EXHIBIT 3.6
708 GYM LLC
OPERATING AGREEMENT
708 GYM LLC
OPERATING AGREEMENT
This Operating Agreement (this "Agreement") is entered into effective
December 31, 1997 by and among the signatories hereto.
BACKGROUND
The parties have agreed to organize and operate a limited liability
company in accordance with the terms and subject to the conditions set forth in
this Agreement.
AGREEMENT
The parties, intending legally to be bound; agree as follows:
Article I
Defined Terms
The following capitalized terms shall have the meaning specified in
this Article I. Other terms are die fined in the text of this Agreement; and,
throughout this Agreement, those terms shall have the meanings respectively
ascribed to them.
"Adjusted Capital Account Deficit" means, with respect to any Economic
Interest Holder, the deficit balance, if any, in the Economic Interest Holder's
Capital Account as of the end of the relevant taxable year, after giving effect
to the following adjustments:
(i) the deficit shall be decreased by the amounts, if
any, which the Economic Interest Holder is obligated to restore pursuant to
Section 4.4.2 or is deemed obligated to restore pursuant to Regulation Section
1.704-1(b)(2)(ii)(c); and
(ii) the deficit shall be increased by the items described
in Regulation Sections 1.704-1(b) (2) (ii) - (d) (4), (5), and (6).
"Adjusted Capital Balance" means, as of any day, an Economic Interest
Holder's total Capital Contributions less all amounts actually distributed to
the Economic Interest Holder pursuant to Sections 4.1 and 4.4 hereof. If any
Economic Interest is transferred in accordance with the terms of this Agreement,
the transferee shall succeed to the Adjusted Capital Balance of the transferor
to the extent the Adjusted Capital Balance relates to the Economic Interest
transferred.
"Affiliate" means, with respect to any Member, any Person: (i) which
owns more than five percent (5%) of the voting interests in the Member; or (ii)
in which the Member owns more than five percent (5%) of the voting interests; or
(iii) in which more than
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five percent (5%) of the voting interests are owned by a Person who has a
relationship with the Member described in clause (i) or (ii) above or who
otherwise controls, is controlled by, or under common control with, another
person.
"Agreement" means this Operating Agreement, as amended from time to
time.
"Capital Account" means the account to be maintained by the Company for
each Economic Interest Holder in accordance with the following provisions:
(i) an Economic Interest Holder's Capital Account shall
be credited with the Economic Interest Holder's Capital Contributions, the
amount of any Company liabilities assumed by the Economic Interest Holder (or
which are secured by Company property distributed to the Economic Interest
Holder), the Economic Interest Holder's distributive share of Profit and any
item in the nature of income or gain specially allocated to the Economic
Interest Holder pursuant to the provisions of Article IV (other than Section
4.3.3); and
(ii) an Economic Interest Holder's Capital Account shall
be debited with the amount of money and the fair market value of any Company
property distributed to the Economic Interest Holder, the amount of any
liabilities of the Economic Interest Holder assumed by the Company (or which are
secured by property contributed by the Economic Interest Holder to the Company),
the Economic Interest Holder's distributive share of Loss and any item in the
nature of expenses or losses specially allocated to the Economic Interest Holder
pursuant to the provisions of Article IV (other than Section 4.3.3).
If any Economic Interest is transferred pursuant to the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent the Capital Account is attributable to the transferred Economic
Interest. If the book value of Company property is adjusted pursuant to Section
4.3.3, the Capital Account of each Economic Interest Holder shall be adjusted to
reflect the aggregate adjustment in the same manner as if the Company had
recognized gain or loss equal to the amount of such aggregate adjustment. It is
intended that the Capital Accounts of all Economic Interest Holders shall be
maintained in compliance with the provisions of Regulation Section 1.704-1(b),
and all provisions of this Agreement relating to the maintenance of Capital
Accounts shall be interpreted and applied in a manner consistent with that
Regulation.
"Capital Contribution" means the total amount of cash and the fair
market value of any other assets contributed (or deemed contributed under
Regulation Section 1.704-1(b)(2)(iv)(d)) to the
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Company by a Member, net of liabilities assumed or to which the assets are
subject.
"Cash Flow" means all cash funds derived from operations of the Company
(including interest received on reserves), without reduction for any noncash
charges, but less cash funds used to pay current operating expenses and to pay
or establish reasonable reserves for future expenses, debt payments, capital
improvements, and replacements as determined by the Members. Cash Flow shall be
increased by the reduction of any reserve previously established.
