LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
SOMA PETROLEUM, LLC
A NEVADA LIMITED LIABILITY COMPANY
Dated as of February 27, 2004
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND INTERPRETATION.........................................................................1
1.1 CERTAIN DEFINITIONS...................................................................................1
1.2 OTHER DEFINED TERMS...................................................................................4
1.3 INTERPRETATION........................................................................................5
ARTICLE II. INTRODUCTORY MATTERS..................................................................................5
2.1 FORMATION OF LLC......................................................................................5
2.2 NAME; PRINCIPAL OFFICE; AGENT.........................................................................5
2.3 PERIOD OF DURATION....................................................................................5
2.4 BUSINESS AND PURPOSE OF THE LLC.......................................................................5
2.5 TITLE TO ALL PROPERTIES...............................................................................6
ARTICLE III. MEMBERS AND CAPITAL CONTRIBUTIONS....................................................................6
3.1 MEMBERS; NO PERSONAL LIABILITY........................................................................6
3.2 INITIAL CAPITAL CONTRIBUTIONS.........................................................................6
3.3 ADDITIONAL CONTRIBUTIONS..............................................................................6
3.4 RIGHTS WITH RESPECT TO CAPITAL........................................................................6
3.5 GENERAL RULES FOR ADJUSTMENT OF CAPITAL ACCOUNTS......................................................6
3.6 SPECIAL RULES WITH RESPECT TO CAPITAL ACCOUNTS........................................................7
3.7 TRANSFEREE'S CAPITAL ACCOUNT..........................................................................7
ARTICLE IV. ALLOCATION OF PROFITS AND LOSSES......................................................................7
4.1 ALLOCATION OF NET PROFITS AND NET LOSSES..............................................................7
4.2 RESIDUAL ALLOCATIONS..................................................................................8
4.3 QUALIFIED INCOME OFFSET...............................................................................8
4.4 MINIMUM GAIN CHARGEBACK...............................................................................8
4.5 MEMBER NONRECOURSE DEBT MINIMUM GAIN CHARGEBACK.......................................................8
4.6 MEMBER NONRECOURSE DEDUCTIONS.........................................................................9
4.7 SPECIAL ALLOCATIONS...................................................................................9
4.8 FEES TO MEMBERS OR AFFILIATES.........................................................................9
4.9 SECTION 704(c) ALLOCATION.............................................................................9
ARTICLE V. DISTRIBUTIONS.........................................................................................10
5.1 AVAILABLE CASH FLOW..................................................................................10
5.2 LIQUIDATING DISTRIBUTIONS............................................................................10
ARTICLE VI. RIGHTS, DUTIES, OBLIGATIONS AND COMPENSATION OF MANAGER AND OFFICERS................................10
6.1 MANAGER..............................................................................................10
6.2 LIMITATIONS ON RIGHTS AND POWERS.....................................................................12
6.3 COMPENSATION OF MANAGER..............................................................................13
ARTICLE VII. MEMBERS; MEMBERS' MEETINGS..........................................................................13
7.1 PLACE OF MEETINGS; MANAGER TO PRESIDE................................................................13
7.2 ANNUAL MEETINGS OF MEMBERS...........................................................................13
7.3 SPECIAL MEETINGS.....................................................................................13
7.4 NOTICE OF MEETINGS...................................................................................13
7.5 VALIDATION OF MEMBERS' MEETINGS......................................................................14
7.6 ACTIONS WITHOUT A MEETING............................................................................14
7.7 REQUIRED VOTE........................................................................................14
7.8 QUORUM AND EFFECT OF VOTE............................................................................14
7.9 COMPENSATION OF MEMBERS..............................................................................14
ARTICLE VIII. RESTRICTIONS ON TRANSFER OF LLC INTERESTS; ADMISSION OF NEW MEMBERS................................15
8.1 TRANSFER OR ASSIGNMENT OF INTERESTS..................................................................15
8.2. RIGHT OF FIRST REFUSAL UPON SALE....................................................................15
8.3 BUYOUT OPTION........................................................................................16
8.4 VOID TRANSFERS.......................................................................................17
8.5 SUBSTITUTION OF MEMBERS..............................................................................17
8.6 ADMISSION OF NEW MEMBERS.............................................................................17
8.7 SUBSEQUENT TRANSFERS SUBJECT TO TERMS OF AGREEMENT...................................................18
8.8 PURCHASE TERMS VARIED BY AGREEMENT...................................................................18
ARTICLE IX. TERMINATION AND DISSOLUTION..........................................................................18
9.1 DISSOLUTION..........................................................................................18
9.2 DISASSOCIATION EVENT.................................................................................18
9.3 STATEMENT OF INTENT TO DISSOLVE......................................................................18
9.4 CONDUCT OF BUSINESS..................................................................................18
9.5 DISTRIBUTION OF NET PROCEEDS.........................................................................19
ARTICLE X. BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS.............................................................19
10.1 MAINTENANCE OF BOOKS AND RECORDS....................................................................19
10.2 ANNUAL ACCOUNTING...................................................................................20
10.3 INSPECTION AND AUDIT RIGHTS.........................................................................20
10.4 BANK ACCOUNTS; FISCAL YEAR AND ACCOUNTING METHOD....................................................20
10.5 TAX MATTERS.........................................................................................21
10.6 INCOME TAX ELECTIONS................................................................................21
ARTICLE XI. INDEMNIFICATION OF THE MEMBERS, MANAGER, AND THEIR AFFILIATES.......................................21
11.1 INDEMNIFICATION OF THE MEMBERS AND THEIR PRINCIPALS.................................................21
11.2 EXPENSES............................................................................................21
11.3 INDEMNIFICATION RIGHTS NON-EXCLUSIVE................................................................22
11.4 ERRORS AND OMISSIONS INSURANCE......................................................................22
11.5 ASSETS OF THE LLC...................................................................................22
ARTICLE XII. ISSUANCE OF LLC CERTIFICATES........................................................................22
12.1 ISSUANCE OF LLC CERTIFICATES........................................................................22
12.2 TRANSFER OF LLC INTERESTS...........................................................................22
12.3 LOST, STOLEN OR DESTROYED CERTIFICATES..............................................................23
ARTICLE XIII. AMENDMENTS.........................................................................................23
13.1 AMENDMENT, ETC. OF OPERATING AGREEMENT..............................................................23
13.2 AMENDMENT OF ARTICLES OF ORGANIZATION...............................................................23
ARTICLE XIV. REPRESENTATIONS AND ACKNOWLEDGMENTS.................................................................23
14.1 INVESTMENT REPRESENTATIONS..........................................................................23
14.2 NO REPRESENTATIONS BY LLC...........................................................................24
ARTICLE XV. MISCELLANEOUS PROVISIONS.............................................................................24
15.1 COUNTERPARTS........................................................................................24
15.2 SURVIVAL OF RIGHTS..................................................................................24
15.3 SEVERABILITY........................................................................................24
15.4 NOTIFICATION OR NOTICES.............................................................................24
15.5 GOVERNING LAW.......................................................................................25
15.6 FURTHER ACTIONS.....................................................................................25
15.7 ARBITRATION OF DISPUTES.............................................................................25
15.8 THIRD PARTY BENEFICIARIES...........................................................................25
15.9 PARTITION...........................................................................................25
15.10 ENTIRE AGREEMENT...................................................................................25
15.11 WAIVER.............................................................................................25
15.12 ATTORNEYS' FEES....................................................................................26
15.13 CONFIDENTIALITY....................................................................................26
EXHIBIT A Initial Member Names and Addresses; Initial Capital Contributions and
Percentage Interests
EXHIBIT B Form of Certificate for LLC Interest
SOMA PETROLEUM, LLC
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
This Limited Liability Company Operating Agreement (this "Agreement")
is made and entered into effective as of February 27, 2004 by and among the
Persons executing this Agreement on the signature pages hereof, with reference
to the recitals set forth below.
R E C I T A L S
WHEREAS, the Member(s) have caused SOMA PETROLEUM, LLC (the "LLC") to
be formed pursuant to the provisions of the Nevada Revised Statutes as set forth
in Title 7, Chapter 86 (the "Statute"); and
WHEREAS, the Member(s) do hereby adopt this Agreement as the operating
agreement of the LLC.
NOW, THEREFORE, in consideration of the covenants and the promises made
herein, the parties hereto hereby agree as follows.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
1.1......CERTAIN DEFINITIONS. In this Agreement, the following terms
have the meanings specified or referred to in this Section 1.1, which shall be
equally applicable to both the singular and plural forms.
1.1.1 "Adjusted Capital Account Deficit" means, with respect
to any Member, the deficit balance, if any, in such Member's Capital Account as
of the end of the relevant fiscal year of the LLC, after giving effect to the
following adjustments:
(i) increase such Capital Account by any amounts
which such Member is obligated to contribute to the LLC (pursuant to
the terms of this Agreement or otherwise) or is deemed to be obligated
to contribute to the LLC pursuant to Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and
(ii) reduce such Capital Account by the amount of
the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
(5) and (6).
