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COR DEVELOPMENT, LLC
NOTICE OF THE ANNUAL MEETING OF MEMBERS
August XX, 2001
TO THE MEMBERS OF COR DEVELOPMENT, LLC:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Members of
COR Development, LLC, a Kansas limited liability company, will be held
on September 17, 2001, at 5:00 p.m., local time, at 13720 Roe, Room 407,
Leawood, Kansas 66224, for the following purposes:
1. To amend certain provisions of the Operating Agreement as
described in the Proxy Statement;
2. Ratification of auditors; and
2. To vote upon such other matters as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
Only members of record at the close of business on August 7, 2001,
are entitled to notice of and to vote at the meeting. The stock transfer
books will not be closed between the record date and the date of the meeting. A
list of members entitled to vote at the Annual Meeting will be available for
inspection at the executive offices of COR Development for
a period of ten days before the Annual Meeting.
All members are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting,
you are urged to sign and return the enclosed Proxy as promptly as possible
in the envelope enclosed for that purpose.
Any member attending the meeting may vote in person even if he or
she has returned a Proxy.
Sincerely,
Robert M. Adams
Manager
June XX, 2001
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF
UNITS YOU OWN. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE READ THE ATTACHED PROXY STATEMENT
CAREFULLY, AND COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
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PROXY STATEMENT
TABLE OF CONTENTS
GENERAL 1
Revocability of Proxies 1
Solicitation 1
Deadline for Receipt of Member Proposals 1
Record Date and Voting 1
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING 2
Proposal One-Amendment of Operating Agreement 2
Proposal Two-Amendment of Operating Agreement 2
Proposal Three-Amendment of Operating Agreement 2
Proposal Four-Amendment of Operating Agreement 3
Proposal Five-Ratification of Auditors 6
PLAN OF OPERATION 6
OTHER MATTERS 7
FORM 10-KSB 7
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COR DEVELOPMENT, LLC
13720 Roe
Leawood, Kansas 66224
PROXY STATEMENT
FOR THE ANNUAL MEETING OF MEMBERS
TO BE HELD ON SEPTEMBER 17, 2001
General
The enclosed proxy (''Proxy'') is solicited on behalf of the Managers
of COR Development, LLC, a Kansas limited liability company ("COR
Development or the Company''), for use at the Annual Meeting of Members to
be held on September 17,2001, (the ''Annual Meeting''). The Annual Meeting will
be held at 5:00 p.m., local time, at 13720 Roe, Room 407, Leawood, Kansas 66224.
These proxy solicitation materials were mailed on or about August XX,
2001 to all members entitled to vote at the Annual Meeting.
Revocability of Proxies
Any person giving a Proxy has the power to revoke it at any time before
its exercise. It may be revoked by filing with the Managers of COR Development
at COR Development's offices, at 13720 Roe, Leawood,Kansas 66224, a notice of
revocation or another signed Proxy with a later date. Any person may also revoke
his or her Proxy by attending the Annual Meeting and voting in person.
Solicitation
COR Development will bear the entire cost of solicitation, including
the preparation, assembly, printing and mailing of this Proxy Statement,
the Proxy and any additional soliciting materials furnished to members.
Copies of solicitation materials will be furnished to fiduciaries, and
custodians holding units in their names that are beneficially owned by
others so that they may forward this solicitation material to such
beneficial owners. In addition, COR Development may reimburse such persons
for their costs in forwarding the solicitation materials to such beneficial
owners. The original solicitation of proxies by mail will be by solicitation by
telephone, telegram, or other means by managers or employees of COR Development.
No compensation will be paid to managers or employees for any such services.
Deadline for Receipt of Member Proposals
Proposals of members of COR Development that are intended to be
presented by such members at the 2001 Annual Meeting of Members must be
received by COR Development no later than September 3, 2001, in order that
they may be presented at that meeting.
Record Date and Voting
There are two classes of securities, common units and preferred units.
On July 25,2001, 252,350 common units (individually, a "Common Unit" and
collectively, the"Common Units") and 596,803 preferred units (individually,
a "Preferred Unit" and collectively, the "Preferred Units") were outstanding.