"Code" means the Internal Revenue Code of 1986, as amended, or any
corresponding provision, of any succeeding law.
"Company" means the limited liability company formed in accordance with
this Agreement.
"Economic Interest" means a Person's share of the Profits and Losses
of, and the right to receive distributions from, the Company.
"Economic Interest Holder" means any Person who holds an Economic
Interest, whether as a Member or an unadmitted assignee of a Member.
"Involuntary Withdrawal" means, with respect to any Member, the
occurrence of any of the following events:
(i) the Member makes an assignment for the benefit of
creditors;
(ii) the Member files a voluntary petition of bankruptcy;
(iii) the Member is adjudged bankrupt or insolvent or there
is entered against the Member an order for relief in any bankruptcy or
insolvency proceeding;
(iv) the Member files a petition seeking for the Member
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation;
(v) the Member seeks, consents to, or acquiesces in the
appointment of a trustee for, receiver for, or liquidation of the Member or of
all or any substantial part of the Member's properties;
(vi) the Member files an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against the Member in any proceeding described in Subsections (i) through (v);
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(vii) any proceeding against the Member seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation, continues
for one hundred twenty (120) days after the commencement thereof, or the
appointment of a trustee, receiver, or liquidator for the Member or all or any
substantial part of the Member's properties without the Member's agreement or
acquiescence, which appointment is not vacated or stayed for one hundred twenty
(120) days or, if the appointment is stayed, for one hundred twenty (120) days
after the expiration of the stay during which period the appointment is not
vacated;
(viii) if the Member is an individual, the Member's death,
incapacity, or adjudication by a court of competent jurisdiction as incompetent
to manage the Member's person or property;
(ix) if the Member is acting as a Member by virtue of
being a trustee of a trust, the termination of the trust;
(x) if the Member is a partnership or limited liability
company, the dissolution and commencement of winding up of the partnership or
limited liability company;
(xi) if the Member is a corporation, the dissolution of
the corporation or the revocation of its charter;
(xii) if the Member is an estate, the distribution by the
fiduciary of the estate's entire interest in the Company;
"Law" means the New York Limited Liability Company Law, as amended from
time to time.
"Member" means each Person who has signed this Agreement and any Person
who subsequently is admitted as a member of the Company.
"Membership Interest" means all of the rights of a Member in the
Company, including a Member's: (i) Economic Interest; (ii) right to inspect the
Company's books and records; (iii) right to participate in the management of and
vote on masters coming before the Company; and (iv) unless this Agreement or the
Articles of Organization provide to the contrary, right to act as an agent of
the Company.
"Minimum Gain" has the meaning set forth in Regulation Section
1.704-2(d). Minimum Gain shall be computed separately for each Economic Interest
Holder in a manner consistent with the Regulations under Code Section 704(b).
"Negative Capital Account" means a Capital Account with a balance of
less than zero.
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"Percentage" means, as to a Member, the percentage set forth after the
Member's name on Exhibit A, as amended from time to time, and as to an Economic
Interest Holder who is not a Member, the Percentage of the Member whose Economic
Interest has been acquired by such Economic Interest Holder, to the extent the
Economic Interest Holder has succeeded to that Member's Economic Interest.
"Person" means and includes an individual, corporation, partnership,
association, limited liability company, trust, estate, or other entity.
"Positive Capital Account" means a Capital Account with a balance
greater than zero.
"Profit" and "Loss" means, for each taxable year of the Company (or
other period for which Profit or Loss must be computed), the Company's taxable
income or loss determined in accordance with Code Section 703(a), within the
following adjustments:
(i) all items of income, gain, loss, deduction, or credit
required to be stated separately pursuant to Code Section 703(a) (1) shall be
included in computing taxable income or loss; and
(ii) any tax-exempt income of the Company, riot otherwise
taken into account in computing Profit or Loss, shall be included in computing
taxable income or loss; and
(iii) any expenditures of the Company described in Code
Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section
1.704-1(b) (2) (iv) (i)) and not otherwise taken into account in computing
Profit or Loss, shall be subtracted from taxable income or loss; and
(iv) gain or loss resulting from any taxable disposition
of Company property shall be computed by reference to the adjusted book value of
the property disposed of, notwithstanding the fact that the adjusted book value
differs from the adjusted basis of the property for federal income tax purposes;
and
(v) in lieu of the depreciation, amortization, or cost
recovery deductions allowable in computing taxable income or loss, there shall
be taken into account the depreciation computed based upon the adjusted book
value of the asset; and
(vi) notwithstanding any other provision of this
definition, any items which are specially allocated pursuant to Section 4.3
hereof shall not be taken into account in computing Profit or Loss.