1.1.2 "Affiliate" means, when used with reference to a
specified Person, (i) the Principal of the Person, (ii) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
(iii) any Person owning or controlling 10% or more of the outstanding voting
interests of such Person and (iv) any relative or spouse of such Person.
1.1.3 "Agreement" means this Limited Liability Company
Operating Agreement, as originally executed and as amended from time to time.
1.1.4 "Articles of Organization" means the articles of
organization filed with the Nevada Secretary of State for the purpose of forming
the LLC.
1.1.5 "Available Cash Flow" means, with respect to any fiscal
year of the LLC or other period, the sum of all cash receipts of the LLC from
any and all sources, less all cash disbursements (including loan repayments,
capital improvements and replacements) and a reasonable allowance for Reserves,
contingencies and anticipated obligations, as determined by the Manager.
1.1.6 "Capital Contribution" means any money, property or
services rendered, or a promissory note or other binding obligation to
contribute money, property or services, that a Member contributes to the LLC as
capital in such Member's capacity as a Member and pursuant to an agreement among
the Members, including an agreement as to the value of such contribution.
1.1.7 "Code" means the Internal Revenue Code of 1986, as
amended.
1.1.8 "Depreciation" means, for each fiscal year of the LLC or
other period, an amount equal to the depreciation, amortization or other cost
recovery reduction allowable with respect to an asset for such fiscal year or
other period.
1.1.9 "Disassociation Event" means the death, retirement,
resignation, expulsion, bankruptcy or dissolution of a Member, or any other
event that terminates the continued membership in the LLC of a Member.
1.1.10 "Economic Interest" means a Person's right to share in
the Net Profits, Net Losses or similar items of, and to receive distributions
from, the LLC, but does not include any other rights of a Member including the
right to vote or to participate in the management of the LLC or, except as
provided in Section 10.3, any right to information concerning the business and
affairs of the LLC.
1.1.11 "LLC Interest" or "Interest" means an ownership
interest in the LLC, which includes the Economic Interest, the right to vote or
participate in the management of the LLC and the right to information concerning
the business and affairs of the LLC, as provided in this Agreement and under the
Statute. The Interests of the Members, and any portion thereof, constitute the
personal property of the holders thereof.
1.1.12 "LLC Minimum Gain" means the amount determined by
computing with respect to each nonrecourse liability of the LLC, the amount of
gain (of whatever character), if any, that would be realized by the LLC if it
disposed (in a taxable transaction) of the Property subject to such liability in
full satisfaction thereof, and by then aggregating the amounts so computed as
set forth in Regulations Section 1.704-2(d).
1.1.13 "Majority in Interest of the Members" means with
respect to any date of determination more than 50% of the interests of the
Members in the current profits and capital of the LLC.
1.1.14 "Manager" means each Person designated or elected to
manage the LLC pursuant to Section 6.1 of this Agreement.
1.1.15 "Member Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
1.1.16 "Member Nonrecourse Debt Minimum Gain" means an amount,
with respect to each Member Nonrecourse Debt, equal to the LLC Minimum Gain that
would result if such Member Nonrecourse Debt were treated as a nonrecourse
liability of the LLC, determined in accordance with Regulations Sections
1.704-2(i)(2) and (3).
1.1.17 "Member Nonrecourse Deductions" has the meaning set
forth in Regulations Section 1.704-2(i)(2). The amount of Member Nonrecourse
Deductions with respect to a Member Nonrecourse Debt for a fiscal year of the
LLC equals the excess (if any) of the net increase (if any) in the amount of
Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse
Debt during that fiscal year over the aggregate amount of any distributions
during that fiscal year to the Member that bears (or is deemed to bear) the
economic loss for such Member Nonrecourse Debt to the extent such distributions
are from the proceeds of such Member Nonrecourse Debt and are allocable to an
increase in Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(2).
1.1.18 "Member" means a Person who is a signatory to this
Agreement, as the same may be amended from time to time, and who has not
resigned, withdrawn or been expelled as a Member or, if other than an
individual, been dissolved.
1.1.19 "Net Profits" and "Net Losses" mean, for each fiscal
year of the LLC or other period, an amount equal to the LLC's taxable income or
loss for such fiscal year or period, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss or deduction required
to be stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(i) Any income of the LLC that is exempt from Federal
income tax and not otherwise taken into account in computing Net
Profits or Net Losses shall be added to such taxable income or loss;
(ii) Any expenditures of the LLC described in Code
Section 705(b)(2)(B) or treated as Code Section 705(b)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i) and
not otherwise taken into account in computing Net Profits or Net Losses
shall be subtracted from such taxable income or loss;
(iii) Gain or loss resulting from any disposition of
Property with respect to which gain or loss is recognized for Federal
income tax purposes shall be computed by reference to the fair market
value of the Property disposed of, notwithstanding that the adjusted
tax basis of such Property differs from its fair market value;
(iv) In lieu of 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
fiscal year or other period, computed in accordance with the Section
1.1.8 hereof, and
(v) Notwithstanding any other provision of this
subsection, any items of income, gain, loss or deduction which are
specifically allocated shall not be taken into account in computing Net
Profits or Net Losses.
1.1.20 "Percentage Interests" of the Members shall be as set
forth on Exhibit A hereto, as the same may be amended from time to time in
accordance with this Agreement or supplemented by a register of Interests or any
other books and records maintained in conformity with this Agreement by the LLC
or its transfer agent or registrar for the purpose of recording the interests of
the LLC's Interest holders.
1.1.21 "Person" means any individual, partnership, limited
partnership, corporation, trust, estate, association, limited liability company
or other entity, whether domestic or foreign.
1.1.22 "Principal" means the individual who is in ultimate
control of a Member.
1.1.23 "Property" means all assets of the LLC, both tangible
and intangible, or any portion thereof.
1.1.24 "Regulations" means the Federal income tax regulations
promulgated by the Treasury Department under the Code, as such regulations may
be amended from time to time.
1.1.25 "Reserves" means funds set aside from Capital
Contributions or gross cash revenues as reserves. Such Reserves shall be
maintained in amounts reasonably deemed sufficient by the Manager for working
capital and the payment of taxes, insurance, debt service, repairs,
replacements, renewals or other costs or expenses incident to the business of
the LLC.
1.2 OTHER DEFINED TERMS. The following terms have the meanings defined
for such terms in the Sections set forth below:
Term Section
Arbitrator 15.7
Buyout Event 8.3.1
Buyout Notice 8.3.1
Buyout Option 8.3.1
Capital Account 3.4.3
Departing Member 8.3.1
Fair Market Value 8.3.2
Indemnitee 11.1
LLC Recitals
LLC Certificate 12.1
Period of Duration 2.5
Permitted Transfer 8.1
Remaining Member 8.3.1
Sale Notice 8.2.1
Statute Recitals
Transfer 8.1
Vote 7.7
1.3 INTERPRETATION. As used in this Agreement, the word "including"
means without limitation, the word "or" is not exclusive and the words "herein,"
"hereof," "hereto" and hereunder refer to this Agreement as a whole. Unless the
context otherwise requires, references herein: (i) to Articles, Sections and
Exhibits mean the Articles and Sections of and the Exhibits attached to this
Agreement, (ii) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and by this
Agreement and (iii) to a statute means such statute as amended from time to time
and includes any successor legislation thereto. The Exhibits referred to herein
shall be construed with and as an integral part of this Agreement to the same
extent as if they were set forth verbatim herein. Titles to Articles and
headings of Sections are inserted for convenience of reference only and shall
not be deemed a part of or to affect meaning or interpretation of this
Agreement. The language herein shall be in all cases construed simply according
to its fair meaning and not strictly for or against any of the Members.
ARTICLE II.
INTRODUCTORY MATTERS
2.1 FORMATION OF LLC. The parties have formed the LLC pursuant to the
provisions of the Statute by filing the Articles of Organization with the Nevada
Secretary of State. The rights and liabilities of the Members shall be
determined pursuant to the Statute and this Agreement. To the extent that the
rights or obligations of any Member are different by reason of any provision of
this Agreement than they would be in the absence of such provision, this
Agreement shall, to the extent permitted by the Statute, control.
2.2 NAME; PRINCIPAL OFFICE; AGENT. The name of the LLC is "SOMA
PETROLEUM, LLC." The LLC shall maintain its principal place of business at 000
Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000, or at any other location
mutually agreed upon by the Members. The name and address of the LLC's agent for
service of process is GKL Resident Agents/Filings, Inc., 0000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxx xxxx, Xxxxxx 00000.
2.3 PERIOD OF DURATION. The period of duration of the LLC (the "Period
of Duration") shall be in perpetuity, unless the LLC is sooner terminated or
dissolved in accordance with the provisions of this Agreement.
2.4 BUSINESS AND PURPOSE OF THE LLC. The purpose of the LLC is to
engage in any lawful activities for which a limited liability company may be
organized under the Statute, provided that the LLC shall not conduct any
banking, insurance or trust company business. Specifically, the LLC has been
formed to develop and procure oil, gas and mineral rights in Somaliland.
