Exhibit 3.23.1
OPERATING AGREEMENT
OF
LODGIAN RICHMOND, LLC
ANY SECURITIES CREATED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
GEORGIA SECURITIES ACT OF 1973, AS AMENDED, IN RELIANCE UPON THE EXEMPTION FROM
REGISTRATION SET FORTH IN SECTION 10-5-9(13) OF SUCH ACT. IN ADDITION, THE
SECURITIES CREATED BY THIS AGREEMENT, IF ANY, HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION SET FORTH IN THE SECURITIES ACT OF 1933 PROVIDED BY SECTION 4(2)
THEREOF, NOR HAVE THEY BEEN REGISTERED WITH THE SECURITIES COMMISSIONS OF
CERTAIN STATES IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION. THE EQUITY
INTERESTS CREATED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY
NOT BE PLEDGED, HYPOTHECATED, SOLD, OR TRANSFERRED, EXCEPT IN COMPLIANCE WITH
THE TERMS AND CONDITIONS OF THIS AGREEMENT AND IN A TRANSACTION WHICH IS EITHER
EXEMPT FROM REGISTRATION UNDER SUCH ACTS OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACTS.
OPERATING AGREEMENT
OF
LODGIAN RICHMOND, LLC
This Operating Agreement is entered into and shall be effective as of this
___ day of March, 1999, by and among the signatories hereto who, collectively,
are the "Members" of Lodgian Richmond, LLC, a Georgia limited liability company
(the "Company").
WHEREAS, the parties hereto desire to organize and operate a limited
liability company under the provisions of the Georgia Limited Liability Company
Act, O.C.G.A. Sections 14-11-100, et. seq. and in accordance with the terms and
subject to the conditions set forth in this Agreement;
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and agreements contained herein, and for other good and valuable consideration,
the parties hereto, intending to be legally bound, agree as follows:
SECTION I
FORMATION, NAME, ARTICLES, PURPOSE, ETC.
1.1 Definitions.
Capitalized terms used in this Agreement shall have the meanings ascribed
to them in Schedule 1.1, which is incorporated herein by this reference.
1.2 Formation and Name.
The parties hereto do hereby agree to the formation and organization of a
Georgia limited liability company, to be known as "Lodgian Richmond, LLC,"
pursuant to O.C.G.A. Sections 14-11-100 et. seq., on the terms and conditions
hereinafter set forth. Pursuant to the Articles of Organization of the Company,
management of the Company is vested in one or more Managers. Persons currently
serving as Managers of the Company are hereby removed, and as of the date
hereof, the Company shall be managed by Lodgian Richmond SPE, Inc., a Georgia
corporation ("SPE"). Additional Managers may be appointed in accordance with
Section VIII hereof.
1.3 Articles.
The Manager has caused the Articles of Organization of the Company to be
executed and filed with the Secretary of State of Georgia on February 23, 1999,
and has executed and filed with the Secretary of State of Georgia on March __,
1999, Amended and Restated Articles of Organization of the Company (as further
amended or restated from time to time, the "Articles").
1.4 Membership Interests.
The Company is authorized to issue an unlimited number of Class A Ordinary
Membership Interests (individually, an "Ordinary Unit" and collectively, the
"Ordinary Units"). No other classes or categories of Membership Interest may be
issued by the Company except as may otherwise be permitted by this Agreement.
Any issuance of Ordinary Units shall otherwise comply with any provisions
regarding such issuance that are otherwise set forth in this Agreement. The
Company will not issue certificates evidencing ownership of such Membership
Interests to the Members. Instead, the Company shall maintain records setting
forth, among other things, the name of the person who is the registered owner of
a Membership Interest, the number of units of Membership Interest owned by such
person, and the date such Membership Interest was acquired by such Member, and
the date, if applicable, such Membership Interest was transferred by such Member
and to whom such Membership Interest was transferred by such Member.
1.5 Registered and Principal Office.
The registered office, principal office, and principal place of business
of the Company shall be at Two Live Oak Center, 3445 Peachtree Road, NE, Suite
700, Atlanta, GA 30326, but, in compliance with the Act, substitute or
additional places of business may be established at such other locations as may,
from time to time, be determined by the Manager. The Manager shall promptly give
notice to the Members of any change in the principal office or place of
business.
1.6 Name and Address or Place of Residence of Manager and Registered
Agent:
(a) The name and address of Member who has initially been appointed
as the Manager of the Company are as follows:
Lodgian Richmond SPE, Inc.
Two Live Oak Center
3445 Peachtree Road, NE, Suite 700
Atlanta, Georgia 30326
Attn: Robert S. Cole
(b) The name and place of legal residence of each of the Members are
set forth in Exhibit "A" attached hereto and made a part hereof. The Members,
who are so identified on the date hereof, are hereby admitted as Members. Any
change in interests shall be reflected in an amendment to Exhibit "A". All
references in this Agreement to Exhibit "A" mean Exhibit "A" as in effect at the
relevant time, including any amendments thereto.
(c) The name and address of the registered agent for service of
process are as follows:
Robert S. Cole
c/o Lodgian, Inc.
Two Live Oak Center
3445 Peachtree Road, NE, Suite 700
Atlanta, Georgia 30326
1.7 Term.
The Company became effective upon the execution of the Articles and the
accomplishment of all filings required for a limited liability company under the
laws of the State of Georgia, and shall terminate in accordance with the
provisions of this Agreement.
1.8 Purpose.
The principal purpose of the Company is: (i) to acquire and own the
Property and certain other related assets; (ii) to, directly or indirectly,
operate, manage, improve, lease, use or sell (in whole or in part) the Property;
and (iii) for all such other purposes as may be necessary or appropriate in
furtherance of the purposes identified in items (i) and (ii).
1.9 Authority.
In order to carry out its purpose, the Company is authorized, subject to
the Act and the other provisions of this Agreement, to do any and all acts and
things directly, or indirectly, necessary, advisable or incidental to or
convenient for the furtherance and accomplishment of its purpose, and for the
protection and benefit of the Company, including, but not limited to, the
following:
(a) To acquire, own, maintain, operate, use and lease, directly or
indirectly, the Property, or any other related assets, or to sell all or
any part thereof;
(b) To, directly or indirectly, borrow money and issue evidence of
indebtedness in furtherance of the Company business and secure any such
indebtedness by mortgage, pledge, or lien on the Property and other assets
of the Company;
(c) To, directly or indirectly, operate and maintain the Property,
including entering into agreements (either directly or through an
Affiliate) with managing agents for the management of the Property;
(d) To, directly or indirectly, organize or cause to be organized
any new legal entity, and/or to acquire and own all or a portion of the
ownership interest in such entity as permitted under the terms of the Loan
Documents and Articles;
(e) To, directly or indirectly, negotiate for and conclude
agreements for the sale, exchange, lease, or other disposition of all,
substantially all, or any portion of the Property or other assets of the
Company, or for the refinancing of any mortgage loan on the property of
the Company;
(f) To, directly or indirectly, prepay, in whole or in part,
refinance, recast, increase, modify or extend any mortgage, and in
connection therewith to execute any extensions, renewals or modifications
thereof;
(g) To enter into any other kind of activity and to, perform and
carry out contracts of any kind, including contracts with Affiliates,
necessary to or in conjunction with or incidental to, the accomplishment
of the business and any of the purposes of the Company;
(h) To the extent permitted under the Articles, to enter into
guarantees of any indebtedness arising from the borrowing of money by
Affiliates of the Company; and
(i) To enter into an indemnification agreement with SPE or any other
person appointed a Manager of the Company in accordance with the
provisions of Section VIII.
1.10 Books and Records.
The Manager shall maintain at the Company's principal office the following
records: (a) a current, alphabetical, and separate listing of all Members of the
Company, including their full names and last known business addresses; (b)
copies of the Company's Articles and any amendments thereto; (c) copies of the
Company's four most recent years' federal, state and local income tax returns;
(d) copies of this Agreement; (e) any merger agreement in which the Company is
the surviving entity; and (f) financial statements for the Company's four most
recent Fiscal Years. The Members may inspect and copy, at the Member's expense,
these records at the Company's principal office during normal business hours.
