Exhibit 3.2(ai)
OPERATING AGREEMENT
OF
ASHTON ATLANTA RESIDENTIAL, L.L.C.
A GEORGIA LIMITED LIABILITY COMPANY
July 7, 1994
THE MEMBERSHIP INTERESTS IN ASHTON ATLANTA RESIDENTIAL, L.L.C. ARE SUBJECT TO
THE RESTRICTIONS ON TRANSFER AND OTHER TERMS AND CONDITIONS SET FORTH IN ARTICLE
III OF THIS AGREEMENT. THE INTERESTS HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAWS OR UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "FEDERAL ACT"). THE INTERESTS MAY NOT BE
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED EXCEPT IN
COMPLIANCE WTTH THE TERMS AND CONDITIONS OF ARTICLE III OF THIS AGREEMENT AND IN
A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER ANY APPLICABLE STATE
SECURITIES LAWS AND WHICH IS EXEMPT FROM REGISTRATION UNDER THE FEDERAL ACT OR
WHICH IS OTHERWISE IN COMPLIANCE WITH THE FEDERAL ACT AND ANY APPLICABLE STATE
SECURITIES ACTS.
OPERATING AGREEMENT
OF
ASHTON ATLANTA RESIDENTIAL, L.L.C.
A GEORGIA LIMITED LIABILITY COMPANY
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS ............................................................... 1
1.01 Definitions ......................................................... 1
1.02 Construction ........................................................ 3
ARTICLE II
ORGANIZATION .............................................................. 3
2.01 Formation ........................................................... 3
2.02 Name 3
2.03 Registered Office; Registered Agent; Principal Office in the United
States; Other Offices ............................................... 3
2.04 Purposes ............................................................ 4
2.05 Foreign Qualification ............................................... 4
2.06 Term ................................................................ 4
2.07 No State-Law Partnership ............................................ 4
ARTICLE III
MEMBERSHIP; DISPOSITIONS OF INTERESTS ..................................... 4
3.01 Initial Members ..................................................... 4
3.02 Representations and Warranties ...................................... 4
3.03 Restrictions on the Discosition of an Interest ...................... 5
3.04 Additional Members .................................................. 6
3.05 Interests in a Member ............................................... 7
3.06 Information ......................................................... 7
3.07 Liability to Third Parties .......................................... 7
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3.08 Withdrawal .......................................................... 7
3.09 Lack of Authority ................................................... 8
ARTICLE IV
CAPITAL CONTRIBUTIONS ..................................................... 8
4.01 Initial Contributions ............................................... 8
4.02 Subsequent Contributions ............................................ 8
4.03 Failure to Contribute ............................................... 8
4.04 Return of Contributions ............................................. 10
4.05 Advances bv Members ................................................. 10
4.06 Capital Accounts .................................................... 10
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS ............................................. 11
5.01 Allocations ......................................................... 11
5.02 Distributions ....................................................... 11
ARTICLE VI
MANAGERS .................................................................. 12
6.01 Management by Managers .............................................. 12
6.02 Actions by Managers; Committees; Delegation of Authority and
Duties .............................................................. 13
6.03 Number and Term of Office ........................................... 14
6.04 Vacancies; Removal; Resignation ..................................... 14
6.05 Meetings ............................................................ 15
6.06 Approval or Ratification of Acts or Contracts by Members ............ 15
6.07 Action by Written Consent or Telephone Conference ................... 15
6.08 Compensation ........................................................ 16
6.09 Conflicts of Interest ............................................... 16
6.10 Officers ............................................................ 16
6.11 Attorney-In-Fact .................................................... 17
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ARTICLE VII
MEETINGS OF MEMBERS ....................................................... 17
7.01 Meetings ............................................................ 17
7.02 Voting List ......................................................... 18
7.03 Proxies ............................................................. 18
7.04 Conduct of Meetings ................................................. 19
7.05 Action by Written Consent or Telephone Conference ................... 19
ARTICLE VIII
INDEMNIFICATION ........................................................... 20
8.01 Right to Indemnification ............................................ 20
8.02 Advance Payment ..................................................... 20
8.03 Indemnification of Officers, Employees, and Agents .................. 20
8.04 Appearance as a Witness ............................................. 21
8.05 Nonexclusivity of Rights ............................................ 21
8.06 Insurance ........................................................... 21
8.07 Member Notification ................................................. 21
8.08 Savings Clause ...................................................... 21
ARTICLE IX
TAXES ..................................................................... 22
9.01 Tax Returns ......................................................... 22
9.02 Tax Elections ....................................................... 22
9.03 "Tax Matters Partner ................................................ 22
ARTICLE X
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS ................................ 23
10.01 Maintenance of Books ................................................ 23
10.02 Reports ............................................................. 23
10.03 Accounts ............................................................ 23
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ARTCILE XI
BANKRUPTCY OF A MEMBER .................................................... 23
11.01 Bankrupt Members .................................................... 23
ARTCILE XII
DISSOLUTION, LIQUIDATION, AND TERMINATION ................................. 24
12.01 Dissolution ......................................................... 24
12.02 Liquidation and Termination ......................................... 25
12.03 Deficit Capital Accounts ............................................ 26
12.04 Articles of Dissolution ............................................. 26
ARTCILE XIII
GENERAL PROVISIONS ........................................................ 26
13.01 Offset .............................................................. 26
13.02 Notices ............................................................. 26
13.03 Entire Agreement; Supersedure ....................................... 27
13.04 Effect of Waiver or Consent ......................................... 27
13.05 Amendment or Modification ........................................... 27
13.06 Binding Effect ...................................................... 27
13.07 Governing Law; Severability ......................................... 27
13.08 Further Assurances .................................................. 28
13.09 Waiver of Certain Rights ............................................ 28
13.10 Indemnification ..................................................... 28
13.11 Notice to Members of Provisions of this Agreement ................... 28
13.12 Counterparts ........................................................ 28
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OPERATING AGREEMENT
OF
ASHTON ATLANTA RESIDENTIAL, L.L.C.
A GEORGIA LIMITED LIABILITY COMPANY
This OPERATING AGREEMENT OF ASHTON ATLANTA RESIDENTIAL, L.L.C. (the
"Operating Agreement"), dated as of July 7, 1994, has been adopted by the
Managers (as defined below) and is hereby executed and agreed to, for good and
valuable consideration, by the Members (as defined below).
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. As used in this Operating Agreement, the following terms
have the following meanings:
"Act" means the Georgia Limited Liability Company Act and any
successor statute, as amended from time to time.
"Articles" has the meaning given that term in Section 2.01.
"Bankrupt Member" means (except to the extent a Required Interest
consents otherwise) any Member (a) that (i) makes a general assignment for
the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii)
becomes the subject of an order for relief or is declared insolvent in any
federal or state bankruptcy or insolvency proceedings; (iv) files a
petition or answer seeking for the Member a reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief
under any law; (v) files an answer or other pleading admitting or failing
to contest the material allegations of a petition filed against the Member
in a proceeding of the type described in subclauses (i) through (iv) of
this clause (a); or (vi) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the Member or of all
or any substantial part of the Member's properties; or (b) against which, a
proceeding seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any law has been
commenced and 120 days have expired without dismissal thereof or with
respect to which, without the Member's consent or acquiescence, a trustee,
receiver, or liquidator of the Member or of all or any substantial part of
the Member's properties has been appointed and 90 days have expired without
the appointment's having been vacated or stayed, or 90 days have expired
after the date of expiration of a stay, if the appointment has not
previously been vacated.
"Business Day" means any day other than a Saturday, a Sunday, or a
holiday on which national banking associations in the State of Georgia are
closed.
"Capital Contribution" means any contribution by a Member to the
capital of the Company.
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"Code" means the Internal Revenue Code of 1986 and any successor
statute, as amended from time to time.
"Commitment" means, subject in each case to adjustments on account of
Dispositions of Membership Interests permitted by this Operating Agreement,
(a) in the case of a Member executing this Operating Agreement as of the
date of this Operating Agreement or a Person acquiring that Membership
Interest, the amount specified for that Member as its Commitment on Exhibit
A, and (b) in the case of a Membership Interest issued pursuant to Section
3.04, the Commitment established pursuant thereto.
"Company" means Ashton Atlanta Residential, L.L.C., a Georgia Limited
liability company.
"Default Interest Rate" means a rate per annum equal to the lesser of
(a) four percent (4%) plus a varying rate per annum that is equal to the
interest rate published as the prime rate by The Bank of Nova Scotia from
time to time, with adjustments in that varying rate to be made on the same
date as any change in that rate, and (b) the maximum rate permitted by
applicable law.
"Delinquent Member" has the meaning given that term in Section
4.03(a).
"Dispose," "Disposing," or "Disposition" means a sale, assignment,
transfer, exchange, mortgage, pledge, grant of a security interest, or
other disposition or encumbrance (including, without limitation, by
operation of law), or the acts thereof.
"General Interest Rate" means a rate per annum equal to the lesser of
(a) a varying rate per annum that is equal to the interest rate published
as the prime rate by The Bank of Nova Scotia from time to time, with
adjustments in that varying rate to be made on the same date as any change
in that rate, and (b) the maximum rate permitted by applicable law.
"Lending Member" has the meaning given that term in Section
4.03(a)(ii).
"Manager" means Bruce Freeman, Harry Rosenbaum and Seymour Joffe and
any Person hereafter elected as a manager of the Company as provided in
this Operating Agreement, but does not include any Person who has ceased to
be a manager of the Company.
"Member" means any Person executing this Operating Agreement as of the
date of this Operating Agreement as a member or hereafter admitted to the
Company as a member as provided in this Operating Agreement, but does not
include any Person who has ceased to be a member in the Company.