Abstentions are counted as present for the purpose of determining the
presence of a quorum for the transaction of business. Each member is
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entitled to one vote for each Common Unit or Preferred Unit held. All
votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes and
abstentions.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
The Operating Agreement of COR Development has an inconsistency
regarding who may determine if distributions are to be made to the holders
of the common units or the preferred units and a provision regarding
compensation of a member that may limit the Managers' ability to employ
any member and compensate him or her appropriately. The Managers believe
that it is necessary to eliminate this inconsistency and to amend the
other provision. Section 6.2(iii) of the Operating Agreement provides
that the members of COR Development determine if a distribution is to be
made to the holders of the common units or the preferred units. In other
provisions of the Operating Agreement, the Managers are given the authority
to determine if these distributions are to be made. Section 6.2(vi) of
the Operating Agreement provides that the members of COR Development
determine if any compensation should be paid to a member for services.
Because members will generally only be able to act at an annual or special
meeting with notice having to be printed and sent out to all members, the
cost for the members to make this determination would be much greater than
the Managers meeting to make that determination. As well, because the
Managers may wish at some time to employ a member for his or her services,
the Managers' ability to do so would be greatly limited if a meeting of the
members had to be called before the Managers could employ that person and
compensate him or her appropriately. Finally, our accountants have
recommended technical changes in Article VIII to properly allow for the
allocation of profit and loss. A new restated Article VIII is proposed.
Finally we ask for your ratification of our selection of the CPA firm of
Marks Nelson Vohland & Campbell, LLC, PA as our auditors.
PROPOSAL ONE - AMENDMENT OF OPERATING AGREEMENT
The Managers propose that the following Section of the Operating
Agreement be amended:
The first sentence of Section 5.1.3.1 of the Operating Agreement would
be changed to read as follows:
Subject to the limitations set forth in this Agreement, the holders
of the Preferred Units shall be entitled to receive cumulative
preferred return per annum as set forth below from funds legally
available therefor, when, as and if declared by the Managers.
The Managers recommend that the members vote FOR this amendment of the
Operating Agreement of COR Development.
PROPOSAL TWO - AMENDMENT OF OPERATING AGREEMENT
The Managers propose that the following Section of the Operating
Agreement be amended as follows:
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Section 6.2(iii) of the Operating Agreement will be deleted.
The Managers recommend that the members vote FOR this amendment of the
Operating Agreement of COR Development.
PROPOSAL THREE - AMENDMENT OF OPERATING AGREEMENT
The Managers propose that the following Section of the Operating
Agreement be amended as follows:
Section 6.2(vi) of the Operating Agreement will be deleted.
The Managers recommend that the members vote FOR this amendment of the
Operating Agreement of COR Development.
If the foregoing two subsections of Section 6.2 of the Operating
Agreement are deleted, the last paragraph of Section 6.2 of Operating
Agreement would be amended to read as follows:
Notwithstanding the foregoing, no act shall be taken, sum expended, decision
made or obligation incurred by the Company or the Managers, with respect to a
matter deemed to be a major decision (hereinafter called "Major Decisions"), as
enumerated below, unless such Major Decision has been approved by a majority of
the Members. The Major Decisions are:
i. The amendment, alteration or revision of this Operating
Agreement;
ii .The adoption or assumption of any contractual or other obligation, the
value of which exceeds $5,000,000.00;
iii. The making of the Company as a surety, guarantor or accommodation party
to any transaction, agreement or obligation;
iv. The assignment, transfer, pledge, release or compromise of any
claims or debts due to the Company in excess of $5,000,000.00; and
v. Any other decision or action which by any provision of this
Operating Agreement is required to be approved by the Members.
PROPOSAL FOUR - AMENDMENT OF OPERATING AGREEMENT
The Managers recommend that the current Article VIII be deleted in
its entirety and that the following Article VIII be substituted
therefor:
ARTICLE VIII. ALLOCATION OF PROFITS AN LOSSES
Section 8.1 Definitions Regarding Allocations. For purposes of this
Article VIII the following terms have the following meanings:
(A) "Adjusted Capital Account Balance" means the balance (be it positive
or negative) which would be obtained by adding to a Member's or Successor's
Capital Account balance such Member's or Successor's share of the "Company
Minimum Gain" and "Member Nonrecourse Debt Minimum Gain" (as hereinafter
defined
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and determined in accordance with Treasury Regulation 1.704-2).
