HomeMy WebLinkAboutRES 081225-5.E - ETJ Disannexation - Berry Creek Townhomes LLC-10.001 acres R562501RESOLUTION NO. 0122 S — 5. C
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS ("GEORGETOWN") RELEASING
APPROXIMATELY 10.001 ACRES OF LAND FROM THE CITY OF
GEORGETOWN'S EXTRATERRITORIAL JURISDICTION ("ETJ"),
SAID LAND IDENTIFIED BY THE WILLIAMSON COUNTY APPRAISAL
DISTRICT AS PARCEL R562501 AND BEING LOCALLY KNOWN AS
3601 SHELL ROAD, GEORGETOWN, WILLIAMSON COUNTY, TEXAS,
RESULTING IN A REDUCTION OF GEORGETOWN'S ETJ; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, on June 30, 2025, the City of Georgetown, Texas, received a petition requesting release
from its ETJ of an approximately 10.001 acre tract of land in the Shell West Reserve Subdivision (the
"Petition"), a true and correct copy of such Petition being attached hereto as Exhibit A and
incorporated herein by reference; and
WHEREAS, pursuant to Subchapter D of Chapter 42 of Local Government Code, landowners or
residents may submit a petition seeking release of an area of land from the City's ETJ; and
WHEREAS, the City Secretary has reviewed the Petition and confirmed that it meets the
requirements of Subchapter D of Chapter 42 of the Local Government Code and the petition
requirements of Chapter 277 of the Election Code.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS:
SECTION 1. The City Council of the City of Georgetown, Texas ("City Council"), does hereby
find that the forgoing recitals are true and correct and adopts the recitals by this reference for all
purposes.
SECTION 2. To the extent required by state law, the City Council does hereby adjust the
boundaries and limits of the ETJ of the City of Georgetown, Texas, such that the ETJ of the City
of Georgetown, Texas, shall be and is hereby adjusted to release and remove the Area subject to
the Petition, as such Area is more particularly described and depicted in Exhibit B attached hereto
and incorporated herein by reference, from the ETJ of the City of Georgetown, Texas.
SECTION 3. The City Council is not consenting to this reduction of its ETJ except as required
by state law.
SECTION 4. This Resolution shall take effect immediately upon its passage.
Resolution No.
O$171Z�5 —5 E Page I 1
Release of Petition Area — Berry Creek Townhomes LLC
PASSED AND APPROVED by the City Council of the City of Georgetown, Texas, on the
L'�tlayof g{— , 2025.
CITY OF "ORGETOWN, TEXAS
By:
Josh chro der, Mayor
ATTEST:
By:
Robyn Densm , City Secretary
APPROVED AS TO FORM:
By: s1
Skye Mas on, City tomey
Resolution No. O8t ?,&C —S. 9
Page 12
Release of Petition Area — Berry Creek Townhomes LLC
Exhibit A
Petition
Resolution No. 0-m -✓• E
Release of Petition Area
Petitioned for ETJ Removal
GEO gfET WN
BERRY CREEK TOWNHOMES LLC
\ 4\
S\1S4L'
l
® Property
Georgetown ETJ
__j City limits
q
tU1�
II
4t
Annunclehon
hlalern dy Home `
r /I
V
is
0 300 600
US Feet
RELEASE FROM EXTRATERRITORIAL
JURISDICTION (ETJ)
ZIAC--l".1 9940
CONTACT INFORMATION
Applicant's Name Perry Creek Town Homes LLC
Company Berry Creek Town Homes LLC
Applicant's Mailing III1114229 N F 620 BOX 101 #UNIT 336
Address �XUST3N, TX 78734
Applicant's Phone #fly-366-1 173
Property Owner
Company
Owner's Mailing
Address
Owner's Name
I -
APR 14 2025
LCITY SEC.
Creek Town Home LLC
Creek Town Homes LLC
509 Sunset Sail Bend Austin i'x 79735
fB 4229 N F 620 BOX 161 #UNrT 336
USTMt TX 78734
Paul Cink
Applicant's Email I)aulcink@,psc-properties.com Owner's DOB I10/24/53
DESCRIPTION OF REQUEST
Number of properties within the area to be released: One
General location of area to be released:
3601 SHELL RD. GEORGETOWN. TX 78633
Total Acres Requesting to be Released from ETJ: 10.1 County of Request: Williamson County
1D Completed Application for Release from ETJ (this page)
-
,a Exact Property description in the form of: 1) Metes and Bounds, or 2) Identification of
the property on a Recorded Plat
07 Signed "Release from ETJ Petition" (see next page)
50% of all owners within the area to be released must provide a signature
If properly is owned by an entity, estate, trust, etc. — provide proof of authority to sign
on behalf of the entity, estate, trust, etc.
® If current ownership differs from data available on the Appraisal District website
provide deed(s) as proof of ownership
Note:
Planning & Development Services , City of Georgetown, City Secretary's Office at (512) 930-3651, or cs@georgetown.org
CITY OF GEORGETOWN RELEASE FROM ETJ PETITION
By signing this petition, I hereby request to be removed from the City of Georgetown Extraterritorial Jurisdiction
(ETJ). I hereby affirm that I am the legal owner of the property identified below.
- -
Tax ID # Physical Address Property Owner's
Leaibiv
Printed Name
R562501 3 601 SHELL RD, Berry Creek Town
,EORGETOWN, TX 78633 Homes LLC (Paul Cink ,
Manager)
- - -
Property Owner's
n ture
/
���,"��y
1
--
Date
��I 'L�1 a
Planning & Development Services m City of Georgetown; City Secretary's Office at (512) 930-3651, or cs@georgetowri.org
State of Delaware
Secretary of State
Division of Corporations
Delivered 12:17 PAI 02/15/2023 CERTIFICATE OF FORMATION
FILED 12:17 PM 02/15/2023
SR 20230526938 - File Number 7298807
rM
Berry Creek Townhomes, LLC
FIRST: The name of the limited liability company is Berry Creek
Townhomes, LLC.
SECOND: The address of its registered office in the State of Delaware is 108 W.
13th Street, Suite 100, Wilmington, DE 19801 in the County of New
Castle. The name of its registered agent at such address is Vcorp
Services, LLC.
THIRD: Members may be admitted in accordance with the terms of the
Operating Agreement of the limited liability company.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
of Formation on February 15, 2023.
/s/Barbara Quinones
Barbara Quinones, Authorized
Person
Corporations Section 1,C E pF
P.O.Box 13697
Austin, Texas 78711-3697 2i 1
Office of the Secretary of State
CERTIFICATE OF FILING
OF
Berry Creek Townhomes, LLC
File Number: 804952900
Jane Nelson
Secretary of State
The undersigned, as Secretary of State of Texas, hereby certifies that an Application for Registration for
the above named Foreign Limited Liability Company (LLC) to transact business in this State has been
received in this office and has been found to conform to the applicable provisions of law.
ACCORDINGLY, the undersigned, as Secretary of State, and by virtue of the authority vested in the
secretary by law, hereby issues this certificate evidencing the authority of the entity to transact business in
this State from and after the effective date shown below for the purpose or purposes set forth in the
application under the name of
Berry Creek Townhomes, LLC
The issuance of this certificate does not authorize the use of a name in this state in violation of the rights
of another under the federal Trademark Act of 1946, the Texas trademark law, the Assumed Business or
Professional Name Act, or the common law.
Jane Nelson
Secretary of State
Come visit us on the internet at https:llwww.sos. texas.gov/
Phone: (512) 463-5555 Fax: (512) 463-5709 Dial: 7-1-1 for Relay Services
Prepared by: Tracy Acuna TID: 10308 Document: 1226702310002
SURVEY SHOWING LOT 3, SHELL WEST RESERVE, A
SUBDIVISION IN WILLIAMSON COUNTY, TEXAS, RECORDED IN
DOCUMENT NO.2017085616, OFFICIAL PUBLIC RECORDS,
WILLIAMSON COUNTY, TEXAS
7RESERVE
PRIVATE ROAD 912
IO70SSFSEFBND(ISANITMY
fABEMwW IllCPQI'Y LINE SEr%ka
/PCS513LEWTLLSITE
N12' 00 23 E
l 12.20'
z
•�� �a
UZ&
11 FfCWCALLPfRDOQWTNFNQNNC6%tb
FOLIFO W NON ROD
0 FONOF6MEPOSF
X- -x---- mwfEAY.'E
SCALL V . tar
WIf
�\ L
w
�I a
m
�I a
J
N22' 17' 29"E yy
51.48' �yF/
S�/
�
'�`7
WtgWiljl iFECENTEROFAROCKCatkM 290-I. r
. r.� sr BIT 1� 1 �.28
LOT 3
10.001 ACRES
WILLIAM ROBERTS SURVEY NO, 4
ABSTRACT NO, 524
�s
r
sH
8-
7 S5r S7' 23w 144AT --
— --�
SHELL ROAD (BY RIGHT -OF -WA j
OF
II FR Ov,OM Kffo ook AMK 70N
11COV:SEILO FOR WM AhDINY«AU
�P �..RFa �
7HEASEOFSEAANO.IEAASSIA7EfLAI4WII M%t.RYIU
.....................
FI THISSUt4YLSBA3E0 ON ATTRE001RWIUfNl 159"IftSTEN'MI TINE OONANIYCCIEAOf/, OT.IAUTER 11MT75f1, I%= DATE Of
TRAMS L. OUICKSALL
ANil OS.%N9FItCIRE&A1F Of IlA110171, ION hHD bYAECiTO NLl W!; CpEXItkK, IEASE$Ntl f1KLlIEt42$ $1D1,lAlED
.....................