2.5 TITLE TO ALL PROPERTIES. Real and personal property owned or
purchased by the LLC shall be held and owned, and conveyance made, in the name
of the LLC. Instruments and documents providing for the acquisition, mortgage or
disposition of Property of the LLC shall be valid and binding upon the LLC,
except as otherwise limited by this Agreement, if executed by the Manager of the
LLC.
ARTICLE III.
MEMBERS AND CAPITAL CONTRIBUTIONS
3.1 MEMBERS; NO PERSONAL LIABILITY. The name, present mailing address
and Percentage Interest of each Member is set forth on Exhibit A hereto. No
Member shall have any personal liability for any obligation of the LLC, except
as expressly provided by law.
3.2 INITIAL CAPITAL CONTRIBUTIONS. Upon execution of this Agreement,
each Member shall contribute to the LLC cash in the amount set forth beside such
Member's name under the heading "Member's Capital Contribution" on Exhibit A
hereto.
3.3 ADDITIONAL CONTRIBUTIONS. Except as may be otherwise expressly set
forth herein, no Member shall be required to make any additional Capital
Contributions or loan or caused to be loaned to the LLC any money or other
assets.
3.4 RIGHTS WITH RESPECT TO CAPITAL.
3.4.1 LLC Capital. Except as otherwise provided in this
Agreement, no Member shall have the right to withdraw or receive any return of
its Capital Contribution, and no Capital Contribution may be returned in a form
of property other than cash.
3.4.2 No Interest on Capital Contributions. Except as
expressly provided in this Agreement, no Capital Contribution of any Member
shall bear any interest or otherwise entitle the contributing Member to any
compensation for the use of contributed capital.
3.4.3 Establishment of Capital Accounts. A separate capital
account (each, a "Capital Account") shall be maintained for each Member. For
book purposes, each Member's Capital Account will be separated into a
contribution account and an income (loss) account and will be maintained
according to generally accepted accounting principles consistently applied.
Sections 3.5 and 3.6 below describe the appropriate accounting treatment for tax
purposes of the Capital Accounts.
3.5 GENERAL RULES FOR ADJUSTMENT OF CAPITAL ACCOUNTS.
3.5.1 Increases. The Capital Account of a Member shall be
increased by:
(i) Such Member's cash contributions;
(ii) The agreed fair market value of property
contributed by such Member (net of liabilities secured by such
contributed property that the LLC is deemed to assume or take subject
to under Code Section 752); and
(iii) All items of LLC income and gain (including
income and gain exempt from tax) allocated to such Member pursuant to
Article IV or other provisions of this Agreement.
3.5.2 Decreases. The Capital Account of a Member shall be
decreased by:
(i) The amount of cash distributed to such Member;
(ii) The agreed fair market value of all actual and
deemed distributions of property made to such Member pursuant to this
Agreement (net of liabilities secured by such distributed property that
the Member is deemed to assume or take subject to under Code Section
752); and
(iii) All items of LLC deduction and loss allocated
to such Member pursuant to Article IV or other provisions of this
Agreement.
3.6 SPECIAL RULES WITH RESPECT TO CAPITAL ACCOUNTS.
3.6.1 Time of Adjustment for Capital Contributions. For
purposes of computing the balance in a Member's Capital Account, no credit shall
be given for any Capital Contribution which such Member is to make until such
contribution is actually made.
3.6.2 Intent to Comply with Treasury Regulations. The
provisions of Section 3.5 and this Section 3.6 and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Section 1.704-1(b), and shall be interpreted and applied in a
manner consistent therewith. To the extent such provisions are inconsistent with
such Regulations Section or are incomplete with respect thereto, the Capital
Accounts shall be maintained in such manner as is required to comply with such
Regulations Section.
3.7 TRANSFEREE'S CAPITAL ACCOUNT. In the event a Member or the holder
of an Economic Interest transfers an Interest in accordance with the terms of
this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Interest.
ARTICLE IV.
ALLOCATION OF PROFITS AND LOSSES
4.1 ALLOCATION OF NET PROFITS AND NET LOSSES. Except as otherwise
provided in this Article IV, Net Profits and Net Losses in each fiscal year of
the LLC shall be allocated among the Members as follows:
4.1.1 Net Profits. After giving effect to any special or other
overriding allocations set forth in this Article IV, Net Profits shall be
allocated among the Members as follows:
(i) first, in proportion to and up to the amounts of
Net Losses allocated for previous fiscal years of the LLC pursuant to
Section 4.1.2(ii) and not previously affected by allocations pursuant
to this Section 4.1.1(i);
(ii) second, in proportion to and up to the amounts
of Net Losses allocated for previous fiscal years of the LLC pursuant
to Section 4.1.2(i) and not previously affected by allocations pursuant
to this Section 4.1.1(ii); and
(iii) thereafter, to the Members in accordance with
their respective Percentage Interests.
4.1.2 Allocation of Net Losses. After giving effect to any
special or other overriding allocations set forth in this Article IV, Net Losses
shall be allocated among the Members as follows:
(i) first, in proportion and to the extent of the
Members' positive adjusted Capital Accounts; and
(ii) thereafter, to the Members in accordance with
their respective Percentage Interests.
4.2 RESIDUAL ALLOCATIONS. Except as otherwise provided in this
Agreement, all items of LLC income, gain, loss, deduction and any other
allocations not otherwise provided for shall be divided among the Members in the
same proportions as they share Net Profits or Net Losses, as the case may be,
for the applicable fiscal year of the LLC.
4.3 QUALIFIED INCOME OFFSET. If any Member unexpectedly receives any
adjustments, allocation or distributions described in clauses (4), (5) or (6) of
Regulations Section 1.704-1(b)(2)(ii)(d), items of LLC income shall be specially
allocated to such Member in an amount and manner sufficient to eliminate the
Adjusted Capital Account Deficit created by such adjustments, allocations or
distributions as quickly as possible. This Section 4.3 is intended to constitute
a "qualified income offset" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(d)(3).
4.4 MINIMUM GAIN CHARGEBACK. If there is a net decrease in LLC Minimum
Gain during a fiscal year, each Member will be allocated, before any other
allocation under this Article IV, items of income and gain for such fiscal year
(and, if necessary, subsequent years) in proportion to and to the extent of an
amount equal to such Member's share of the net decrease in LLC Minimum Gain
determined in accordance with Regulations Section 1.704-2(g)(2). This Section
4.4 is intended to comply with, and shall be interpreted consistently with, the
"minimum gain chargeback" provisions of Regulations Section 1.704-2(f).
4.5 MEMBER NONRECOURSE DEBT MINIMUM GAIN CHARGEBACK. Notwithstanding
any other provision of this Article IV, but except Section 4.4, if there is a
net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member
Nonrecourse Debt during any fiscal year of the LLC, each Member who has a share
of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Treasury Regulations Section
1.704-2(i)(5), shall be specially allocated items of LLC income and gain for
such year (and, if necessary, subsequent years) in an amount equal such Member's
share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Section 1.704-2(i)(4). This Section 4.5 is intended
to comply with a minimum gain chargeback requirement of that Section of the
Regulations and shall be interpreted consistently therewith.
4.6 MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse Deductions
for any fiscal year of the LLC or other period shall be specially allocated to
the Member who bears (or is deemed to bear) the economic risk of loss with
respect to the Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with Regulations Section
1.704-2(i)(2).
4.7 SPECIAL ALLOCATIONS. Any special allocations of items of Net
Profits pursuant to Sections 4.4, 4.5 and 4.6 shall be taken into account in
computing subsequent allocations of Net Profits pursuant to Section 4.1, so that
the net amount of any items so allocated and the gain, loss and any other item
allocated to each Member pursuant to Section 4.1 shall, to the extent possible,
be equal to the net amount that would have been allocated to each such Member
pursuant to the provisions of this Article IV if such special allocations had
not occurred.
4.8 FEES TO MEMBERS OR AFFILIATES. Notwithstanding the provisions of
Section 4.1, in the event that any fees, interest or other amounts paid to any
Member or any Affiliate thereof pursuant to this Agreement or any other
agreement between the LLC and any Member or Affiliate thereof providing for the
payment of such amount, and deducted by the LLC in reliance on Section 707(a)
and/or 707(c) of the Code, are disallowed as deductions to the LLC on its
federal income tax return and are treated as LLC distributions, then:
(i) the Net Profits or Net Losses, as the case may be, for the
fiscal year of the LLC in which such fees, interest, or other amounts were paid
shall be increased or decreased, as the case may be, by the amount of such fees,
interest or other amounts that are treated as LLC distributions; and
(ii) there shall be allocated to the Member to which (or to
whose Affiliate) such fees, interest or other amounts were paid, prior to the
allocations pursuant to Section 4.1, an amount of gross income for such fiscal
year equal to the amount of such fees, interest or other amounts that are
treated as LLC distributions.
4.9 SECTION 704(c) ALLOCATION. Any item of income, gain, loss and
deduction with respect to any property (other than cash) that has been
contributed by a Member to the capital of the LLC and which is required or
permitted to be allocated to such Member for income tax purposes under Section
704(c) of the Code so as to take into account the variation between the tax
basis of such property and its fair market value at the time of its contribution
shall be allocated to such Member solely for income tax purposes in the manner
so required or permitted.