SECTION II
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
2.1 Contributions of the Members.
Subject to the conditions hereinafter set forth in Section 2.4
below, each Member shall pay or contribute to the Company the amount of money or
other property set forth opposite his name on Exhibit "A." A Member shall not be
required, to make any additional Capital Contributions to the Company other than
the Capital Contributions set forth on Exhibit "A" unless such Member otherwise
agrees to make additional Capital Contributions in accordance with the
provisions of Sections 2.7.
2.2 Capital Accounts. A Capital Account shall be maintained for each
Member. Capital Accounts shall be increased by:
(a) The amount of money and the Asset Value of property (net of
liabilities that the Company assumes or takes subject to under Section 752
of the Code) contributed by the Member; and
(b) The amount of any Company Profit allocated to the Member;
and shall be decreased by:
(c) The amount of money and the Asset Value of property (net of
liabilities that the member assumes or takes subject to under Section 752
of the Code) distributed to the Member by the Company;
(d) Allocations to the Member of Company expenditures that are not
deductible in computing Company Profit or Company Loss and that are not
capital expenditures; and
(e) Allocations to the Member of Company Loss.
2.3 Compliance with Treasury Regulation 1.704-1(b)(2)(iv).
The manner in which Capital Accounts are to be maintained pursuant to this
Agreement are intended to comply with the requirements of Treasury Regulation
1.704-1(b)(2)(iv) and shall be interpreted and applied in a manner consistent
with such regulation throughout the full term of this Agreement. The following
special allocations shall be made in the following order:
(a) Minimum Gain Chargeback. If there is a net decrease in Company
minimum gain during the year, each Member shall be specially allocated
items of
Company income and gain for the year (and, if applicable, subsequent
years) equal to such Member's share of the net decrease in Company minimum
gain. This allocation shall be defined, interpreted and determined in
accordance with applicable Treasury Regulations.
(b) Member Minimum Gain Chargeback. If there is net decrease in
Member minimum gain attributable to a Member non-recourse debt during the
year, each Member with a share of the Member minimum gain shall be
specially allocated items of Company income and gain for the year equal to
such Member's share of the decrease in Member minimum gain attributable to
such Member. This allocation shall be defined, interpreted, and determined
in accordance with applicable Treasury Regulations.
(c) Qualified Income Off-Set. If a Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4)-(6), items of Company income
and gain shall be specially allocated to each Member in an amount and
manner sufficient to eliminate, to the extent required by Treasury
Regulations, the negative Capital Account balance of such Member as
quickly as possible. This allocation shall be made only if a Member would
have a negative Capital Account balance after all other allocations in
this Section II are made.
2.4 Limited Liability of Members.
No Member shall be liable for any of the losses, debts, liabilities, or
obligations of the Company or be required (except as provided in Section 2.7
hereof) to contribute any capital beyond his required Capital Contribution or to
lend any funds to the Company except that a Member may be required by law
pursuant to the Act to return all or a portion of his Capital Contribution which
has been distributed to him.
2.5 Withdrawal of Capital.
No Member shall be entitled, without the consent of the Manager, to
withdraw any part of his Capital Contribution prior to the dissolution and
liquidation of the Company, except that distributions made in accordance with
Section III may represent in whole or in part a return of capital. Neither the
Company nor its Manager guarantees that the Company's assets will be sufficient
to repay in whole or in part each Member's Capital Contributions. No interest
shall be paid on any capital contributed to the Company.
2.6 Member Loans.
Loans by any Member shall not be considered a part of a Member's Capital
Contributions and the repayment of any loan from a Member shall not be subject
to the restrictions on repayment of Capital Contributions set forth in this
Agreement.
2.7 Additions to Company Capital.
The Manager may from time to time determine that additional capital is
required in order to acquire, improve or continue the ownership and operation of
the Property. Upon such a determination, additional funds may be obtained at the
option of the Manager, in its sole discretion, in the following manner, directly
or indirectly, from the following sources, without any authorization from the
Members, and such sources may be utilized as necessary, in any order or priority
by borrowing from:
(a) commercial banks;
(b) other prime lenders;
(c) other Members; or
(d) lenders other than prime lenders (including loans secured by
secondary financing against the property).
In the event that the Manager, in its sole discretion, determines that the
most desirable source for additional capital is from existing Members and the
Members so agree, the Members may make such additional Capital Contributions to
the Company. Notwithstanding the foregoing, the Members shall be permitted to
make additional Capital Contributions in connection with the acquisition of the
Property.
2.8 No Rights in Third Parties.
The provisions of this Agreement are for the benefit of the Company and
the Members, and are not intended to be for the benefit of any person to whom
any debts, liabilities or obligations are owed by, or who otherwise has any
claim against, the Company or any Member, and no creditor or other person shall
obtain any rights under such provisions or solely by reason of such provisions.
SECTION III
DISTRIBUTIONS TO MEMBERS
3.1 General Rules.
Any distribution to be made under this Section III shall be made to the
registered holder of the Membership Interest, at such holder's last reported
address, as recorded on the Company's books and records, as of the date of such
distribution, unless such distribution is otherwise required by law to be made
to a third-party. The determination of the amount of any distribution that a
Member may otherwise be entitled to under this Section III shall be based upon
the class and number of units recorded as owned, as reported on the Company's
books and records, as of the date of such distribution. The Manager and the
Company shall incur no liability for making distributions in accordance with the
provisions of the preceding sentences, whether or not the Manager or the Company
has knowledge or notice of any Transfer of ownership of a Membership Interest.
3.2 Distributions With Respect to Ordinary Units.
It is the intention of the Company that the Manager will distribute to the
Company's Members on a quarterly basis the net cash flow of the Company and
within thirty (30) days after any sale, exchange, assignment, transfer, or other
disposition by the Company of the Property, or any other assets, the net
proceeds realized by the Company as a result of the sale, exchange, assignment,
transfer, or other disposition, after reduction for any debt service due with
respect to indebtedness of the Company and/or for reserves the Manager may
reasonably determine is necessary for the operation of the Company. Accordingly,
the Manager, inits discretion as to both timing, amount, and source of the
funds, may make distributions to the Members holding Ordinary Units, pro rata
based upon the number of Ordinary Units owned by each Member.
3.3 Restrictions on Distributions.
Notwithstanding anything to the contrary in this Section III, the Manager
may not make any distribution with respect to the Company's Membership Interests
if such distribution is otherwise prohibited by, or in contravention of, the
Articles or the Act, NACC Loan Agreement or the Note.
3.4 No Interest on Distributions.
If any Member shall receive (because the Company is unable to deliver such
distribution in accordance with Section 3.1 or otherwise) the whole or any part
of his share of any distribution to which such Member is entitled under this
Section III, such Member shall not be entitled to receive any interest thereon;
nor shall any such sum not withdrawn be deemed an increase in such Member's
share of the capital of the Company without the express written consent of all
other Members.
SECTION IV
ALLOCATION OF PROFITS AND LOSSES
4.1 Ordinary Units.
(a) The Company Profits and Company Losses shall be determined and
allocated with respect to each Fiscal Year of the Company as of the end of such
year.
(b) After giving effect to the special allocations in Section
4.1(b)(i), (ii) and (iii) below, all Company Profits and Company Losses shall be
allocated to the Members owning Ordinary Units pro rata based upon the number of
Ordinary Units owned by each Member.
(i) Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Company asset pursuant to Code Section
734(b) or Code Section 743(b) is required pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital Accounts
shall be treated as an item of gain (if the adjustment increases the basis
of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Member in a manner
consistent with the manner in which their Capital Accounts are required to
be adjusted pursuant to such section of the Regulation.
