations shall be offset with other special allocations. Accordingly,
to the extent consistent with the Regulations, to the extent that any such
special allocations are made to a Member, subsequent offsetting special
allocations shall be made to such Member such that the net amount of all items
of income, gain, loss and deduction allocated to each Member is the same that
would have been allocated to each Member if no special allocations had been made
to any Member, taking into account future special allocations that, although not
yet made, are likely to offset previous special allocations.
4.3 Allocation During Year. For purposes of determining Profits,
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Losses, or any other items allocable to any period ending on a date other than
the last day of the Company's year, Profits, Losses, and items of income, gain,
loss and deduction shall be allocated among such periods in accordance with (S)
706 of the Code and the Regulations thereunder, using such allocation method
(pro rata or interim closing of the books or other method permitted by the
Regulations) as shall be determined by the Managers.
4.4 Tax Allocations.
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4.4.1 General Allocation. Except as otherwise provided in this
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Section 4.4, items of income, gain, loss and deduction as determined for federal
income tax purposes shall be allocated in the same manner as the related items
of Profits, Losses, or specially allocated items. Tax credits shall be
allocated in accordance with Regulation (S) 1.704-1(b)(4)(ii).
4.4.2 Contributed Property. In accordance with (S) 704(c) of the
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Code and the Regulations thereunder, income, gain, loss, and deduction with
respect to any property contributed to the capital of the Company shall, solely
for tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for federal
income tax purposes and its Book Value.
4.4.3 Revaluations. If the Book Value of any Company property is
------------
adjusted pursuant to Section 2.4.4(b) of this Agreement, income, gain, loss and
deduction with respect to such property shall be allocated among the Members so
as to take account of any variation between the adjusted basis of such property
for federal income tax purposes and its Book Value in the same manner as under
(S) 704(c) of the Code and the Regulations thereunder.
4.4.4 No Effect on Capital Accounts. Allocations pursuant to
-----------------------------
this Section 4.4 are solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Profits, Losses, or other items or distributions
pursuant to any provision of this Agreement.
4.4.5 Allocation Method. The method for making allocations
-----------------
pursuant to Section 4.4.2 shall be such method permitted by Regulation (S)
1.704-3 as shall be selected by the Managers.
4.5 Allocations Among Class Members. All Profits, Losses, and items
-------------------------------
of income, gain, loss, deduction, and credit allocated to the Class B Members
shall be allocated among the Class B Members in accordance with their Percentage
Interests. All Profits, Losses, and items of income, gain, loss, deduction, and
credit allocated to the Class A Members shall be allocated among the Class A
Members in accordance with their Percentage Interests.
SECTION 5
MANAGEMENT OF COMPANY
---------------------
5.1 General Provisions Concerning Management. The powers of the
----------------------------------------
Company shall be exercised by or under the authority of, and the business and
affairs of the Company shall be managed under the direction of, the Managers.
All actions by the Managers on behalf of the Company shall require the consent
of at least one (1) of the Managers. No Member (other than in such Person's
capacity as a Manager) has the authority
-14-
or power to act for or on behalf of the Company, to do any act that would be
binding on the Company or to incur any expenditures on behalf of the Company.
The Class A Members shall have no right to vote on any matter affecting the
Company.
5.2 Number and Term of Office. The Company shall have two (2)
-------------------------
Managers. Each Manager shall be appointed by the Class B Members holding a
majority of the Class B Units. Xxxx X. Xxxxx and Xxxxx X. Xxxxxxxx are the
initial Managers. Each Manager shall serve until death, resignation, or removal
in accordance with this Agreement.
5.3 Vacancies; Removal; Resignation. A Manager may resign at any time
-------------------------------
upon giving written notice of resignation to all of the other Managers. A
Manager may be removed at any time (with or without cause) by the Class B
Members holding a majority of the Class B Units and under no other
circumstances. If a Manager ceases to serve as a Manager at any time for any
reason, the resulting vacancy shall be filled by a Manager designated by the
Class B Members holding a majority of the Class B Units.