THEREIN, THERE WAY 06 O:NERfASEWN19.IESIRICT1DMf,011EAU1,VYRAWCfd7q' 31QM'LWa6ALINEYCR CONOT COMPLETE AN
644%
ABSTIRACTOFTRI£
51A METE$MO BOUIDSOE$CPPIION WAS PREPARED BYASEPARATE DOCUEENT,
EIACCCxm 10THE RATKYLILF-ODOL-41.0mCE PNOGRAV BLOOD MJK90 RAZE MONK MllIWp1COLMY.TEAAS.4VMNN'R
�•
:�
510\J. eQ�
.Y^ Y
1f.91C171SEFiFEC1YE DAT[SEPICY9fR 2G,70760:IS PfiCJER1Y LE8N20lEKVMCNbOdi[DASMFASOEIEAV:VED10 BE 011ESIBE
`%
V SURV `"
iNE ED71F1A NOODf WN.I/i loliiOfiµ ROW h`JY1lJ.CE iRO6441R00DNAMNCBM7E VN1f fOq UY N ADIIMS/ER9O11E
.'uTLYIC ROOON4gNCE /RWiAN 17OOE$NJrAECE$SAPoLYASEIRW µIARW 9UUECt IOfl00dN7.PM71C1RA,ASY fFDY IOCµ
ORTAfthm SOURCESOF SrW197E,d1Alt CVh:U.`11LCRFARAE]OUifOEfKCW ROODrNTAROApfAL TASf100D DAtENEIIf OOFB I DO HEREBY CERTIFYTHATTHS SURVEY WAS MAOE ONTEE GROUND OF THE
v0TWAY1rArT1EPRO"IYA180RSIRCTUKSLOCA/ED1noNWlLtier EEfwwno00NCORFMDLNVAM MEFt00D PROFON LEGALLY DESCRIBED HEAEONAND IS CORRECT, AM THAT MERE
HAZMDMFAISSINIECTTOCNMEASDETMLMSTUOIESOCCURXIWRWATEMHEDpi CHANNELCMDfrMSCHIH0ETMFL000 MENOSICNFHCANTD,'rOHEyA\C1ESMWUCf$.EHORTAGESINAREA,
STATEMENT SHALL NOT CREATE LIABILITY ON THE PART OF THESURVEYOR BOUDMY WE CORD LIM VISKE ENCAp4CJINeNI&OVER LAPPING OF
1100-YAPPARIENTUIUTIAS1101A CAICD. NOATTEWr HAS BEEN MADE AS PART OF THIS SURVEYTOSHOWT1E ENS OFSPE, DEPTH. NPROVEIENT&OIRIIY
fF3;RUAOS. E%CEPTASSMOY.IL AND THAT SAID
CpAYTgl1, CRlOGA1pNOfANfYCtRGRgRDu1l11Y. FOr11NFp0M110N HEGNWINDUNOEROROUIOUFUIIEBREASECONTACF LIE pµCpERTYVAyf.�OMA�j11QM1lAOE01G1ED
APPROPREAIEAGNNCY,
ROADWAY.
RE$'IRICGON$;
voILADE21s4 PAa m uovaueNy rAiE 2.Aaticua iJdC1E00RD5. oawt«r Doa NCOfA1N7, mo1001B1& 20WOMIIID
zolrwlzl.:aNln;ra lweovla. AAG 701ra5k!e, aflraFLPletr<R1xroe. NSUM6W W�nrr. r1Jw.
TRRRS L OUICRSAIL GATE.UFOATIO WISFMIf
SOtaAEB
P40MTERED PRCFESWol LAW SURVEYOR
ICU OOCUULgrM WrfAkl4 ORgSADE FASI]AhT, pA1¢ SEWA6fiFAMILITYMDY 11ACA T fEET NMDM E'SFMONSI h"
IEMASPEGISTRATIONNO.N11
:2000AfMIA.7CIIDtl51Q RJIIXUTILITY EASIEFFIn FEET NNDTMAOID WE SOUt40.LYPROPERrT LINL(91DY.N0•A WRAY)
JDD N0. IT'0E7.1
.x OGI1NLRf:lJ.1011teNl411ApASEIMOtInIF 7fFELTNNNIMµWlTIE f0U1HLRlTfROP[1lTYLLY iS1OPBr0N SRPhfl1
i17A VOLUMEMHiMt.PA7OEi".FA6.'A!NKRSSTeLl1WWDELCOTOCKSh MTKALWATt%GMRE{C)EYRCOYNCpOMD.ESRD4ESK11MS IEvAp1[,DUNNTCEHYI GFA®Ov rtSfNLEp
lhEj
KINC.
10EVNE 1210, PAGESb,EASEMENTGMNTED IO GEIERALTETEPHDNECOMPANY OFTHESOUMST,IIBEASEMENTCENTEREDON
WBTNLEDLNEBI
USURVEYING
109.VDLUM 2U2, PAGE 18, MAINTENANCE AWEEMN"r.
I ,w�.eol.nrix
LIMITED LIABILITY COMPANY AGREEMENT
OF
BERRY CREEK TOWNHOMES, LLC
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933,15 U.S.C. § 15b ET SEQ., AS AMENDED (THE "FEDERAL ACT"), IN
RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
FEDERAL ACT. IN ADDITION, THE ISSUANCE OF THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE DELAWARE CORPORATE SECURITIES LAW OR ANY OTHER STATE SECURITIES LAWS
(COLLECTIVELY, THE "STATE ACTS'), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE
REGISTRATION PROVISIONS OF THE STATE ACTS. IT IS UNLAWFUL TO CONSUMMATE A SALE OR OTHER
TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN TO, OR TO RECEIVE ANY CONSIDERATION
THEREFOR FROM, ANY PERSON WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE
PROPOSED SALE OR OTHER TRANSFER OF THIS SECURITY DOES NOT AFFECT THE AVAILABILITY TO
THE COMPANY OF SUCH EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH
PROPOSED SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL
SECURITIES LAWS. THE TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED UNDER THE TERMS OF
THIS AGREEMENT.
#92957v1
TABLE OF CONTENTS
Page
Section 1. Name and Principal Executive Office; Representations................................................................... I
1.1 Name.................................................................................................................................................1
1.2 Certificate of Formation....................................................................................................................1
1.3 Fictitious Business Name Statement.................................................................................................1
1.4 Representations and Warranties........................................................................................................2
Section 2. Purposes and Nature of Business......................................................................................................3
2.1 Purposes of Company.......................................................................................................................3
Section3. Term..................................................................................................................................................4
Section 4. Capital Contributions and Accounts.................................................................................................4
4.1 Initial Capital Contributions of the Manager and the Members........................................................4
4.2 Subsequent Capital Contributions.....................................................................................................4
4.3 Capital Accounts of Members...........................................................................................................5
4.4 Withdrawal of Capital.......................................................................................................................6
4.5 Interest on Capital Accounts.............................................................................................................6
4.6 Deficit Capital Accounts...................................................................................................................6
4.7 Optional Adjustments to Capital Accounts.......................................................................................6
4.8 Loans.................................................................................................................................................6
Section 5. Distributions...............................................................
5.1 Distributions of Cash Available for Distribution..............................................................................6
5.2 Distributions of Cash From Refinancing, Sale or Other Disposition................................................6
5.3 Distribution Upon Termination of the Company..............................................................................7
5.4 Valuation and Distribution of Non -Cash Distributions.....................................................................8
5.5 Discretion in Making Distributions...................................................................................................8
5.6 Limitation on Other Distributions.....................................................................................................9
5.7 Tax Distribution................................................................................................................................9
Section 6. Allocations Of Net Income, Net Loss And Gain...............................................................................9
Section7. Tax Elections....................................................................................................................................9
Section 8. Admission Of Additional Members..................................................................................................9
Section9. Management......................................................................................................................................9
9.1 In General..........................................................................................................................................9
9.2 Qualification and Removal of Manager..........................................................................................1 1
9.3 Time Devoted to Business..............................................................................................................12
9.4 Power to Employ and Contract With Affiliated Entities.................................................................12
9.5 Company Expenses.........................................................................................................................12
9.6 Competing Ventures.......................................................................................................................12
9.7 Manager May Also Be a Member...................................................................................................12
9.8 Officers...........................................................................................................................................13
9.9 Compensation of the Manager........................................................................................................13
Section 10. Liability and Indemnification..........................................................................................................13
#92957v1
Section 11.
Membership; Voting Rights; Meetings...........................................................................................14
11.1
Membership....................................................................................................................................14
11.2
Voting.............................................................................................................................................15
11.3
Member Meetings...........................................................................................................................15
Section 12.
Additional Members; Transfer of Interests of Members
.................................................................16
12.1
Additional Members.......................................................................................................................16
12.2
Assignment by Members................................................................................................................16
12.3
Substituted Member........................................................................................................................17
12.4
Payment of Expenses......................................................................................................................17
12.5
Substitution Instrument...................................................................................................................18
12.6
No Dissolution Upon Assignment..................................................................................................18
12.7
Withdrawal of Member; Bankruptcy..............................................................................................18
12.8
Drag Along Right...........................................................................................................................18
Section 13.
Amendment and Power of Attorney...............................................................................................
18
13.1
Amendment by Members................................................................................................................18
13.2
Amendment by Manager.................................................................................................................18
13.3
Power of Attorney...........................................................................................................................19
13.4
Additional Instruments....................................................................................................................19
Section 14.
Records, Reports and Bank Accounts.............................................................................................
19
14.1
Records...........................................................................................................................................19
14.2
Amendments...................................................................................................................................20
14.3
Tax Information..............................................................................................................................20
Section 15.
Dissolution and Termination of the Company................................................................................20
15.1
Events of Dissolution ......................................................................................................................20
15.2
Procedure on Death, Bankruptcy, Dissolution or Incompetency of a Member...............................20
15.3
Liquidation......................................................................................................................................21
15.4
Time for Liquidation.......................................................................................................................21
15.5
No Liability for Return of Capital...................................................................................................21
Section 16.
General Provisions..........................................................................................................................21
16.1
Survival of Rights...........................................................................................................................21
16.2
Construction....................................................................................................................................21
16.3
Section Headings............................................................................................................................21
16.4
Agreement in Counterparts.............................................................................................................21
16.5
Governing Law...............................................................................................................................21
16.6
Time................................................................................................................................................21
16.7
Additional Documents....................................................................................................................22
16.8
Validity...........................................................................................................................................22
16.9
Pronouns.........................................................................................................................................22
16.10
Descriptions....................................................................................................................................22
16.11
Venue And Attorneys' Fees............................................................................................................22
16.12
Partition...........................................................................................................................................22
16.13
Representative Capacity; Trusts......................................................................................................22
16.14
Joint Ownership..............................................................................................................................22
16.15
Valuation of Non -Cash Assets........................................................................................................23
Section 17
Definitions....................................................................................................................................... 23
#92957v1
EXHIBITA.......................................................................................................................................................A-i
Tax Allocations and Elections....................................................................................................................................A-i
1.1 Allocations.................................................................................................................................... A-i
1.2 Accounting With Reference to Issuance or Transfer of Company Interest .................................. A-ii
1.3 Fiscal Year.................................................................................................................................: A-iii
1.4 Basis Adjustment........................................................................................................................ A-iii
1.5 Elections...................................................................................................................................... A-iii
1.6 Tax Matters Partner..................................................................................................................... A-iii
#92957v1
LIMITED LIABILITY COMPANY AGREEMENT
OF
BERRY CREEK TOWNHOMES, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made and
entered into as of February 15, 2023, by and among (i) Berry Creek Townhomes Management,
LLC, a Delaware limited liability company, as the Class B Member and the Manager (the
"Manager") and (ii) the Persons who have acquired Units as Members pursuant to Section 4.1.1,
for the purposes of forming a limited liability company pursuant to the Act. Certain capitalized
terms used in this Agreement are defined in Section 17 below.