"Membership Interest" means the interest of a Member in the Company,
including, without limitation, rights to distributions (liquidating or
other), allocations, information, and to consent or approve.
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"Permitted Transferee" has the meaning given that term in Section
3.03(b)
"Person" includes individuals, individuals acting in a fiduciary
capacity, corporations, limited partnerships, limited liability companies,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts or other organizations, whether or not they are
recognized as separate legal entities.
"Proceeding" has the meaning given that term in Section 8.01.
"Operating Agreement" means this instrument as it may be amended from
time to time.
"Required Interest" means one or more Members having among them more
than 51% of the Sharing Ratios of ail Members.
"Sharing Ratio" with respect to any Member means the percentage set
forth on Exhibit A, subject to change as herein provided.
Other terms defined herein have the meanings so given them.
1.02 CONSTRUCTION. Whenever the context requires, the gender of all words
used in this Operating Agreement includes the masculine, feminine, and neuter.
All references to Articles and Sections refer to articles and sections of this
Operating Agreement, and all references to Exhibits are to Exhibits attached
hereto, each of which is by reference made a part hereof for all purposes.
ARTICLE II
ORGANIZATION
2.01 FORMATION. The Company has been organized as a Georgia limited
liability company by the filing of Articles of Organization (the "Articles")
under and pursuant to the Act and the issuance of a Certificate of Organization
for the Company by the Secretary of State of Georgia.
2.02 NAME. The name of the Company is "Ashton Atlanta Residential, L.L.C."
and all Company business must be conducted in that name or such other names that
comply with applicable law as the Managers may select from time to time.
2.03 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE IN THE UNITED
STATES; OTHER OFFICES. The registered office of the Company required by the Act
to be maintained in the State of Georgia shall be the office of the initial
registered agent filed with the Secretary of State with the Articles or such
other office (which need not be a place of business of the Company) as the
Managers may designate from time to time in the manner provided by law. The
registered agent of the Company in the State of Georgia shall be the initial
registered agent or such other Person or Persons as the Managers may designate
from time to time in the manner provided by law. The principal office of the
Company in the United States shall be at such place as the Managers may
designate from time to time, which need not be in the State of Georgia, and the
Company shall maintain records there as required by Section 14-11-313 of the Act
and shall keep the mailing address of such principal
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office on file with the Secretary of State in the State of Georgia. The Company
may have such other offices as the Managers may designate from time to time.
2.04 PURPOSES. The purposes of the Company are those set forth in Section
14-11-201(b) of the Act.
2.05 FOREIGN QUALIFICATION. Prior to the Company's conducting business in
any jurisdiction other than Georgia, the Managers shall cause the Company to
comply, to the extent procedures are available and those matters are reasonably
within the control of the Managers, with all requirements necessary to qualify
the Company as a foreign limited liability company in that jurisdiction. At the
request of the Managers, each Member shall execute, acknowledge, swear to, and
deliver all certificates and other instruments conforming with this Operating
Agreement that are necessary or appropriate to qualify, continue, and terminate
the Company as a foreign limited liability company in all such jurisdictions in
which the Company may conduct business.
2.06 TERM. The Company commenced on July 7, 1994, the date the Secretary of
State of Georgia issued a certificate of organization for the Company, and shall
continue in existence until December 31, 2035 or such earlier time as this
Operating Agreement may specify.
2.07 No STATE-LAW PARTNERSHIP. The Members intend that the Company not be a
partnership (including, without limitation, a Limited partnership) or joint
venture, and that no Member or Manager be a partner or joint venturer of any
other Member or Manager, for any purposes other than federal and state tax
purposes, and this Operating Agreement may not be construed to suggest
otherwise.
ARTICLE III
MEMBERSHIP; DISPOSITIONS OF INTERESTS
3.01 INITIAL MEMBERS. The initial members of the Company are the Persons
executing this Operating Agreement as of the date of this Operating Agreement as
members, each of which is admitted to the Company as a Member effective
contemporaneously with the execution by such Person of this Operating Agreement.
3.02 REPRESENTATIONS AND WARRANTIES. Each Member hereby represents and
warrants to the Company and each other Member that (a) if that Member is a
corporation, it is duly organized, validly existing and in good standing under
the law of the state of its incorporation and is duly qualified and in good
standing as a foreign corporation in the jurisdiction of its principal place of
business (if not incorporated therein); (b) if that Member is a limited
liability company, it is duly organized, validly existing, and (if applicable)
in good standing under the law of the state of its organization and is duly
qualified and (if applicable) in good standing as a foreign limited liability
company in the jurisdiction of its principal place of business (if not organized
therein); (c) if that Member is a partnership, trust, or other entity, it is
duly formed, validly existing, and (if applicable) in good standing under the
law of the state of its formation, and if required by law is duly qualified to
do business and (if applicable) in good standing in the jurisdiction of its
principal place of business (if not formed therein), and the representations and
warranties in clause (a), (b) or (c), as applicable, are true and correct with
respect to each partner (other than limited partners), trustee, or other member
thereof; (d) that Member has full corporate, limited liability company,
partnership, trust, or other applicable power and authority to execute and
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agree to this Operating Agreement and to perform its obligations hereunder and
all necessary actions by the board of directors, shareholders, managers,
members, partners, trustees, beneficiaries, or other Persons necessary for the
due authorization, execution, delivery, and performance of this Operating
Agreement by that Member have been duly taken; (e) that Member has duly executed
and delivered this Operating Agreement; (f) that Member's authorization,
execution, delivery, and performance of this Operating Agreement does not
conflict with any other agreement or arrangement to which that Member is a party
or which it is bound; and (g) that Member's interest in the Company has been
purchased by that Member and is held by that Member only for investment, and
that the Member does not have any intention to distribute, divide, or resell
that interest in the Company.
3.03 RESTRICTIONS ON THE DISPOSITION OF AN INTEREST. (a) Except as
specifically provided in this Section 3.03, a Disposition of an interest in the
Company may not be effected without the consent of (i) a majority of the
Managers who are Members (excluding any Manager who is making such Disposition),
or (ii) if there are no Managers of the type described in clause (i), a Required
Interest. Any attempted Disposition by a Person of an interest or right, or any
part thereof, in or in respect of the Company other than in accordance with this
Section 3.03 shall be, and is hereby declared, null and void ab initio.
(b) Notwithstanding the provisions of Section 3.03(a), the interest of any
Member in the Company may be transferred without the consent of the Managers or
any of the Members if (i) the transfer occurs by reason of or incident to the
death, dissolution, divorce, liquidation, merger or termination of the
transferor Member, and (ii) the transferee is a Permitted Transferee. A
"Permitted Transferee" is any member of such Member's immediate family, or a
trust, corporation, limited liability company, or partnership controlled by such
Member or members of such Member's immediate family, or another Person
controlling, controlled by, or under common control with such Member.
(c) Subject to the provisions of Section 3.03(d), (e) and (f), (i) a Person
to whom an interest in the Company is transferred has the right to be admitted
to the Company as a Member with the Sharing Ratio and the Commitment so
transferred to such Person, if (A) the Member making such transfer grants the
transferee the right to be so admitted, and (B) such transfer is consented to in
accordance with Section 3.03(a); (ii) a Permitted Transferee under the
circumstances described in Section 3.03 (b)has the right to be admitted to the
Company as a Member with the Sharing Ratio and the Commitment so transferred to
the Permitted Transferee; and (iii) the Company or (with the permission of the
Company, which may be withheld in its sole discretion) a Lending Member may
grant the purchaser of a Delinquent Member's interest in the Company at a
foreclosure of the security interest therein granted pursuant to Section 4.03(b)
the right to be admitted to the Company as a Member with such Sharing Ratio and
such Commitment (no greater than the Sharing Ratio and the Commitment of the
Member effecting such Disposition prior thereto) as they may agree.
(d) The Company may not recognize for any purpose any purported Disposition
of all or part of a Membership Interest unless and until the other applicable
provisions of this Section 3.03 have been satisfied and the Managers have
received, on behalf of the Company, a document (i) executed by both the Member
effecting the Disposition (or if the transfer is on account of the death,
incapacity, or liquidation of the transferor, its representative) and the Person
to which the Membership Interest or part thereof is Disposed, (ii) including the
notice address of any Person to be admitted to the Company as
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a Member and its agreement to be bound by this Operating Agreement with respect
to the Membership Interest or part thereof being obtained, (iii) setting forth
the Sharing Ratios and the Commitments after the Disposition of the Member
effecting the Disposition and the Person to which the Membership Interest or
part thereof is Disposed (which together must total the Sharing Ratio and the
Commitment of the Member effecting the Disposition before the Disposition), and
(iv) containing a representation and warranty that the Disposition was made in
accordance with all applicable laws and regulations (including securities laws)
and, if the Person to which the Membership Interest or part thereof is Disposed
is to be admitted to the Company, its representation and warranty that the
representations and warranties in Section 3.02 are true and correct with respect
to that Person. Each Disposition and, if applicable, admission complying with
the provisions of this Section 3.03(d) is effective as of the day in which the
Managers receive the notification of Disposition and the other requirements of
this Section 3.03 have been met.
(e) For the right of a Member to Dispose of a Membership Interest or any
part thereof or of any Person to be admitted to the Company in connection
therewith to exist or be exercised, (i) either (A) the Membership Interest or
part thereof subject to the Disposition or admission must be registered under
the Securities Act of 1933, as amended, and any applicable state securities laws
or (B) the Company must receive a favorable opinion of the Company's legal
counsel or of other legal counsel acceptable to the Managers to the effect that
the Disposition or admission is exempt from registration under those laws and
(ii) the Company must receive a favorable opinion of the Company's legal counsel
or of other legal counsel acceptable to the Managers to the effect that the
Disposition or admission, when added to the total of all other sales,
assignments, or other Dispositions within the preceding 12 months, would not
result in the Company's being considered to have terminated within the meaning
of the Code. The Managers, however, may waive the requirements of this Section
3.03(e).