(ii) Section 704(c) of the Code. Notwithstanding the
foregoing, (i) in the event Section 704(c) of the Code or Section 704(c)
principles applicable under any Treasury Regulation promulgated under
Section 704(b) of the Code, require allocations of Company Profit or
Company Loss in a manner different than set forth above, the provisions of
Section 704(c) and any applicable Treasury Regulation promulgated under
Section 704(c) of the Code shall control such allocations. Allocations
pursuant to Section 704(c) shall be made for tax purposes only and shall
not affect any Member's Capital Account. The Manager shall select any
method for making allocations under Code Section 704(c) as described in
Treasury Regulation Section 1.704-3(b) or any successor regulatory
provision thereto.
(iii) Regulatory Allocations. It is the intention of the
Company that the allocations hereunder comply with the provisions of
Section 704(b) of the Code and the Treasury Regulations promulgated from
time to time thereunder so that the allocations made hereunder will be
deemed to have "substantial economic effect" as provided therein. To the
extent special allocations of Company Profit or Loss are required to be
made to comply with the requirements thereof, and which are not otherwise
provided for herein, such special allocations shall be made in the manner
set forth in the Code and Regulations, as determined in good faith by the
Manager. To the extent any such special allocations are made, subsequent
allocations of Company Profit and Company Loss shall be made to offset any
economic distortion caused by such
special allocations, as determined by the Manager in good faith.
4.2 Allocations Among Members.
Whenever a proportionate part of the Company Profit or Company Loss is
credited or charged to a Member's Capital Account, every item of income, gain,
loss, deduction or credit entering into the computation of such Company Profit
or Company Loss, or applicable to the period during which such Company Profit or
Company Loss is realized, shall be considered credited or charged, as the case
may be, to such account in the same proportion. As between a Member and his
transferee, unless otherwise agreed by them, Company Profits and Company Losses
for any Fiscal Year shall be allocated on a daily basis, and the transferee
shall be allocated Company Profits and Company Losses with respect to the period
commencing with the day of transfer.
SECTION V
RIGHTS, POWERS, AND DUTIES OF MANAGER
5.1 Rights and Powers of Manager.
Except as may be expressly limited by other provisions of this Agreement,
the Manager shall have complete authority over and exclusive control and
management of the business and affairs of the Company and shall devote such time
to the Company as may be reasonably required for the achievement of its
purposes. If not otherwise specifically stated, and except as specifically
authorized in Section 1.8, the references to action by the Manager or by the
Company shall mean only action as provided in this Section 5.1. In connection
with the management of the business and affairs of the Company, the Manager may
employ on behalf of the Company any other persons to perform services for the
Company, including persons employed by, affiliated with, or related to any
Manager. The Manager, inits sole discretion, shall have the fullest power and
authority permitted by law, and without limiting its authority and powers, the
Manager, shall have the right, if, as and when he deems necessary or
appropriate, on behalf of the Company, subject only to the terms and conditions
of this Agreement:
(a) To acquire, improve, operate, maintain, lease, use and improve
(including capital expenditures of, any type) the Property or any other
related assets, in such manner and on such terms and conditions as the
Manager shall deem necessary or appropriate;
(b) To exercise for the Company any and all rights, privileges, and
powers available to the Company as holder of any Company property
including, without
limitation, the refinancing, replacement, renewal, consolidation,
extension, modification and creation of encumbrances, mortgages, deeds of
trust, deeds to secure debt, security agreements and other secured
indebtedness on the Company property or any part thereof, and the
modification, cancellation, extension or waiver of instruments, rights,
options, and obligations pertaining to or affecting the Company property
or any part thereof, all upon such terms and conditions as it deems
proper;
(c) To borrow money for Company purposes, and in connection with
such borrowing to execute promissory notes on behalf of the Company; to
mortgage, pledge or otherwise encumber the property and assets held by the
Company to secure the obligations of the Company, and in connection with
any such mortgage, to grant a confession of judgment on the part of
Company and include in such mortgage, pledge or other instrument of
security, such provisions as may be required by any lender;
(d) To consent to the initial execution, modification, renewal or
extension of any obligations, whether or not secured, or of any
guarantees, or of any terms or provisions of any such guaranty, or to the
release of any obligor under any such guaranty; to institute or refrain
from instituting suits or actions against such obligor; and to pay or to
abstain from the payment of taxes, water rents, sewer charges,
assessments, mortgage payments, insurance premiums, and maintenance
expenses, all at such time or times and upon such terms and conditions and
under such circumstances as the Manager, in its (their) sole discretion,
shall deem proper;
(e) To adjust, compromise, settle or refer to arbitration any claims
in favor of or against the Company or any nominee of the Company or any
property held by the Company or its nominee, and to institute, prosecute
and defend any legal proceedings or arbitration proceedings as the Manager
shall deem advisable;
(f) To perform or cause to be performed all of the Company's
obligations under any agreement to which the Company is a party;
(g) To execute, acknowledge and deliver any and all instruments in
connection with any or all of the foregoing;
(h) To expend the capital and revenues of the Company in furtherance
of the Company's business;
(i) To lease, sell, transfer, assign, convey, trade, exchange, or
otherwise dispose of all or any portion of the Property, or any other real
or personal property of the Company upon such terms and conditions and for
such consideration as the Manager deems appropriate;
(j) To enter into any agreement for the merger, reorganization, or
consolidation of the Company with any other legal entity as may be
permitted by law, to consummate, in accordance with the terms of such an
agreement, the merger, reorganization, or consolidation of the Company,
and through its Manager and Officers, who are hereby authorized and so
directed, to take all acts and file all documents necessary or required to
effectuate such merger, reorganization, or consolidation;
(k) To delegate all or any of its duties hereunder and in
furtherance of any such delegation to appoint, employ, or contract with
any person the Manager may in its sole discretion deem necessary,
including entities owned or controlled by the Manager (including
Affiliates of the Manager), or desirable for the transaction of the
business of the Company, which persons may, under the supervision of the
Manager, perform any of the following or other acts or services for the
Company as the Manager may approve, provided, however, that the Manager
shall continue to be primarily responsible for the performance of all such
obligations; serve as the Company's advisor and consultant in connection
with policy decisions made by the Manager; act as consultants,
accountants, correspondents, attorneys, brokers, escrow agents, or in any
other capacity deemed by the Manager necessary or desirable; investigate,
select and, on behalf of the Company, conduct relations with persons
acting in such capacities and pay appropriate fees to, and enter into
appropriate contracts with, or employ, or retain services performed or to
be performed by, any of them in connection with any of the Company's
properties; and perform or assist in the performance of administrative or
managerial functions necessary in the management of the Company;
(l) To terminate, modify, enforce, continue or otherwise deal with
any note and mortgages, to refinance or sell the Property or other Company
property, and to take any other action with respect to agreements made
between the Company and a lender or any Affiliate thereof;
(m) To exercise all decision-making authority and other powers on
behalf of the Company in its capacity as a member, partner, or shareholder
of any Affiliate; and
(n) To, generally possess and exercise any and all of the rights,
powers and privileges of a Manager under the laws of the State of Georgia.
5.2 Duties.
The Manager shall manage and control the Company, its business and
affairs, in order to carry out the business of the Company as set forth herein.
The Manager shall devote himself to the business of the Company to the extent it
deems necessary to conduct it and shall render to the Members, whenever
reasonably requested by any of them, a just and faithful account of all dealings
and transactions in relation to the business of the Company. The
Manager shall execute such further documents and take such further action as
shall be appropriate to comply with the requirements of the Act or other laws by
which the Company is bound. The Manager shall not be required to devote full
time to such duties.
5.3 Officers.
In order to more efficiently perform their duties and obligations under
this Agreement, the Manager and the other Members hereby consent to the
appointment, upon execution of this Agreement, of Robert M. Cole to serve as
President of the Company, Robert M. Flanders, to serve as Vice President of the
Company and Toni Jones to serve as Secretary, and Treasurer of the Company. The
President shall have the authority, to the full and same extent as, that which
has been conferred on the Manager by this Agreement, and shall be subject to the
same limitations that are otherwise imposed under this Agreement on the Manager.