Recitals
WHEREAS, the Company was formed as a limited liability company under the Delaware
Limited Liability Company Act, as amended (the "Act"), by the filing of the articles of
organization with the Delaware Secretary of State on February 15, 2023 (the "Certificate");
WHEREAS, prior to the date of this Agreement, the Manager was the sole Member of the
Company;
WHEREAS, as of the date of this Agreement certain Persons who have entered into
subscription agreements to purchase Class A Units in the Company ("Subscription Agreements")
are making Capital Contributions and are being admitted as additional Members of the Company;
and
WHEREAS, the parties hereto desire to enter into this Agreement to reflect the respective
rights, obligations and interests of the Members.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members, intending to be legally bound, hereby agree as follows:
Section 1. Name and Principal Executive Office; Representations.
1.1 Name. The name of the Company is Berry Creek Townhomes, LLC. The principal
executive office of the Company is 4229 N FM 620, Box 101, Unit 336, Austin, TX 78734, unless
changed by the Manager, in its sole and absolute discretion, with written notice given to the
Member(s) of such change.
1.2 Certificate of Organization. The Manager shall provide a copy of the Certificate
and any amendment thereof to any Member that requests a copy from°the Manager in writing.
1.3 Fictitious Business Name Statement. The Manager is authorized to file and publish
a Fictitious Business Name Statement for the Company in any jurisdiction it deems appropriate.
#92957v1
1.4 Representations and Warranties. Each of the Members hereby makes the following
representations, warranties and covenants with respect to this investment:
1.4.1 The Member understands: (i) that the interests in the Company evidenced
by this Agreement have not been registered under the Securities Act of 1933, 15 U.S.C. § 15b et
seq., or the securities laws of Delaware or any other state (collectively, the "Securities Acts")
because the Company is issuing interests in the Company in reliance upon the exemptions from
the registrations requirements of the Securities Acts providing for issuance of securities not
involving a public offering; (ii) that the Manager and the Company is relying upon the
representations made by the Member herein in determining that such an exemption is available,
and would not be forming the Company in the absence of such representations; (iii) that exemption
from registration under the Securities Acts would not be available if any interest in the Company
was acquired by a Member with a view to distribution and the Member agrees that the Company
is under no obligation to register the interests in the Company or to assist the Member in complying
with any exemption from registration under the Securities Acts if such Member should at a later
date wish to dispose of such Member's interest in the Company; and (iv) that no public market
exists with respect to the interests and no representation has been made that such a public market
will exist at a future date.
1.4.2 The Member hereby represents that such Member is acquiring its interest
in the Company for such Member's own account, for investment and not with a view, or for resale
in connection with, any distribution thereof. No other Person has any interest in or right with
respect to the interest issued to the Member, nor has the Member agreed to give any Person any
such interest or right in the future.
1.4.3 The Member hereby represents that the Member has not received any
advertisement or general solicitation with respect to the sale of interests in the Company.
1.4.4 The Member represents that by reason of such Member's business and
financial experience or the business or financial experience of such Member's financial advisors
(who are not affiliated with the Company), it has the capacity to protect such Member's own
interest in connection with the acquisition of the interest in the Company. Each Member further
acknowledges that such Member is familiar with the financial condition and prospects of the
Company's business, and the current activities of the Company. Each Member believes that the
interests are securities of the kind such Member wishes to purchase and hold for investment, and
that the nature and amount of the interests are consistent with such Member's investment program.
1.4.5 Before acquiring any interest in the Company, the Member has
investigated the Company and its business and the Company has made available to the Member
all information necessary for the Member to make an informed decision to acquire an interest in
the Company. Without limitation of the foregoing, the Member has (i) read and understood this
Agreement, and (ii) has had the opportunity to retain one or more professional advisers to evaluate
the Company. The Member considers itself to be a Person possessing experience and
sophistication as an investor adequate for the evaluation of the merits and risks of the Member's
investment in the Company.
2
a9z9s7v i
1.4.6 The Member understands the meaning and consequences of the
representations, warranties and covenants made by it herein and that the Manager and the
Company has relied upon such representations, warranties and covenants. Each Member hereby
indemnifies, defends, protects and holds wholly free and harmless the Company from and against
any and all losses, damages, expenses or liabilities arising out of the breach and/or inaccuracy or
any such representation, warranty and/or covenant. All representations, warranties and covenants
contained herein and the indemnification contained in this Section 1.4.6 shall survive the execution
of this Agreement, the formation of the Company, and the liquidation of the Company.
1.4.7 The Member covenants, represents and warrants as follows: (i) he/she/it is
not in violation of any Anti -Terrorism Law; (ii) he/she/it is not a Prohibited Person; and (iii)
he/she/it does not (A) conduct any business or engage in any transaction or dealing with any
Prohibited Person, including the making or receiving any contribution of funds, goods or services
to or for the benefit of any Prohibited Person, (B) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive Order No. 13224
or (C) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti -
Terrorism Law; he/she/it will not engage in any of the foregoing activities in the future.
"Prohibited Person" means (i) a Person that is listed in the Annex to, or is otherwise subject to
the provisions of, Executive Order No. 13224, (ii) a Person owned or Controlled by, or acting for
or on behalf of, any Person that is listed in the Annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224, (iii) a Person with whom Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti -Terrorism Law, (iv) a Person who commits,
threatens or conspires to commit or supports "terrorism" as defined in Executive Order No. 13224,
(v) a Person that is named as a "specially designated national and blocked person" on the most
current list published by the U.S. Treasury Department Office of Foreign Assets Control at its
official website, http://www.treas.gov/ofac/tl1sdn.pdf or at any replacement website or at any
other official publication of such list, and (vi) a Person who is affiliated with a Person described
in clauses (i) — (v) above.
"Anti -Terrorism Law" means any Law relating to terrorism or money-laundering, including
Executive Order No. 13224 and the USA Patriot Act.
Section 2. Purposes and Nature of Business.
2.1 Purposes of Company. The purposes of the Company and the business to be carried
on by it, subject to the limitations contained elsewhere in this Agreement, are: (a) to acquire own,
hold, operate, manage, finance, lease, develop, and/or dispose of, in part or in its entirety, the
Property; (b) engage in any activities reasonably related to any of the foregoing; and (c) to carry
on any other activities necessary to, in connection with or incidental to the accomplishment of the
foregoing purposes of the Company, as determined by the Manager.
3
#929570
Section 3. Term.
The term of the Company shall be perpetual, unless terminated in accordance with the
dissolution and termination provisions of this Agreement, or by law.
Section 4. Capital Contributions and Accounts.
4.1 Initial Capital Contributions of the Manager and the Members.
4.1.1 Members. The Company initially intends to offer and sell up to One
Thousand Five Hundred (1,500) Class A Units and to admit as Members Persons or entities who
contribute cash for such Class A Units; provided that the offering of such Class A Units may be
terminated at such time as the Manager in its sole and absolute discretion determines. The Class
A Members shall contribute cash in the amount of One Thousand Dollars ($1,000.00) for each
Class A Unit purchased, with a minimum requirement of Seventy -Five (75) Units purchased. The
capital account of each Member shall be increased by the amount of cash contributed to the
Company under this Section 4.1.1. The Units shall be allocated between Class A-1 and Class A-
2 Units or as reasonably determined by the Manager. Class A-2 Units shall be reserved only for
such Members whose Capital Contribution is made from or within a Self -Directed Investment
Retirement Account (SDIRA) such that certain tax allocations, including depreciation, shall not
apply. The Manager shall accept subscriptions for either Class A-1 or Class A-2 Units on a case -
by -case basis until all Units are subscribed in whatever proportion of Class A-1 and Class A-2
Units shall be deemed appropriate in the sole discretion of the Manager. The Class A-1 and Class
A-2 Members shall be collectively referred to herein as the "Class A Members" unless where
specifically distinguished elsewhere herein. Any tax credits which would have otherwise flowed
to a Class A-2 Member, shall be applied to the Class B Member(s).
4.1.2 Manager. The Manager shall contribute to the Company cash in the
amount of One Hundred Dollars ($100.00), its capital account shall be increased by such
contribution and the Manager shall receive one hundred (100) Class B Units in connection with
such contribution. The Class B Units represent the Manager's profit interest in the Company. Any
actual cash invested by the Class B Member or its principals shall be treated as a Class A
investment.
4.2 Subsequent Capital Contributions.
4.2.1 Capital Call. Preemptive Rights. No Member shall be required to make
any capital contributions to the Company beyond the amounts set forth in Section 4.1. In the event
that at any time (or from time to time) the Manager determines in its sole discretion that additional
funds in excess of the Members' initial capital contributions described in Section 4.1 hereof are
required by the Company for or in respect of its business or any of its obligations, expenses, costs,
liabilities or expenditures, then the Manager may request that the Class A Members make further
capital contributions Pro rata in accordance with their Unit ownership ("Subsequent Capital
Contributions"). The Manager shall request Subsequent Capital Contributions by giving Notice
to each Class A Member at least ten (10) days prior to the date on which such Subsequent Capital
Contributions are due (a "Subsequent Draw Date"). Such Notice shall set forth the Subsequent
Capital Contribution requested of each Class A Member, the Subsequent Draw Date, the terms of
4
#92957v1
any additional Units to be issued in connection with such Subsequent Capital Contribution and the
payment terms for any Subsequent Capital Contributions. Class A Members electing to make
Subsequent Capital Contributions are referred to as "Electing Members."
4.2.2 In the event any Class A Member fails to timely make, or elects not to
make, a Subsequent Capital Contribution (a "Non -Electing Member'), those Electing Members
that have elected to make full Pro rata Subsequent Capital Contributions (the "Fully Electing
Members") shall have a right to elect to make the additional Subsequent Capital Contributions not
elected by the Non -Electing Members, Pro rata based on all Fully Electing Members, until no more
elections are made or all Subsequent Capital Contributions requested by the Manager have been
allocated.
4.2.3 In the event the Class A Members do not elect to fund the total amount of
Subsequent Capital Contributions requested by the Manager, the Manager is authorized to issue
Units to third parties so long as such offers are for the same equity and on the same payment terms
as is included in the Notice of Subsequent Capital Contribution delivered to the Class A Members,
provided, however, that such an offer of securities to third parties may be open for longer than ten
(10) days, but no longer than sixty (60) days, or a Notice of Subsequent Capital Contribution must
again be delivered to the Class A Members.