ARTICLE V.
DISTRIBUTIONS
5.1 AVAILABLE CASH FLOW. Subject to applicable law, the Manager from
time to time may elect to distribute Available Cash Flow of the LLC to the
Members in proportion to their Percentage Interests as of the time of such
distribution. For purposes of allocations of Net Profits pursuant to Section
4.1.1, Available Cash Flow attributable to a specific fiscal year of the LLC
shall be deemed distributed as of the end of such fiscal year.
5.2 LIQUIDATING DISTRIBUTIONS. If the LLC is liquidated, the assets of
the LLC shall be distributed to the Members in accordance with the balances in
their respective Capital Accounts, after giving effect to all Capital
Contributions, distributions and allocations for all periods. Distributions to
the Members pursuant to this Section 5.2 shall be made in accordance with
Section 1.704-1(b)(2)(ii)(b)(2) of the Regulations.
ARTICLE VI.
RIGHTS, DUTIES, OBLIGATIONS AND
COMPENSATION OF MANAGER AND OFFICERS
6.1 MANAGER. The LLC shall be managed initially by Xxxxxx Xxxxx. A
Manager need not be a Member or an individual.
6.1.1 Duties of the Manager. The Manager shall function
collectively as the general manager and chief executive officer of the LLC and
have, subject to the control of the Members, general supervision, direction and
control of the business of the LLC. The Manager shall have such rights, duties
and powers as are specified in this Agreement, or conferred upon the Manager by
a Vote of the Members.
6.1.2 Execution of Documents. To the extent practicable, the
Manager shall operate the business and affairs of the LLC in consultation with
one another, but notwithstanding the provisions of this Section 6.1, and except
as set forth in Section 6.2 hereof, any Manager acting alone may execute any
contract, deed, lease, agreement or other instrument on behalf of the LLC, and
the execution thereof by a Manager shall be conclusive evidence in favor of
every Person relying thereon or claiming thereunder that such contract, deed,
lease, agreement or other instrument, when executed and delivered by such
Manager, was duly authorized by the Members and/or the Manager, as appropriate;
provided, however, that any action by the Manager with respect to the matters
set forth in Section 6.2 hereof shall be authorized by a majority of the Manager
in the manner set forth in this Section 6.1.
6.1.3 Election. Each Manager shall hold office until such
Manager's successor has been elected by a Vote of the Members and has qualified,
unless such Manager earlier resigns or is removed or otherwise disqualified to
serve. In voting for Manager, each Member shall have a number of votes equal to
such Member's Percentage Interest in the LLC. The candidate for a Manager
position who receives the most Member votes cast with respect to such position
shall succeed thereto.
6.1.4 Subordinate Officers. The Members may appoint a
secretary, a chief financial officer and such other officers as the business of
the LLC may require, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in this Agreement, or as the
Members may determine.
6.1.5 Removal and Resignation. Any Manager or other officer of
the LLC may be removed, with or without cause, by a Vote of the Members. Any
Manager or other officer of the LLC may resign at any time without prejudice to
any rights of the LLC under any contract to which the Manager or other officer
of the LLC is a party, by giving written notice to the Members or to the
Manager, as applicable. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
6.1.6 Vacancies. A vacancy among the Manager or in any office
because of death, resignation, removal, disqualification or any other cause
shall be filled by a Vote of the Members through the appointment of a successor
Manager or officer who shall hold office for the unexpired term.
6.1.7 Meetings. Any meetings of the Manager shall be held at
the principal office of the LLC, unless some other place is designated in the
notice of the meeting. Any Manager may participate in a meeting through use of a
conference telephone or similar communication equipment so long as all Manager
participating in such a meeting can hear one another. Accurate minutes of any
meeting of the Manager shall be maintained by the officer designated by the
Manager for that purpose.
6.1.8 Regular Meetings. Meetings of Manager shall not be
required. Regular meetings of the Manager may be held immediately following the
adjournment of any annual meeting of the Members at which the Manager are
elected. No notice need be given of such regular meetings.
6.1.9 Special Meetings. Special meetings of the Manager for
any purpose may be called at any time by any Manager. At least 48 hours notice
of the time and place of a special meeting of the Manager shall be delivered
personally to the Manager or personally communicated to them by an officer of
the LLC by telephone, telegraph or facsimile. If the notice is sent to a Manager
by letter, it shall be addressed to such Manager at his, her or its last known
business address as it is shown in the records of the LLC. In case such notice
is mailed, it shall be deposited in the United States mail, first-class postage,
prepaid, in the place in which the principal office of the LLC is located at
least four days prior to the time of the holding of the meeting. Such mailing,
telegraphing, telephoning or delivery as above provided shall be considered due,
legal and personal notice to such Manager.
6.1.10 Meetings Without Notice. Notice of a meeting need not
be given to any Manager who signs a waiver of notice, a consent to holding the
meeting or an approval of the minutes thereof, whether before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to such Manager. All such waivers, consents and
approvals shall be filed with the LLC's records or made a part of the minutes of
the meeting.
6.1.11 Written Consent in Lieu of Meetings. Any action
required or permitted to be taken by the Manager may be taken without a meeting
and will have the same force and effect as if taken by a vote of the Manager at
a meeting properly called and noticed, if authorized by a writing signed
individually or collectively by all, but not less than all, of the Manager. Any
such consent shall be filed with the records of the LLC.
6.1.12 Quorum. A majority of the total number of incumbent
Manager shall be necessary to constitute a quorum for the transaction of
business at any meeting of the Manager, and except as otherwise provided in this
Agreement or by the Statute, the action of a majority of the Manager present at
any meeting at which there is a quorum, when duly assembled, is valid. A meeting
at which a quorum is initially present may continue to transact business,
notwithstanding the withdrawal of Manager, if any action taken is approved by a
majority of the required quorum for such meeting.
6.2 LIMITATIONS ON RIGHTS AND POWERS. Except by a Vote of the Members
which is evidenced in writing, neither the Manager nor any officers of the LLC
shall have the authority to:
(i) Enter into or commit to any agreement, contract,
commitment or obligation on behalf of the LLC obligating any Member or Principal
to fund additional capital, to make or guarantee a loan or to increase its
personal liability either to the LLC or to third parties;
(ii) Permit the LLC's funds to be commingled with the funds of
any other Person;
(iii) Do any act in contravention of this Agreement;
(iv) Do any act which would make it impossible to carry on the
business of the LLC;
(v) Confess a judgment against the LLC; or
(vi) Sell, exchange or otherwise dispose of all or
substantially all of the assets of the LLC, whether in a single transaction or
in a series of related transactions, or merge the LLC with or into any other
limited liability company, limited partnership, corporation or other entity.
6.3 COMPENSATION OF MANAGER. The LLC shall pay to the Manager such
salary and other benefits as shall be approved from time to time by a Vote of
the Members. The LLC shall reimburse the Manager for any expense paid by a
Manager that properly is to be borne by the LLC.
ARTICLE VII.
MEMBERS; MEMBERS' MEETINGS
7.1 PLACE OF MEETINGS; MANAGER TO PRESIDE. Meetings of the Members
shall be held at the principal office of the LLC or at such other location as
may be reasonably designated by the Manager. The Manager shall preside at all
meetings of the Members.
7.2 ANNUAL MEETINGS OF MEMBERS. Annual meetings of the Members shall
not be required. An annual meeting of the Members may be held at such date, time
and place within or without the State of Nevada as the Manager may determine
from time to time. At any annual meeting, the Members may elect the Manager and
transact such other business as may be properly brought before the meeting.
Notwithstanding the foregoing, the Manager shall not be under any obligation to
convene an annual meeting of the Members unless requested to do so in writing by
a Majority in Interest of the Members.
7.3 SPECIAL MEETINGS. Special meetings of the Members may be called at
any time by any Manager or by one or more Members holding in the aggregate more
than 10% of the Percentage Interests. Upon receipt of a written request, which
request may be mailed or delivered personally to the Manager, from any Person
entitled to call a special meeting of Members, the Manager shall cause notice to
be given to the Members that a meeting will be held at a time requested by the
Person or Persons calling the meeting, which time for the meeting shall be not
less than 10 nor more than sixty 60 days after the receipt of such request. If
such notice is not given within 20 days after delivery of such request to the
Manager, the Persons calling the meeting may give notice thereof in the manner
provided by this Agreement.
7.4 NOTICE OF MEETINGS. Except as provided in Section 7.3 with respect
to special meetings, notice of meetings shall be given by the Manager to the
Members in writing not less than 10 nor more than 60 days before the date of the
meeting. Notices for regular and special meetings shall be given personally, by
mail or by facsimile, and shall be sent to each Member's last known business
address appearing on the books of the LLC. Such notice shall be deemed given at
the time it is delivered personally, deposited in the mail or sent by facsimile.
Notice of any meeting of Members shall specify the place, the day and the hour
of the meeting, and (i) in case of a special meeting, the general nature of the
business to be transacted, or (ii) in the case of an annual meeting, those
matters which the Manager, at the date of mailing, intend to present for action
by the Members.