The Vice-President shall have the authority to exercise the powers of the
President in the absence or unavailability of the President, and shall have such
other powers and authority as the President or the Manager shall delegate to him
from time to time. The Secretary shall keep minutes of all meetings of the
Members, and have charge of the minute books and all other records (other than
financial records) of the Company, and shall perform such other duties and have
such other powers as may be delegated to him or her by the President from time
to time. The Treasurer shall be charged with the management of the financial
affairs of the Company, including the maintenance of the Company's bank accounts
and other financial books and records and shall perform such other duties and
have such other powers as may be delegated to him or her by the President from
time to time. The President of the Company shall be permitted to appoint
Officers of the Company at such time as the President determines that the
appointment of such Officer is necessary, otherwise helpful, or expedient in
running the affairs of the Company. Such appointment shall be evidenced by
written consent action of the President which sets forth the title of such
Officer, the authority and responsibilities of such Officer, and the
compensation of such Officer. Once appointed, an officer of the Company shall
serve until such time as he or she is removed from such office by the President
of the Company. The President shall serve until such time as he or she is
removed from such office by the Manager of the Company.
5.4 Dealings with Third Parties.
(a) All rights and powers of the Company generally and as specifically
enumerated above, may be exercised by the Manager or the Company's Officers, and
any party dealing with the Company may rely upon the actions of the Manager or
the Company's Officers exercising the rights and powers authorized by this
Agreement. No party dealing with the Manager or any officer of the Company shall
be obliged to see to the application of any money or property loaned, paid, or
transferred to the Manager or any officer to see that the terms of this
Agreement are complied with, or to determine whether any action or failure to
act on the part of the Manager or Officer is in accordance with or authorized by
the terms of this
Company. Every instrument executed by the Manager or Officer shall be
conclusively interpreted in favor of every person acting thereon that (i) at the
time of the delivery of such instrument this Company was in full force and
effect; (ii) said instrument was issued in accordance with the terms and
provisions of this Company; (iii) the Manager was duly authorized and empowered
to execute such instrument. The receipt given by it shall discharge said party
or parties, and they shall not be bound to see to the application of any such
money or property or be answerable for the loss or misapplication thereof.
(b) Should anyone ever question the authority of the Manager or an
Officer of the Company to do any of the things provided in this Section, and
thereby bind the Members, and specifically including the Manager's or
President's authority to borrow money on behalf of the Company or to mortgage,
pledge, or otherwise encumber the property and assets of the Company, except as
provided in Section 5.4 herein, then and in that event, the Members do by these
presents hereby name, constitute and appoint the Manager, as their agent and
attorney-in-fact, with full and complete authority to do any and all of the
things specified in this Section, including, but not limited to, authority to
confess judgment and waive appraisement, insofar as the same affects said
constituent, or the said Company, or any rights or interests that it may have in
any property, real, personal or mixed, to the same extent as though said
constituent personally executed the said instrument, and for the further
purposes and to the same extent as hereinafter set forth in Section XIV.
5.5 Restrictions on Authority of Manager and the Company.
Each Member executing this Agreement hereby specifically waives any right
that may be provided under the Act to such Member to approve, to vote on, or to
consent to any action that may be taken by the Company, through its Manager
and/or Officers in furtherance of any Company matter, including, without
limitation, the approval rights set forth in Section 14-11-308(b) of the Act,
and specifically agrees that, in lieu of such rights under the Act, such rights
of such Member (other than a Member who also is a Manager or an Officer) with
respect to approval, the right to vote on, or consent to any action the Company
may take, through its Manager or Officers, on any matter arising in connection
with the business and affairs of the Company shall be limited specifically to
only the following actions and Company matters:
(a) Notwithstanding any other provision to the contrary in this
Agreement, the Manager and Officers may not take any of the following
actions:
(i) do any act in contravention of this Agreement or the
Company's Articles;
(ii) do any act which would make it impossible to carry on the
ordinary business of the Company, except as contemplated in this
Agreement;
(iii) file any voluntary bankruptcy petition on behalf of the
Company, consent to the appointment of any receiver, custodian, or
trustee, or execute or deliver any assignment for the benefit of the
creditors of the Company, except to the extent permitted under the
Articles;
(iv) possess Company property or assign the rights of the
Company in specific property for other than a Company purpose; or
(v) admit a person as a Member except as otherwise provided in
this Agreement;
(vi) knowingly or willingly consent to any act (except an act
expressly permitted by this Agreement) which would cause the Company
to become an association taxable as a corporation; or
(vii) except as permitted by the Articles, amend, alter,
change, or repeal any provision contained in the Articles;
(b) Notwithstanding the provisions of Section 5.1 through 5.3, the
Company, through its Manager and Officers, may only take any of the
following actions if the written consent of all the Members is first
obtained:
(i) participate in any merger, reorganization, or
consolidation with any other legal entity as may be permitted by
law; provided, however, that if such consent is required and
obtained, the Company's Manager and Officers may take all actions,
on behalf of the Company, in furtherance of such merger,
reorganization, or consolidation as may be permitted under Section
5.1(j);
(ii) sell, exchange, assign, transfer, lease, or otherwise
dispose of substantially all of the assets and property of the
Company;
(iii) offer any Membership Interest of the Company, or any
successor security thereto, for sale to the public in an
underwritten offering;
(iv) offer additional Membership Interests in the Company or
admit additional Members, except as otherwise provided for in
Section IX; or
(v) transfer the Property to any entity other than an
Affiliate.
5.6 Compensation of Manager.
Except as expressly provided in this Agreement, the Manager shall not
receive any compensation for serving as Manager. Notwithstanding the foregoing,
any Manager who also
serves as an officer or employee of the Company or, any Affiliate thereof may be
paid reasonable compensation for such services.
5.7 Tax Matters Partner.
Lodgian Richmond SPE, Inc. is hereby designated as the "Tax Matters
Partner" in accordance with Section 6231(a)(7) of the Code and, in connection
therewith and in addition to all other powers given thereunder, shall have all
other powers needed to fully perform hereunder, including, without limitation,
the power to retain all attorneys and accountants ofits choice and the right to
settle any audits without the consent of the Members. The designation made in
this paragraph is hereby expressly consented to by each Member as an express
condition to becoming a Member. In the event that Lodgian Richmond SPE, Inc. no
longer is a Manager of the Company, Lodgian Richmond SPE, Inc. shall no longer
serve as the "Tax Matters Partner" of the Company and a new "Tax Matters
Partner" shall be appointed by a Majority of the Members.
SECTION VI
LIABILITY AND INDEMNIFICATION OF
MANAGER AND OFFICERS
6.1 Return of Capital Contribution.
Notwithstanding anything in this Agreement to the contrary, neither the
Manager nor the Company's Officers shall be personally liable for the return of
the Capital Contributions of the Members, or any portion thereof, it being
expressly understood that any such return shall be made solely from Company
assets.
6.2 Liability for Actions or Omissions.
Neither the Manager nor the Company's Officers shall be liable,
responsible or accountable in damages or otherwise to any of the Members or the
Company for any act or omission of the Manager, or Company's Officer, or any of
them, in good faith on behalf of the Company and in a manner reasonably believed
by the Manager and/or Company's Officers to be within the scope of the authority
granted to the Manager and/or Company Officer by this Agreement. The foregoing
shall not relieve the Manager or Company Officer of liability for fraud, gross
negligence or willful misfeasance or where such relief would be prohibited by
the Act
6.3 Indemnification by Company.
(a) The Company shall and hereby does indemnify, defend and save
harmless the Manager and the Company's Officers from and against any claim,
loss, expense, liability, action or demand incurred by the Manager or the
Company's Officers in respect of any omission to act or of any act performed by
the Manager or the Company's Officers, in the good faith belief that he was
acting or refraining from acting within the scope ofits authority under this
Agreement, on behalf of the Company or in furtherance of the Company's
interests, including, without limitation, reasonable fees and expenses of
litigation and appeal (including, without limitation, reasonable fees and
expenses of attorneys engaged by the Manager and/or the Company's Officers in
defense of such act or omission).
(b) Neither the Manager nor the Company's Officers shall be entitled
to any indemnity for any loss sustained or fees or expenses incurred by a
Manager or by Company Officer by reason of the fraud, gross negligence or
willful misfeasance of a Manager or by the Company Officer, or where such
indemnification would be prohibited by the Act.