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"Regulation" means the income tax regulations, including any temporary
regulations, from time to time promulgated under the Code.
"Transfer" means--when used as a noun--any sale, hypothecation, pledge,
assignment, attachment, or other transfer, and--when used as a verb--means to
sell, hypothecate, pledge, assign, or otherwise transfer.
"Voluntary Withdrawal" means a Member's disassociation with the Company
by means other than a Transfer or an Involuntary Withdrawal.
Article II
Formation and Name; Office; Purpose; Term
2.1. Organization. The parties have organized a limited liability
company pursuant to the Law and the provisions of this Agreement and, for that
purpose, have caused Articles of Organization to be prepared, executed, and
filed with the New York Department of State.
2.2. Name of the Company. The name of the Company shall be 708 Gym
LLC. The Company may do business under that name and under any other name or
names upon which the Members agree. If the Company does business under a name
other than that set forth in its Articles of Organization, then the Company
shall file a certificate as required by General Business Law ss. 130.
2.3. Purpose. The Company is organized to engage in any business
permitted under the Law, except to do in New York any business for which any
statute of New York other than the Limited Liability Company Law specifically
requires some other business entity or natural person to be formed or used for
such business.
2.4. Term. The term of the Company shall begin upon the filing of
Articles of Organization with the New York Department of State and shall
continue until December 31, 2097, unless its existence is sooner terminated
pursuant to Article VII of this Agreement.
2.5. Registered Agent. The name and address of the Company's
registered agent in the State of New York shall be Xxxx Xxxxxx, 00 Xxxxxxxxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 0000.
2.6. Members. The name, present mailing address, and Percentage of
each Member are set forth on Exhibit A.
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Article III
Members; Capital; Capital Accounts
3.1. Initial Capital Contributions. On December 31, 1997 the
Members shall surrender and assign the assets, properties and business, and the
Company shall assume and agree to be bound by and pay the liabilities and
obligations all as set forth in the Assignment and Assumption Agreement by and
between the Company and the Members.
3.2. No Additional Capital Contributions Required. No Member shall
be required to contribute any additional capital to the Company, unless required
by a vote of the Members holding two-thirds (2/3) in interest, and in no event
in an amount greater than twenty-five thousand dollars ($25,000). No Member
shall have any personal liability for any obligation of the Company.
3.3. No Interest on Capital Contributions. Economic Interest
Holders shall not be paid interest on their Capital Contributions.
3.4. Return of Capital Contributions. Except as otherwise provided
in this Agreement, no Economic Interest Holder shall have the right to receive
any return of any Capital Contribution.
3.5. Form of Return of Capital. If an Economic Interest Holder is
entitled to receive a return of a Capital Contribution, the Company may
distribute cash, notes, property, or a combination thereof to the Economic
Interest Holder in return of the Capital Contribution.
3.6. Capital Accounts. A separate Capital Account shall be
maintained for each Economic Interest Holder.
3.7. Loans. Any Member may, at any time, make or cause a loan to be
made to the Company in any amount and on those terms as approved by a majority
in interest of the other Members.
Article IV
Profit, Loss, and Distributions
4.1. Distributions of Cash Flow. Cash Flow for each taxable year of
the Company shall be distributed to the Economic Interest Holders in proportion
to their Percentages no later than ninety (90) days after the end of the taxable
year.
4.2. Allocation of Profit or Loss. After giving effect to the
special allocations set forth in Section 4.3, for any taxable year of the
Company, Profit or Loss shall be allocated to the Economic Interest Holders in
proportion to their Percentages.
4.3. Regulatory Allocations.
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4.3.1. Qualified Income Offset. No Economic Interest Holder
shall be allocated Losses or deductions if the allocation causes the Economic
Interest Holder to have as Adjusted Capital Account Deficit. If an Economic
Interest Holder receives (1) an allocation of Loss or deduction (or item
thereof) or (2) any distribution, which causes the Economic Interest Holder to
have an Adjusted Capital Account Deficit at the end of any taxable year, then
all items of income and gain of the Company (consisting of a pro rata portion of
each item of Company income, including gross income and gain) for that taxable
year shall be allocated to that Economic Interest Holder, before any other
allocation is made of Company items for that taxable year, in the amount and in
proportions required to eliminate the excess as quickly as possible. This
Section 4.3.1 is intended to comply with, and shall be interpreted consistently
with, the "qualified income offset" provisions of the Regulations promulgated
under Code Section 704 (b).