7.5 VALIDATION OF MEMBERS' MEETINGS. Business transacted at a meeting
of Members which was not called or noticed pursuant to the provisions of Section
7.3 or 7.4 shall be valid as though transacted at a meeting duly held after
regular call and notice, if Members holding in the aggregate more than 50% of
the Percentage Interests are present, and if, either before or after the
meeting, each of the Members entitled to vote but not present (whether in person
or by proxy, as that term is used in the Statute) at the meeting signs a written
waiver of notice, a consent to the holding of such meeting or an approval of the
minutes thereof. All such waivers, consents or approvals shall be filed with the
records of the LLC. Attendance at a meeting shall constitute a waiver of notice,
unless an objection is made at the beginning of the meeting that it was not duly
called or convened.
7.6 ACTIONS WITHOUT A MEETING. Any action which may be taken at any
annual or special meeting of Members may be taken without a meeting and without
prior notice if a consent in writing, setting forth the action so taken, shall
be signed by Members holding in the aggregate the number of votes equal to or
greater than the number of votes required to approve such action at a meeting of
the Members. Notwithstanding the foregoing, unless the consents of all of the
Members have been given in writing, notice of any approval of (i) an amendment
to this Agreement or the Articles of Organization, (ii) a dissolution of the LLC
pursuant to clause (ii) of Section 9.1 hereof or (iii) a merger of the LLC as
provided in Section 17551 of the Statute shall be given at least 10 days before
the consummation of any such action to each Member whose consent was not so
obtained. Any Member giving a written consent may revoke the consent by a
writing received by the LLC prior to the time that written consents of Members
required to authorize the proposed action have been filed with the LLC. Any such
revocation shall be effective upon its receipt by the LLC.
7.7 REQUIRED VOTE. Unless otherwise expressly set forth in this
Agreement or required by the terms of the Statute, Code or applicable
Regulations thereunder, the affirmative vote of at least a Majority in Interest
of the Members (a "Vote"), wherein each Member casts a number of votes equal to
the Member's Percentage Interest in the LLC, shall constitute the approval of
the Members.
7.8 QUORUM AND EFFECT OF VOTE. A Majority in Interest of the Members
shall constitute a quorum at all meetings of the Members for the transaction of
business, and a Vote of the Members shall be required to approve any action,
unless a greater vote is required or a lesser vote is provided for by this
Agreement or by the Statute. Each Member shall have a number of votes equal to
the Percentage Interest held by such Member, provided that if, pursuant to the
Statute or the terms of this Agreement, a Member is not entitled to vote on a
specific matter, then such Member's number of votes and Percentage Interest
shall not be considered for purposes of determining whether a quorum is present,
or whether approval by Vote of the Members has been obtained in respect of such
specific matter.
7.9 COMPENSATION OF MEMBERS. Except as expressly permitted by this
Agreement or any other duly authorized and approved written agreement, the LLC
shall pay no compensation to any Member or any Principal of any Member for their
services to the LLC.
ARTICLE VIII.
RESTRICTIONS ON TRANSFER OF LLC
INTERESTS; ADMISSION OF NEW MEMBERS
8.1 TRANSFER OR ASSIGNMENT OF INTERESTS. No transfer, sale,
hypothecation, pledge, encumbrance, assignment or other disposition (each of the
foregoing, a "Transfer") of a Member's Interest, or any part thereof, will be
valid without the consent of a Majority in Interest of the Members. Any Transfer
of an Interest, including an involuntary Transfer, which does not satisfy the
requirements of this Section 8.1 shall be subject to the provisions of Section
8.3 hereof; provided, however, that any Transfer by a Member to a trust or other
entity wholly owned by or established for the benefit of such Member, or to a
parent, spouse, sibling or descendant of such Member or to a trust established
exclusively for the benefit of one or more of such Persons (any such Transfer, a
"Permitted Transfer"), shall not require consent pursuant to this Section 8.1.
8.2. RIGHT OF FIRST REFUSAL UPON SALE. Other than with respect to
Permitted Transfers, in the event that any Member receives a bona fide offer for
the purchase and sale of all or any portion of such Member's Interest, the
Member shall first offer to sell such Interest or portion thereof to the other
Members and to the LLC in accordance with the provisions of this Section 8.2.
8.2.1 Notice of Offer to Sell. Promptly following the receipt
of an offer to purchase all or any portion of his, her or its Interest, a Member
shall deliver a written notice (the "Sale Notice") to the LLC and the other
Members stating (i) such Member's bona fide intention to sell his, her or its
Interest, (ii) the name and address of the proposed transferee, (iii) the
Interest or portion thereof to be sold and (iv) the purchase price and terms of
payment upon which the Member proposes to sell such Interest.
8.2.2 Right of First Refusal. Within 90 days after receipt of
the Sale Notice, the LLC and the Members electing to purchase the Interest
subject to the Sale Notice shall have the first right to purchase or obtain such
Interest upon the price and terms of payment designated in the Sale Notice. If
the Sale Notice provides for the payment of non-cash consideration, the LLC and
the purchasing Members each may elect to pay the consideration in cash equal to
the good faith estimate of the present fair market value of the non-cash
consideration offered, as determined by the Manager or, in the absence of an
agreement among the Manager as to such value, by a nationally recognized firm of
appraisers jointly selected by the Manager.
8.2.3 Election to Exercise Right of First Refusal. Within 30
days after receipt of the Sale Notice, each non-selling Member shall notify the
Manager in writing of his, her or its desire to purchase a portion of the
Interest subject to the Sale Notice. The failure of any Member to so notify the
Manager within the applicable period shall constitute an election on the part of
that Member not to purchase any portion of the Interest subject to the Sale
Notice. Each Member so electing to purchase shall be entitled to purchase a
portion of such Interest in the same proportion that the Percentage Interest of
such Member bears to the aggregate of the Percentage Interest of all of the
Members electing to so purchase the Interest subject to the Sale Notice. In the
event any Member elects to purchase none or less than all of his, her or its pro
rata share of such Interest, then the other Members can elect to purchase more
than their pro rata share. If such Members fail to purchase the entire Interest
subject to the Sale Notice, the LLC may purchase any remaining share of such
Interest.
8.2.4 Lapse of Right of First Refusal. If the LLC or the other
Members elect not to purchase or obtain all of the Interest subject to the Sale
Notice, then the selling Member may sell the Interest described in the Sale
Notice to the proposed transferee, provided such sale (i) is completed within 30
days after the expiration of the LLC's and the other Members' right to purchase
such Interest, (ii) is made on terms no less favorable to the selling Member
than as designated in the Sale Notice and (iii) the requirements of Section 8.1
have been met. If such Interest is not so sold, the selling Member must give
notice in accordance with this Section 8.2. prior to any subsequent sale of such
Member's Interest.
8.3 BUYOUT OPTION.
8.3.1 Buyout Notice. Any Member (a "Remaining Member") or its
designated Affiliate shall have the right (the "Buyout Option") to purchase all,
but not less than all, of the LLC Interest of any other Member (a "Departing
Member") in the event the Departing Member Transfers any portion of such
Member's LLC Interest other than as permitted pursuant to Section 8.1 hereof (a
"Buyout Event"). Within 30 days of receipt of notice of a Buyout Event, the
Remaining Member shall give written notice (the "Buyout Notice") to the
Departing Member of the Remaining Member's desire to purchase the Departing
Member's LLC Interest. In the event that there is more than one Remaining Member
at the time a Buyout Event occurs, the Remaining Members shall be entitled to
exercise the Buyout Option pro rata in accordance with their respective
Percentage Interests.
8.3.2 Purchase Price of the Departing Member's LLC Interest.
The purchase price of the Departing Member's LLC Interest shall be the Fair
Market Value thereof. For purposes hereof, the "Fair Market Value" of such
Interest shall be such value as is mutually agreed upon among the Members (which
term shall include, for purposes of this Section 8.3.2, the Departing Member's
legal representatives); provided, however, that in the event that such Persons
are unable to agree upon a Fair Market Value within 30 days of the date of the
Buyout Notice, the Fair Market Value shall be determined by an independent
appraiser affiliated with a nationally recognized firm of accountants,
appraisers or investment bankers and selected by the Manager in the exercise of
their reasonable discretion. The appraiser shall render a written report setting
forth its determination of Fair Market Value as promptly as possible, and the
Transfer incident to the exercise of the Buyout Option shall be made within 15
days after such determination has been made. In making such determination, the
appraiser shall value the LLC as a going concern and shall take into
consideration (i) the transferability and liquidity of the Departing Member's
Interest, (ii) the fact that additional capital may be required, from time to
time, in connection with the business of the LLC and (iii) the economic risk and
liability associated with the ownership of such Interest. Absent manifest error,
the appraiser's determination of Fair Market Value shall be final and binding on
all parties. The fees and expenses of any appraiser shall be paid by the LLC.