4.2.4 The Manager is authorized to issue additional Units in connection with
any Subsequent Capital Contributions or sales of Units to third parties in accordance with this
Section 4.2 and shall have the authority to admit any such third parties as Members of the
Company.
4.2.5 In addition to, or in place of, such a request for Subsequent Capital
Contributions, the Manager may, cause the Company to borrow such required additional funds,
with interest payable at then prevailing rates, from commercial banks, savings banks and/or other
lending institutions or persons (including Members), or any combination thereof.
4.3 Capital Accounts of Members. An individual capital account shall be determined
and maintained for each Member in accordance with Regulations Section 1.704- 1 (b)(2)(iv), which
provides that a Member's capital account shall be increased by (i) the amount of cash contributed
to the Company by such Member, (ii) the Fair Market Value of property contributed by such
Member to the Company (net of liabilities secured by such contributed property that the Company
is considered to assume or take subject to under Code Section 752), and (iii) any Company Net
Income or Gain (or item thereof) allocated to such Member (including income and gain exempt
from tax). A Member's capital account shall be decreased by (i) the amount of cash distributed by
the Company to such Member, (ii) the Fair Market Value of property distributed to such Member
by the Company (net of liabilities secured by such distributed property that such Member is
considered to assume or take subject to under Code Section 752), (iii) such Member's allocable
share of Company expenditures described in Code Section 705(a)(2)(B), and (iv) any Company
Net Loss (or item thereof) allocated to such Member. Such Net Income, Gain, and Net Loss shall
be determined in accordance with the federal income tax return filed by the Company, the
allocations provided for in Section 6 of this Agreement, and by reference to the definitions
contained in Section 17, provided that, in any circumstances in which property is reflected on the
books of the Company (as maintained in accordance with Regulations Section 1.704- 1 (b)(2)(iv))
#929570
at a book value that differs from the adjusted tax basis of such property, Net Income, Gain, and
Net Loss (or item thereof) shall be determined by reference to the book value of such property.
Such allocation of book items shall be made in accordance with Regulations Section 1.704-
1(b)(2)(iv)(g). In the event a Member transfers all or any portion of his Company interest, the
transferee shall succeed to the individual capital contributions, capital account and capital account
balance of the transferor to the extent such individual capital contributions, capital account and
capital account balance relate to the transferred interest. Neither contributions to the capital of the
Company nor the Members' capital account balances shall bear interest.
4.4 Withdrawal of Capital. Without the consent of the Manager, or as otherwise
provided for in this Agreement, no Member shall have any right to withdraw or make a demand
for withdrawal or return of any capital.
4.5 Interest on Capital Accounts. No interest shall be paid on any capital contributions.
4.6 Deficit Capital Accounts. No Member shall have any obligation to restore a deficit
capital account balance.
4.7 Optional Adjustments to Capital Accounts. Upon (i) a contribution of cash or
property (which shall be valued at its Fair Market Value) to the Company by a new or existing
Member for a Company Membership Interest, or (ii) a distribution by the Company to a retiring
or continuing Member for a Company Membership Interest, the Company may, in the discretion
of the Manager, increase or decrease the capital accounts of the Members to reflect a revaluation
of Company property on the books of the Company, in accordance with the provisions of
Regulations Section 1.704-1(b)(2)(iv)(f).
4.8 Loans. The Manager may determine that additional working capital is needed by
the Company and may invite the Members to loan money to the Company on a Pro rata basis
("Member Loans"). It is not mandatory that a Member loan any sum of money to the Company
and if one or more of the Members do not make a loan, the shortfall may be picked up by the other
Members wishing to do so, on a Pro rata basis. There will be no adjustment of ownership as a
result of making or not making a loan to the Company. A loan shall be evidenced by a promissory
note from the Company to the lending Member. Any loan to the Company from any Member shall
bear interest at the Prime Rate plus two percent (2%), and shall be repaid in accordance with the
agreed upon terms of such loan to the lending Member before any distribution of Cash Flow is
made to the Members pursuant to Section 5.1.
Section 5. Distributions.
5.1 Distributions of Cash Available for Distribution. Subject to Section 5.7, Cash
Available for Distribution, when distributed from time -to -time, shall be distributed to the
Members, in accordance with the following:
5.1.1 First, to the Class A Members (to be shared among them in proportion to
their respective Unpaid Class A Preferred Return) an annualized cumulative, non -compounding
Class A Preferred Return of Seven percent (7.0%), calculated on the Unreturned Capital
Contribution of each Class A Member;
Cel
#92957v]
5.1.2 Second, to the Class A Members (to be shared among them in proportion
to their respective Unpaid Class A Preferred Return), until each Member's Unpaid Class A
Preferred Return for any year that has gone unpaid has been returned;
5.1.3 Thereafter, Seventy percent (70.0%) of the Cash Available for
Distribution shall be distributed to the Class A Members, pro rata, based on each Class A
Member's Membership Interest; and
5.1.4 Pari passu with the distribution to the Class A Members, Thirty percent
(30.0%) of the Cash Available for Distribution shall be distributed to the Class B Member.
5.2 Distributions of Cash from Refinancing, Sale or Other Disposition. Subject to
Section 5.7, Cash From Refinancing and Cash From Sale or Other Disposition as defined in
Section 17, when distributed from time -to -time, shall, after payment of any debts of the Company
then due and the establishment of reasonable and necessary reserves, as determined by the
Manager in good faith, be distributed to the Members, in accordance with the following:
5.2.1 Distributions of Cash from Refinancing.
(a) First, to the Class A Members pro rata until each Class A Member
has received their respective Class A Preferred Return;
(b) Second, to the Class A Members pro rata, until each Member's
Unpaid Class A Preferred Return for any year that has gone unpaid has been satisfied;
(c) Third, in the sole discretion of the Manager, either:
(i) to the Class A Members as a Return of Capital (defined
below) until each Member's Unpaid Capital Contribution has been repaid, in whole or in part, with
any remainder to be split in accordance with Section 5.1 above, as applicable; or
(ii) no Return of Capital with all remaining Cash Available for
Distribution distributed in accordance with Section 5.1 above, as applicable.
(d) "Return of Capital" shall mean proceeds returned by the Company
which reduce the Unreturned Capital Contribution of each Class A Member, upon complete
payment of which (where the Unretumed Capital Contribution equals 0) the Class A Member shall
cease to receive the Class A Preferred Return.
5.2.2 Distributions of Cash from Sale or Other Disposition.
(a) First, to the Class A Members until each Class A Member's
Unreturned Capital Contribution has been reduced to zero (0), if any;
(b) Second, to the Class A Members (to be shared among them in
proportion to their respective Unpaid Class A Preferred Return), until each Member's Unpaid
Class A Preferred Return for any year (including the current year) that has gone unpaid has been
returned, if any; and
7
#929570
5.3 Distribution Upon Termination of the Company. Upon the final termination of the
Company, the Manager shall take account of all of the Company's assets and liabilities. The assets
may be liquidated as promptly as is consistent with obtaining a reasonable value therefor, and the
proceeds therefrom together with assets distributed in kind, to the extent thereof, shall be applied
and distributed in the following order:
5.3.1 To the payment of debts and liabilities of the Company which are then due
(other than any loans or advances that may have been made by any of the Members to the
Company) and the expenses of liquidation.
5.3.2 To the setting up of any reserves which the Manager may deem reasonably
necessary for any contingent or unforeseen liabilities or obligations or debts or liabilities not yet
payable by the Company which have arisen out of or in connection with the Company. Such
reserves may be held for disbursement by the Manager or delivered to an independent escrow
holder, designated by the Manager, to be held by such escrow holder for the purpose of disbursing
such reserves in payment of any of the aforementioned contingencies, debts or liabilities, and, at
the expiration of such period as the Manager shall deem advisable, to distribute the balance
thereafter remaining in the manner hereinafter provided.
5.3.3 To the repayment of any unpaid loans or advances which are then due and
which have been made by any of the Members to the Company, including any accrued but unpaid
interest thereon, in proportion to the loan amounts, up to the full amounts thereof, and then any
other loans or advances, including any accrued but unpaid interest thereon, in proportion to the
loan amounts, up to the full amounts thereof.
5.3.4 Thereafter, in accordance with Section 5.2., the distribution described in
this Section 5.3.4 shall occur by the end of the taxable year of Company dissolution, or, if later,
within ninety (90) days after the date of such dissolution.
5.4 Valuation and Distribution of Non -Cash Distributions. To the extent that non -cash
assets shall be distributed in kind pursuant to this Section 5.4, the Fair Market Value of such assets
shall first be determined, pursuant to Section 16.15, and the distribution of such assets shall be
made in accordance with such valuation after first allocating to the capital accounts of the Members
the amount of Gain or Net Loss which would have been allocated to said capital accounts if the
non -cash asset had been sold at such Fair Market Value rather than distributed in kind. Any non -
cash assets (including, but not limited to, promissory notes) received by the Company in
connection with a sale or other disposition may be distributed in kind to the Members or to a
collection account with the proceeds to be distributed in accordance with the terms of this Section
5.4 as received. Any such distribution of non -cash assets shall be at the discretion of the Manager.
The Manager in its absolute discretion may determine the relative proportions of cash and non -
cash assets distributed to each Member. Any non -cash assets distributed shall be subject to any
then -existing agreements or restrictions relating thereto.
5.5 Discretion in Making Distributions. The Company shall distribute, subject to the
discretion of the Manager, cash and/or assets in kind from time -to -time, without regard to whether
or not funds represent income for the purpose of determining tax liability, or net profit for the
8
#92957v]
purpose of Company accounting. Such distributions shall be made in the discretion of the Manager
in accordance with good and sound business practices.
5.6 Limitation on Other Distributions. No distribution shall be made unless such
distribution is permitted under the Act and any agreements or contracts binding the Company. No
Member shall be entitled to receive distributions other than as specifically provided by this
Agreement.
5.7 Tax Distribution. Notwithstanding any other provision of this Agreement, the
Manager, in its sole discretion, may cause the Company to make distributions of cash to each
Member on or before April 15 of any year of amounts which are not less than the result obtained
by multiplying the Tax Rate (as hereinafter defined) by the estimated taxable Net Income and Gain
of the Company allocable to such Member under Exhibit A for the previous year. The "Tax Rate"
shall be thirty-five percent (35%). Any amounts distributed under this Section 5.7 shall be taken
into account in computing subsequent distributions under Section 5.1 or Section 5.2, so that the
total amount distributed under Section 5.1, Section 5.2 and this Section 5.7 shall be the amount
which would have been distributed under Section 5.1 and Section 5.2 if the special distribution
under this Section 5.7 had not occurred.