4.3.2. Minimum Gain Chargeback. Except as set forth in
Regulation Section 1.704-2(f) (2), (3), and (4), if, during any taxable year,
there is a net decrease in Minimum Gain, each Economic Interest Holder, prior to
any other allocation pursuant to this Article IV, shall be specially allocated
items of gross income and gain for such taxable year (and, if necessary,
subsequent taxable years) in an amount equal to that Economic Interest Holder's
share of the net decrease of Minimum Gain, computed in accordance with
Regulation Section 1.704-2(g) Allocations of gross income and gain pursuant to
this Section 4.3.2 shall be made first from gain recognized from the
disposition of Company assets subject to non-recourse liabilities (within the
meaning of the Regulations promulgated under Code Section 752), to the extent of
the Minimum Gain attributable to those assets, and thereafter, from a pro rata
portion of the Company's other times of income and gain for the taxable year. It
is the intent of the parties hereto that any allocation pursuant to this Section
4.3.2 shall constitute a "minimum gain chargeback" under Regulation Section
1.704-2(f).
4.3.3. Contributed Property and Book-ups. In accordance with
Code Section 704(c) and the Regulations thereunder as well as Regulation
Section 1.704-1(b) (2) (iv) (d) (3), income, gain, loss, and deduction with
respect to any property contributed (or deemed contributed) to the Company
shall, solely for tax purposes, be allocated among the Economic Interest Holders
so as to take account of any variation between the adjusted basis of the
property to the Company for federal income tax purposes and its fair market
value at the date of contribution (or deemed contribution). If the adjusted book
value of any Company asset is adjusted as provided herein, subsequent
allocations of income, gain, loss, and deduction with respect to the asset shall
take account of any variation between the adjusted basis of the asset for
federal income tax purposes and its adjusted book value in the manner required
under Code Section 704 (c) and the Regulations thereunder.
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4.4. Liquidation, and Dissolution.
4.4.1. If the Company is liquidated, the assets of the
Company shall be distributed to the Economic Interest Holders in accordance with
the balances in their respective Capital Accounts, after taking into account the
allocations of Profit or Loss pursuant to Section 4.2, if any, and
distributions, if any, of cash or property pursuant to Section 4.1.
4.4.2. No Economic Interest Holder shall be obligated to
restore a Negative Capital Account.
4.5. General.
4.5.1. Except as otherwise provided in this Agreement, the
timing and amount of all distributions shall be determined by the Members.
4.5.2. If any assets of the Company are distributed in kind
to the Economic Interest Holders, those assets shall be valued on the basis of
their fair market value, and any Economic Interest. Holder entitled to any
interest in those assets shall receive that interest as a tenant-in-common with
all other Economic Interest Holders so entitled. Unless the Members otherwise
agree, the fair market value of the assets shall be determined by an independent
appraiser who shall be selected by the Members. The Profit or Loss for each
unsold asset shall be determined as if the asset had been sold at its fair
market value, and the Profit or Loss shall be allocated as provided in Section
4.2 and shall be properly credited or charged to the Capital Accounts of the
Economic Interest Holders prior to the distribution of the assets in liquidation
pursuant to Section 4.4.
4.5.3. All Profit and Loss shall be allocated, and all
distributions shall be made to the Persons shown on the records of the Company
to have been Economic Interest Holders as of the last day of the taxable year
for which the allocation or distribution is to be made. Notwithstanding the
foregoing, unless the Company's taxable year is separated into segments, if
there is a Transfer or an Involuntary Withdrawal during the taxable year, the
Profit and Loss shall be allocated between the original Economic Interest Holder
and the successor on the basis of the number of days each was an Economic
Interest Holder during the taxable year; provided, however, the Company's
taxable year shall be segregated into two or more segments in order to account
for Profit, Loss or proceeds attributable to any extraordinary non-recurring
items of the Company.