8.3.3 Exercise Terms. The Buyout Notice shall specify the date
on which the Transfer pursuant to an exercise of the Buyout Option shall be
consummated, which date shall be no earlier than 30 days nor later than 90 days
from the date of the Buyout Notice, unless otherwise agreed by the Remaining
Member and the Departing Member. Except as may be otherwise agreed by the
Remaining Member and the Departing Member, the Remaining Member shall pay at
least 20% of the purchase price for the Departing Member's LLC Interest in cash,
with the balance of the purchase price payable pursuant to a promissory note
bearing interest at 110% of the then current applicable federal rate for
mid-term obligations (as determined pursuant to Section 7872 of the Code). Such
note shall be payable in equal installments of principal and interest over a
period not to exceed five years. Any such promissory note may be prepaid at any
time without premium or penalty. The Departing Member's LLC Interest shall be
transferred free and clear of all liens and encumbrances and, except as
otherwise provided, the Departing Member shall be released at the closing from
any guarantees, obligations, liabilities or similar undertakings to third
parties given by such Member on behalf of the LLC.
8.3.4 Further Cooperation. On the closing of the purchase and
sale of the Departing Member's LLC Interest pursuant to an exercise of the
Buyout Option, each Member shall execute, acknowledge and deliver to each other
Member such instruments, and take such actions, as each Member may reasonably
request in order to effect the purchase and sale of the LLC Interest pursuant to
the terms and conditions of this Section 8.3.
8.3.5 LLC Option. In the event the Remaining Member elects not
to exercise any of its rights under this Section 8.3, the LLC, at its election,
may assume such rights.
8.4 VOID TRANSFERS. If the Manager determine in their sole discretion
that any Transfer would cause the termination of the LLC under the Code, then
such Transfer shall be null and void.
8.5 SUBSTITUTION OF MEMBERS. A transferee of an Interest shall become a
substitute Member, provided that (i) the Transfer was valid under Section 8.1
hereof and not voided by the Manager pursuant to Section 8.4 hereof, (ii) the
transferee has become a party to this Agreement and (iii) the transferee pays
any reasonable expenses in connection with his, her or its admission as a
Member. A transferee who becomes a substituted Member has, to the extent
transferred, all of the rights, powers and duties of a Member under this
Agreement and the Statute.
8.6 ADMISSION OF NEW MEMBERS. A new Member may be admitted into the LLC
only upon the consent of a Majority in Interest of the Members. The amount of
Capital Contribution, if any, which must be made by a new Member shall be
determined by the Vote of all existing Members. A new Member shall not be deemed
admitted into the LLC until the Capital Contribution required of such Person
shall have been made and such Person has become a party to this Agreement and
made any and all investment representations deemed necessary or advisable by the
Manager in their sole discretion.
8.7 SUBSEQUENT TRANSFERS SUBJECT TO TERMS OF AGREEMENT. After the
consummation of any Transfer of any part of an LLC Interest, the Interest or
portion thereof so transferred shall continue to be subject to the terms and
provisions of this Agreement and any further Transfers shall be required to
comply with all the terms and provisions hereof.
8.8 PURCHASE TERMS VARIED BY AGREEMENT. Provided that the restrictions
set forth in this Agreement have been satisfied, nothing contained herein is
intended to prohibit Members from agreeing upon other terms and conditions for
the purchase by the LLC or any other Member of the Interest (or any portion
thereof) of any Member desiring to retire, withdraw or resign.
ARTICLE IX.
TERMINATION AND DISSOLUTION
9.1 DISSOLUTION. The LLC shall be dissolved upon the occurrence of any
of the following events:
(i) When the Period of Duration of the LLC expires;
(ii) The written approval by a Majority in Interest of the
Members to dissolve the LLC;
(iii) The sale of all or substantially all of the assets of
the LLC and the distribution to the Members of the proceeds thereof; or
(iv) Except as otherwise set forth in this Agreement, any
other event causing a dissolution of the LLC under the Statute.
9.2 DISASSOCIATION EVENT. The occurrence of a Disassociation Event
shall not constitute a dissolution or termination of the LLC.
9.3 STATEMENT OF INTENT TO DISSOLVE. As soon as possible after the
occurrence of any of the events specified in Section 9.1 above, the LLC shall
execute a Statement of Intent to Dissolve in such form as prescribed by the
Nevada Secretary of State.
9.4 CONDUCT OF BUSINESS. Upon the occurrence of any event specified in
Section 9.1, the LLC shall continue solely for the purpose of winding up its
affairs in an orderly manner, liquidating its assets and satisfying the claims
of its creditors. The Manager who have not wrongfully dissolved the LLC or, if
none, the Members, shall be responsible for overseeing the winding up and
liquidation of the LLC, shall take full account of the assets and liabilities of
the LLC, shall cause its assets to be either sold or distributed, and shall
cause the proceeds therefrom, to the extent sufficient therefor, to be applied
and distributed as provided in this Section 9.4. The Persons winding up the
affairs of the LLC shall give written notice of the commencement of winding up
by mail to all known creditors and claimants whose addresses appear on the
records of the LLC. The Manager or Manager winding up the affairs of the LLC
shall be entitled to reasonable compensation for such services.
9.5 DISTRIBUTION OF NET PROCEEDS. The Members shall continue to divide
Net Profits and Net Losses and Available Cash Flow during the winding-up period
in the same manner and the same priorities as provided for in Articles IV and V
hereof. The proceeds from the liquidation of Property shall be applied in the
following order:
(i) To creditors other than Members in the order of priority
provided by law; then
(ii) To creditors who are Members in order of priority, except
amounts owed to Members on account of their Capital Contributions; then
(iii) To the Members as provided in Section 5.2 hereof.
Where the distribution pursuant to this Section 9.5 consists both of
cash (or cash equivalents) and non-cash assets, the cash (or cash equivalents)
shall first be distributed, in a descending order, to fully satisfy each
category starting with the most preferred category set forth above. In the case
of non-cash assets, the distribution values are to be based on the fair market
value thereof as determined in good faith by the liquidator, and the shortest
maturity portion of such non-cash assets (e.g., notes or other indebtedness)
shall, to the extent such non-cash assets are readily divisible, be distributed,
in a descending order, to fully satisfy each category above, starting with the
most preferred category.
ARTICLE X.
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
10.1 MAINTENANCE OF BOOKS AND RECORDS. The Manager shall cause the
books and records of the LLC to be maintained in accordance with generally
accepted accounting principles, and shall give reports to the Members in
accordance with prudent business practices and the Statute. There shall be kept
at the principal office of the LLC, as well as at the office of record of the
LLC specified in Section 2.3, if different, the following LLC documents:
(i) A current list in alphabetical order of the full name and
last known business or residence address of each Member and holder of an
Economic Interest in the LLC, together with the Capital Contributions,
Percentage Interest and share in Net Profits and Net Losses of each Member and
holder of an Economic Interest;
(ii) A current list of the full name and business or residence
address of each Manager;
(iii) A copy of the Articles of Organization and any
amendments thereto, together with any powers of attorney pursuant to which the
Articles of Organization and any amendments thereto were executed;
(iv) Copies of the LLC's federal, state and local income tax
or information returns and reports, if any, for the six most recent fiscal years
of the LLC;
(v) A copy of this Agreement and any amendments thereto,
together with any powers of attorney pursuant to which this Agreement and any
amendments thereto were executed;
(vi) Copies of the financial statements of the LLC, if any,
for the six most recent fiscal years of the LLC;
(vii) The LLC's books and records as they relate to the
internal affairs of the LLC for at least the current and past four fiscal years
of the LLC;
(viii) Originals or copies of all minutes, actions by written
consent, consents to action and waivers of notice to Members and Member Votes,
actions and consents; and
(ix) Any other information required to be maintained by the
LLC pursuant to the Statute.
10.2 ANNUAL ACCOUNTING. Within 120 days after the close of each fiscal
year of the LLC, the LLC shall (i) cause to be prepared and submitted to each
Member a balance sheet and income statement for the preceding fiscal year (or
portion thereof) in conformity with generally accepted accounting principles and
(ii) provide to the Members all information necessary for them to complete
federal and state tax returns.
10.3 INSPECTION AND AUDIT RIGHTS. Each Member and each holder of an
Economic Interest in the LLC who is not a Member has the right upon reasonable
request, for purposes reasonably related to the interest of that Person, to
inspect and copy during normal business hours any of the XXX xxxxx and records
required to be maintained in accordance with Section 10.1. Such right may be
exercised by the Person or by that Person's agent or attorney. The determination
of the Manager as to adjustments to the financial reports, books, records and
returns of the LLC, in the absence of fraud or gross negligence, shall be final
and binding upon the LLC and all of the Members. In addition, upon the request
of a Member or a holder of an Economic Interest, for purposes reasonably related
to the interest of that Person, the Manager shall promptly deliver to the Member
or holder of an Economic Interest, at the expense of the LLC, a copy of this
Agreement and a copy of the information listed in paragraphs (i), (ii) and (iv)
of Section 10.1 of this Agreement.
10.4 BANK ACCOUNTS; FISCAL YEAR AND ACCOUNTING METHOD. The bank
accounts of the LLC shall be maintained in such banking institutions as the
Manager shall determine. The fiscal year and accounting method of the LLC shall
be as determined by the Manager in their reasonable discretion and in accordance
with, to the extent applicable, the Code.