SECTION VII
RIGHTS AND OBLIGATIONS OF MEMBERS
7.1 Negative Covenants.
No Member, other than a Manager or Officer who is also a Member, shall:
(a) Be allowed to take part in the management or control of the
Company affairs, or to sign for or bind the Company, such power to vest
solely and exclusively in the Manager and the Company's Officers;
(b) Be entitled to be paid any salary or to have a Company drawing
account in his capacity as a Member;
(c) Withdraw or reduce his Capital Contribution except as a result
of the dissolution of the Company or as otherwise provided by law;
notwithstanding the foregoing, distributions made in accordance with
Section III which represent in whole or in part a return of capital shall
not be considered to be a withdrawal or reduction of a Member's Capital
Contribution under this Section 7.1(c);
(d) Cause the termination or dissolution of the Company by consent
or otherwise (including by consent under Section 14-11-603 of the Act, as
may be amended from time to time) such right being specifically waived by
the Members; or
(e) Demand or receive property other than cash in return for his
Capital Contribution.
7.2 Dissenter's Rights.
Each Member executing this Operating Agreement hereby specifically waives
his or her right to exercise the right to dissent to any of the actions, if
taken by the Company, set forth in Section 14-11-1002(a)(1)-(4) of the Act and
be paid the fair value of his or her Membership Interest, unless the action
taken is one of the actions set forth in Section 14-11-1002(a)(1) or (2) of the
Act and such action is taken without the consent of the Members owning a
Majority of the Ordinary Units as required by Section 5.5(b) of this Agreement.
7.3 Voting Rights.
Each Member executing this Operating Agreement hereby specifically waives
any rights to consent to, vote upon, or approve of any actions that may be taken
by the Company, through its Manager and Officer, that may be provided to such
Member by or under the Act, and hereby specifically acknowledges that, in lieu
of any such rights to consent to, vote upon,
or approve of any actions that may be taken by the Company, the Member's rights
shall be limited to the rights that are otherwise provided to such Member under
the terms of this Agreement.
7.4 Representations and Warranties.
(a) Each Member executing this Agreement represents to the Company,
as of the date of such execution, that such Member has the full right, power and
authority to enter into and perform the transactions described and obligations
set forth in this Agreement, and the entry into this Agreement by such Member
does not, and the performance of his obligations under this Agreement will not,
violate any law or material agreement with any third party to which such Member
or his property or assets are bound.
(b) Each Member warrants and represents that (i) he is acquiring his
Membership Interest in the Company for investment purposes only and exclusively
for his own account, and that he has no agreement, understanding, arrangement or
intention to divide or share ownership of his Membership Interest with anyone
else or to resell, transfer or dispose of all or any portion of such Interest to
any other person, and that (ii) he is an "accredited investor" as defined in
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act")
and Regulation D promulgated thereunder.
(c) Each Member acknowledges:
(i) that he and/or his purchaser representative (if any) have
such knowledge and experience in financial and business matters that he is
or they are capable of evaluating the merits and risks of the investment
involved in the purchase of a Membership Interest in the Company and has
so evaluated same;
(ii) that he is aware that this investment is speculative and
represents a substantial risk of loss;
(iii) that he is able to bear the economic risk of such
investment, even if it involves a complete loss of this investment;
(iv) that in connection with his purchase of Membership
Interests in the Company, he has been fully informed as to the
circumstances under which he is required to take and hold such Membership
Interests pursuant to the requirements of the Securities Act, and
applicable state securities or "Blue Sky" laws; and
(v) that the Manager has informed him that his Membership
Interests are not registered under the Securities Act or any Blue Sky law
and may not be transferred, assigned or otherwise disposed of unless such
Membership Interests are subsequently registered under the Securities Act
and any applicable Blue Sky laws, or
exemptions from such registration requirement are then available.
(d) Each Member understands:
(i) that the Company and the Manager is under no obligation to
register such Membership Interests under the Securities Act or under any
Blue Sky law or to comply with any applicable exemption under the
Securities Act or under the Blue Sky law with respect to such Membership
Interests; and
(ii) that the Company will not be required to supply him with
any information necessary to enable him to make a sale of such Membership
Interests pursuant to Rule 144 under the Securities Act (assuming such
Rule is applicable and is otherwise available to him with respect to such
Membership Interests).
SECTION VIII
APPOINTMENT AND REMOVAL OF MANAGER
8.1 Appointment of Initial Manager.
By executing this Agreement, the Members hereby appoint SPE as the initial
Manager of the Company with all the rights, duties, responsibilities and
obligations set forth herein.
8.2 Appointment of Additional or Successor Manager.
The Members shall have the authority to appoint such additional persons as
Managers; provided, however, that, during any period in which SPE is a Manager,
SPE, shall hold ultimate decision-making authority vis-a-vis the other
Manager(s) and none of the other Manager shall possess any of the voting,
approval, or consent rights set forth in Section 14-11-308(a)(2) of the Act.
8.3 Voluntary Withdrawal of a Manager.
A Manager may Voluntarily Withdraw from the position of Manager upon
thirty (30) days written notice to the Company. If a Manager Voluntarily
Withdraws as a Manager and there are no other Managers of the Company, the
Members owning a Majority of the Ordinary Units shall elect one or more new
Managers.
8.4 Involuntary Withdrawal of a Manager.
A Manager of the Company can be removed at any time with the consent of
all the
Members owning Ordinary Units.
SECTION IX
ISSUANCE AND TRANSFER OF MEMBERSHIP INTERESTS
9.1 [Reserved]
9.2 [Reserved]
9.3 Issuance of Ordinary Units.
The Company, through its Manager, is authorized to issue its Ordinary
Units in connection with the acquisition of the Property by the Company. When,
in the discretion of the Company's Manager, the Manager determine that
additional capital is required for one of the purposes set forth in Sections 1.8
and 2.7 of the Agreement, the Company, in its discretion may issue additional
Ordinary Units, but only to the Members currently owning the Company's Ordinary
Units.
9.4 Effect of a Transfer of a Member's Interest in the Company.
The Withdrawal of a Member, the admission of a Member, or the assignment
by a Member of all or a portion of his Membership Interest shall not cause a
dissolution or termination of the Company.
9.5 Effect of Death, Etc. of a Member on the Company.
The death, bankruptcy, or adjudication of incompetence of a Member, the
Voluntary Withdrawal of a Member, Involuntary Withdrawal of a Member, or any
other event of disassociation under the Act shall not cause a dissolution or
termination of the Company.
9.6 Transfer of Membership Interests.
(a) Requirement for Transfer. Except as otherwise provided in this
Agreement, a Member or the transferee of a Member may Transfer all or part of
his Membership Interest only with the consent of the other Members, provided
that, unless otherwise consented to by the Manager, (i) the transferee, if an
individual, is at least 21 years of age, (ii) the transferee executes an
instrument reasonably satisfactory to the Manager accepting and adopting the
provisions and agreements set forth herein, and (iii) the Manager shall consent
to such Transfer, which consent may be given or withheld in the Manager's sole
discretion; provided, further, that such consent shall be withheld if the
transferor Member does not obtain a legal opinion, acceptable to counsel for the
Company, that (1) such Transfer would not result in the close of the Company's
taxable year with respect to all Members,
impair the ability of the Company to be taxed as a partnership, cause the
termination of the Company within the meaning of Section 708(b) of the Code, or
cause the termination of its status as a partnership under the Code, and (2)
such Transfer does not violate any provision of any Federal or state securities
law.