(B) "Agreed Contribution Amount" means, as of the end of the applicable
whole or partial fiscal year of the Company, the amount (if any) which the
Member's or Successor in question would be required to contribute to the
capital of the Company pursuant to Section 8.1 hereof if the Company's
assets were wholly worthless and a call made under Section 8.1 to generate the
funds necessary to pay off all of the Company's liabilities (other than
"nonrecourse liabilities" as that term is used in the
Treasury Regulation promulgated under Section 752 of the Code).
(C) "Net Loss" for a whole or partial fiscal year of the Company means the
excess, if any, of (1) the sum of the Company's items of deduction except
interest expenses (excluding all items of deduction and loss allocated
pursuant to Section 8.2) for such period over (2) the sum of the Company's
items of income and gain (excluding all items of income and gain allocated
pursuant to Section 8.2) for such period.
(D) "Net Profit" for a whole or partial fiscal year of the Company means
the excess, if any, of (1) the sum of the Company's items of income and gain
(excluding all items of income and gain allocated pursuant to Section 8.2)
such period over (2) the sum of the Company's items of deduction except
interest expenses and loss(excluding all items of deduction and loss
allocated pursuant to Section 8.2) for such period.
(E) "Nonrecourse Deductions" has the same meaning assigned to such phrase
in Treasury Regulation 1.704-2.
(F) "Company Minimum Gain" has the same meaning assigned to such phrase
under Treasury Regulation 1.704-2.
(G) "Member Nonrecourse Debt Minimum Gain" has the same meaning assigned
to such phrase under Treasury Regulation 1.704-2.
(H) "Member Nonrecourse Deductions" has the same meaning assigned to such
phrase under Treasury Regulation 1.704-2.
(I) "Preferred Unit Amount" means the amount which is the sum of (1) a
Preferred Unit Member or Successor's Contribution Account balance (if any),
plus (2) such Member's or Successor's Undistributed preferred Return (if any),
determined as of the last day of the whole or partial fiscal year or other
period in question.
(J) "Residual Capital Account Balance" means the excess (if any) of the amount
of a Successor's positive Adjusted Capital Account Balance over such Partner's
of Successor's Preference Capital Amount.
(K) "Interest Expense" means all items of deduction incurred by the Company
that represents the cost of borrowing funds of any nature.
(L) "Gross Income" means the sum of all items of income and gain recognized
by the Company during any fiscal year
Section 8.2 Nonrecourse Deductions: Minimum Gain Chargebacks
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(A) Special Allocation: Any Interest Expense that is incurred by the Company
during each fiscal year shall be allocated to the Common Unit Holders in their
relative Contribution Percentages.
(B) Gross Income Allocation: Amounts of Gross Income shall first be allocated
to the Preferred Unit Holders, in their relative Contribution Percentages, in
an amount that causes their Adjusted Capital Account Balances to be the same
as the balance of their Preferred Unit Amount.
(C) The Partnership's Nonrecourse Deductions (if any) for each fiscal year
of the Company shall, subject to Section 8.4 (relating to among other things,
allocations to take into account book/tax disparities), be allocated to
common members for both book and tax purposes, in accordance with their
relative Distribution Percentages during such period. The Company's Member
Nonrecourse Deductions (if any) shall be allocated among the Members accordance
with Treasury Regulation 1.704-2(i).
(D) If there is a net decrease in Company Minimum Gain and/or Member
Nonrecourse Debt Minimum Gain during a fiscal year of the Company, then
prior to making the other allocations provided for in this Article IV for
such fiscal year, the Member shall be allocated items of income and gain for
such year in the manner and relative amounts (if any) required by the
applicable provisions of Treasury Regulation 1.704-2 regarding "minimum gain
chargebacks" and/or the "chargeback of partner nonrecourse debt minimum gain,"
as applicable.
(E) The allocations set forth in the foregoing provisions of this Section
8.2 shall be made after taking into account all distributions of Company
Operating Proceeds made through the end of the period in question.