Section 6. Allocations Of Net Income, Net Loss And Gain and Depreciation. Allocations
of Net Loss and Gain of the Company shall be governed by Exhibit A. The Net Profits or Net
Losses for each Fiscal Year of the Company shall be allocated to the Members in such a manner
that, at the end of such Fiscal Year, the Adjusted Capital Account balance of each Member shall,
to the extent possible, equal the amount that would have been distributed to such Member pursuant
to a Hypothetical Liquidation as of the end of the last day of such Fiscal Year. For this purpose, a
"Hypothetical Liquidation" means that all assets of the Company are disposed of in a taxable
disposition for the Book Value of such assets, the debts of the Company are paid, and the remaining
amounts are distributed to the Members pursuant to Section 5. Allocations of depreciation shall be
split proportionately between Class A Members, pro rata,, and the Class B Member, subject to the
limitations set forth in Section 4.1.1 regarding Class A-2 Units.
Section 7. Tax Elections. Tax elections of the Company shall be governed by Exhibit A.
Section 8. Admission Of Additional Members.
No additional Members shall be admitted to the Company without the prior written consent
of the Manager.
Section 9. Manazement.
9.1 In General. All decisions with respect to the business and affairs of the Company
shall be made by the Manager. The Members shall not participate in the management of the
Company. Except as otherwise provided in this Agreement, the Manager shall have full power
and authority, subject in all cases to the requirements of applicable law, to manage the business
and affairs of the Company for the purposes herein stated, to make all decisions affecting such
business and affairs and to do all things that the Manager deems necessary or desirable in
connection with the conduct of the business and affairs of the Company, including, without
limitation, the full power to (or to vote the interest of the Company to):
0
#929570
9.1.1 manage, operate and control the daily operations of the business of the
Company:
9.1.2 finance, refinance, encumber, market, sell, transfer, assign, convey,
exchange, lease, sublease, mortgage or otherwise dispose of or deal with the Property;
9.1.3 borrow money and incur indebtedness from third parties (whether affiliated
or unaffiliated with the Manager) for the purposes of the Company, and to cause to be executed
and delivered therefore in the Company name promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, guarantees, hypothecations or other evidence of debt and securities thereof,
including but not limited to any renewal, extension, modification or other refinancing of loans;
9.1.4 in furtherance of the Company's purposes and business, borrow money,
whether on a secured or unsecured basis but without personal recourse to any Member;
9.1.5 perform, or cause to be performed, all of the Company's obligations under
any agreement to which the Company is a party, including this Agreement;
9.1.6 cause the Company to enter into contracts and agreements with architects,
contractors, construction companies and others in connection with the development, construction,
rehabilitation, renovation and repair of the Property;
9.1.7 cause the Company to enter into contracts and agreements with a property
manager to manage the Property;
9.1.8 lease the residential units and any commercial space in the Property upon
such terms and conditions as the Manager deems appropriate;
9.1.9 pay any and all reasonable fees and make any and all reasonable expenditures
that it, in its sole discretion, deems necessary or appropriate in connection with the organization
of the Company, the management of the affairs of the Company, and the carrying out of its
obligations and responsibilities under this Agreement;
9.1.10 establish reserves consistent with the purpose of this Agreement;
9.1.11 appoint such officers of the Company, at the expense of the Company, as
the Manager, in its discretion, deems appropriate and to remove any such officers and, unless the
Manager decides otherwise, if the title is one commonly used for officers of a business corporation,
the assignment of such title shall constitute the delegation of the authority and duties that are
normally associated with that office, subject to any specific delegation of authority and duties
made by the Manager;
9.1.12 retain, engage or employ such persons, firms or corporations (whether or not
the Manager or any Member is affiliated with any such person, firm or corporation), at the expense
of the Company, as employees, consultants, accountants, attorneys, brokers, agents, managers,
insurers, title insurers, contractors and other professionals as the Manager, in its sole discretion,
shall deem advisable in the ordinary course of business of the Company;
10
#92957v1
9.1.13 fix the salaries or other compensation, if any, of the Persons or entities
engaged by the Manager in accordance with this Section 9.1;
9.1.14 purchase and maintain, at Company expense, liability and other insurance to
protect the Manager and the Company's assets from third party claims; provided that, in its
judgment, such insurance is appropriate, available and reasonably priced;
9.1.15 pay, extend, renew, modify, adjust, submit to arbitration, prosecute, defend,
or settle, upon such terms as it may deem sufficient, any obligation, suit, liability, cause of action,
or claim, including tax audits, either in favor of or against the Company;
9.1.16 establish and maintain accounts with financial institutions, including federal
or state banks, brokerage firms, trust companies, savings and loan institutions, or money market
funds, in such amounts as the Manager may deem necessary;
9.1.17 cause to be paid any and all taxes, charges, and assessments that may be
levied, assessed, or imposed upon any of the assets of the Company, unless the same are contested
by the Manager;
9.1.18 pursuant to and subject to the terms of Section 12, to admit an assignee of
Units as a Substituted Member;
9.1.19 admit additional Members;
9.1.20 maintain the Company's capitalization table to reflect the admission or
withdrawal of any Member, any change in any Member's Capital Contributions, or any changes
in any Member's address;
9.1.21 determine the amount and timing of distributions to the Members in
accordance with Section 5 hereof and to elect to forego distributions and to invest or reinvest
Company assets in the furtherance of the purposes of the Company;
9.1.22 cause the Company to borrow money from and loan money to the Members,
or borrow monies from third parties for and on behalf of the Company upon such terms and
conditions as the Manager may deem advisable and proper; and
9.1.23 make, execute, assign, acknowledge, file, and deliver any and all documents
or instruments and amendments thereto, and to take any and all other actions, that the Manager
may deem appropriate to carry out the purposes and business of the Company as set forth herein,
on such terms and conditions as it deems proper; and
9.1.24 do any act that is necessary or desirable to carry out any of the foregoing.
9.2 Qualification and Removal of Manager_
9.2.1 Qualification of Manager. The Manager need not be a Member of the
Company. The Manager need not be a natural Person.
11
#929570
9.2.2 Removal of Manager. The Manager may be removed and replaced only
upon a final adjudication by a court of competent jurisdiction that the Manager has committed a
material breach of its obligations as the Manager under this Agreement or has engaged in any act
of willful misconduct or fraud.
9.2.3 Resignation of Manager. The Manager may resign as the Manager at any
time upon written Notice to the Company, without prejudice to the rights, if any, of the Company
under any contract to which the Manager is a party. If such Manager is also a Member of the
Company, such resignation shall not affect the Manager's rights as member. Upon the resignation
of a Manager, the Class B Members shall elect a replacement Manager.
9.2.4 Fiduciary Duties Owed by Manager. A Manager shall owe fiduciary
duties to the Company and the Members to the extent and in the manner prescribed in the Act and
under applicable case law. Otherwise, no Manager of the Company shall be personally liable,
responsible or accountable in damages or otherwise to the Company or to any other Person because
of any act or failure to act, except to the extent the Person's actions constitute willful misconduct
or fraud.
9.3 Time Devoted to Business. The Manager shall devote such time to the business
affairs of the Company as the Manager shall deem to be reasonably required for its welfare and
success.
9.4 Power to Employ and Contract With Affiliated Entities. The Manager shall have
the right to employ or contract with a Member or entities in which any Member has an interest
without the prior consent of the Members.
9.5 Company Expenses.
9.5.1 Reimbursable Expenses. All Company expenses shall be billed directly
to and paid by the Company. The Manager may be reimbursed for the following Company
expenses: (a) the actual cost to the Manager and its Affiliates of goods and materials used for or
by the Company and obtained from unaffiliated parties; and (b) reasonable expenses incurred in
connection with rendering administrative services necessary to the prudent operation of the
Company, including but not limited to reasonable travel and entertainment expenses.
9.5.2 Non -Reimbursable Expenses. The Manager shall not be reimbursed by
the Company for expenses which are unrelated to the business of the Company.
9.6 Competing Ventures. Any of the Members or the Manager may freely engage in
or possess an interest in other business ventures of every nature and description, independently or
with others, including but not limited to, the ownership of assets of the same type and nature as
the assets of the Company, and neither the Company nor any of the Members shall have any right
by virtue of this Agreement in and to such independent ventures or to the income or profits derived
therefrom.
9.7 Manager May Also Be a Member. A Manager may purchase and hold Units as a
Member and shall be treated as a Member as to any such Units held by it as a Member. Upon the
12
N92957vl
Manager ceasing to be a Manager for whatever reason, such Manager shall continue to be a
Member with respect to its Unit(s) and the Company.
9.8 Officers. The Company may, in the discretion of the Manager, have officers, but
is not required to do so. The Company may also have, in the discretion of the Manager, one or
more vice presidents, a financial officer, and such other officers as may be appointed in accordance
with the provisions of this section. Any number of offices may be held by the same Person. An
officer need not be a Member. Each officer appointed shall have the duties as prescribed from
time -to -time by the Manager. The officers of the Company shall be chosen by the Manager, in its
discretion, and each shall hold his office until he or she shall resign or shall be removed by the
Manager, in its discretion.
9.9 Compensation of the Manager.
9.9.1 The Manager shall be entitled to (i) an acquisition fee of two percent (2.0%)
of the purchase price paid upon the closing of the Property.
9.9.2 The compensation in this Section 9.9 is in addition to any distribution the
Manager is entitled to as Manager or by virtue of the Manager's Class B Units as established in
Section 5 above, which shall be made to Manager prior to any payment for Preferred Return. The
Manager and its key principals may enter into a confidential agreement to determine how the
compensation identified in this Section 9.9 will be disbursed and distributed among them.
Section 10. Liability and Indemnification.
10.1 Limitation on Liabili
10.1.1 Covered Persons. As used herein, the term "Covered Person" shall mean
(i) each Member, (ii) the Manager, (iii) each officer, director, stockholder, partner, member,
Affiliate, employee, agent or representative of each Member, and each of their Affiliates; and (iv)
each Officer, employee, agent or representative of the Company.
10.1.2 Standard of Care. No Covered Person shall be liable to the Company or
any other Covered Person for any loss, liability, damage or claim incurred by reason of any action
taken or omitted to be taken by such Covered Person in good faith reliance on the provisions of
this Agreement and in a manner reasonably believed by them to be within the scope of the authority
conferred upon them by this Agreement and in the best interests of the Company, so long as such
action or omission does not constitute fraud, gross negligence, willful misconduct or a material
breach of this Agreement by such Covered Person or is not made in knowing violation of the
provisions of this Agreement.