(b) Requirement for Substitution. No transferee of the whole or a
portion of a Member's Membership Interest shall have the right to become a
Substituted Member in place of his assignor unless and until all of the
following conditions are satisfied:
(i) A duly executed and acknowledged written instrument of
transfer approved by the Manager has been filed with the Company setting
forth the intention of the transferor that the transferee become a
Substituted Member in his place;
(ii) The transferor and transferee execute and acknowledge
such other instruments as the Manager may reasonably deem necessary or
desirable to effect such substitution, including the written acceptance
and adoption by the transferee of the provisions of this Agreement;
(iii) The written consent of the Manager to such substitution
shall be obtained, the granting or denial of which shall be within the
sole and absolute discretion of the Manager;
(iv) A reasonable transfer fee has been paid to the Company
sufficient to cover all reasonable expenses connected with the transfer
and substitution;
(v) If required, an appropriate amendment of the Articles has
been duly filed and recorded. The Manager agree to file such amendment and
cause it to be recorded promptly after the conditions specified in
subparagraphs (i) through (iv) above have been satisfied; and
(vi) The Company has received an opinion of counsel, at the
request of the Manager, satisfactory to the Company and its counsel that
such transfer can be made without registration under federal or state
securities laws together with a written representation and warranty
identical to the representation and warranty contained in Section 7.4 in
its entirety.
(c) The Company shall make an appropriate notation in the records of
the Company describing the limitations on resale contained in this Section 9.6.
(d) Any Transfer of the Membership Units made or attempted in
contravention of the restrictions of this Section 9.6 is void.
9.7 Effectiveness of Transfer.
(a) The Transfer by a Member or a transferee of a Member, with the
consent of the Manager, of all or part of his Membership Interest shall become
effective on the first day of the month following receipt by the Manager of
evidence of such Transfer in form and substance reasonably satisfactory to the
Manager and a transfer fee sufficient to cover all reasonable expenses of the
Company connected with such Transfer; provided that, the Manager have consented,
if required, to such Transfer in accordance with Section 9.7; provided further
that the Manager may, in their sole discretion, establish an earlier effective
date for the Transfer if requested to do so by the transferor or transferee.
(b) No Transfer of Membership Interests or any part thereof which is
in violation of this Section IX shall be valid or effective, and the Company
shall not recognize the same for the purposes of allocating Company Profits and
Company Losses or making distributions of cash with respect to the units
representing such Membership Interests, or part thereof. The Company may enforce
the provisions of this Section either directly, or indirectly or through its
agents by refusing to register or transfer, or permit the registration or
transfer, on its books of any proposed Transfers not in accordance with this
Section IX.
(c) The Company shall, from such time as a Membership Interest is
registered in the name of the transferee on the Company's books in accordance
with the above provisions and other applicable provisions of this Agreement, pay
to the transferee all further distributions or other compensation by way of
income or return of capital, on account of the units representing the Membership
Interest that has been transferred. Until the registration or Transfer on the
Company's books, the Manager may proceed as if no Transfer has occurred.
9.8 Purchase of Membership Units by a Manager.
If a Manager acquires a Membership Unit as a Member, said Manager shall,
with respect to such Membership Unit, enjoy all of the rights and, except as
provided in Section 7.1, be subject to all of the obligations and duties, of a
Member.
SECTION X
DISSOLUTION OF THE COMPANY
10.1 Dissolution of The Company.
(a) The Company shall dissolve upon the earlier occurrence of any of
the following events:
(i) provided that the requirements, if any, set forth in the
Company's Articles are satisfied, upon the mutual written agreement of all
the Members setting
forth their determination that the Company should be dissolved; or
(ii) otherwise by operation of law.
SECTION XI
LIQUIDATION OF COMPANY
11.1 Procedure.
Upon the dissolution of the Company, the Manager or the person required by
law to wind up the Company's affairs shall cause the cancellation of this
Agreement and take the following steps and actions:
(a) a statement of dissolution which complies with the requirements
of Section 14-11-606 of the Act shall be filed with the Secretary of State
of Georgia, and such other filings, notices, and other actions shall be
taken as required by Article 6 of the Act;
(b) a statement setting forth the assets and liabilities of the
Company as at the date of dissolution shall be prepared by the Company's
accountant or firm of accountants and such statement shall be furnished to
all of the Members;
(c) the assets of the Company shall be liquidated as promptly as
possible, but in an orderly and businesslike manner so as not to involve
undue sacrifice; and
(d) any gain or loss realized by the Company upon the sale or other
disposition of its property and assets shall be allocated among the
Members in accordance with the provisions of Section IV.
11.2 Distributions Upon Dissolution.
The proceeds of sale and all other assets of the Company shall be applied
and distributed as follows, and in the following order of priority:
(a) First, to the creditors of the Company (including the Manager
and its Affiliates) in payment of the unpaid liabilities of the Company to
the extent required under agreements with such creditors and the
reasonable expenses of liquidation;
(b) Second, to the setting up of any reserves which the Manager or
the person required by law to wind up the Company's affairs may deem
reasonably
necessary for any contingent or unforeseen liabilities or obligations of
the Company arising out of or in connection with the Company's business.
Said reserves may, in the discretion of the Manager or the person required
by law to wind up the Company's affairs, be paid over to an escrow agent
selected by them to be held by it as escrowee for the purpose of
disbursing such reserves in payment of any of the aforementioned
contingencies, to the expiration of such period as the Manager shall deem
advisable, to distribute the balance thereafter remaining as hereinafter
provided in this section; and
(c) Third, to the Members owning Ordinary Units, pro rata based upon
the number of Ordinary Units outstanding.
SECTION XII
MEMBER AND MANAGER ACTIVITIES
The provisions of Section 14-11-307 of the Act, addressing "conflicting
interest transactions," shall not apply to any Member, Manager, or Officer, or
any Affiliate of any Member, Manager, or Officer, and the activities of any
Member, Manager, Officer, or their Affiliates with respect to any activities
shall be subject to the limitations and obligations set forth in this Agreement.
Any Member, Manager, or Officer, and any Affiliate of such Member, Manager, or
Officer, including any shareholder, officer, director or employee thereof may,
notwithstanding the existence of this Agreement, engage in or possess an
interest in any other business or venture of every nature and description,
independently or with others including, but not limited to, the ownership,
financing, leasing, operation, management, brokerage and development of real
property, whether the same be competitive with the Company or otherwise, without
having or incurring any obligation to offer any interest in such activities to
the Company or any party hereto. Neither this Agreement nor any activity
undertaken pursuant hereto shall prevent the Manager, Officer, Affiliate, or any
Member from engaging in such activities, or require the Manager to permit the
Company or any Member to participate in any such activities and as a material
part of the consideration for a Manager's employment hereunder and admission of
each Member, each Member hereby waives, relinquishes, and renounces any such
right or claim of participation. Neither the Company nor any Manager or Member
shall have the right to the income of proceeds derived from any party's other
business interest, even if that business interest is competitive with the
Company business and such business interest shall not be deemed wrongful or
improper. Notwithstanding the foregoing, any transaction with any affiliate
shall be at arms-length and require the payment of consideration at fair value
for any property exchanged or services provided.
SECTION XIII
RECORDS AND ACCOUNTING
13.1 Books of Account.
The Manager shall keep or cause to be kept complete and true books of
account of the Company in accordance with the accounting method followed by the
Company for federal income tax purposes and otherwise in accordance with sound
accounting principles and procedures applied on a consistent basis, which shall
reflect all Company transactions and shall be appropriate and adequate for the
Company's business. Such books of account, records and documents of the Company
shall be kept at the principal place of business of the Company and each Member
and his authorized representatives shall have at all times, during normal
business hours and upon reasonable notice, free access to and the right to
inspect and copy, at his expense, such books of account.
13.2 Financial Reports.
(a) As soon as practicable after the close of each fiscal year, but
in no event later than 75 days after the close of any such year, the Manager
shall deliver to each Member an annual financial unaudited report of the Company
for such Fiscal Year, including a balance sheet, a profit and loss statement and
a statement showing distributions to the Members and allocations to the Members
of Company Profits or Company Losses, and such other information as is
reasonably available to the Company which may be helpful in determining the
amount of taxable income to be included by each Member in his federal, state and
local income tax returns for such year. Such annual statement shall also be
provided to any person who was a Member at any time during the year covered by
such annual statements.
(b) The Manager shall cause the Company's accountants to prepare or
review the federal, state and local tax returns of the Company for each fiscal
year and shall timely file such returns and such returns shall be completed on
the method of tax accounting deemed appropriate by the Manager in accordance
with Section 13.5.