5.4 Meetings of Managers; Written Consents. Meetings of the Managers
--------------------------------------
may be called by or at the request of any Manager. Any Manager may participate
in a meeting of the Managers by means of conference telephone or similar
communications equipment by means of which all Persons participating in the
meeting can hear and speak to each other at the same time or in sequence, and
participation in a meeting pursuant to this provision shall constitute presence
at the meeting. Any action required or permitted to be taken at a meeting of the
Managers may be taken without a meeting if a consent, in writing, setting forth
the action so taken shall be signed by the Managers required to approve such
action.
5.5 Contracts with Affiliates. The Managers, on behalf of the
-------------------------
Company, may enter into contracts and agreements for property or services with
any Manager, Member, or any Affiliate of a Manager or Member, provided such
contracts and agreements are reasonably necessary to the business of the Company
and are on terms and conditions which are reasonable and fair to the Company and
its Members in the context of the value of the property or services so provided.
5.6 Company Expenses. All expenses of the Company shall be billed
----------------
directly to and be paid by the Company. Each Manager shall be reimbursed for
all expenses incurred by it for or on behalf of the Company. The Managers shall
be entitled to such reasonable fees for serving as Managers.
5.7 Officers. The Managers shall have the authority to establish such
--------
officers of the Company as the Managers shall determine, and to appoint
individuals to serve as such officers, including without limitation (i) a Chief
Executive Officer; (ii) a President and/or Chief Operating Officer, (iii) one or
more Vice Presidents, (iv) a Treasurer and/or Chief Financial Officer, and (v) a
Secretary and an Assistant Secretary. Each such officer shall have
-15-
such management powers and authorities as the Managers shall from time to time
delegate to such officer. An individual may hold more than one office at any
time.
SECTION 6
BOOKS AND RECORDS; TAX AND FINANCIAL MATTERS
--------------------------------------------
6.1 Books and Records. Proper and complete records and books of
-----------------
account of the Company, including the names, addresses, and Units of all
Members, shall be maintained at the principal place of business of the Company.
Each Member or duly authorized personal representative of a Member shall have
access and the right to inspect such books and records during normal business
hours, provided any information obtained thereby may be used solely for purposes
related to the business of the Company.
6.2 Fiscal Year. The fiscal year of the Company shall end on the last
-----------
day of the month of December each year, unless a different fiscal year is
specified by the Managers or required by the Code.
6.3 Reports and Tax Returns. The Company books shall be closed and
-----------------------
balanced at the end of each fiscal year. As soon as practicable after the end
of each year, the Managers shall transmit to each Person who was a Member at any
time during the year the Schedule K-1 (form 1065) for the Member for such year
and a copy of the related Form 1065 and attachments. The Managers shall cause
to be prepared and filed all tax returns for the Company, and all tax elections
concerning the Company shall be made at the direction of the Managers. Each
Member agrees that it shall not, without the consent of the Managers, take any
position on any of its original or amended income tax returns or claims for
refund any position with respect to any Company item of income, gain, loss,
deduction, or credit that is inconsistent with the treatment of such item by the
Company on the Schedule K-1.
6.4 Tax Matters Member. The Managers shall designate a Member to be
------------------
the Tax Matters Member. The Tax Matters Member shall, at the direction of the
Managers, exercise all of the authority of a "tax matters partner" under the
Code.
6.5 Banking. All funds of the Company shall be deposited in the name
-------
of the Company in such checking account or accounts as shall be designated by
the Managers. All withdrawals therefrom are to be made upon checks signed by a
Person or Persons authorized by the Managers.
SECTION 7
TRANSFERS, ADMISSIONS, AND WITHDRAWALS
--------------------------------------
7.1 Transfers. Except as provided in this Agreement, no Member shall
---------
transfer, sell, assign, encumber, or otherwise dispose of all or any portion of
the Member's Interest, including without limitation by way of liquidation,
dissolution, merger, consolidation,
-16-
division, or other reorganization of a Member, without the consent of all of the
Managers and, if requested by the Managers, only after the Company receives an
opinion of counsel, satisfactory in form and substance to the Managers, that (A)
neither the offering nor the transfer will violate any Federal or state
securities law or regulations, and (B) such transfer will not cause a
termination of the Company pursuant to Section 708(b)(1)(B) of the Code or cause
the Company to be treated as other than a partnership for federal income tax
purposes. Any purported transfer, sale, assignment, encumbrance, or other
disposition in violation of this Agreement shall be null and void. The
transferee shall pay all costs and expenses incurred by the Company in
connection with such transfer. Any permitted transferee of a Unit who is not
admitted as a Member in accordance with Section 7.2 of this Agreement shall have
the right to the distributions and the Profits, Losses, and items of income,
gain, loss, deduction, and credit allocable to the transferred Unit, but shall
have no other rights as a Member under this Agreement or the Act. Any
distribution by the Company to the Person shown on the Company records as a
Member or a Member's legal representative or permitted assignee shall relieve
the Company and the Managers of all liability to any other Person who may be
interested in such distribution by reason of any other assignment or transfer of
such Member's Unit for any reason.