10.1.3 Good Faith Reliance. A Covered Person shall be fully protected in relying
in good faith upon the records of the Company and upon such information, opinions, reports or
statements (including financial statements and information, opinions, reports or statements as to
the value or amount of the assets, liabilities, Net Income or Net Losses of the Company or any
facts pertinent to the existence and amount of assets from which distributions might properly be
paid) of the following Persons or groups: (i) another Member; (ii) one or more Officers or
employees of the Company; (iii) any attorney, independent accountant, appraiser or other expert
13
#92957v]
or professional employed or engaged by or on behalf of the Company; or (iv) any other Person
selected in good faith by or on behalf of the Company, in each case as to matters that such relying
Person reasonably believes to be within such other Person's professional or expert competence.
10.1.4 Limitation of Liability. This Agreement is not intended to, and does not,
create or impose any fiduciary duty on any Covered Person. Furthermore, each of the Members
and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be
implied by Applicable Law, and in doing so, acknowledges and agrees that the duties and
obligation of each Covered Person to each other and to the Company are only as expressly set forth
in this Agreement and any other written agreement among the parties. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Members to replace such other duties and liabilities
of such Covered Person.
10.2 Indemnification. The Company shall indemnify and hold harmless each Covered
Person, from and against any claim, loss, liability or damage (including attorneys' fees incurred
by any of them in connection with the defense of any action based on any such alleged act or
omission, which attorneys' fees may be paid, as incurred, from Company funds) incurred by reason
of an act performed, or omitted to be performed, by any of them in good faith on behalf of the
Company and in a manner reasonably believed by them to be within the scope of the authority
conferred upon them by this Agreement and in the best interests of the Company, provided that
such indemnification is not prohibited by law or the act or omission does not amount to gross
negligence or willful misconduct. All judgments against the Company or a Covered Person,
whereby the Covered Person is entitled to indemnification as herein provided, shall first be
satisfied from Company assets.
Section 11. Membership; Voting Rights; Meetings.
11.1 Membership.
11.1.1 Members. The name, present mailing address and taxpayer identification
number of each Member will be kept with the records of the Company maintained in accordance
with this Agreement. Unless named in this Agreement, or unless admitted to the Company as a
substituted or new Member as provided herein, no Person shall be considered a Member, and the
Company need deal only with the Members so named and so admitted. The Company shall not
be required to deal with any other Person by reason of any Transfer or by reason of the dissolution,
death or Bankruptcy of a Member, except as otherwise provided in this Agreement.
11.1.2 Membership Interests. Equity ownership in the Company shall be
represented by Membership Interests, which will be issued in the form of Units.
11.1.3 No Benefit to Third Parties. The provisions of this Agreement are not
intended to be for the benefit of any creditor or other person (other than a Member in its capacity
as a Member) to whom any debts, liabilities or obligations are owed by (or who otherwise has any
claim against) the Company or any of the Members; and no such creditor or other person shall
obtain any right under any such provision against the Company or any of the Members by reason
of any debt, liability or obligation (or otherwise).
14
#92957v1
11.1.4 Confidentialiri. By virtue of being a Member of the Company, a Member
may, from time to time, receive Confidential Information (as hereinafter defined) about the
Company or its Affiliates. Each Member agrees to take all reasonable steps to prevent disclosure
of Confidential Information and not use any Confidential Information except as may be necessary
for the limited purposes set forth in this Agreement; provided that no provision of this Agreement
shall be construed to preclude such disclosure of Confidential Information as may be required by
court order. In the case that Confidential Information shall be required by court order, the affected
Member shall give written notice to the Manager prior to making such disclosure. For purposes
of this Agreement, "Confidential Information" means all information pertaining to the business,
products, services or technology of the Company or its Affiliates, or of any company or entity or
any asset thereof that is a potential investment of the Company, or a supplier, vendor or business
partner of the Company; provided that Confidential Information shall not include any information
that (1) is in the public domain at the time of disclosure or enters the public domain following
disclosure through no fault of the Member, (2) the Member can demonstrate as already in its
possession prior to disclosure hereunder or is subsequently disclosed to the Member with no
obligation of confidentiality by a third party having the right to disclose it or (3) is independently
developed by the Member without reference to the Company's or its Affiliates' Confidential
Information.
11.2 Voting. Except as otherwise stated in this Agreement or required under the Act,
Members (other than any Member serving as the Manager) shall not take any part in the day-to-
day management or conduct of the business of the Company, nor shall such Members have any
right or authority to act for or bind the Company. Except as otherwise provided in the Act, the
Certificate or this Agreement, whenever any action is to be taken by vote of the Members, it shall
be authorized upon receiving the affirmative vote of the Members holding a majority of the
outstanding Units. Notwithstanding the foregoing, except for those matters for which Member
consent is expressly required by this Agreement, the Class A Members shall have no voting,
approval or consent rights.
11.3 Member Meetings. The Manager may call a meeting of the Members. The
Manager shall provide the Members with a Notice specifying the date, time and place of such
meeting. Members holding a majority of the outstanding Units, represented in person, via
telephone or similar communications equipment by means of which all persons participating in
the meeting can hear each other, shall constitute a quorum at any meeting of Members. In the
event that Members collectively holding a majority of the outstanding Units are not in attendance
within one (1) hour following the time for which the meeting was called, the meeting shall be
adjourned to the day that is five (5) Business Days following the day on which the meeting was to
be held. The adjourned meeting (the "Adjourned Meeting") shall be held at the time on such day
and place at which the meeting was to be held and shall have the same agenda as the original
meeting. Each Member shall be notified by Notice of the date, time and place of each adjourned
meeting. Any action permitted or required by the Act or this Agreement may be taken without a
meeting if a consent in writing, setting forth the action to be taken, is signed by not less than the
minimum number of Members that would be necessary to take such action at a meeting at which
all Members were present and voted. Such consent shall have the same force and effect as a vote
at a meeting and may be stated as such in any document or instrument filed with the Secretary of
State of the State of Delaware, and the execution of such consent shall constitute attendance or
presence in person at a meeting of the Members. Prompt notice of the taking of any action without
15
#92957vl
a meeting by less than unanimous written consent will be given to those Members who did not
consent in writing to such action.
Section 12. Additional Members: "Transfer of Interests of Members.
12.1 Additional Members. No Members shall be admitted to the Company without the
prior written consent of the Manager, which consent may be granted or withheld in the absolute
discretion of the Manager.
12.2 Assignment by Members.
12.2.1 Unauthorized Assignments Void. The Class A Units of a Member may be
assigned only as permitted by the provisions of this Section 12 and, except as so permitted, no
Member shall assign, sell, dispose of, pledge, give or otherwise transfer (hereinafter referred to
collectively as "assign") such Member's Class A Units or any part thereof or any interest therein
or rights thereof, whether voluntarily, by operation of law, at judicial sale or otherwise, to any
Person. Any attempted assignment prohibited by the provisions of this Section 12 shall be null
and void and of no force or effect.
12.2.2 Conditions to Assignment Generally. In addition to the other requirements
of this Agreement, no Member shall be entitled to assign all or any part of such Member's Class
A Units unless all of the following conditions have been met: (a) if required by the Manager, the
Company shall (at its option) have received an attorney's written opinion, in form and substance
reasonably satisfactory to the Company, specifying the nature and circumstances of the proposed
assignment, and based on such facts stating that the proposed assignment will not be in violation
of any of the registration provisions of the Securities Act of 1933, as amended, or any applicable
state securities laws; (b) the Company shall have received from the transferee (and the transferee's
spouse if such spouse will receive a community property interest in the Membership Interest) a
counterpart signature page to, or a written consent to be bound by all of the terms and conditions
of, this Agreement; (c) the assignment will not result in the loss of any license or regulatory
approval or exemption that has been obtained by the Company, or result in a default under or
breach or termination of any loan agreement or other contract to which the Company is a party;
and (d) the Company is reimbursed upon request for its reasonable expenses in connection with
the assignment.
12.2.3 Permitted Transfers. Subject to the requirements of Section 12.2.2, a
Member may assign all or a portion of the economic rights of his Units to a Permitted Transferee
(a "Permitted Transfer"), provided that such Permitted Transferee shall only be entitled to exercise
the assigning Member's other rights under this Agreement, such as the right to vote, upon
execution and delivery of a counterpart signature page to this Agreement and with the approval of
the Manager. For purposes of this Agreement, a "Permitted Transferee" of a Member means (i)
such Member's spouse, siblings, (including adoptive relationships and stepchildren) and the
spouses of each such natural persons (collectively, "Family Members"); (ii) a trust under which
the distribution of Units may be made only to such Member and/or any Family Member of such
Member; (iii) a charitable remainder trust, the income from which will be paid to such Member
during his life, (iv) a corporation, partnership or limited liability company, the stockholders,
partners or members of which are only such Member and/or Family Members of such Member, or
16
#929570
(v) by will or by the laws of intestate succession, to such Member's executors, administrators,
testamentary trustees, legatees or beneficiaries. Any Permitted Transferee must be an "accredited
investor," as defined in Regulation D promulgated under the Securities Act, and the Company has
the right to require an opinion of counsel stating that such transfer is permitted under applicable
securities laws. Any Permitted Transfer of all or any portion of a Member's Membership Interest
shall be effective no earlier than the date following the date upon which the requirements of this
Agreement have been met and Notice of such Permitted Transfer has been provided to the
Company.
12.2.4 Assignment with Consent. Other than Permitted Transfers, no Member
shall assign all or any portion of such Member's Units to any Person without the prior written
consent of the Manager.
12.2.5 Company Right of First Refusal. In the event an assignment of Class A
Units, other than as authorized under Sections 12.2.3 or 12.2.4, is attempted, whether by sale,
exchange, gift, bequest, devise, pledge, divorce, marital settlement, court proceeding, Bankruptcy,
operation of law or otherwise, the Company shall have the option, but not the obligation, in the
discretion of the Manager, to purchase such Class A Units at the price determined under Section
12.2.6. Such purchase price shall be paid as follows: ten percent (10.0%) concurrently with the
purchase of the Class A Units and the remaining ninety percent (90.0%) in equal quarterly
installments over a period of two (2) years from the date of purchase, provided, however, that the
Company may prepay such price at any time. Such option may be exercised by the Company at
any time within sixty (60) days after the date the Company shall have received written notice or
actual knowledge that such an event shall have occurred. While the Company's option is
exercisable, the transferee thereof shall not be entitled to vote such Class A Units or otherwise
exercise any of the rights of a registered holder thereof until the time shall have expired (i) for the
exercise of such option or (ii) if such option shall be exercised, for the completion of settlement of
such purchase.