13.3 Fiscal Year.
The fiscal year of the Company for both reporting and federal income tax
purposes shall begin with the 1st day of January and end on the 31st day of
December in each calendar year.
13.4 Banking.
The funds of the Company shall be deposited in such bank or banks as the
Manager shall deem appropriate. Such funds shall be withdrawn only by the
Manager or his (their) duly authorized agents. All deposits and other funds not
needed in the operations of the business of the Company may be deposited in
interest-bearing accounts or invested in short-
term United States Government or other governmental (state or local) obligations
or in certificates of deposit, master notes or other evidences of indebtedness
or "Money-Market" Funds.
13.5 Accounting Decisions and Tax Elections.
All decisions as to accounting matters and tax elections, except as
specifically provided to the contrary herein, required or permitted to be made
by the Company shall be made by the Manager in its sole discretion. Such
decisions may be based on the advice of the Company's accountants, upon which
the Manager may rely.
SECTION XIV
POWER OF ATTORNEY
14.1 Appointment.
(a) Each Member hereby makes, constitutes and appoints the Manager,
and any successor Manager, and the Officers, with full power of substitution and
re-substitution, his or its true and lawful attorney-in-fact for him and in his
name, place and stead and for his use and benefit, from time to time:
(i) To amend this Agreement in order to bring the Agreement in
compliance with or to conform to any of the requirements set forth under
the terms of the Loan Documents;
(ii) To file and record this Agreement and any separate
Articles or amended Articles which is required to be filed or which the
Manager deems it advisable to file, and which are not expressly prohibited
hereby or by the terms of the Articles;
(iii) To make, file and record, all agreements amending this
Agreement, as now or hereafter amended, that may be appropriate to reflect
or effect, as the case may be;
(A) a change of the name or the location of the
principal place of business of the Company;
(B) a transfer or acquisition of any Interest by a
Member in any manner permitted by this Agreement;
(C) a person becoming a substituted Member of the
Company
as permitted by this Agreement;
(D) a change in any provision of this Agreement effected
by the exercise by any person of any right or rights
hereunder; or
(E) a dissolution of the Company pursuant to this
Agreement;
(iv) To make such certificates, instruments and documents as
may be required by, or may be appropriate under Georgia law in connection
with the use of the name of the Company by the Company;
(v) To make such certificates, instruments and documents as
such Member may be required, or as may be appropriate for such Member to
make, by Georgia law to reflect:
(A) a change of name or address of such Member;
(B) any changes in or amendments of this Agreement, or
pertaining to the Company, of any kind referred to in this
Section; or
(C) any other changes in or amendments of this Agreement
in accordance with Section 15.1 hereof;
(vi) To make, file and record amendments of this Agreement to
comply with any requirements of the Act, or the regulations promulgated
thereunder, provided the same does not materially adversely affect the
rights of the Members;
(vii) To make, file and record any documents which may be
required in connection with borrowings by the Company, including, without
limitation, documents required by financial institutions, and including
correction of or insertions to any document executed by a Member;
(viii) To make, file and record any documents which may be
required in connection with any filings with federal or state securities
commissions or other federal or state authorities; and
(ix) To make, file and record any instrument which the Manager
deems to be in the best interests of the Company to file and which is not
inconsistent with the provisions of this Agreement.
(b) Each of the agreements, certificates, instruments and documents
made pursuant to Section 14.1(a) shall be in such form as the Manager and
counsel for the Company shall deem appropriate. The powers conferred by this
Section to make agreements,
certificates, instruments and documents, shall be deemed to include without
limitation the powers to sign, execute, acknowledge, swear to, verify, deliver,
file, record or publish the same.
(c) Each Member authorizes the Manager as such attorney-in-fact to
take any further action which such Manager shall consider necessary or advisable
in connection with any action taken pursuant to this Section 14.1 hereby giving
such Manager as such attorney-in-fact full power and authority to do and perform
each and every act or thing whatsoever requisite or advisable to be done in and
about any action taken pursuant to this Section 14.1 as fully as such Member
might or could do if personally present, and hereby ratifying and confirming all
that the Manager as such attorney-in-fact shall lawfully do or cause to be done
by virtue of this Section 14.1, provided, however, that the power and authority
granted in this Section XIV shall not include the power or authority to vote on
behalf of a Member if it is granted by this Agreement or by the Act and is not
otherwise precluded by this Agreement.
14.2 Irrevocability and Manner of Exercise.
The power of attorney granted pursuant to Section 14.1:
(a) is a special power of attorney coupled with an interest and is
irrevocable;
(b) may be exercised by a Manager as such attorney-in-fact, by
listing all of the Members executing any agreement, certificate,
instrument or document with the single signature of such Manager acting as
attorney-in-fact for all of them;
(c) shall survive the transfer by a Member of the whole or a portion
of his Interest, except that where the purchaser, transferee, or assignee
thereof with the consent of the Manager is admitted as a substituted
Member, the power of attorney shall survive the transfer for the sole
purpose of enabling such attorney-in-fact to execute, acknowledge and
swear to and file any such agreement, certificate, instrument or document
necessary to effect such substitution; and
(d) shall, to the extent permitted under the laws of the domicile of
such Member, survive the death, incapacity or incompetency of the Member.
SECTION XV
GENERAL PROVISIONS
15.1 Amendments.
(a) Amendments may be made to this Agreement from time to time by
the Manager without the consent of the Members:
(i) to add to the representations, duties, or obligations of
the Manager;
(ii) to cure any ambiguity or correct or supplement any
provision hereunder which may be inconsistent with any other provision
hereunder;
(iii) to delete or add any provision to this Agreement
required or requested to be so deleted or added by the Internal Revenue
Service, staff of the Securities and Exchange Commission, or any other
Federal Agency or by any state "Blue Sky" Commissioner or similar such
official, or any lender (other than the Manager or an Affiliate thereof)
or surety even though such deletion or addition may adversely affect
rights of Members (but no change in the rights of Members to profits,
losses or cash distributions or to make Capital Contributions shall be
made without the consent of all Members); or
(iv) to modify the allocation provisions in Sections II and IV
to comply with Final Regulations subsequently issued by the Treasury
Department. The intent of such change will be to conform as closely as
practical with the present provisions Sections II and IV.
(b) Notwithstanding any provisions of the preceding paragraphs to
the contrary (and except as is expressly permitted by Section 14.1(a)(i) and
Section 15.1 (a)), this Agreement may not be amended or modified without the
prior written consent of all the Members.
(c) If this Agreement shall be amended as a result of adding or
substituting a Member, the amendment to this Agreement shall be signed by all
Manager and by the person to be substituted or added (or his attorney-in-fact)
and, if a Member is to be substituted, by the assigning Member or his
attorney-in-fact. If this Agreement shall be amended to reflect the designation
of an additional or successor Manager, such amendment shall be signed by all
Manager and by such additional or successor Manager. If this Agreement shall be
amended to reflect the withdrawal of a Manager and the business of the Company
is continued, such amendment shall be signed by the remaining or successor
Manager.
(d) In making any amendments, the Manager shall prepare all required
documentation and make all official filings and publications as are required by
its undertakings and the other persons affected by such amendment shall
cooperate with the Manager to the extent reasonably necessary to enable the
Manager to meet its obligations.
(e) Notwithstanding any provision to the contrary in this Agreement,
the Company may not amend, alter, change, or repeal any provision contained in
the Articles except to the extent permitted thereunder.
15.2 Complete Agreement.
This Agreement sets forth all of the promises, agreements, conditions,
understandings, warranties and representations among the parties hereto with
respect to the Company, the Company business and the property of the Company,
and there are no promises, agreements, conditions, understandings, warranties or
representations, oral or written, express or implied, among them other than as
set forth in this Agreement.
15.3 Meetings and Voting.
All decisions and actions of the Company may be taken by the Members
entitled to participate therein by submitting notices to the Members entitled to
participate in such decisions or actions and obtaining the written consent of
the requisite number of percentage of Members. There shall be no meetings of the
Company.