7.2 Admissions.
----------
7.2.1 Transferees. No transferee of a Unit shall be admitted as
-----------
a Member of the Company without the prior written consent of the Managers, and
only if the transferee agrees to be legally bound by this Agreement as a Member
and executes and delivers to the Managers such documents and instruments as are
necessary or appropriate in connection with the transferee becoming a Member.
The transferee shall pay all costs and expenses incurred by the Company in
connection with such admission.
7.2.2 Additional Members. Subject to Section 2.1, the Managers
------------------
shall have the authority to admit additional Members on such terms and
conditions as the Managers shall determine.
7.3 No Withdrawal. No Member shall have the right to withdraw from
-------------
the Company without the consent of the Managers prior to the dissolution and
winding up of the Company.
7.4 Incapacity of Member. The Incapacity of a Member or occurrence of
--------------------
any other event that terminates the continued membership of a Member in the
Company shall not dissolve or terminate the Company. In the event of such
Incapacity, provided the transfer of the Member's Units complies with Section
7.1, the executor, administrator, guardian, trustee or other personal
representative or successor in interest of the Member affected by such
Incapacity shall be deemed to be the assignee of such Member's Units and may,
subject to Section 7.2, become a substituted Member.
-17-
SECTION 8
TERMINATION AND DISSOLUTION
---------------------------
8.1 Dissolution Events. The Company shall be terminated and dissolved
------------------
upon the earliest to occur of the following events:
8.1.1 Election of the Managers. The election of the Managers to
------------------------
dissolve the Company; or
8.1.2 Judicial Dissolution. Entry of a final decree of judicial
--------------------
dissolution pursuant to the Act.
8.2 Liquidation.
-----------
8.2.1 Winding Up. Upon the dissolution of the Company, the
----------
Company's business shall be liquidated in an orderly manner. The Managers shall
determine which Company property shall be distributed in-kind and which Company
property shall be liquidated. Profits and Losses up to and including the
liquidation shall be allocated among the Members in accordance with Section 4.
The liquidation of Company property shall be carried out as promptly as is
consistent with obtaining the fair value thereof.
8.2.2 Payments and Distributions. Company property or the
--------------------------
proceeds therefrom, to the extent sufficient therefor, shall be applied and
distributed in the following order of priority, with no distribution being made
in any category set forth below until each preceding category has been satisfied
in full:
(a) To the payment and discharge of all of the Company's
debts and liabilities, including any debts and liabilities owed to any Member,
and to the expenses of liquidation;
(b) To the establishment of Reserves (which Reserves, to
the extent no longer needed by the Company, shall be distributed in accordance
with the order of priority set forth in Section (c) hereof);
(c) To and among the Members in accordance with Section 3
of this Agreement.
SECTION 9
EXCULPATION AND INDEMNIFICATION
-------------------------------
-18-
9.1 Exculpation. No Indemnified Person shall be liable, responsible
-----------
or accountable in damages or otherwise to the Company or any Member for any act
or omission performed or omitted by the Indemnified Person, provided that the
act or omission is not determined by a court to be due to the Indemnified
Person's willful misconduct.