12.2.6 Valuation. The redemption price paid for Units under Section 12.2.5, shall
be the lower of (a) the fair market value of the Company's assets determined in accordance with
Section 16.15, with the Company's accountant determining the transferor Member's capital
account balance which would exist if the Company's assets were sold in a taxable disposition for
a price equal to such fair market value, and (b) any Unreturned Capital Contribution related to
such Units. The per Unit purchase price shall be the amount so determined, divided by the total
Units owned by the transferor Member.
12.3 Substituted Member. No Assignee of any Member's Class A Units shall be entitled
to become a Substituted Member unless the Manager shall, in its absolute discretion, consent
thereto in writing, and unless the Assignee shall consent in writing, in a form satisfactory to the
Manager, to be bound by the terms of this Agreement in the place and stead of the assigning
Member. Unless and until an Assignee has become a Substituted Member, such Assignee shall be
deemed to be an Assignee only of the right to share in the distributions and allocations of the
Company, and shall have no other rights (including, without limitation, voting rights) hereunder.
12.4 Payment of Expenses. Neither the Company, nor any Member, shall be bound by
an otherwise valid assignment, and no Assignee of any Member's Units shall be entitled to become
17
#929570
a Substituted Member, unless the Company is reimbursed for all reasonable expenses, including
legal fees, associated with such assignment and substitution.
12.5 Substitution Instrurnent. Subject to full compliance with the terms and provisions
of this Agreement, any instrument reflecting the assignment of the Company interest of a Member
and the admission of the transferee as a Substituted Member of the Company need only be executed
and acknowledged by a Manager, the transferor and the transferee.
12.6 No Dissolution Upon Assi nmem. An assignment of Units by a Member shall
neither dissolve nor terminate the Company.
12.7 Withdrawal of Member; Bankruptcy. No Member shall be entitled to withdraw or
retire from the Company nor to demand the right to the return of capital until dissolution of the
Company; provided, however, a Member shall cease to be a Member upon the Bankruptcy of the
Member. Upon Bankruptcy, such Member shall be an Assignee only unless its Units are purchased
under Section 12.2.5.
12.8 Drag Along Right. Notwithstanding any other provision of this Agreement to the
contrary, (i) the Manager or (ii) the holders of a majority of the Units (for purposes of this Section
12.8, the "Selling Members"), with the prior written consent of the Manager, shall have the right
(the "Drag Along Right"), exercisable by notice (the "Notice of Sale") to the other Members
("Dragged Members"), to require the Dragged Members to sell all of the Membership Interests
owned by the Dragged Members to the purchaser (who shall be bona fide and named in the Notice
of Sale, together with the terms and conditions of sale, which shall be arm's length), such sale to
take place contemporaneously with, and on the same terms and conditions of, the sale of the
Membership Interests by the Selling Members. The proceeds of a sale made under this Section
12.8 shall be allocated among the Members in a manner consistent with the manner in which
distributions are made under Section 5.2.
Section 13. Amendment and Power of Attorney.
13.1 Amendment by Members. This Agreement may be amended, modified and
changed with the vote of the Members holding at least eighty percent (80.0%) of the Units and the
written consent of the Manager. No amendment, modification or change shall effectively reduce
the number of Unit(s) held by any particular Member unless such Member has consented in writing
to such amendment, modification or change that reduces the Unit(s) held by such Member.
13.2 Amendment by Manager. Subject to Section 13.1, the Manager may amend this
Agreement from time to time without the consent, approval or other authorization of, or notice to,
any of the Members if, in the reasonable opinion of the Manager, the amendment does not have a
material adverse effect on any Member. For the avoidance of doubt, any amendment to the
Company's capitalization table to reflect the admission or withdrawal of any Member, or the
change in any Member's Capital Contributions, or any changes in the Member's addresses, all as
contemplated by this Agreement shall not be considered to have a material adverse effect on any
Member.
18
#929570
13.3 Power of Attorney.
13.3.1 Each Member, by its execution hereof, jointly and severally, makes,
constitutes and appoints the Manager, or any Person which becomes a successor to the Manager,
as its true and lawful agent and attorney -in -fact, with full power of substitution, in its name, place
and stead to make, execute, sign, acknowledge, swear to, record and file, on its behalf (i) the
original Certificate of Formation and all amendments thereto required or permitted by law or the
provisions of this Agreement; (ii) all certificates and other instruments deemed advisable by the
Manager to permit the Company to become or to continue as a Membership or Company wherein
the Members have limited liability in any jurisdiction where the Company may be doing business;
(iii) all instruments that effect a change or modification of the Company in accordance with this
Agreement, including without limitation the substitution of Assignees as Substituted Members
pursuant to Section 12; (iv) all conveyances and other instruments deemed advisable by the
Manager to effect the dissolution and termination of the Company; (v) all fictitious or assumed
name certificates required or permitted to be filed on behalf of the Company; and (vi) all other
instruments which may be required or permitted by law to be filed on behalf of the Company.
13.3.2 The foregoing power of attorney:
(a) is coupled with an interest and shall be irrevocable and survive the
death or incapacity of each Member;
(b) may be exercised either by signing separately as attorney -in -fact for
each Member or, after listing all of the Members executing an instrument, by a single signature of
the Person acting as attorney -in -fact for all of them; and
(c) shall survive the delivery of an assignment by a Member of the
whole or any portion of its interest; except that, where the Assignee of the whole of such Member's
interest has been approved by the Manager for admission to the Company as a Substituted
Member, the power -of -attorney of the assignor shall survive the delivery of such assignment for
the sole purpose of enabling the Manager to execute, acknowledge and file any instrument
necessary to effect such substitution.
13.4 Additional Instruments. Each Member shall execute and deliver to the Manager
within five (5) days after receipt of the Manager's request therefore such further designations,
powers of attorney and other instruments as the Manager deems necessary to effectuate the
purposes of this Section 13.
Section 14. Records, Reports an!I Bank ;kccomits.
14.1 Records. The Company shall maintain the following records at its principal
executive office:
14.1.1 A current list of the full name and last known business or residence address
of each Member and Manager together with the capital contributions and Units of each Member.
19
#9z9s7vl
14.1.2 A copy of the Certificate and all amendments thereto, together with
executed copies of any powers of attorney pursuant to which the Certificate or any such
amendment has been executed.
14.1.3 Copies of the Company's federal, state, and local income tax or information
returns and reports, if any, for the six (6) most recent taxable years.
14.1.4 Copies of the original of this Agreement and all amendments thereto.
14.1.5 The Company's books and records for at least the current and past three (3)
fiscal years.
Upon the request of any Member, the Manager shall promptly deliver to the
Member, at the expense of the Company, a copy of any of the information required to be
maintained by the Company under subdivisions 14.1.2, 14.1.3, 14.1.4, or 14.1.5 of Section 14.1 of
this Agreement. Any such information furnished by the Company shall have the personal
information of the other Members redacted. Additionally, Any Member shall have the right up
reasonable request to obtain from the Manager a copy of the Company's federal, state, and local
income tax or information returns for each year promptly after such returns become available.
Notwithstanding any of the foregoing, such records presented to the requesting Member have the
personal information of the other Members redacted.
14.2 Amendments. The Manager shall promptly furnish to any other Member a copy of
any amendment to this Agreement executed by the Manager pursuant to a power of attorney from
the other Members.
14.3 Tax Information. The Manager shall send to each of the Members within ninety
(90) days after the end of each taxable year such information as is necessary to complete federal
and state income tax or information returns, and a copy of the Company's federal, state, and local
income tax or information returns for the year.
Section 15. Dissolution and Termination of the Company.
15.1 Events of Dissolution. The Company shall be dissolved upon the first to occur of
the following events:
15.1.1 The sale of all or substantially all of the assets of the Company;
15.1.2 The election by the Members holding at least a majority of the Units, with
the consent of the Manager; or
15.1.3 The entry of a decree of judicial dissolution under the Act.
15.2 Procedure on Death, Bankruptcy, Dissolution, or Incompetency of a Member. In
the event any Member shall die, suffer Bankruptcy (as defined in Section 17), be dissolved or
become incompetent with the result that such Member cannot continue to exercise dominion over
its Units, the Company shall not be dissolved. In any such event, the personal representative,
executor, administrator, trustee, guardian, conservator or other successor in interest of the Member
20
#92957v]
who has been affected by such event, shall be treated as an Assignee of the Company interest of
said affected Member, and upon the winding up and closing of an estate for which the successor
has been acting, it may transfer and assign the Member's Units, subject to Section 12 hereof, to
the Person or Persons entitled thereto, who shall likewise be deemed Assignee(s) of said Units as
to the Units or undivided portions thereof distributed to such Assignee(s), unless and until admitted
as a Substituted Member or Members as provided in this Agreement.
15.3 l.iyi1idZ1tiO11. Upon dissolution of the Company, the Members shall promptly
liquidate and wind up the Company in an orderly fashion and distribute the net proceeds of
liquidation on dissolution and termination pursuant to Section 5.2.1 hereof. A Member may be
the liquidator by the vote of Members holding at least a majority of the Units. In selling the
Company's assets, the liquidator shall take all reasonable steps to locate potential purchasers in
order to accomplish the sale at the highest attainable price. Nothing herein shall prevent any
Member(s) from, directly or indirectly, purchasing the Company's assets from the liquidator,
provided that the offer of such Member(s) is equal to or higher than the highest attainable price
from a Person who is not an Affiliate of the Company. The expenses of the liquidator shall be
deemed expenses of the Company.
15.4 Time for Liquidation. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the discharge of liabilities to creditors so as to enable
the Members to minimize the normal losses attendant upon a liquidation.
15.5 No Liability for Return of Capital. No Member or Manager shall be personally
liable for the return of all or any part of the contribution of any other Member to the Company.
Any such return shall be made solely from the Company assets.
Section 16. General Provisions.
16.1 Survival of Ri g1� its. This Agreement shall be binding upon and inure to the benefit
of the Members and their respective heirs, legatees, legal representatives, successors, and assigns,
subject to the restrictions in Section 12.2.
16.2 Construction. The language in all parts of this Agreement shall be construed
according to its fair meaning and not strictly for or against any of the Members hereto.
16.3 Section Headings. The captions of the sections of this Agreement are for
convenience only.