15.4 Notices.
Any notice, payment, demand, or communication required or permitted to be
given by any provision of this Agreement shall be in writing and shall be deemed
to have been delivered and given for all purposes (a) if delivered personally to
the party or to an officer of the party to whom the same is directed, or (b)
whether or not the same is actually received, if sent by registered or certified
mail, postage and charges prepaid, addressed: (i) if to a Manager, to his
address set forth in Section 1.5 or to such other address as the Manager may
from time to time specify by written notice to the Members, and (ii) if to a
Member, at such Member's address set forth on the signature pages hereto, or to
such other address as such Member may from time to time specify by written
notice to the Manager. Any such notice shall be deemed to be given as of the
date so delivered, if delivered personally, or on the date that is three (3)
business days after the same was deposited in a regularly maintained receptacle
for the deposit of United States mail, addressed, and sent as aforesaid. Any
such notice may at any time be waived by the person entitled to receive such
notice.
15.5 Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original copy and all of which together shall
constitute one agreement binding on all parties hereto, notwithstanding that all
the parties shall not have signed the same counterpart, except that no
counterpart shall be binding unless signed by all Manager.
15.6 Section Headings.
The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define,
or limit the scope, extent or intent of this Agreement or any provisions hereof.
15.7 Pronouns and Plurals.
All pronouns used herein shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the identity of the person or persons,
or entity or entities, may require in the context, and the singular form of
nouns, pronouns and verbs shall include the plural, and vice versa, whichever
the context may require.
15.8 Successors.
Subject to the limits on transferability and assignability contained in
this Agreement, each and all of the covenants, terms, provisions and agreements
contained in this Agreement shall be binding upon and inure to the benefit of
the successors, heirs, and assigns of the respective parties hereto.
15.9 Applicable Law.
This Agreement shall be construed and enforced in accordance with the laws
of the State of Georgia and the Act, without regard to the choice of law
principle thereof.
15.10 Time of Essence and Number of Days.
Time is of the essence in this Agreement. In computing the number of days
(other than business days) for purposes of this Agreement, all days shall be
counted, including Saturdays, Sundays, and holidays; provided, however, that if
the final day of any time period falls on a Saturday, Sunday, or holiday, then
the final day shall be deemed to be the next day which is not a Saturday, Sunday
or holiday.
15.11 Severability.
Every provision of this Agreement is intended to be severable. If any term
or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder of this
Agreement.
15.12 Waiver of Action for Partition.
Each of the Members irrevocably waives any right that such Member may have
to maintain any action for partition with respect to any of the assets of the
Company.
15.13 Interpretation.
No provision of this Agreement is to be interpreted for or against any
party because that party or that party's legal representative drafted such
provision.
[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned, being all the Members of the Company,
have executed this Operating Agreement effective this 24th day of March, 1999.
MEMBERS:
SERVICO, INC.
By: /s/ Robert M. Flanders
----------------------------------------------
Robert M. Flanders, President
Attested: /s/ Toni Jones
----------------------------------------
Toni Jones, Secretary
LODGIAN RICHMOND SPE, INC.
By: /s/ Robert M. Flanders
----------------------------------------------
Robert M. Flanders, President
Attested: /s/ Toni Jones
----------------------------------------
Toni Jones, Secretary
EXHIBIT "A"
Members Capital Contribution No. of Class A
------- -------------------- Ordinary
Membership Units
Held
----------------
Servico, Inc. $990 990
Lodgian Richmond SPE, Inc. $10 10
SCHEDULE 1.1
DEFINITIONS
Defined terms used in this Agreement and not set forth in this Schedule
1.10 shall have the meanings set forth elsewhere in this Agreement, and all of
such defined terms, wherever set forth, shall be equally applicable to both the
singular and plural forms of the terms defined.
* * * * * * * *
"Affiliate" means any person controlling, under common control with, or
controlled by the person in question, and the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person, whether through ownership
of voting securities, by contract or otherwise.
"Agreement" means this Operating Agreement, as the same may be amended
from time to time.
"Asset Value" means (i) the fair market value of any asset contributed to
the Company by any Member determined as of the time of contribution; (ii) the
fair market value on the date of distribution of any asset distributed by the
Company to any Member with respect to such Member's interest in the Company; and
(ii) the fair market value of all Company Property at the happening of any of
the following events: (A) the admission of a Member to, or the increase of an
interest of an existing Member in, the Company in exchange for a Capital
Contribution; or (B) the liquidation of the Company pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(g).
"Capital Account" means, in respect to any Member, the Capital
Contribution of such Member as set forth in this Agreement, adjusted as set
forth in Section II.
"Capital Contribution" means, in respect to any Member, the money or the
fair market value of property contributed or agreed to be contributed to the
Company by such Member as shown in Exhibit "A" and shall include any additional
Capital Contribution made pursuant to Sections 2.7.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or corresponding provisions of subsequent laws.
"Company Profit" and "Company Loss" shall mean, for each Fiscal Year or
other period, an amount equal to the Company's taxable income or loss for such
year or period, determined in accordance with Section 703(a) of the Code (for
this purpose, all items of income, gain, loss, or deduction required to be
stated separately shall be included in taxable income or loss); provided,
however, that (a) income exempt from federal income tax shall be
treated as taxable income, (b) expenditures described in Section 705(a)(2)(B) of
the Code or treated as such expenditures under Treasury Regulation Section
1.704-1(b)(2)(iv)(i) shall be subtracted from taxable income, (c) the difference
between the adjusted basis for federal income tax purposes and Asset Value of
Company property shall be treated as gain or loss upon the happening of an event
described in clause (iii) of the definition of "Asset Value" herein, (d) gain or
loss resulting from the disposition of Company property with respect to which
gain or loss is recognized for federal income tax purposes shall be computed by
reference to the Asset Value of such Company property, (e) items specially
allocated under Sections 2.3(a), 2.3(b) and 2.3(c), and 4.1(b)(i) and (iii)
shall not be taken into account.
"Fiscal Year" means the calendar year.
"Involuntary Withdrawal" or "Involuntarily Withdraws" means the removal of
a Member or the removal and/or replacement of a Manager in accordance with the
terms of this Agreement.
"Majority" means 51%, by number, of the units or members, as the case may
be, in connection with any vote or consent action required in connection with
this Agreement.
"Manager" means, initially, Lodgian Richmond SPE, Inc., a Georgia
corporation, and any substituted or additional Manager appointed as such in
accordance with the terms of this Agreement, who has not been so removed as a
Manager in accordance with such terms.
"Members" means the persons executing this Agreement as Members and any
persons subsequently admitted to the Company as substituted or additional
Members; collectively, the Manager and the Members, and, individually, any one
of the Manager and Members.
"Membership Interest" means the interest of a Member in the capital, the
profits, and/or the rights, along with the obligations, that are possessed by
such Member as defined by the class and category of such interest, as defined by
the terms of this Agreement. The Company may issue certificate representing the
Membership Interests in the Company.
"Nonrecourse Debt" means a Company liability with respect to which none of
the Members has any personal liability as determined under Treasury Regulation
ss. 1.752-1.
"Officers" means, initially, Robert S. Cole, as President, Robert M.
Flanders, as Vice President, and Toni Jones, as Secretary and Treasurer, and any
other individual who is designated an officer of the Company by the Manager or
the President of the Company who is delegated authority to act on behalf of the
Company in accordance with Section 5.3 of the Agreement.
"Person" means any individual, partnership, corporation, limited liability
company,
trust, or other entity.
"Property" means the real property more particularly described on Schedule
1.1(A) hereto, and all improvements, fixtures, furnishings and equipment now or
hereafter situated thereon or used in connection therewith.
"Representative" means the executor, administrator, guardian, trustee, or
other personal representative of a Member.
"Substituted Member" means any person admitted to the Membership as a
Member pursuant to Section 9.6.
"Transfer" means any sale, assignment, gift, pledge, or other disposition,
whether voluntary or by operation of law, of a Membership Interest.
"Voluntary Withdrawal" or "Voluntarily Withdraws" means the resignation or
withdrawal of a Member or a Manager other than an Involuntary Withdrawal.