(f) The Member effecting a Disposition and any Person admitted to the
Company in connection therewith shall pay, or reimburse the Company for, all
costs incurred by the Company in connection with the Disposition or admission
(including, without limitation, the legal fees incurred in connection with the
legal opinions referred to in Section 3.03(e)) on or before the tenth day after
the receipt by that Person of the Company's invoice for the amount due. If
payment is not made by the date due, the Person owing that amount shall pay
interest on the unpaid amount from the date due until paid at a rate per annum
equal to the Default Interest Rate.
3.04 ADDITIONAL MEMBERS. Additional Persons may be admitted to the Company
as Members and Membership Interests may be created and issued to those Persons
and to existing Members at the direction of (a) a majority of the Managers who
are Members, or (b) if there are no Managers who are Members, a Required
Interest, on such terms and conditions as the Managers may determine at the time
of admission. The terms of admission or issuance must specify the Sharing Ratios
and the Commitments applicable thereto and may provide for the creation of
different classes or groups of Members and having different rights, powers, and
duties. The Managers shall reflect the creation of any new class or group in an
amendment to this Operating Agreement indicating the different rights, powers,
and duties, and such an amendment need be executed only by the Managers. Any
such admission also must comply with the provisions of Section 3.03(d)(i) and
(ii) and is effective only after the new Member has executed and delivered to
the Managers a document including the new Member's notice address, its agreement
to be bound by this
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Operating Agreement, and its representation and warranty that the representation
and warranties in Section 3.02 are true and correct with respect to the new
Member. The provisions of this Section 3.04 shall not apply to Dispositions of
Membership Interests.
3.05 INTERESTS IN A MEMBER. A Member that is not a natural person may not
cause or permit an interest, direct or indirect, in itself to be Disposed of
such that, after the Disposition, (a) the Company would be considered to have
terminated within the meaning of section 708 of the Code or (b) without the
consent of the Managers and a Required Interest, that Member shall cease to be
controlled by substantially the same Persons who control it as of the date of
its admission to the Company. On any breach of the provisions of clause (b) of
the immediately preceding sentence, the Company shall have the option to buy,
and on exercise of that option the breaching Member shall sell, the breaching
Member's Membership Interest, all in accordance with Section 11.01 as if the
breaching Member were a Bankrupt Member.
3.06 INFORMATION. (a) In addition to the other rights specifically set
forth in this Operating Agreement, each Member is entitled to all information to
which that Member is entitled to have access pursuant to Section 14-11-313 of
the Act under the circumstances and subject to the conditions therein stated.
The Members agree, however, that the Managers from time to time may determine,
due to contractual obligations, business concerns, or other considerations, that
certain information regarding the business, affairs, properties, and financial
condition of the Company should be kept confidential and not provided to some or
all other Members, and that it is not just or reasonable for those Members or
assignees or representatives thereof to examine or copy that information.
(b) The Members acknowledge that, from time to time, they may receive
information from or regarding the Company in the nature of trade secrets or that
otherwise is confidential, the release of which may be damaging to the Company
or Persons with which it does business. Each Member shall hold in strict
confidence any information it receives regarding the Company that is identified
as being confidential (and if that information is provided in writing, that is
so marked) and may not disclose it to any Person other than another Member or a
Manger, except for disclosures (i) compelled by law (but the Member must notify
the Managers promptly of any request for that information, before disclosing it
if practicable), (ii) to advisers or representatives of the Member or Persons to
which that Member's Membership Interest may be Disposed as permitted by this
Operating Agreement, but only if the recipients have agreed to be bound by the
provisions of this Section 3.06(b), or (iii) of information that Member also has
received from a source independent of the Company that the Member reasonably
believes obtained that information without breach of any obligation of
confidentiality. The Members acknowledge that breach of the provisions of this
Section 3.06(b) may cause irreparable injury to the Company for which monetary
damages are inadequate, difficult to compute, or both. Accordingly, the Members
agree that the provisions of this Section 3.06(b) may be enforced by specific
performance.
3.07 LIABILITY TO THIRD PARTIES. No Member or Manager shall be liable for
the debts, obligations or liabilities of the Company, including under a
judgment, decree or order of a court.
3.08 WITHDRAWAL. A Member does not have the right or power to withdraw from
the Company as a member.
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3.09 LACK OF AUTHORITY. No Member (other than a Manager or an officer) has
the authority or power to act for or on behalf of the Company, to do any act
that would be binding on the Company, or to incur any expenditures on behalf of
the Company.
ARTICLE IV
CAPITAL CONTRIBUTIONS
4.01 INITIAL CONTRIBUTIONS. Contemporaneously with the execution by such
Member of this Operating Agreement, each Member shall make the Capital
Contributions described for that Member in Exhibit A.
4.02 SUBSEQUENT CONTRIBUTIONS. Without creating any rights in favor of any
third party, each Member shall contribute to the Company, in cash, on or before
the date specified as hereinafter described, that Member's Sharing Ratio of all
monies that in the judgement of the Managers are necessary to enable the Company
to cause the assets of the Company to be properly operated and maintained and to
discharge its costs, expenses, obligations, and liabilities; provided, however,
that a Member is not obligated to contribute a total amount that, when added to
all Capital Contributions that Member previously has made pursuant to Section
4.01 or this Section 4.02, exceeds that Member's Commitment. The Managers shall
notify each Member of the need for Capital Contributions pursuant to this
Section 4.02 when appropriate, which notice must include a statement in
reasonable detail of the proposed uses of the Capital Contributions and a date
(which date may be no earlier than the fifth Business Day following each
Member's receipt of its notice) before which the Capital Contributions must be
made. Notices for Capital Contributions must be made to all Members in
accordance with their Sharing Ratios.
4.03 FAILURE TO CONTRIBUTE. (a) If a Member does not contribute by the time
required all or any portion of a Capital Contribution that Member is required to
make as provided in this Operating Agreement, the Company may exercise, on
notice to that Member (the "Delinquent Member"), one or more of the following
remedies:
(i) taking such action (including, without limitation, court
proceedings) as the Managers may deem appropriate to obtain payment by the
Delinquent Member of the portion of the Delinquent Member's Capital
Contribution that is in default, together with interest thereon at the
Default Interest Rate from the date that the Capital Contribution was due
until the date that it is made, all at the cost and expense of the
Delinquent Member;
(ii) permitting the other Members in proportion to their Sharing
Ratios or in such other percentages as they may agree (the "Lending Member"
whether one or more), to advance the portion of the Delinquent Member's
Capital Contribution that is in default, with the following results:
(A) the sum advanced constitutes a loan from the Lending Member
to the Delinquent Member and a Capital Contribution of that sum to the
Company by the Delinquent Member pursuant to the applicable provisions
of this Operating Agreement,
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(B) the principal balance of the loan and all accrued unpaid
interest thereon is due and payable in whole on the tenth day after
written demand therefor by the Lending Member to the Delinquent
Member,
(C) the amount lent bears interest at the Default Interest Rate
from the day that the advance is deemed made until the date that the
loan, together with all interest accrued on it, is repaid to the
Lending Member,
(D) all distributions from the Company that otherwise would be
made to the Delinquent Member (whether before or after dissolution of
the Company) instead shall be paid to the Lending Member until the
loan and all interest accrued thereon have been paid in full to the
lending Member (with payments being applied first to accrued and
unpaid interest and then to principal),
(E) the payment of the loan and interest accrued thereon is
secured by a security interest in the Delinquent Member's Membership
Interest, as more fully set forth in Section 4.03(b), and
(F) the Lending Member has the right, in addition to the other
rights and remedies granted to it pursuant to this Operating Agreement
or available to it at law or in equity, to take any action (including,
without Limitation, court proceedings) that the Lending Member may
deem appropriate to obtain payment by the Delinquent Member of the
loan and all accrued and unpaid interest thereon, at the cost and
expense of the Delinquent Member;
(iii) exercising the rights of a secured party under the Uniform
Commercial Code of the State of Georgia, as more fully set forth in Section
4.03(b): or
(iv) exercising any other rights and remedies available at law or in
equity.
(b) Each Member giants to the Company, and to each Lending Member with
respect to any loans made by the Lending Member to that Member as a Delinquent
Member pursuant to Section 4.03(a)(ii), as security, equally and ratably, for
the payment of all Capital Contributions that Member has agreed to make and the
payment of all loans and interest accrued thereon made by Lending Members to
that Member as a Delinquent Member pursuant to Section 4.03(a)(ii), a security
interest in and a lien on its Membership Interest and the proceeds thereof, all
under the Uniform Commercial Code of the State of Georgia. On any default in the
payment of a Capital Contribution or in the payment of such a loan or interest
accrued thereon, the Company or the Lending Member, as applicable, is entitled
to all the rights and remedies of a secured party under the Uniform Commercial
Code of the State of Georgia with respect to the security interest granted in
this Section
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4.03(b). Each Member shall execute and deliver to the Company and the other
Members all financing statements and other instruments that the Managers or the
Lending Member, as applicable, may request to effectuate and carry out the
preceding provisions of this Section 4.03(b). At the option of the Managers or a
Lending Member, this Operating Agreement or a copy hereof may serve as a
financing statement.