9.2 Indemnification. The Company shall indemnify and hold harmless
---------------
each Indemnified Person against any loss or damage (including attorneys" and
other professional fees) incurred by the Indemnified Person on behalf of the
Company or in furtherance of the Company's interests, without relieving the
Indemnified Person of liability for willful misconduct. The Company is
authorized to purchase and maintain insurance to insure its indemnification
obligations as set forth herein. The satisfaction of any indemnification shall
be from and limited to Company's assets and the proceeds of any such insurance,
and no Member shall have any liability on account thereof. The right to
indemnification shall include the right to be paid or reimbursed by the Company
the reasonable expenses incurred by the Indemnified Person in advance of the
final disposition of any proceeding; provided, however, that the advance payment
of such expenses shall be made only upon delivery to the Company of a written
affirmation by such Indemnified Person of such Indemnified Person's good faith
belief that the Indemnified Person has met the standard of conduct necessary for
indemnification under this Agreement and a written undertaking, by or on behalf
of such Indemnified Person, to repay all amounts so advanced if it shall
ultimately be determined that such Indemnified Person is not entitled to be
indemnified under this Agreement or otherwise.
SECTION 10
REPRESENTATIONS AND WARRANTIES
------------------------------
10.1 General. As of the date hereof, each of the Members makes each of
-------
the representations and warranties applicable to such Member as set forth in
this Section 10.1, and such representations and warranties shall survive the
execution of this Agreement.
10.1.1 Due Incorporation or Formation; Authorization of
------------------------------------------------
Agreement. If such Member is a corporation, partnership, trust, limited
---------
liability company, or other legal entity, it is duly organized or formed,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation or formation and has the power and authority to own property and
carry on its business as owned and carried on at the date hereof and as
contemplated hereby. Such Member is duly licensed or qualified to do business
and in good standing in each of the jurisdictions in which the failure to be so
licensed or qualified would have a material adverse effect on its financial
condition or its ability to perform its obligations hereunder, and the
execution, delivery, and performance of this Agreement has been duly authorized
by all necessary corporate or partnership or company action. This Agreement
constitutes the legal, valid, and binding obligation of each Member.
-19-
10.1.2 No Conflict or Default. The execution, delivery, and
----------------------
performance of this Agreement and the consummation by such Member of the
transactions contemplated hereby (i) will not conflict with, violate, or result
in a breach of any of the terms, conditions, or provisions of any law,
regulation, order, writ, injunction, decree, determination, or award of any
court, any governmental department, board, agency, or instrumentality, or any
arbitrator, applicable to such Member, and (ii) will not conflict with, violate,
result in a breach of, or constitute a default under any of the terms,
conditions, or provisions of the articles of incorporation, bylaws, partnership
agreement, or operating agreement of such Member, or of any material agreement
or instrument to which such Member is a party or by which such Member is or may
be bound or to which any of its material properties or assets are or may be
subject.
10.1.3 Governmental Authorizations. Any registration, declaration
---------------------------
or filing with or consent, approval, license, permit or other authorization or
order by, any governmental or regulatory authority that is required in
connection with the valid execution, delivery, acceptance, and performance by
such Member under this Agreement or the consummation by such Member of any
transaction contemplated hereby has been completed, made, or obtained on or
before the effective date of this Agreement.
10.1.4 Litigation. There are no actions, suits, proceedings, or
----------
investigations pending or, to the knowledge of such Member, threatened against
or affecting such Member or any of such Member's properties, assets, or
businesses in any court or before or by any governmental department, board,
agency, instrumentality, or arbitrator which, if adversely determined, could (or
in the case of an investigation could lead to any action, suit, or proceeding
which, if adversely determined, could) reasonably be expected to materially
impair such Member's ability to perform its obligations under this Agreement or
to have a material adverse effect on the financial condition of such Member.
10.2 Investment Representation. This Agreement is made with each
-------------------------
Member in reliance upon such Member's representation to the Company, which by
executing this Agreement the Member hereby confirms, that such Member's Units
are to be acquired for investment, and not with a view to the sale or
distribution of any part thereof, and that such Member has no present intention
of selling, granting participation in, or otherwise distributing the same. Each
Member further represents that such Member does not have any contract,
undertaking, agreement, or arrangement with any person to sell or transfer to
any third person all or any part of such Member's Units. Each Member represents
that such Member has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Company, and that such Member is an "accredited investor" as that term is
defined in Regulation D promulgated by the Securities and Exchange Commission.