10.5 TAX MATTERS. One of the Manager who is also a Member, or in the
event no Manager is a Member, a Member or an officer of a corporate Member,
shall be designated as "Tax Matters Partner" (as defined in Code section 6231),
to represent the LLC (at the LLC's expense) in connection with all examinations
of the LLC's affairs by tax authorities, including resulting judicial and
administrative proceedings, and to expend LLC funds for professional services
and costs associated therewith. In its capacity as Tax Matters Partner, the
designated Person shall oversee the LLC tax affairs in the overall best
interests of the LLC. Xxxxx Xxxxx is hereby designated as the initial Tax
Matters Partner, and shall serve in such capacity until such time as the Members
designate another Tax Matters Partner.
10.6 INCOME TAX ELECTIONS. The Tax Matters Partner designated pursuant
to Section 10.5 shall have the authority on behalf of the LLC to make all
elections permitted under the Code and all other tax-related statutes and
regulations, including elections of methods of depreciation and elections under
Section 754 of the Code. The decision to make or not to make an election shall
be at the Tax Matters Partner's sole and absolute discretion. The Members hereby
acknowledge that they are aware of the income tax consequences of the
allocations made by this Agreement and hereby agree to be bound by the
provisions of this Agreement in reporting their shares of the LLC income and
loss for income tax purposes.
ARTICLE XI.
INDEMNIFICATION OF MEMBERS,
MANAGER AND THEIR AFFILIATES
11.1 INDEMNIFICATION OF MEMBERS AND THEIR PRINCIPALS. The LLC shall
indemnify and hold harmless the Members, the Manager, their Affiliates and their
respective officers, directors, employees, agents and Principals (individually,
an "Indemnitee") from and against any and all losses, claims, demands, costs,
damages, liabilities, joint and several, expenses of any nature (including
reasonable attorneys' fees and disbursements), judgments, fines, settlements and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
the Indemnitee was involved or may be involved, or threatened to be involved, as
a party or otherwise, arising out of or incidental to the business of the LLC,
regardless of whether the Indemnitee continues to be a Member, an Affiliate, or
an officer, director, employee, agent or Principal of the Member at the time any
such liability or expense is paid or incurred, to the fullest extent permitted
by the Statute and all other applicable laws.
11.2 EXPENSES. Expenses incurred by an Indemnitee in defending any
claim, demand, action, suit or proceeding subject to Section 11.1 shall, from
time to time, be advanced by the LLC prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the LLC of an
undertaking by or on behalf of the Indemnitee to repay such amount if it shall
be determined that such Person is not entitled to be indemnified as authorized
in Section 11.1.
11.3 INDEMNIFICATION RIGHTS NON-EXCLUSIVE. The indemnification provided
by Section 11.1 shall be in addition to any other rights to which those
indemnified may be entitled under any agreement or vote of the Members, as a
matter of law or equity or otherwise, both as to action in the Indemnitee's
capacity as a Member, as an Affiliate or as an officer, director, employee,
agent or Principal of a Member and as to any action in another capacity, and
shall continue as to an Indemnitee who has ceased to serve in such capacity and
shall inure to the benefit of the heirs, successors, assigns, representatives
and administrators of the Indemnitee.
11.4 ERRORS AND OMISSIONS INSURANCE. The LLC may purchase and maintain
insurance, at the LLC's expense, on behalf of the Members and such other Persons
as the Members shall determine, against any liability that may be asserted
against, or any expense that may be incurred by, such Person in connection with
the activities of the LLC and/or the Members' acts or omissions as the Members
of the LLC regardless of whether the LLC would have the power to indemnify such
Person against such liability under the provisions of this Agreement or under
applicable law.
11.5 ASSETS OF THE LLC. Any indemnification under Section 11.1 shall be
satisfied solely out of the assets of the LLC. No Member shall be subject to
personal liability or required to fund or to cause to be funded any obligation
by reason of these indemnification provisions.
ARTICLE XII.
ISSUANCE OF LLC CERTIFICATES
12.1 ISSUANCE OF LLC CERTIFICATES. Upon or at any time after the
execution of this Agreement and the payment of the Capital Contributions by the
Members, the Manager may elect to cause the LLC to issue one or more LLC
Certificates in the form of Exhibit B hereto (each, an "LLC Certificate") in the
name of each Member certifying that the Person named therein is the record
holder of the LLC Interests set forth therein. For purposes of this Agreement,
the term "record holder" shall mean the person whose name appears on Exhibit A
as the Member owning the LLC Interest at issue.
12.2 TRANSFER OF LLC INTERESTS. An LLC Interest which is transferred in
accordance with the terms of this Agreement shall be transferable on the books
of the LLC by the record holder thereof in person or by such record holder's
duly authorized attorney, but, except as provided in Section 12.3 hereof with
respect to lost, stolen or destroyed certificates, in the event an LLC
Certificate has been issued, no transfer of an LLC Interest shall be entered
until the previously issued LLC Certificate representing such LLC Interest shall
have been surrendered to the LLC and canceled and a replacement LLC Certificate
issued to the assignee of such LLC Interest in accordance with such procedures
as the Manager may establish. In the event of a Transfer of less than all of a
Member's LLC Interests and if LLC Certificates have been issued, the Manager
shall issue to the transferring Member a new LLC Certificate representing the
LLC Interests not being transferred. Except as otherwise required by law, the
LLC shall be entitled to treat the record holder of an LLC Certificate on its
books as the owner thereof for all purposes regardless of any notice or
knowledge to the contrary.
12.3 LOST, STOLEN OR DESTROYED CERTIFICATES. The LLC shall issue a new
LLC Certificate in place of any LLC Certificate previously issued if the record
holder of the LLC Certificate:
(i) makes proof by affidavit, in form and substance
satisfactory to the Manager, that a previously issued LLC Certificate has been
lost, destroyed or stolen;
(ii) requests the issuance of a new LLC Certificate before the
LLC has notice that the LLC Certificate has been acquired by a purchaser for
value in good faith and without notice of an adverse claim;
(iii) indemnifies the LLC against any claim that may be made
on account of the alleged loss, destruction or theft of the LLC Certificate; and
(iv) satisfies any other reasonable requirements imposed by
the Manager.
If a Member fails to notify the LLC within a reasonable time after it
has notice of the loss, destruction or theft of an LLC Certificate, and a
transfer of the LLC Interest represented by the LLC Certificate is registered
before receiving such notification, the LLC shall have no liability with respect
to any claim against the LLC for such transfer or for a new LLC Certificate.
ARTICLE XIII.
AMENDMENTS
13.1 AMENDMENT, ETC. OF OPERATING AGREEMENT. This Agreement may be
adopted, altered, amended or repealed and a new operating agreement may be
adopted by a Majority in Interest of the Members; provided, however, that no
provision of this Agreement which requires the vote of a greater percentage than
a Majority in Interest of the Members may be amended without the affirmative
vote of such greater percentage.
13.2 AMENDMENT OF ARTICLES OF ORGANIZATION. Notwithstanding any
provision to the contrary in the Articles of Organization or this Agreement, in
no event shall the Articles of Organization be amended without the affirmative
vote of a Majority in Interest of the Members.
ARTICLE XIV.
REPRESENTATIONS AND ACKNOWLEDGMENTS
14.1 INVESTMENT REPRESENTATIONS. Each Member hereby represents and
warrants to the Manager, the other Members and the LLC that such Member is
acquiring his, her or its Interest hereunder for such Member's own account, for
investment only, not for the benefit of any other Person and not for resale to
any other Person or for future distribution, and that he, she or it relied
solely on the advice of such Member's personal tax, investment or other advisors
in making such Member's investment decision.
14.2 NO REPRESENTATIONS BY LLC. Each Member acknowledges that the
Manager have not made and hereby make no representations or warranties other
than those set forth in this Agreement, and that neither any Manager, agent or
employee of the LLC or of any Manager or any other Person has at any time
expressly or implicitly represented, guaranteed or warranted to such Member that
he, she or it may freely transfer such Person's Interests, that a percentage of
profit and/or amount or type of consideration will be realized as a result of an
investment in the Interest, that past performance or experience on the part of
the Manager or their Affiliates or any other Person in any way indicates the
predictable results of the ownership of any Interests or of the overall LLC
business, that any cash distributions from LLC operations or otherwise will be
made to the Members by any specific date or will be made at all, or that any
specific tax benefits will accrue as a result of an investment in the LLC.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
15.1 COUNTERPARTS. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one Agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
are not signatory to the original or the same counterpart.
15.2 SURVIVAL OF RIGHTS. This Agreement shall be binding upon, and, as
to permitted or accepted successors, transferees and assigns, inure to the
benefit of the Members and the LLC and their respective heirs, legatees, legal
representatives, successors, transferees and assigns, in all cases whether by
the laws of descent and distribution, merger, reverse merger, consolidation,
sale of assets, other sale, operation of law or otherwise.
15.3 SEVERABILITY. In the event any Section, or any sentence within any
Section, is declared by a court of competent jurisdiction to be void or
unenforceable, such sentence or Section shall be deemed severed from the
remainder of this Agreement and the balance of this Agreement shall remain in
full force and effect.