4.04 RETURN OF CONTRIBUTIONS. Other than as expressly provided in this
Operating Agreement, a Member is not entitled to the return of any part of its
Capital Contributions or to be paid interest in respect of either its capital
account or its Capital Contributions. An unrepaid Capital Contribution is not a
liability of the Company or of any Member. A Member is not required to
contribute or to lend any cash or property to the Company to enable the Company
to return any Member's Capital Contributions.
4.05 ADVANCES BY MEMBERS. If the Company does not have sufficient cash to
pay its obligations, any Member(s) that may agree to do so with the Managers'
consent may advance all or part of the needed funds to or on behalf of the
Company. An advance described in this Section 4.05 constitutes a loan from the
Member to the Company, bears interest at the General Interest Rate from the date
of the advance until the date of payment, and is not a Capital Contribution.
4.06 CAPITAL ACCOUNTS. A capital account shall be established and
maintained for each Member. Each Member's capital account (a) shall be increased
by (i) the amount of money contributed by that Member to the Company, (ii) the
fair market value of property contributed by that Member to the Company (net of
liabilities secured by the contributed property that the Company is considered
to assume or take subject to under section 752 of the Code), and (iii)
allocations to that Member of Company income and gain (or items thereof),
including income and gain exempt from tax and income and gain described in
Treas. Reg. Section 1.704-1(b)(2)(iv)(g), but excluding income and gain
described in Treas. Reg. Section 1.704-1(b)(4)(i), and (b) shall be decreased by
(i) the amount of money distributed to that Member by the Company, (ii) the fair
market value of property distributed to that Member by the Company (net of
liabilities secured by the distributed property that the Member is considered to
assume or take subject to under section 752 of the Code), (iii) allocations to
that Member of expenditures of the Company described in section 705(a)(2)(B) of
the Code, and (iv) allocations of Company loss and deduction (or items thereof),
including loss and deduction described in Treas. Reg. Section
1.704-1(b)(2)(iv)(g), but excluding items described in clause (b)(iii) above and
loss or deduction described in Treas. Reg. Section 1.704-1(b)(4)(i) or Section
1.704-1(b)(4)(iii). The Members' capital accounts also shall be maintained and
adjusted as permitted by the provisions of Treas. Reg. Section
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treas. Reg.
Sections 1.704-1(b)(2)(iv) and 1.704-1 (b)(4), including adjustments to reflect
the allocations to the Members of depreciation, depletion, amortization, and
gain or loss as computed for book purposes rather than the allocation of the
corresponding items as computed for tax purposes, as required by Treas. Reg.
Section 1.704-1(b)(2)(iv)(g). A Member that has more than one Membership
Interest shall have a single capital account that reflects all its Membership
Interests, regardless of the class of Membership Interests owned by that Member
and regardless of the time or manner in which those Membership Interests were
acquired. On the transfer of all or part of a Membership Interest, the capital
account of the transferor that is attributable to the transferred Membership
Interest or part thereof shall carry over to the transferee Member in accordance
with the provisions of Treas. Reg. Section 1.704-1(b)(2)(iv)(l)
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ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.01 ALLOCATIONS. (a) Except as may be required by section 701(c) of the
Code and Treas. Reg. Section 1.701-1(b)(2)(iv)(f)(4), all items of income, gain,
loss, deduction, and credit of the Company shall be allocated among the Members
in accordance with their Sharing Ratios.
(b) All items of income, gain, loss, deduction, and credit allocable to any
Membership Interest that may have been transferred shall be allocated between
the transferor and the transferee based on the portion of the calendar year
during which each was recognized as owning that Membership Interest, without
regard to the results of Company operations during any particular portion of
that calendar year and without regard to whether cash distributions were made to
the transferor or the transferee during that calendar year; provided, however,
that this allocation must be made in accordance with a method permissible under
section 706 of the Code and the regulations thereunder.
5.02 DISTRIBUTIONS. All receipts and revenues of the Company from any
source shall be applied and distributed in the following order of priority with
no distribution being made in any category set forth below unless and until the
preceding category has been satisfied in full either by payment or by setting
aside of a cash reserve for payment of same.
(a) in payment of all debts, obligations, liabilities, costs and expenses
incurred in connection with or on account of the Company;
(b) in repayment of any loans and accrued interest thereon made by a
Lending Member pursuant to Section 4.03(a)(ii);
(c) in repayment of Contributions by the Member in accordance with their
Sharing Ratios, subject to the provisions of Section 4.03.
(d) after having satisfied (a), (b) and (c) above, receipts and revenues of
the Company shall represent the profits of the Company and shall be distributed
in the following order of priority:
(i) the Contributions made by the Members to the Company pursuant to
Sections 4.01 and 4.02 herein shall bear interest at a rate which is two
percent (2%) per annum greater than the prime rate charged by the Bank of
Nova Scotia to its most credit worthy customers of U.S. Dollar demand
loans, but in no event shall the rate of interest exceed the maximum rate
permitted by laws, from the date of such advance until repaid to such
Member in accordance with (c) above.
(ii) after having satisfied (a), (b), (c) and (d)(i) above, the
receipts and revenues of the Company shall be distributed to the Members
pro rate and pari passu in accordance with their Sharing Ratios.
However, no distribution of profits shall be made until after completion of any
development and/or construction activities undertaken by the Company, without
the agreement of the Members.
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ARTICLE VI
MANAGERS
6.01 MANAGEMENT BY MANAGERS. (a) Except for situations in which the
approval of the Members is required by this Operating Agreement or by
nonwaivable provisions of applicable law, and subject to the provisions of
Section 6.02, (i) the powers of the Company shall be exercised by or under the
authority of, and the business and affairs of the Company shall be managed under
the direction of, the Managers; and (ii) the Managers may make all decisions and
take all actions for the Company not otherwise provided for in this Operating
Agreement, including, without limitation, the following:
(i) entering into, making, and performing contracts, agreements, and
other undertakings binding the Company that may be necessary, appropriate,
or advisable in furtherance of the purposes of the Company and making all
decisions and waivers thereunder;
(ii) opening and maintaining bank and investment accounts and
arrangements, drawing checks and other orders for the payment of money, and
designating individuals with authority to sign or give instructions with
respect to those accounts and arrangements;
(iii) maintaining the assets of the Company in good order;
(iv) collecting sums due the Company;
(v) to the extent that funds of the Company are available therefor,
paying debts and obligations of the Company;
(vi) acquiring, utilizing for Company purposes, and Disposing of any
asset of the Company;
(vii) borrowing money or otherwise committing the credit of the
Company for Company activities and voluntary prepayments or extensions of
debt;
(viii) selecting, removing, and changing the authority and
responsibility of lawyers, accountants, and other advisers and consultants;
(ix) obtaining insurance for the Company;
(x) determining distributions of Company cash and other property as
provided in Section 5.02;
(xi) establishing a seal for the Company;
(xii) selling, leasing, exchanging or otherwise disposing of
(including by way of a pledge, mortgage, deed of trust or trust indenture)
all or any portion of the Company's property and assets (with or without
good will); and
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(xiii) being a party to a merger of the type described in Section
14-11-903 of the Act.
(b) Notwithstanding the provisions of Section 6.01(a), the Managers may not
cause the Company to do any of the following without complying with the
applicable requirements set forth below:
(i) Dissolve the Company under paragraph (3) of Code Section
14-11-602, except upon the written consent of all Members;
(ii) Enter into an agreement of merger of the Company of the type
described in subsection (a) of Code Section 14-11-903, except upon the
written consent of a Required Interest;
(iii) Authorize the sale, exchange, lease or other transfer of all or
substantially all of the assets of the Company, except upon the written
consent of a Required Interest. For the purposes of this paragraph, assets
shall be deemed to be less than all or substantially all of the Company's
assets if the value of the assets does not exceed two-thirds of the value
of all of the assets of the Company and the revenues represented or
produced by such assets do not exceed two-thirds of the total revenues of
the Company; provided, however, that this paragraph shall not create any
inference that the sale, exchange, lease or other transfer of assets
exceeding the amounts described in this paragraph is the sale of all or
substantially all of the assets of the Company;
(iv) Admit any new member except as provided herein and in the Act;
(v) Amend the articles of organization under the Act or this Operating
Agreement, without the written consent of each Member;
(vi) Take any action under subsection (b) of Act Section 14-11-402 to
reduce or eliminate an obligation to make a contribution to the capital of
the Company;
(vii) Take action to continue the Company under paragraph (4) of Act
Section 14-11-602, except upon the agreement of a Required Interest or
greater interest as may be provided herein.
6.02 ACTIONS BY MANAGERS; COMMITTEES; DELEGATION OF AUTHORITY AND DUTIES.
(a) In managing the business and affairs of the Company and exercising its
powers, the Managers shall act (i) collectively through meetings and written
consents pursuant to Sections 6.05 and 6.07; (ii) through committees pursuant to
Section 6.02(b); (iii) through Managers and authorized representatives to whom
authority and duties have been delegated pursuant to Section 6.02(c).
(b) The Managers may, from time to time, designate one or more committees,
each of which shall be comprised of one or more Managers. Any such committee, to
the extent provided in such resolution or in the Articles or this Operating
Agreement, shall have and may exercise all of the authority of the Managers,
subject to the limitations set forth in
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the Act. At every meeting of any such committee, the presence of a majority of
all the members thereof shall constitute a quorum, and the affirmative vote of a
majority of the members present shall be necessary for the adoption of any
resolution. The Managers may dissolve any committee at any time, unless
otherwise provided in the Articles or this Operating Agreement.