4.5.4. The Members are hereby authorized, upon the advice of
the Company's tax counsel, to amend this Article IV to comply with the Code and
the Regulations promulgated under Code Section 704 (b); provided, however, that
no amendment shall
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materially affect distributions to an Economic Interest Holder without the
Economic Interest Holder's prior written consent.
Article V
Management: Rights, Powers, and Duties
5.1. Management. The Company shall be managed by the Members.
Except as otherwise provided in this Agreement, each Member shall have the right
to act for and bind the Company in the ordinary course of its business.
5.2. Meetings of and Voting by Members.
5.2.1. A meeting of the Members may be called at any time
by any Member. Meetings of Members shall be held at the Company's principal
place of business or at any other place in New York, New York designated by the
Person calling the meeting. Not less than ten (10) nor more than sixty (60)
days before each meeting, the Person calling the meeting shall give written
notice of the meeting to each Member entitled to vote at the meeting. The notice
shall state the place, date, hour, and purpose of the meeting. Notwithstanding
the foregoing provisions, each Member who is entitled to notice waives notice if
before or after the meeting the Member signs a waiver of the notice which is
filed with the records of Members' meetings, or is present at the meeting in
person or by proxy without objecting to the lack of notice. Unless this
Agreement provides otherwise, at a meeting of Members, the presence in person or
by proxy of Members holding not less than a majority (over 50 percent) of the
Percentages then held by Members constitutes a quorum. A Member may vote either
in person or by written proxy signed by the Member or by the Member's duly
authorized attorney in fact.
5.2.2. Except as otherwise provided in this Agreement, the
affirmative vote of Members holding a majority (over 50 percent) or more of the
Percentages then held by Members shall be required to approve any matter coming
before the Members.
5.2.3. In lieu of holding a meeting, the Members may vote or
otherwise take action by a written instrument indicating the consent of Members
holding such Percentages then held by Members as would be required for Members
to take action under this operating agreement. No written consent shall be
effective to take such action unless within sixty (60) days of the earliest
dated consent delivered in accordance with the Law, signed consents sufficient
to take such action have been likewise delivered. If such consent is not
unanimous, prompt notice shall be given to those Members who have not consented
in writing but who would have been entitled to vote thereon had such action
been taken at a meeting.
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5.3. Personal Service. No Member shall be required to perform
services for the Company solely by virtue of being a Member. Unless approved by
the Members, no Member shall be entitled to compensation for services performed
for the Company. However, upon substantiation of the amount and purpose thereof,
the Members shall be entitled to reimbursement for expenses reasonably incurred
in connection with the activities of the Company.
5.4. Duties of Parties.
5.4.1. The Members shall devote such time to the business
and affairs of the Company as is necessary to carry out the Members' duties set
forth in this Agreement.
5.4.2. Except as otherwise expressly provided in Section
5.4.3, nothing in this Agreement shall be deemed to restrict in any way the
rights of any Member, or of any Affiliate of any Member, to conduct any other
business or activity whatsoever, and no Member shall be accountable to the
Company or to any other Member with respect to that business or activity even if
the business or activity competes with the Company's business, the organization
of the Company shall be without prejudice to the Members' respective rights (or
the rights of their respective Affiliates) to maintain, expand, or diversify
such other interests and activities and to receive and enjoy profits or
compensation therefrom. Each Member waives any rights the Member might otherwise
have to share or participate in such other interests or activities of any other
Member or the Member's Affiliates.
5.4.3. Each Member understands and acknowledges that the
conduct of the Company's business may involve business dealings and undertakings
with Members and their Affiliates. In any of those cases, those dealings and
undertakings shall be at arm's length and on commercially reasonable terms.
5.5. Liability and Indemnification.
5.5.1. A Member shall not be liable, responsible, or
accountable, in damages or otherwise, to any other Member or to the Company for
any act performed by the Member with respect to Company matters, except for
fraud, bad faith, gross negligence, or an intentional breach of this Agreement.
5.5.2. The Company shall indemnify each Member for any act
performed by the Member with respect to Company matters, except for fraud, bad
faith, gross negligence, or an intentional breach of this Agreement.
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Article VI
Transfer of Interests and Withdrawal of Members
6.1. Transfers. No Member may Voluntarily Transfer all, or any
portion of, or any interest or rights in, the Membership Interest owned by the
Member. Each Member hereby acknowledges the reasonableness of this prohibition
in view of the purposes of the Company and the relationship of the Members. The
voluntary Transfer of any Membership Interests, including Economic Interests, in
violation of the prohibition contained in this Section 6.1 shall be deemed
invalid, null and void, and of no force or effect. Any Person to whom Membership
Interests are attempted to be transferred in violation of this Section 6.1 shall
not be entitled to vote on matters coming before the Members, participate in the
management of the Company, act as an agent of the Company, receive distributions
from the Company, or have any other rights in or with respect to the Membership
Interests.