15.4 NOTIFICATION OR NOTICES. Except as otherwise provided in Articles
VI and VII with respect to notices given for purposes of meetings of Manager and
meetings of Members, any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given if
personally delivered, transmitted by facsimile (with mechanical confirmation of
transmission), or deposited in the United States mail, registered or certified,
postage prepaid, addressed to the parties' addresses set forth on Exhibit A
hereto, unless the same shall have been changed by notice in accordance
herewith. Notices given in the manner provided for in this Section 15.4 shall be
deemed effective on the third day following deposit in the mail or on the day of
transmission or delivery if given by facsimile or by hand.
15.5 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the internal laws of the State of Nevada.
15.6 FURTHER ACTIONS. Each of the Members agrees to execute,
acknowledge and deliver such additional documents, and take such further
actions, as may reasonably be required from time to time to carry out each of
the provisions and the intent of this Agreement, and every agreement or document
relating hereto or entered into in connection herewith.
15.7 ARBITRATION OF DISPUTES. Any controversy or claim arising out of
or relating to this Agreement or the breach thereof shall be submitted to
binding, non-appealable arbitration administered by the American Arbitration
Association in accordance with its Commercial Arbitration Rules. Such
controversy or claim shall be heard by a single arbitrator (the "Arbitrator").
The award shall be made within six months of selection of the Arbitrator.
Judgment on the award may be entered in any court having jurisdiction and the
parties hereby consent to the jurisdiction of the Superior Court for Los Angeles
County, Nevada, and of the United States District Court for the Central District
of Nevada, for injunctive relief, specific performance or other relief in aid of
any proceedings hereunder, but not otherwise. The arbitration shall be held in
Los Angeles, Nevada or as otherwise mutually agreed by the parties hereto. The
Arbitrator shall determine issues of arbitrability but may not limit, expand or
otherwise modify the terms of this Agreement nor have any authority to award
punitive or other damages in excess of compensatory damages and each party
irrevocably waives any claim thereto. The Arbitrator shall permit, to the extent
reasonably necessary, one document production request, and one follow-up
request, and one deposition of the principals involved in a controversy or claim
submitted to arbitration hereunder. The parties, their representatives, other
participants and the Arbitrator shall hold the existence, content and result of
the arbitration in confidence except as disclosure is required by law or as is
reasonably necessary to defend claims or procedural rights of the party making
the disclosure.
15.8 THIRD PARTY BENEFICIARIES. There are no third party beneficiaries
of this Agreement except (i) Affiliates and Principals of the Members and (ii)
any other Persons as may be entitled to the benefits of Article XI hereof.
15.9 PARTITION. The Members agree that the Property that the LLC may
own or have an interest in is not suitable for partition. Each of the Members
hereby irrevocably waives any and all rights that it may have to maintain any
action for partition of any Property the LLC may at any time have an interest
in.
15.10 ENTIRE AGREEMENT. This Agreement and the Articles of Organization
constitute the entire agreement of the Members with respect to, and supersedes
all prior written and oral agreements, understandings and negotiations with
respect to, the subject matter hereof.
15.11 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.
15.12 ATTORNEYS' FEES. In the event of any litigation, arbitration or
other dispute arising as a result of or by reason of this Agreement, the
prevailing party in any such litigation, arbitration or other dispute shall be
entitled to, in addition to any other damages assessed, its reasonable
attorneys' fees, and all other costs and expenses incurred in connection with
settling or resolving such dispute. The attorneys' fees which the prevailing
party is entitled to recover shall include fees for prosecuting or defending any
appeal and shall be awarded for any supplemental proceedings until the final
judgment is satisfied in full. In addition to the foregoing award of attorneys'
fees to the prevailing party, the prevailing party in any lawsuit or arbitration
procedure on this Agreement shall be entitled to its reasonable attorneys' fees
incurred in any post judgment proceedings to collect or enforce the judgment.
This attorneys' fees provision is separate and several and shall survive the
merger of this Agreement into any judgment.
15.13 CONFIDENTIALITY. Each Member for itself and on behalf of its
Affiliates agrees to keep the provisions of this Agreement and all schedules,
exhibits and appendices hereto in confidence, except pursuant to the
requirements of applicable law, and shall not publish or otherwise disclose the
same at any time without the prior written consent of all the Members.
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
Agreement as of the date first written above.
STRIKER, LLC
--------------------------------------------------------------------------------
By:
BLRS, LLC
--------------------------------------------------------------------------------
By:
THE EQUITABLE LIFE INVESTMENT COMPANY INC.
--------------------------------------------------------------------------------
By:
EXHIBIT A
INITIAL MEMBER NAMES AND ADDRESSES; INITIAL
CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
(As of February 27, 2004)
======================================= ====================================== ======================= =======================
MEMBER'S NAME MEMBER'S ADDRESS MEMBER'S CAPITAL MEMBER'S PERCENTAGE
CONTRIBUTION INTEREST
======================================= ====================================== ======================= =======================
Striker, LLC $ 25%
--------------------------------------- -------------------------------------- ----------------------- -----------------------
BLRS, LLC $ 25%
--------------------------------------- -------------------------------------- ----------------------- -----------------------
The Equitable Life Investment $ 50%
Company Inc.
======================================= ====================================== ======================= =======================
TOTALS: $ 100%
======================================= ====================================== ======================= =======================
EXHIBIT B
(FACE OF CERTIFICATE)
THE LLC INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE. SUCH LLC INTERESTS MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUBSEQUENTLY REGISTERED OR QUALIFIED OR UNLESS AN EXEMPTION
FROM REGISTRATION OR QUALIFICATION IS AVAILABLE. THE AGREEMENT (AS DEFINED
BELOW) PROVIDES FOR FURTHER RESTRICTIONS ON TRANSFER OF THE LLC INTERESTS
REPRESENTED HEREBY.
CERTIFICATE FOR LLC INTEREST
IN
SOMA PETROLEUM, LLC
Certificate No. ______________ ________ Percentage Interest
The undersigned, as a Manager of SOMA PETROLEUM, LLC, a Nevada limited
liability company (the "LLC"), hereby certifies that ___________________________
is the holder of an LLC Interest representing a _______ percent (__%) Percentage
Interest, as those terms are defined in the Operating Agreement of the LLC,
dated as of ________________, as amended and restated from time to time (the
"Agreement") (copies of which are on file at the principal office of the LLC).
This Certificate is not negotiable or transferable except by operation
of law, or as otherwise provided in the Agreement, and any such transfer will be
valid only upon delivery of this Certificate, together with a duly executed
assignment in the form set forth on the reverse hereof (or otherwise acceptable
to the Manager and sufficient to convey an interest in an LLC pursuant to the
(Nevada) Xxxxxxx-Xxxxxx Limited Liability Company Act, as it may be amended and
in effect from time to time, or any successor statute thereto) to the Manager of
the LLC.
Dated: . SOMA PETROLEUM, LLC
-------------------------------------
By:
---------------------
Its: Manager
(REVERSE OF CERTIFICATE)
ASSIGNMENT OF LLC INTEREST
IN
SOMA PETROLEUM, LLC
FOR VALUE RECEIVED, the undersigned ("Assignor") hereby assigns,
conveys, sells and transfers unto
("Assignee")
(Please insert Social Security (Please print or typewrite name and
or other identifying number of Assignee) address of Assignee)
all rights and interest of Assignor in ______ percent of the LLC Interest
evidenced hereby and directs that all future distributions and allocations with
respect to such specified assigned LLC Interest be paid or allocated by the LLC
to such Assignee. The Assignor hereby irrevocably constitutes and appoints each
Manager as Assignor's attorney-in-fact with full power of substitution in the
premises to transfer the same on the books of the LLC.
Dated:
----------------------------- -----------------------------------
Signature of Assignor
Note: The signature to any assignment must correspond with the name
as written upon the face of this Certificate, in every
particular, without alteration or enlargement or any change
whatever. If the assignment is executed by an attorney,
executor, administrator, trustee or guardian, the person
executing the assignment must give such person's full title in
such capacity, and proper evidence of authority to act in such
capacity, if not on file with the LLC or its transfer agent,
must be forwarded with this Certificate.
The undersigned, a Manager of the LLC, hereby consents to this
Assignment pursuant to Section 8.1 of the Agreement.
Dated: , LLC
------------------------------- -----------------------------------
By:
-----------------------------------
Its: Manager
THE LLC INTERESTS EVIDENCED HEREBY ARE SUBJECT TO ALL TERMS AND
CONDITIONS OF THE AGREEMENT AND UNLESS AND UNTIL ADMITTED TO THE LLC AS A
MEMBER, NO ASSIGNEE SHALL BE ENTITLED TO ANY OF THE RIGHTS, POWERS OR PRIVILEGES
OF THE ASSIGNOR, EXCEPT THAT ASSIGNEE SHALL BE ENTITLED TO THE DISTRIBUTIONS
PAID AND ALLOCATIONS MADE WITH RESPECT TO SUCH INTERESTS AS DIRECTED BY THE
ASSIGNOR ABOVE.