(c) The Managers hereby delegate to each of the Managers (acting by
themself and without the necessity of any other approval or authorization) and
may delegate to an authorized representative of the Company, including without
limitation, any Attorney-In-Fact pursuant to a Power of Attorney executed by all
of the Managers, the authority to take any of the actions authorized in Section
6.0l(a) hereof. In addition, the Managers may assign titles (including, without
limitation, president, vice president, secretary, assistant secretary, treasurer
and assistant treasurer) to any such Manager or authorized representative.
Unless the Managers decide otherwise, if the title is one commonly used for
officers of a business corporation, the assignment of such title shall
constitute the delegation to such Manager of the authority and duties that are
normally associated with that office, subject to any specific delegation of
authority and duties made pursuant to the first sentence of this Section
6.02(c). Any number of titles may be held by the same Manager or authorized
representative. Any delegation pursuant to this Section 6.02(c) may be revoked
at any time by the Managers.
(d) Any Person dealing with the Company, other than a Member, may rely on
the authority of any Manager, authorized representative or officer in taking any
action in the name of the Company without inquiry into the provisions of this
Operating Agreement or compliance herewith, regardless of whether that action
actually is taken in accordance with the provisions of this Operating Agreement.
6.03 NUMBER AND TERM OF OFFICE. The number of Managers of the Company shall
be determined from time to time by resolution of the Managers; provided,
however, that no decrease in the number of Managers that would have the effect
of shortening the term of an incumbent Manager may be made by the Managers. If
the Managers make no such determination, there shall be three managers. Each
Manager shall hold office for the term for which he is elected and thereafter
until his successor shall have been elected and qualified, or until his earlier
death, resignation or removal. Unless otherwise provided in the Articles,
Managers need not be Members or residents of the State of Georgia.
6.04 VACANCIES; REMOVAL; RESIGNATION. Any Manager position to be filled by
reason of an increase in the number of Managers may be filled by election at an
annual or special meeting of Members called for that purpose. Any vacancy
occurring in the Managers other than by reason of an increase in the number of
Managers may be filled (a) by election at an annual or special meeting of the
Members called for that purpose or (b) by the affirmative vote of a majority of
the remaining Managers though less than a quorum of the Managers. A Manager
elected to fill a vacancy occurring other than by reason of an increase in the
number of Managers shall be elected for the unexpired term of his predecessor in
office. At any meeting of Members at which a quorum of Members is present called
expressly for that purpose, or pursuant to a written consent adopted pursuant to
this Operating Agreement, any Manager may be removed, with or without cause, by
a Required Interest. Any Manager may resign at any time. Such resignation shall
be made in writing and shall take effect at the time specified therein, or if no
time be specified, at the time of its receipt by the remaining Managers. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
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6.05 MEETINGS. (a) Unless otherwise required by law or provided in the
Articles or this Operating Agreement, a majority of the total number of Managers
fixed by, or in the manner provided in, the Articles or this Operating
Agreement shall constitute a quorum for the transaction of business of the
Managers, and the act of a majority of the Managers present at a meeting at
which a quorum is present shall he the act of the Managers. A Manager who is
present at a meeting of the Managers at which action on any Company matter is
taken shall be presumed to have assented to the action unless his dissent shall
be entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the Person acting as secretary of the meeting before
the adjournment thereof or shall deliver such dissent to the Company immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
Manager who voted in favor of such action.
(b) Meetings of the Managers may be held at such place or places as shall
be determined from time to time by resolution of the Managers. At all meetings
of the Managers, business shall be transacted in such order as shall from time
to time be determined by resolution of the Managers. Attendance of a Manager at
a meeting shall constitute a waiver of notice of such meeting, except where a
Manager attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
(c) In connection with any annual meeting of Members at which Managers were
elected, the Managers may, if a quorum is present, hold its first meeting for
the transaction of business immediately after and at the same place as such
annual meeting of the Members. Notice of such meeting at such time and place
shall not be required.
(d) Regular meetings of the Managers shall be held at such times and places
as shall be designated from time to time by resolution of the Managers. Notice
of such regular meetings shall not be required.
(e) Special meetings of the Managers may be called by any Manager on at
least 24 hours notice to each other Manager. Such notice need not state the
purpose or purposes of, nor the business to be transacted at, such meeting,
except as may otherwise be required by law or provided for by the Articles or
this Operating Agreement.
6.06 APPROVAL OR RATIFICATION OF ACTS OR CONTRACTS BY MEMBERS. The Managers
in their discretion may submit any act or contract for approval or ratification
at any annual meeting of the Members, or at any special meeting of the Members
called for the purpose of considering any such act or contract, and any act or
contract that shall be approved or be ratified by a Required Interest shall be
as valid and as binding upon the Company and upon all the Members as if it shall
have been approved or ratified by every Member of the Company.
6.07 ACTION by WRITTEN CONSENT OR TELEPHONE CONFERENCE. Any action
permitted or required by the Act, the Articles or this Operating Agreement to be
taken at a meeting of the Managers or any committee designated by the Managers
may be taken without a meeting if a consent in writing, setting forth the action
to be taken, is signed by all the Managers or members of such committee, as the
case may be. Such consent shall have the same force and effect as a unanimous
vote at a meeting and may be stated as such in any document or instrument filed
with the Secretary of State of Georgia, and the execution of
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such consent shall constitute attendance or presence in person at a meeting of
the Managers or any such committee, as the case may be. Subject to the
requirements of the Act, the Articles or this Operating Agreement for notice of
meetings, unless otherwise restricted by the Articles, Managers, or members of
any committee designated by the Managers, may participate in and hold a meeting
of the Managers or any committee of Managers, as the case may be, by means of a
conference telephone or similar communications equipment by means of which all
Persons participating in the meeting can hear each other, and participation in
such meeting shall constitute attendance and presence in person at such meeting,
except where a Person participates in the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened.
6.08 COMPENSATION. The Managers shall reserve such compensation, if any,
for their services as may be designated from time to time by all of the
Managers. In addition, the Managers shall be entitled to be reimbursed for
out-of-pocket costs and expenses incurred in the course of their service
hereunder, including the portion of their overhead reasonably allocable to
Company activities.
6.09 CONFLICTS OF INTEREST. Subject to the other express provisions of this
Operating Agreement, each Manager, Member and officer of the Company at any time
and from time to time may engage in and possess interests in other business
ventures of any and every type and description, independently or with others,
including ones in competition with the Company, with no obligation to offer to
the Company or any other Member, Manager or officer the right to participate
therein. The Company may transact business with any Manager, Member, officer or
Affiliate thereof, provided the terms of those transactions are no less
favorable than those the Company could obtain from unrelated third parties.
6.10 OFFICERS. (a) The Managers may, from time to time, designate one or
more Persons to be officers of the Company. No officer need be a resident of the
State of Georgia, a Member or a Manager. Any officers so designated shall have
such authority and perform such duties as the Managers may, from time to time,
delegate to them. The Managers may assign titles to particular officers. Unless
the Managers decide otherwise, if the title is one commonly used for officers of
a business corporation, the assignment of such title shall constitute the
delegation to such officer of the authority and duties that are normally
associated with that office, subject to (i) any specific delegation of authority
and duties made to such officer by the Managers pursuant to the third sentence
of this Section 6.10(b), or (ii) any delegation of authority and duties made to
one or more Managers or authorized representatives pursuant to Section 6.02(a).
Each officer shall hold office until his successor shall be duly designated and
shall quality or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided. Any number of offices may be held by
the same Person. The salaries or other compensation, if any, of the officers and
agents of the Company shall be fixed from time to time by the Managers.
(b) Any officer may resign as such at any time. Such resignation shall be
made in writing and shall take effect at the time specified therein, or if no
time be specified, at the time of its receipt by the Managers. The acceptance of
a resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation. Any officer may be removed as such, either with or
without cause, by the Managers whenever in their judgment the best interests of
the Company will be served thereby; provided, however, that such removal shall
be without prejudice to the contract rights, if any, of the Person so removed.
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Designation of an officer shall not of itself create contract rights. Any
vacancy occurring in any office of the Company (other than Manager) may be
filled by the Managers.
6.11 ATTORNEY-IN-FACT. (a) One or more of the Managers and/or the
President, if any, may, from time to time, designate one or more Persons to be
an Attorney-In-Fact of the Company. No Attorney-In-Fact need be a resident of
the State of Georgia, a Member or a Manager. Any Attorney-In-Fact so designated
shall have such authority and perform such duties as the Managers or President
may, from time to time, delegate to such Person a written instrument
constituting a Power of Attorney. Each Attorney-In-Fact shall hold office until
his death or until he shall resign or shall have been removed in the manner
hereinafter provided. The salaries or other compensation, if any, of any
Attorney-In-Fact of the Company shall be fixed from time to time by the
Managers.
(b) Any Attorney-In-Fact may resign as such at any time. Such resignation
shall be made in writing and shall take effect at the time specified therein, or
if no time be specified, at the time of its receipt by the Managers. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation. Any Attorney-In-Fact may be removed as
such, either with or without cause, by the Managers whenever in their judgment
the best interests of the Company will be served thereby; provided, however,
that such removal shall be without prejudice to the contract rights, if any, of
the Person so removed. Designation of an Attorney-In-Fact shall not of itself
create contract rights.
ARTICLE VII
MEETINGS OF MEMBERS
7.01 MEETINGS. (a) A quorum shall be present at a meeting of Members if the
holders of a Required Interest are represented at the meeting in person or by
proxy. With respect to any matter, other than a matter for which the affirmative
vote of the holders of a specified portion of the Sharing Ratios of all Members
entitled to vote is required by the Act, the affirmative vote of a Required
Interest at a meeting of Members at which a quorum is present shall be the act
of the Members.