6.2. Voluntary Withdrawal. No Member shall have the right or power
to Voluntarily Withdraw from the Company, except as otherwise provided by this
Agreement. Any withdrawal in violation of this Agreement shall entitle the
Company to damages for breach, which may be offset against the amounts otherwise
distributable to such member.
6.3. Involuntary Withdrawal. Immediately upon the occurrence of an
Involuntary Withdrawal, the successor of the Withdrawn Member shall thereupon
become an Economic Interest Holder, but shall not become a Member. If the
Company is continued as provided in Section 7.1.3, the successor Economic
Interest Holder shall have all the rights of an Economic Interest Holder, but
shall not be entitled by reason of the withdrawal to receive in liquidation of
the Economic Interest, the fair market value of the Member's Economic Interest
as of the date the Member Involuntarily withdrew from the Company.
Article VII
Dissolution, Liquidation, and
Termination of the Company
7.1. Events of Dissolution. The Company shall be dissolved upon
the happening of any of the following events:
7.1.1. when the period fixed for its duration in Section 2.4
has expired;
7.1.2. upon the written agreement of the Members holding
two-thirds or more of the Percentages then held by Members; or
7.1.3. the occurrence of an Involuntary Withdrawal, unless
the remaining Members holding two-thirds or more of the
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Percentages then held by Members, within ninety (90) days after the occurrence
of the Involuntary Withdrawal, elect to continue the business of the Company
pursuant to the terms of this Agreement.
7.2. Procedure for Winding Up and Distribution. If the Company is
dissolved, the remaining Members shall wind up its affairs. On winding up of the
Company, the assets of the Company shall be distributed, first, to creditors of
the Company, including Members and Economic Interest Holders who are creditors,
in satisfaction of the liabilities of the Company, and then to the Members and
Economic Interest Holders in accordance with Section 4.4 of this Agreement.
7.3. Filing of Articles of Dissolution. If the Company is
dissolved, the Members shall promptly file Articles of Dissolution with the New
York Department of State. If there are no remaining Members, the Articles shall
be filed by the last Person to be a Member; if there are no remaining Members,
or a Person who last was a Member, the Articles shall be filed by the legal or
personal representatives of the Person who last was a Member.
Article VIII
Books, Records, Accounting, and Tax Elections
8.1. Bank Accounts. All funds of the Company shall be deposited in
a bank account or accounts opened in the Company's name. The Members shall
determine the institution or institutions at which the accounts will be opened
and maintained, the types of accounts, and the Persons who will have authority
with respect to the accounts and the funds therein.
8.2. Books and Records. The Members shall keep or cause to be kept
complete and accurate books and records of the Company as required under Section
1102 of the Law as well as supporting documentation of transactions with respect
to the conduct of the Company's business. The books and records shall be
maintained in accordance with sound accounting practices and shall be available
at the Company's principal office for examination by any Member or the Member's
duly authorized representative at any and all reasonable times during normal
business hours.
8.3. Annual Accounting Period. The annual accounting period of the
Company shall be its taxable year. The Company's taxable year shall be selected
by the Members, subject tip the requirements and limitations of the Code.
8.4. Reports. Within seventy-five (75) days after the end of each
taxable year of the Company, the Members shall cause to be sent to each Person
who was a Member at any time during the taxable year then ended a complete
accounting of the affairs of the Company for the taxable year then ended. In
addition, within seventy five (75) days after the end of each taxable year of
the Company, the
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Members shall cause to be sent to each Person who was an Economic Interest
Holder at any time during the taxable year then ended, that tax information
concerning the Company which is necessary for preparing the Economic Interest
Holder's income tax returns for that year. At the request of any Member, and at
the Member's expense, the Members shall cause an audit of the Company's books
and records to be prepared by independent accountants for the period requested
by the Member.