SECTION 11
-20-
MISCELLANEOUS
-------------
11.1 Notices. All notices, approvals, consents, requests,
-------
instructions, and other communications (collectively "Communications") required
to be given in writing pursuant to this Agreement shall be validly given, made
or served only if in writing and when delivered personally or by registered or
certified mail, return receipt requested, postage prepaid, or by a reputable
overnight or same day courier, addressed to the Company or the Member at the
address that is on record at the principal office of the Company, or by
facsimile transmission to the facsimile number on record at the principal office
of the Company. Any such Communication shall be treated as given under this
Agreement when the Communication is delivered to such address or facsimile
number. The designation of the Person to receive such Communication on behalf of
a Member or the address or facsimile number of any such Person for the purposes
of such Communication may be changed from time to time by written notice given
to the Company pursuant to this Section.
11.2 Successors. This Agreement shall inure to the benefit of and
----------
shall be binding upon all of the parties and their respective heirs, successors
and assigns.
11.3 Applicable Law. This Agreement and the rights of the parties
--------------
hereunder shall be interpreted in accordance with the laws of the State of
Delaware, without regard to any conflicts of law rules or principles of such
state.
11.4 Amendment. No change or modification to this Agreement shall be
---------
valid unless the same be in writing and signed by the Class B Members holding a
majority of the Class B Units, provided, however, that no amendment to this
Agreement shall (a) impair, prejudice, diminish, or otherwise materially
negatively impact the rights of the Class A Members under this Agreement or (b)
create a new Class of Members with rights as to dividends, liquidation
preferences and redemption that are senior to the rights of the Class A Members,
in either case without the consent of the Class A Members holding a majority of
the Class A Units.
11.5 Entire Agreement. This Agreement contains the entire
----------------
understanding among the parties with respect to the subject matter hereof and
supersedes any prior written or oral understandings and agreements between them
respecting the subject matter hereof. There are no representations, agreements,
arrangements, or understandings, oral or written, between or among the parties
hereto relating to the subject matter of this Agreement which are not fully
expressed herein.
11.6 Severability. If any provision of this Agreement or the
------------
application thereof to any Person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to
-21-
other Persons or circumstances shall not be affected thereby but rather shall be
enforced to the greatest extent permitted by law.
11.7 Counterparts. This Agreement may be executed simultaneously in
------------
one or more counterparts with the same effect as if all of the Members had
signed the same document. All counterparts shall be construed together and shall
constitute one and the same instrument.
11.8 Construction. When from the context it appears appropriate, each
------------
term stated either in the singular or the plural shall include the singular and
the plural and pronouns stated either in the masculine, the feminine or the
neuter shall include the masculine, the feminine and the neuter.
11.9 Headings and Captions. The headings and captions contained in
---------------------
this Agreement are inserted only as a matter of convenience and in no way
define, limit or extend the scope or intent of this Agreement or any provisions
hereof.
11.10 No Waiver. The failure of any Member to insist upon strict
---------
performance of a covenant hereunder or of any obligation hereunder or to
exercise any right or remedy hereunder, regardless of how long such failure
shall continue, shall not be a waiver of such Member's right to demand strict
compliance therewith in the future unless such waiver is in writing and signed
by the Member giving the same.
11.11 Other Business and Investment Ventures. Each Member and Manager
--------------------------------------
may engage in other business or investment ventures, including business or
investment ventures in competition with the Company, and neither the Company nor
the other Members shall have any rights in such business or investment ventures.
11.12 Additional Instruments. Each Member agrees to execute and
----------------------
deliver such additional agreements, certificates, and other documents as may be
necessary or appropriate to carry out the intent and purposes of this Agreement.
-22-
IN WITNESS WHEREOF, the Members have executed this Agreement as of the day
and year first above written.
CLASS B MEMBER:
ADVANCED ALUMINUM, LLC
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Manager
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Manager
-23-
USCRE Properties, LLC
Limited Liability Company Agreement
Exhibit "A"
MEMBERS' CAPITAL CONTRIBUTIONS AND UNITS
----------------------------------------
Capital Class B Class A
Members Contribution Units Units
------------------------- ------------ ----- -----
Class B Members
---------------
Advanced Aluminum, LLC $___________ 10,000 0
Class A Member
--------------
None