(b) All meetings of the Members shall be held at the principal place of
business of the Company or at such other place within or without the State of
Georgia as shall be specified or fixed in the notices or waivers of notice
thereof; provided that any or all Members may participate in any such meeting by
means of conference telephone or similar communications equipment pursuant to
Section 7.05.
(c) Notwithstanding the other provisions of the Articles or this Operating
Agreement, the chairman of the meeting or the holders of a Required Interest
shall have the power to adjourn such meeting from time to time, without any
notice other than announcement at the meeting of the time and place of the
holding of the adjourned meeting. If such meeting is adjourned by the Members,
such time and place shall be determined by a vote of the holders of a Required
Interest. Upon the resumption of such adjourned meeting, any business may be
transacted that might have been transacted at the meeting as originally called.
(d) An annual meeting of the Members, for the election of the Managers and
for the transaction of such other business as may properly come before the
meeting, shall be
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held at such place, within or without the State of Georgia, on such date and at
such time as the Managers shall fix and set forth in the notice of the meeting.
(e) Special meetings of the Members for any proper purpose or purposes may
be called at any time by the Managers or the holders of at least ten percent of
the Sharing Ratios of all Members. If not otherwise stated in or fixed in
accordance with the remaining provisions hereof, the record date for determining
Members entitled to call a special meeting is the date any Member first signs
the notice of that meeting. Only business within the purpose or purposes
described in the notice (or waiver thereof) required by this Operating Agreement
may be conducted at a special meeting of the Members.
(f) Written or printed notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten nor more than 60
days before the date of the meeting, either personally or by mail, by or at the
direction of the Managers or Person calling the meeting, to each Member entitled
to vote at such meeting. If mailed, any such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the Member at
his address provided for on Exhibit A, with postage thereon prepaid.
(g) The date on which notice of a meeting of Members is mailed or the date
on which the resolution of the Managers declaring a distribution is adopted, as
the case may be, shall be the record date for the determination of the Members
entitled to notice of or to vote at such meeting, including any adjournment
thereof, or the Members entitled to receive such distribution.
(h) The right of Members to cumulative voting in the election of Managers
is expressly prohibited.
7.02 VOTING LIST. The Managers shall make, at least ten days before each
meeting of Members, a complete list of the Members entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the Sharing Ratios held by each, which list, for a period of ten
days prior to such meeting, shall be kept on file at the registered office or
principal place of business of the Company and shall be subject to inspection by
any Member at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any Member during the whole time of the meeting. The
original membership records shall be prima-facie evidence as to who are the
Members entitled to examine such list or transfer records or to vote at any
meeting of Members. Failure to comply with the requirements of this Section
shall not affect the validity of any action taken at the meeting.
7.03 PROXIES. A Member may vote either in person or by proxy executed in
writing by the Member. A telegram, telex, cablegram or similar transmission by
the Member, or a photographic, photostatic, facsimile or similar reproduction of
a writing executed by the Member shall be treated as an execution in writing for
purposes of this Section. Proxies for use at any meeting of Members or in
connection with the taking of any action by written consent shall be filed with
the Managers, before or at the time of the meeting or execution of the written
consent, as the case may be. All proxies shall be received and taken charge of
and all ballots shall be received and canvassed by the Managers, who shall
decide all questions touching upon the qualification of voters, the validity of
the proxies, and the
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acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions. No proxy shall be valid after 11
months from the date of its execution unless otherwise provided in the proxy. A
proxy shall be revocable unless the proxy form conspicuously states that the
proxy is irrevocable and the proxy is coupled with an interest. Should a proxy
designate two or more Persons to act as proxies, unless that instrument shall
provide to the contrary, a majority of such Persons present at any meeting at
which their powers thereunder are to be exercised shall have and may exercise
all the powers of voting or giving consents thereby conferred, or if only one be
present, then such powers may be exercised by that one; or, if an even number
attend and a majority do not agree on any particular issue, the Company shall
not be required to recognize such proxy with respect to such issue if such proxy
does not specify how the Sharing Ratios that are the subject of such proxy are
to be voted with respect to such issue.
7.04 CONDUCT OF MEETINGS. All meetings of the Members shall be presided
over by the chairman of the meeting, who shall be a Manager (or representative
thereof) designated by a majority of the Managers. The chairman of any meeting
of Members shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order.
7.05 ACTION BY WRITTEN CONSENT OR TELEPHONE CONFERENCE. (a) Any action
required or permitted to be taken at any annual or special meeting of Members
may be taken without a meeting, without prior notice, and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holder or holders of not less than the minimum Sharing Ratios that
would be necessary to take such action at a meeting at which the holders of all
Sharing Ratios entitled to vote on the action were present and voted. Every
written consent shall bear the date of signature of each Member who signs the
consent. No written consent shall be effective to take the action that is the
subject to the consent unless, within 60 days after the date of the earliest
dated consent delivered to the Company in the manner required by this Section, a
consent or consents signed by the holder or holders of not less than the minimum
Sharing Ratios that would be necessary to take the action that is the subject of
the consent are delivered to the Company by delivery to its registered office,
its principal place of business, or the Managers. Delivery shall be by hand or
certified or registered mail, return receipt requested. Delivery to the
Company's principal place of business shall be addressed to the Managers. A
telegram, telex, cablegram or similar transmission by a Member, or a
photographic, photostatic, facsimile or similar reproduction of a writing signed
by a Member, shall be regarded as signed by the Member for purposes of this
Section. Notice of the taking of any action by Members without a meeting by less
than unanimous written consent shall be given to those Members who did not
consent in writing to the action within ten days following such action.
(b) The record date for determining Members entitled to consent to action
in writing without a meeting shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Company by delivery to its registered office, its principal place of
business, or the Managers. Delivery shall be by hand or by certified or
registered mail, return receipt requested. Delivery to the Company's principal
place of business shall be addressed to the Managers.
(c) Members may participate in and hold a meeting by means of conference
telephone or similar communications equipment by means of which all Persons
participating
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in the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person at such meeting, except where a
Person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE VIII
INDEMNIFICATION
8.01 RIGHT TO INDEMNIFICATION. Subject to the limitations and conditions as
provided in the Act and this Article VIII, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (hereinafter a "Proceeding"), or
any appeal in such a Proceeding or any inquiry or investigation that could lead
to such a Proceeding, by reason of the fact that he or she, or a Person of whom
he or she is the legal representative, is or was a Manager, officer, or
Attorney-In-Fact of the Company, or while a Manager, officer or Attorney-In-Fact
of the Company is or was serving at the request of the Company as a Manager,
director, officer, partner, venturer, proprietor, trustee, employee, agent,
Attorney-In-Fact or similar functionary of another foreign or domestic limited
liability company, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise shall be indemnified by the
Company to the fullest extent permitted by the Act, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Company to provide broader indemnification
rights than said law permitted the Company to provide prior to such amendment)
against judgments, penalties (including excise and similar taxes and punitive
damages), fines, settlements and reasonable expenses (including, without
limitation, attorneys' fees) actually incurred by such Person in connection with
such Proceeding, and indemnification under this Article VIII shall continue as
to a Person who has ceased to serve in the capacity which initially entitled
such Person to indemnify hereunder. The rights granted pursuant to this Article
VIII shall be deemed contract rights, and no amendment, modification or repeal
of this Article VIII shall have the effect of limiting or denying any such
rights with respect to actions taken or Proceedings arising prior to any such
amendment, modification or repeal. It is expressly acknowledged that the
indemnification provided in this Article VIII could involve indemnification for
negligence or under theories of strict liability.
8.02 ADVANCE PAYMENT. The right to indemnification conferred in this
Article VIII shall include the right to be paid or reimbursed by the Company the
reasonable expenses incurred by a Person of the type entitled to be indemnified
under Section 8.01 who was, is or is threatened to be made a named defendant or
respondent in a Proceeding in advance of the final disposition of the Proceeding
and without any determination as to the Person's ultimate entitlement to
indemnification; provided, however, that the payment of such expenses incurred
by any such Person in advance of the final disposition of a Proceeding, shall be
made only upon delivery to the Company of a written affirmation by such Manager
of his or her good faith belief that he has met the standard of conduct for
indemnification under this Article VIII and a written undertaking, by or on
behalf of such Person, to repay all amounts so advanced if it shall ultimately
be determined that such indemnified Person is not entitled to be indemnified
under this Article VIII or otherwise.
8.03 INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS. The Company, by
adoption of a resolution of the Managers, may indemnity and advance expenses to
an
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officer, employee or agent of the Company to the same extent and subject to the
same conditions under which it may indemnify and advance expenses to Managers
under this Article VIII; and, the Company may indemnify and advance expenses to
Persons who are not or were not Managers, officers, employees or agents of the
Company but who are or were serving at the request of the Company as a Manager,
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic limited liability company,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise against any liability asserted against him and
incurred by him in such a capacity or arising out of his status as such a Person
to the same extent that it may indemnity and advance expenses to Managers under
this Article VIII.
8.04 APPEARANCE AS A WITNESS. Notwithstanding any other provision of this
Article VIII. the Company may pay or reimburse expenses incurred by a Manager in
connection with his appearance as a witness or other participation in a
Proceeding at a time when he is not a named defendant or respondent in the
Proceeding.
8.05 NONEXCLUSIVITY OF RIGHTS. The right to indemnification and the
advancement and payment of expenses conferred in this Article VIII shall not be
exclusive of any other right which a Manager or other Person indemnified
pursuant to Section 8.03 may have or hereafter acquire under any law (common or
statutory), provision of the Articles or this Operating Agreement, agreement,
vote of Members or disinterested Managers or otherwise.