8.5. Tax Matters Member. The Members shall designate a Member to be
the Company's tax matters Member ("Tax Matters Member"). The Tax Matters Member
shall have all powers and responsibilities provided in Code Section 6221, et
seq. The Tax Matters Member shall keep all Members informed or all notices from
government taxing authorities which may come to the attention of the Tax Matters
Member. The Company shall pay and be responsible for all reasonable third-party
costs and expenses incurred by the Tax Matters Member in performing those
duties. A Member shall be responsible for any costs incurred by the Member with
respect to any tax audit or tax-related administrative or judicial proceeding
against any Member, even though it relates to the Company. The Tax Matters
Member shall not compromise any dispute with the Internal Revenue Service
without the approval of the Members.
Article IX
General Provisions
9.1. Assurances. Each Member shall execute all certificates and
other documents and shall do all such filing, recording, publishing, and other
acts as the Members deem appropriate to comply with the requirements of law for
the formation and operation of the Company and to comply with any laws, rules,
and regulations relating to the acquisition, operation, or holding of the
property of the Company.
9.2 Notifications. Any notice, demand, consent, election, offer,
approval, request, or other communication (collectively a "notice") required or
permitted under this Agreement must be in writing and either delivered
personally or sent by certified or registered mail, postage prepaid, return
receipt requested or by facsimile transmission, provided receipt of facsimile
transmission is actually acknowledged by the Member or Member's agent. A notice
must be addressed to a Member at the Member's last known address on the records
of the Company. A notice to the Company must be addressed to the Company's
principal office. A notice that is sent by mail will be deemed given three (3)
business days after it is mailed. Any party may designate, by notice to all of
the others, substitute addresses or addressees for notices, and, thereafter,
notices are to be directed to those substitute addresses or addressees. A notice
sent by facsimile is deemed given when receipt is acknowledged.
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9.3. Specific Performance. The parties recognize that irreparable
injury will result from a breach off any provision of this Agreement and that
money damages will be inadequate to fully remedy the injury. Accordingly, in the
event of a breach or threatened breach of one or more of the provisions of this
Agreement, any party who may be injured (in addition to any other remedies which
may be available to that party) shall be entitled to one or more preliminary or
permanent orders (i) restraining and enjoining any act which would constitute
breach or (ii) compelling the performance of any obligation which, if not
performed, would constitute a breach.
9.4. Complete Agreement. This Agreement constitutes the complete
and exclusive statement of the agreement among the Members with respect to the
subject matter thereof. It supersedes all prior written and oral statements,
including any prior representation, statement, condition, or warranty.
9.5. Applicable. Law. All questions concerning the construction,
validity, and interpretation of this Agreement and the performance of the
obligations imposed by this Agreement shall be governed by the internal law, not
the law of conflicts, of the State of New York.
9.6. Article and Section Titles. The headings herein are inserted
as a matter of convenience only and do not define, limit, or describe the scope
of this Agreement or the intent of the provisions hereof.
9.7. Binding Provisions. This Agreement is binding upon, and inures
to the benefit of, the parties hereto and their respective heirs, executors,
administrators, personal and legal representatives, successors, and permitted
assigns.
9.8. Exclusive Jurisdiction and Venue. Any suit involving any
dispute or matter arising under this Agreement or relating to the organization
or operation of the Company may only be brought in a United States District
Court located in the State of New York or any New York State Court having
jurisdiction over the subject matter of the dispute or matter. All Members
hereby consent to the exercise of personal jurisdiction by any such court with
respect to any such proceeding and waive any objection.
9.9. Terms. Common nouns and pronouns shall be deemed to refer to
the masculine, feminine, neuter, singular, and plural, as the identity of the
Person may in the context require.
9.10. Separability of Provisions. Each provision of this Agreement
shall be considered separable; and if, for any reason, any provision or
provisions herein are determined to be invalid and contrary to any existing or
future law, such invalidity shall not
15
impair the operation of or affect those portions of this Agreement which are
valid.
9.11. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which, when taken together, constitute one and the same document. The signature
of any party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
IN WITNESS WHEREOF, the parties have executed, or caused this Agreement
to be executed as of the date set forth above.
MEMBERS:
708 GYM MERGER CORP.
/s/ Xxxx Xxxxxx
----------------------
Xxxx Xxxxxx,
President
/s/ Xxxx Xxxxxxxxxxx
----------------------
Xxxx Xxxxxxxxxxx,
Secretary
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708 GYM LLC
Operating Agreement
Exhibit A
List of Members and Percentages
Name and Address Percentage
708 Gym Merger Corp. 100%
00 Xxxxxxxxxx Xxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
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