Section 8.3 Allocation of Net Profit and Net Loss. Subject to Section
8.4, the Company's Net Loss or Net Profit (as the case may be) for each
fiscal year of the Company shall, after taking into account (and adjusting
the Member's Capital Accounts for) all distributions of Operating Proceeds made
through the end of the period in question, and all allocations pursuant to
Section 8.2 for the period in question, but prior to making distributions of
Dissolution Proceeds be allocated among the Partners as follows:
(A) If there is a Net Loss for such fiscal year, such Net Loss shall be
allocated as follows and in the following order of priority:
(1) First, to the Common Unit Member and Successors, in the relative amounts,
and up to the aggregate amount, necessary so that their Residual Capital
Account Balances (if any) will be in the ratio of their Distribution
Percentages;
(2) Next, to the Common Unit Member and Successors, in the ratio of
Their Residual Capital Account Balances, up to the aggregate amount necessary
to rreduc such Residual Capital Account Balances to zero;
(3) Next, to the Preferred Unit Member and Successors, in the ratio
of their Residual Adjusted Capital Account Balances, up to the aggregate
amount necessary to reduce their Adjusted Capital Account Balances to zero;
(4) Next, among the Members and Successors with Agreed Contribution
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Amounts, in the ratio of such Agreed Contribution Amounts, up to the aggregate
amount of such Agreed Contribution Amounts; and
(5) Then, any remaining Net Loss to the Members in proportion to their
respective Distribution Percentages.
(B) If there is a Net Profit for such fiscal year, such Net Profit shall
be allocated as follows and in the following order of priority:
(1) First, to the Common Unit Member and Successors with negative Adjusted
Capital Account Balances (if any), in the ratio of such negative Adjusted
Capital Account Balances, up to the amount necessary to restore all such
Adjusted Capital Account Balances to zero;
(2) Next, to the Common Unit Member and Successors in the relative amounts,
and up to the aggregate amount (if any) necessary so that the Capital Account
Balances of the Common Unit Members will be in the ratio of their respective
Distribution Percentages.
Section 8.4 Allocations with Respect to Tax Matters.
(A) Solely for tax purposes, income, gain, loss and deduction with respect to
property contributed to the Company by any Member or Successor shall be
allocated in accordance with Section 704(c) of the Code, Treasury Regulations
issued thereunder, and Treasury Regulation 1.704-1(b)(2)(iv)(g), so as to take
account of any variation between the basis of the property to the Company and
its fair market value at the time of contribution.
(B) For purposes of determining shares of nonrecourse liabilities of the
Company under Treasury Regulation 1.752-3(a)(3), it is hereby specified (in
accordance with such Treasury Regulation) that the percentage interest in
Company profits of each Member or Successor is the same as his Distribution
Percentage.
(C) If the Company "revalues" its property under the provisions of Treasury
Regulation 1.704-1(b)(2)(iv)(f), the Capital Accounts shall be adjusted in
accordance with Treasury Regulation 1.704-1(b)(2)(iv)(g) for allocations of
depreciation, depletion, amortization and gain or loss, as computed for book
purposes, with respect to so much of the Company's property as has been
Subject to such "revaluation" as that term is used in Treasury
Regulation 1.704-1(b)(2)(iv)(f) (the "Revalued Property"). The distributive
shares of the Members and Successors of depreciation, depletion, amortization
and gain or loss with respect to Revalued Property, as computed for tax
purposes, shall be determined so as to take account of the variation between
the adjusted tax basis and book value of such Revalued Property in the same
manner as under Section 704(c) of the Code.
(D) If during any taxable year of the Company there is a change in the
Interest of any Member or Successor in the Company, then the Manager shall
cause the allocations of the Company's income, gains, losses, deductions
and credits (and items thereof) to be made in a manner which takes into
account the varying interests of the Members and Successors in the Company
during such taxable year in accordance with Code Section 706(d) and the
Treasury Regulations thereunder.
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(E) The Managers are hereby authorized and directed to specially allocate
items of income, gain, loss and deduction among the Members during any
fiscal year of the Company and/or upon the Company's liquidation and
termination (in any reasonable manner which it determines appropriate)
so as to cause the Members Capital Accounts to be consistent with the
manner in which they agreed to share distributions hereunder (as reflected
in Article VIII and Section 8.3). Each Member agrees that he will not (1)
file any federal, state or local income tax return which would be inconsistent
or at variance herewith, or (2) challenge or contest the validity or propriety
of the allocations made under the authority of this Paragraph by the Manager.