8.06 INSURANCE. The Company may purchase and maintain insurance, at its
expense, to protect itself and any Person who is or was serving as a Manager,
officer, employee or agent of the Company or is or was serving at the request of
the Company as a Manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
limited liability company, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify such Person against such expense, liability or loss under this Article
VIII.
8.07 MEMBER NOTIFICATION. To the extent required by law, any
indemnification of or advance of expenses to a Manager in accordance with this
Article VIII shall be reported in writing to the Members with or before the
notice or waiver of notice of the next Members' meeting or with or before the
next submission to Members of a consent to action without a meeting and, in any
case, within the 12-month period immediately following the date of the
indemnification or advance.
8.08 SAVINGS CLAUSE. If this Article VIII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Manager or any other
Person indemnified pursuant to this Article VIII as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative to the full extent permitted by any
applicable portion of this Article VIII that shall not have been invalidated and
to the fullest extent permitted by applicable law.
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ARTICLE IX
TAXES
9.01 TAX RETURNS. The Managers shall cause to be prepared and filed all
necessary federal and state income tax returns for the Company, including making
the elections described in Section 9.02. Each Member shall furnish to the
Managers all pertinent information in its possession relating to Company
operations that is necessary to enable the Company's income tax returns to be
prepared and filed.
9.02 TAX ELECTIONS. The Company shall make the following elections on the
appropriate tax returns:
(a) to adopt the year ending on May 31 as the Company's fiscal year;
(b) to adopt a method of accounting as the Managers may determine from
time to time;
(c) if a distribution of Company property as described in section 734
of the Code occurs or if a transfer of a Membership Interest as described
in section 743 of the Code occurs, on written request of any Member, to
elect, pursuant to section 754 of the Code, to adjust the basis of Company
properties;
(d) to elect to amortize the organizational expenses of the Company
and the startup expenditures of the Company under Section 195 of the Code
ratably over a period of 60 months as permitted by section 709(b) of the
Code; and
(e) any other election the Managers may deem appropriate and in the
best interests of the Members.
Neither the Company nor any Manager or Member may make an election for the
Company to be excluded from the application of the provisions of subchapter K of
chapter 1 of subtitle A of the Code or any similar provisions of applicable
state law, and no provision of this Operating Agreement (including, without
limitation, Section 2.06) shall be construed to sanction or approve such an
election.
9.03 "TAX MATTERS PARTNER." A majority of the Managers who are Members
shall designate one Manager that is a Member to be the "tax matters partner" of
the Company pursuant to section 6231(a)(7) of the Code,; or, if there is no
Manager that is a Member, the "tax matters partner" shall be a Member that is
designated as such by a Required Interest. Any Member who is designated "tax
matters partner" shall take such action as may be necessary to cause each other
Member to become a "notice partner" within the meaning of section 6223 of the
Code. Any Member who is designated "tax matters partner" shall inform each other
Member of all significant matters that may come to its attention in its capacity
as "tax matters partner" by giving notice thereof on or before the fifth
Business Day after becoming aware thereof and, within that time, shall forward
to each other Member copies of all significant written communications it may
receive in that capacity. Any Member who is designated "tax matters partner" may
not take any action contemplated by sections
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6222 through 6232 of the Code without the consent of a Required Interest, but
this sentence does not authorize such Manager (or any other Manager) to take any
action left to the determination of an individual Member under sections 6222
through 6232 of the Code.
ARTICLE X
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
10.01 MAINTENANCE OF BOOKS. The Company shall keep books and records of
accounts and shall keep minutes of the proceedings of its Members, its Managers
and each committee of the Managers. The books of account for the Company shall
be maintained on a cash basis in accordance with the terms of this Operating
Agreement, except that the capital accounts of the Members shall be maintained
in accordance with Section 4.06. The calendar year shall be the accounting year
of the Company.
10.02 REPORTS. On or before the 120th day following the end of each fiscal
year during the term of the Company, the Managers shall cause each Member to be
furnished with a balance sheet, an income statement, and a statement of changes
in Members' capital of the Company for, or as of the end of, that year certified
by a recognized firm of certified public accountants. These financial statements
must be prepared in accordance with accounting principles generally employed for
cash basis records consistently applied (except as therein noted) and must be
accompanied by a report of the certified public accountants certifying the
statements and stating that (a) their examination was made in accordance with
generally accepted auditing standards and, in their opinion, the financial
statements fairly present the financial position, financial results of
operations, and changes in Members' capital in accordance with accounting
principles generally employed for cash-basis records consistently applied
(except as therein noted) and (b) in making the examination and reporting on the
financial statements described above, nothing came to their attention that
caused them to believe that (i) the income and revenues were not paid or
credited in accordance with the financial and accounting provisions of this
Operating Agreement, (ii) the costs and expenses were not charged in accordance
with the financial and accounting provisions of this Operating Agreement, or
(iii) the Managers or any Member failed to comply in any material respect with
the financial and accounting provisions of this Operating Agreement, or if they
do conclude that the Managers or a Member so failed, specifying the nature and
period of existence of the failure. The Managers also may cause to be prepared
or delivered such other reports as they may deem appropriate. The Company shall
bear the costs of all these reports.
10.03 ACCOUNTS. The Managers shall establish and maintain one or more
separate bank and investment accounts and arrangements for Company funds in the
Company name with financial institutions and firms that the Managers determine.
The Managers may not commingle the Company's funds with the funds of any Member;
however, Company funds may be invested in a manner the same as or similar to the
Managers' investment of their own funds or investments by their Affiliates.
ARTICLE XI
BANKRUPTCY OF A MEMBER
11.01 BANKRUPT MEMBERS. Subject to Section 12.01(c), if any Member becomes
a Bankrupt Member, the Company shall have the option, exercisable by notice from
the Managers to the Bankrupt Member (or its representative) at any time prior to
the 180th day
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after receipt of notice of the occurrence of the event causing it to become a
Bankrupt Member, to buy, and on the exercise of this option the Bankrupt Member
or its representative shall sell, its Membership Interest. The purchase price
shall be an amount equal to the fair market value thereof determined by
agreement of the Bankrupt Member (or its representative) and the Managers;
however, if those Persons do not agree on the fair market value on or before the
30th day following the exercise of the option, either such Person, by notice to
the other, may require the determination of fair market value to be made by an
independent appraiser specified in that notice. If the Person receiving that
notice objects on or before the tenth day following receipt to the independent
appraiser designated in that notice, and those Persons otherwise fail to agree
on an independent appraiser, either such Person may petition the United States
District Judge for the Northern District of Georgia (Atlanta Division) then
senior in service to designate an independent appraiser. The determination of
the independent appraiser, however designated, is final and binding on all
parties. The Bankrupt Member and the Company each shall pay one-half of the
costs of the appraisal. The purchaser shall pay the fair market value as so
determined in four equal cash installments, the first due on closing and the
remainder (together with accumulated interest on the amount unpaid at the
General Interest Rate) due on each of the first three anniversaries thereof. The
payment to be made to the Bankrupt Member or its representative pursuant to this
Section 11.01 is in complete liquidation and satisfaction of all the rights and
interest of the Bankrupt Member and its representative (and of all Persons
claiming by, through, or under the Bankrupt Member and its representative) in
and in respect of the Company, including, without limitation, any Membership
Interest, any rights in specific Company property, and any rights against the
Company and (insofar as the affairs of the Company are concerned) against the
Members.
ARTICLE XII
DISSOLUTION, LIQUIDATION, AND TERMINATION
12.01 DISSOLUTION. The Company shall dissolve and its affairs shall be
wound up on the first to occur of the following:
(a) the written consent of a Required Interest;
(b) the expiration of the period fixed for the duration of the Company
set forth herein;
(c) any Manager who is a Member (or, if there is no Manager who is a
Member, any Member) shall become a Bankrupt Member (with or without the
consent of a Required Interest); provided, however, that if the event
described in this Section 12.01(c) shall occur and there shall be at least
one other Member remaining, the Company shall not be dissolved, and the
business of the Company shall be continued, if all Members so agree; and
(d) entry of a decree of judicial dissolution of the Company under
article 6.02 of the Act.
Except as provided in Section 12.01(c), the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member, or the occurrence of any other
event that terminates the continued membership of a Member in the Company, shall
not cause a dissolution of the Company.
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12.02 LIQUIDATION AND TERMINATION. On dissolution of the Company, the
Managers shall act as liquidator or may appoint one or more Members as
liquidator. The liquidator shall proceed diligently to wind up the affairs of
the Company and make final distributions as provided herein and in the Act. The
costs of liquidation shall be borne as a Company expense. Until final
distribution, the liquidator shall continue to operate the Company properties
with all of the power and authority of the Managers. The steps to be
accomplished by the liquidator are as follows:
(a) as promptly as possible after dissolution and again after final
liquidation, the liquidator shall cause a proper accounting to be made by a
recognized firm of certified public accountants of the Company's assets,
liabilities, and operations through the last day of the calendar month in
which the dissolution occurs or the final liquidation is completed, as
applicable;
(b) the liquidator shall cause the Statement of Commencement described
in Section 14-11-606 of the Act to be filed with the Secretary of State in
the manner described therein.
(c) the liquidator shall cause the notices described in Section 14-11-
607 of the Act to be mailed to each known creditor of and claimant against
the Company in the manner described therein;
(c) the liquidator shall cause such other notices described in Act to
be made as the liquidator shall deem appropriate and advisable;
(d) the liquidator shall pay, satisfy or discharge from Company funds
all of the debts, liabilities and obligations of the Company (including,
without limitation, all expenses incurred in liquidation and any advances
described in Section 4.05) or otherwise make adequate provision for payment
and discharge thereof (including, without limitation, the establishment of
a cash escrow fund for contingent liabilities in such amount and for such
term as the liquidator may reasonably determine); and
(d) all remaining assets of the Company shall be distributed to the
Members as follows:
(i) the liquidator may sell any or all Company property,
including to Members, and any resulting gain or loss from each sale
shall be computed and allocated to the capital accounts of the
Members;
(ii) with respect to all Company property that has not been sold,
the fair market value of that property shall be determined and the
capital accounts of the Members shall be adjusted to reflect the
manner in which the unrealized income, gain, loss, and deduction
inherent in property that has not been reflected in the capital
accounts previously would be allocated among the Members if there were
a taxable disposition of that property for the fair market value of
that property on the date of distribution; and
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(iii) Company property shall be distributed among the Members in
accordance with the positive capital account balances of the Members,
as determined after taking into account all capital account
adjustments far the taxable year of the Company during which the
liquidation of the partnership occurs (other than those made by reason
of this clause (iii)); and those distributions shall be made by the
end of the taxable year of the Company during which the liquidation of
the Company Occurs (or, if later, 90 days after the date of the
liquidation).
All distributions in kind to the Members shall be made subject to the liability
of each distributee for costs, expenses, and liabilities theretofore incurred or
for which the Company has committed prior to the date of termination and those
costs, expenses, and liabilities shall be allocated to the distributee pursuant
to this Section 12.02. The distribution of cash and/or property to a Member in
accordance with the provisions of this Section 12.02 constitutes a complete
return to the Member of its Capital Contributions and a complete distribution to
the Member of its Membership Interest and all the Company's property. To the
extent that a Member returns funds to the Company, it has no claim against any
other Member for those funds.
12.03 DEFICIT CAPITAL ACCOUNTS. Notwithstanding anything to the contrary
contained in this Operating Agreement, and notwithstanding any custom or rule of
law to the contrary, to the extent that the deficit, if any, in the capital
account of any Member results from or is attributable to deductions and losses
of the Company (including non-cash items such as depreciation), or distributions
of money pursuant to this Operating Agreement to all Members in proportion to
their respective Sharing Ratios, upon dissolution of the Company such deficit
shall not be an asset of the Company and such Members shall not be obligated to
contribute such amount to the Company to bring the balance of such Member's
capital account to zero.
12.04 ARTICLES OF DISSOLUTION. On completion of the distribution of Company
assets as provided herein, the Company is terminated, and the Managers (or such
other Person or Persons as the Act may require or permit) shall file Articles of
Dissolution with the Secretary of State of Georgia, cancel any other filings
made pursuant to Section 2.05, and take such other actions as may be necessary
to terminate the Company.
ARTICLE XIII
GENERAL PROVISIONS
13.01 OFFSET. Whenever the Company is to pay any sum to any Member, any
amounts that Member owes the Company may be deducted from that sum before
payment.
13.02 NOTICES. Except as expressly set forth to the contrary in this
Operating Agreement, all notices, requests, or consents provided for or
permitted to be given under this Operating Agreement must be in writing and must
be given either by depositing that writing in the United States mail, addressed
to the recipient, postage paid, and registered or certified with return receipt
requested or by delivering that writing to the recipient in person, by courier,
or by facsimile transmission; and a notice, request, or consent given under this
Operating Agreement is effective on receipt by the Person to receive it. All
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notices, requests, and consents to be sent to a Member must be sent to or made
at the addresses given for that Member on Exhibit A or in the instrument
described in Section 3.03(d) or 3.04, or such other address as that Member may
specify by notice to the other Members. Any notice, request, or consent to the
Company or the Managers must be given to the Managers at the following address:
1600 Parkwood Circle, Suite 120
Atlanta, Georgia 30339
Whenever any notice is required to be given by law, the Articles or this
Operating Agreement, a written waiver thereof, signed by the Person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
13.03 ENTIRE AGREEMENT; SUPERSEDURE. This Operating Agreement constitute
the entire agreement of the Members and their Affiliates relating to the Company
and supersedes all prior contracts or agreements with respect to the Company,
whether oral or written.
13.04 EFFECT OF WAIVER OR CONSENT. A waiver or consent. express or implied,
to or of any breach or default by any Person in the performance by that Person
of its obligations with respect to the Company is not a consent or waiver to or
of any other breach or default in the performance by that Person of the same or
any other obligations of that Person with respect to the Company. Failure on the
part of a Person to complain of any act of any Person or to declare any Person
in default with respect to the Company, irrespective of how long that failure
continues, does not constitute a waiver by that Person of its rights with
respect to that default until the applicable statute-of-limitations period has
run.
13.05 AMENDMENT OR MODIFICATION. This Operating Agreement may be amended or
modified from time to time only by a written instrument adopted by the Managers
and executed and agreed to by a Required Interest; provided, however, that (a)
an amendment or modification reducing a Member's Sharing Ratio or increasing its
Commitment (other than to reflect changes otherwise provided by this Operating
Agreement) is effective only with that Member's consent, (b) an amendment or
modification reducing the required Sharing Ratio or other measure for any
consent or vote in this Operating Agreement is effective only with the consent
or vote of Members having the Sharing Ratio or other measure theretofore
required, and (c) amendments of the type described in Section 3.04 may be
adopted as therein provided.
13.06 BINDING EFFECT. Subject to the restrictions on Dispositions set forth
in this Operating Agreement, this Operating Agreement are binding on and inure
to the benefit of the Members and their respective heirs, legal representatives,
successors, and assigns.
13.07 GOVERNING LAW; SEVERABILITY. This Operating Agreement is governed by
and shall be construed in accordance with laws of the State of Georgia,
excluding any conflict-of-laws rule or principle that might refer the
governance or the construction of this Operating Agreement to the law of another
jurisdiction. In the event of a direct conflict between the provisions of this
Operating Agreement and (a) any provision of the Articles, or (b) any mandatory
provision of the Act, the applicable provision of the Articles, and the Act,
shall control. If any provision of this Operating Agreement or the application
thereof to any Person or circumstance is held invalid or unenforceable to any
extent, the remainder of this
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Operating Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by law.
13.08 FURTHER ASSURANCES. In connection with this Operating Agreement and
the transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Operating Agreement and those transactions.
13.09 WAIVER OF CERTAIN RIGHTS. Each Member irrevocably waives any right it
may have to maintain any action for dissolution of the Company or for partition
of the property of the Company.
13.10 INDEMNIFICATION. To the fullest extent permitted by law, each Member
shall indemnify the Company, each Manager and each other Member and hold them
harmless from and against all losses, costs, liabilities, damages, and expenses
(including, without limitation, costs of suit and attorney's fees) they may
incur on account of any breach by that Member of this Operating Agreement.
13.11 NOTICE TO MEMBERS OF PROVISIONS OF THIS AGREEMENT. By executing this
Operating Agreement, each Member acknowledges that it has actual notice of (a)
all of the provisions of this Agreement, including, without limitation, the
restrictions on the transfer of Membership Interests set forth in Article III,
and (b) all of the provisions of the Articles. Each Member hereby agrees that
this Operating Agreement constitutes adequate notice of all such provisions,
including, without limitation, any notice requirement under the Act and the
Georgia Uniform Commercial Code, and each Member hereby waives any requirement
that any further notice thereunder be given.
13.12 COUNTERPARTS. This Operating Agreement may be executed in any number
of counterparts with the same effect as if all signing parties had signed the
same document. All counterparts shall be construed together and constitute the
same instrument.
13.13 ARBITRATION. If, at any time or from time to time during the
continuance of the Company or after the dissolution or other termination
thereof, any dispute, difference or question shall arise between any of the
Members, or their successors, assigns or nominees, touching or concerning the
Company of the property, assets, rights or transactions thereof, or the
dissolution or other termination thereof, or the property of the Company or the
construction, meaning or effect of this Operating Agreement, or any provision
hereof, or the rights of obligations of the Members, or their successors,
assigns or nominees, under this Operating Agreement or otherwise, with respect
thereto, then every such dispute, difference or question shall be submitted to
and settled by arbitration and the decision of the arbitrator appointed as
hereinafter provided to deal with such matter shall be accepted by all the
Members to such dispute, difference or question. The arbitration shall be
conducted by a single arbitrator agreed upon by the Members to the matter. The
decision of the arbitrator shall be final and binding upon all the Members to
such dispute, difference or question and their nominees, and there shall be no
appeal therefrom.
[CONTINUED ON NEXT PAGE]
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IN WITNESS WHEREOF, following adoption of this Operating Agreement by the
Managers, the Members have executed this Operating Agreement as of the date
first set forth above.
MEMBERS:
ELLY NEVADA, INC.,
a Nevada Corporation
By: /s/ Elly Reisman
------------------------------------
Elly Reisman, President
NORMAN NEVADA, INC.,
a Nevada Corporation
By: /s/ Norman Reisman
------------------------------------
Norman Reisman, President
LARRY NEVADA, INC.,
a Nevada Corporation
By: /s/ Larry Robbins
------------------------------------
Larry Robbins, President
BRUCE NEVADA, INC.,
a Nevada Corporation
By: /s/ Bruce Freeman
------------------------------------
Bruce Freeman, President
HARRY NEVADA, INC.,
a Nevada corporation
By: /s/ Harry Rosenbaum
------------------------------------
Harry Rosenbaum, President
SEYMOUR NEVADA, INC.,
a Nevada Corporation
By: /s/ Seymour Joffe
------------------------------------
Seymour Joffe, President
HAYDN NEVADA, INC.,
a Nevada Corporation
By: /s/ Haydn Matthews
------------------------------------
Haydn Matthews, President
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