Section 8.5 Special Gross Income Allocation
Notwithstanding the allocations made pursuant to sections 8.2, 8.3 or
8.4, should in any year a distribution be made to a Preferred Unit Holder in
an amount that would cause their Adjusted Capital Account Balance to be
reduced below zero and in such a year there is insufficient amounts of
Gross Income to allocate to bring their Adjusted Capital Accounts to zero,
then items of Gross Income shall be "created" and allocated to them in an
amount sufficient to cause their Adjusted Capital Account Balances to be zero.
The offsetting items of deductions "created" shall be allocated to the Common
Unit Holders in their respective contribution percentages.
PROPOSAL FIVE - RATIFICATION OF AUDITORS
The Managers recommend that you ratify their selection of the CPA firm
of Marks Nelson Vohland & Campbell, LLC, PA ("MNVC"), 4601 College Blvd.,
Leawood, Kansas 66211, as our auditors. MNVC has extensive experience in
Public accounting, including significant experience in auditing the financial
records of public companies such as COR Development. MNVC is independent from
COR Development, as required by the AICPA and the SEC. We ask that you ratify
their one-year appointment as our auditors.
The Managers recommend that the members vote FOR this amendment of the
Operating Agreement of COR Development.
Approval of an amendment to the Operating Agreemennt requires a majority vote of
the members.
PLAN OF OPERATION
For the next twelve (12) months, COR Development will be actively
Involved in the development of the 47 acres that were purchased in part with
the proceeds of the offering of the Common Units and the Preferred Units.
During the next few months, COR Development will be finalizing the site plans
for the building of the facilities for the office, retail and hotel space.
We will then be conducting meetings with the staff of the City of Leawood,
Kansas and meetings with adjacent property owners in preparation for receiving
approval of the site plans and receiving building permits for the construction
of the facilities.
We will employ a construction company for the construction of the facilities
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and the overall management of the construction. As of this date, we have
selected Walton Construction Co., Inc. to act as the general contractor for
the building of the facilities. As of this date, we also have selected a
company to serve as the entity to assist with securing the approval of the
site plans and to obtain tenants for the facilities.
During the coming twelve months, construction will commence on the
facilities. This construction will involve selective demolition, earthwork,
construction of underground duct and utility structures, construction of
sanitary sewerage and storm drainage and installation of pavement.
At this time, we have sufficient cash to proceed forward with the
development of the real estate until we obtain a construction loan. We
anticipate obtaining a construction loan at the end of the current calendar
year or at the beginning of the next calendar year. We currently anticipate
that the principal amount of the construction loan will be approximately
$39,000,000. This construction loan will provide sufficient funds to proceed
with the construction. If a construction loan is not obtained, we will not
be able to continue with the construction of the facilities.
Based upon the current site plans, there will be approximately 500,000
square feet of retail and office space. The facilities will be on 36 acres.
The current site plans will include a 120-room hotel, 197,000 square feet of
retail space, 243,000 square feet of office space, a bank and five
restaurants. The current site plans provide more square feet of retail and
office space then originally anticipated in the prospectus which indicated a
combined 329,000 square feet of retail and office space. The reconfiguration
of the facilities on the property has allowed for more space to use and to
rent.
The construction will continue for an extended time. We anticipate
that the construction of all of the facilities should occur in 2005.
OTHER MATTERS
COR Development knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come
before the annual meeting, it is the intention of the persons named in the
enclosed form of Proxy to vote the shares they represent as the Managers
may recommend. Discretionary authority with respect to such other matters
is granted by the execution of the enclosed Proxy.
FORM 10-KSB
COR Development did not file an Annual Report for 2000 on Form 10-KSB
with the Securities and Exchange Commission (the "SEC") because no sales of
the Common Units or the Preferred Units were actually consummated in calendar
year 2000. For calendar year 2001 and the years thereafter as required by
the SEC, COR Development will be required to file an Annual Report.
COR Development knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come
before the Annual Meeting, it is the intention of the persons named in the
enclosed form of Proxy to vote the shares they represent as the Managers
may recommend. Discretionary authority with respect to such other matters
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is granted by the execution of the enclosed Proxy.
Dated: July XX, 2001 THE MANAGERS OF COR DEVELOPMENT, LLC
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