16.4 Agreement in Counterparts. This Agreement, or any amendment hereto, may be
executed in multiple counterparts, each of which shall be deemed an original Agreement, and all
of which shall constitute one (1) Agreement by each of the Members, notwithstanding that all of
the Members are not signatories to the original or the same counterpart, to be effective as of the
day and year first above written.
16.5 Governing Law. This Agreement shall be construed according to the laws of the
State of Delaware.
16.6 Time. Time is of the essence with respect to this Agreement.
21
#9z957vl
16.7 Additional Documents. Each Member shall perform any further acts and execute
and deliver any documents which may be reasonably necessary to carry out the provisions of this
Agreement, including, but not limited to, providing acknowledgment before a Notary Public of
any signature heretofore or hereafter made by a Member.
16.8 Validity. Should any portion of this Agreement be declared invalid and
unenforceable, then such portion shall be deemed to be severable from this Agreement and shall
not affect the remainder hereof.
16.9 Pronouns. All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the Person, Persons, entity or
entities may require.
16.10 Descriptions. Anything referred to in this Agreement is expressly incorporated
herein by reference as if set forth in full, whether or not attached hereto.
16.11 Venue And Attorneys' Fees. In the event of any litigation concerning any
controversy, claim or dispute between the parties hereto, arising out of or relating to this agreement
or the breach hereof or the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorney's fees and costs incurred in connection
therewith or in the enforcement or collection of any judgment or award rendered therein. The
"prevaiIingparty" means the party determined by the court to have most nearly prevailed (even if
such party did not prevail in all matters), not necessarily the one in whose favor a judgment is
rendered. Further, in the event of any default by a party under this agreement, such defaulting
party shall pay all the expenses and attorneys' fees incurred by the other party in connection with
such default, whether or not any litigation is commenced. Each of the members hereby
acknowledges and agrees that the exclusive venue for any litigation concerning any provision of
this agreement shall be Georgetown, Texas.
16.12 Partition. The Members agree that the assets of the Company are not and will not
be suitable for partition. Accordingly, each of the Members hereby irrevocably waives any and
all rights that he or she may have, currently or in the future, to maintain any action for partition of
any of the assets of the Company.
16.13 Representative Capacity: Trusts. During any period that any Units are held as
assets of a living trust revocable by the trustees of such trust, such Units shall be treated as owned
by the deemed owner of such trust for income tax purposes, and any acts of the trustee of said
revocable living trust shall be deemed the acts of the deemed owner of such trust for income tax
purposes. The death of the deemed owner of a trust holding Units shall be the death of a Member
for the purposes of Section 15, and the trustee of such a trust shall be the successor for the purposes
of Section 15.
16.14 Joint Ownership. For all purposes hereunder in those cases where two or more
Persons are indicated as a Member, holding Units as joint tenants or community property, the
following shall apply:
16.14.1 To the extent required by law, such Persons shall each be considered as
Members hereunder, each shall be deemed to have contributed an equal amount of the capital
-22
#92957v1
contribution and to own an equal amount of such Units, and each shall be deemed to have an initial
capital interest consisting of an equal amount of the capital contribution as set forth opposite their
respective names.
16.14.2 For purpose of voting upon or consenting to any actions or matters, as
provided herein or by law, (i) if only one votes, such act binds all; (ii) if more than one votes, the
act of a majority so voting binds all; or (iii) if more than one votes, but the vote is evenly split on
any particular matter, each fraction may vote the Company interest proportionately.
16.14.3 Any notices given to either or any of such Persons shall, unless the
Company is otherwise advised in writing, be deemed notice to all such Persons.
16.15 Valuation of Non -Cash Assets. For purposes of this Agreement, the procedure for
valuing any non -cash assets shall, unless otherwise provided herein, be as follows:
16.15.1 Assets Other Than Marketable Securities. If the Members cannot
otherwise agree on the value of an asset, the Manager shall select a qualified appraiser who has
customarily been engaged in appraising assets similar to the asset in question for a period of not
less than five (5) years. Such valuation shall include a ten percent (10.0%) discount for costs of
sale. The valuation of the appraiser so selected shall be binding on all Members.
16.15.2 Marketable Securities. Any securities held by the Company which are
traded on an established market shall be valued according to the market price.
Section 17. Definitions.
Capitalized terms used herein and not otherwise defined shall have the following indicated
meanings:
17.1 "Affiliate" means, with respect to any Person, any other Person who, directly or
indirectly (including through one or more intermediaries), controls, is controlled by, or is under
common control with, such Person. For purposes of this definition, "control," when used with
respect to any specified Person, shall mean the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person, whether through ownership of voting
securities or partnership or other ownership interests, by contract or otherwise; and the terms
"controlling" and "controlled" shall have correlative meanings.
17.2 "Agreement" means this Limited Liability Company Agreement.
17.3 "Assignee" means a Person who has acquired all or part of the Units of a Member
but has not been admitted as a Substituted Member. An "Assignee" shall be entitled to the
distributions and allocations accompanying the Company interest but shall not have any voting
rights or entitled to any other rights of a Member hereunder.
17.4 "Bankruptcy" with respect to any Member shall be deemed to have occurred when
the Member:
17.4.1 Makes an assignment for the benefit of creditors;
23
#92957v1
17.4.2 Files a voluntary petition in bankruptcy;
17.4.3 Is adjudged a bankrupt or insolvent, or has entered against the Member an
order for relief, in any bankruptcy or insolvency proceeding;
17.4.4 Files a petition or answer seeking for the Member any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation;
17.4.5 Files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Member in any proceeding of this nature;
17.4.6 Seeks, consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the Member or of all or any substantial part of the Member's properties; or
17.4.7 120 days after the commencement of any proceeding against the Member
seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without the Member's consent or acquiescence of a trustee,
receiver or liquidator of the Member or of all or any substantial part of the Member's properties,
the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay,
the appointment is not vacated.
17.5 "Business Days" means any day other than Saturday, Sunday or any legal holiday
observed in the state of formation of the Company or the location of the Property.
17.6 "Capital Contribution" shall mean the cash or property contributed to the Company
by a Member pursuant to Code Section 721.
17.7 "Cash Available for Distribution" means Cash Flow less amounts set aside for
restoration or creation of reserves determined by the Manager, in its sole and absolute discretion,
to be necessary and desirable, including but not limited to reserves for debt service for a reasonable
period of time, taxes, insurance, increases in working capital and contingencies.
17.8 "Cash Flow" means cash funds provided from operations of the Company, without
deduction for depreciation or amortization expenses, but after deducting funds used to pay all other
expenses (including compensation set forth in Section 9.9), debt payments, capital improvements
and replacements.
17.9 "Cash From Refinancing" means the gross proceeds received by the Company upon
the refinancing of the Company assets (less all costs of such refinancing, including the payment
of all obligations refinanced in connection therewith), less amounts set aside for restoration or
creation of reserves determined by the Manager, in its sole and absolute discretion, to be necessary
and desirable, including but not limited to, reserves for debt service for a reasonable period of
time, taxes, insurance, increases in working capital and contingencies. This term shall not include
Cash Flow.
24
#92957v1
17.10 "Cash From Sale or Other Disposition" means the net proceeds received by the
Company upon the sale or other disposition of less than all or substantially all of the Company
assets, less amounts set aside for restoration or creation of reserves determined by the Manager, in
its sole and absolute discretion, to be necessary and desirable, including but not limited to, reserves
for debt service for a reasonable period of time, taxes, insurance, increases in working capital and
contingencies. This term shall not include Cash Flow.
17.11 "Class A Preferred Return" means, for each Class A Member, an amount equal to
a cumulative, non -compounded return of seven percent (7.0%) per annum on the amount of such
Class A Member's Unreturned Capital Contribution, as determined from time to time.
17.12 "Class A Member(s)" means the Member(s) holding Class A Units.
17.13 "Class A Units" means Units designated as nonvoting Class A Units of
Membership Interests issued pursuant to Section 4.1.1.
4.1.2.
17.14 "Class B Member(s)" means the Member(s) holding Class B Units.
17.15 "Class B Units" means the Class B Units issued to the Manager pursuant to Section
17.16 "Code" means the Internal Revenue Code of 1986, as amended.
17.17 "Company" refers to the limited liability company created under this Agreement.
17.18 "Default Interest Rate" means the lesser of. (i) the maximum rate allowed by law,
or (ii) the Prime Rate plus five percent (5%) per annum. The Default Interest Rate shall change
from time -to -time with changes in the Prime Rate.
17.19 "Fair Market Value" shall mean that term as defined in Regulations Section 1.704-
1(b)(2)(iv)(h).
17.20 "Majority" shall mean the vote of the Members holding more than fifty percent
(50.0%) of the Units held by all Members then having the right to vote.
17.21 "Member" means each Person designated on and executing the signature page of
this Agreement as a Member.
17.22 "Members" refers collectively to the Manager and to the Members, and reference
to a "Member" means any one of the Members.
17.23 "Membership Interest" shall mean the entire legal and equitable ownership interest
of a Member in the Company at any particular time, including (if and only if the same is provided
for hereunder) the right to participate in the management of the business and affairs of the
Company, including the right to vote on, consent to or otherwise participate in any decision or
action of or by the Members granted pursuant to the terms and provisions of this Agreement or the
Act.
25
#92957v1
17.24 "Net Income," "Net Loss," and "Gain" mean, respectively, the following amounts
as designated on the Company's informational tax return filed for federal income tax purposes, as
determined by the tax attorney(s) or accountant(s) employed by the Company: (i) ordinary income,
(ii) ordinary loss, plus net long-term capital loss, net short-term capital loss, and Section 1231 loss;
and (iii) net long-term capital gain, net short-term capital gain, and other net gain under Section
1231. In the event that property is reflected on the books of the Company (as maintained in
accordance with Regulations Section 1.704-1(b)(2)(iv)) at a book value that differs from the
adjusted tax basis of such property, Net Income, Gain and Net Loss (or item thereof) shall be
determined by reference to the book value of such property. Such allocation of book values shall
be made in accordance with Regulations Section 1.704-1(b)(2)(iv)(g).
17.25 "Notice" means any notice or other communication which satisfies the following
requirements:
17.25.1 The Notice must be in writing.
17.25.2 The Notice must be delivered personally, by prepaid first class mail, via
facsimile or by telegraph to the last known address furnished by the addressee.
17.25.3 In the case of any Member, said address shall be as reflected in this
Agreement unless the Member has given the Company Notice of a different address. If any Notice
addressed to a Member at the address of a Member appearing on the books of the Company is
returned to the Company by the United States Postal Service marked to indicate that the United
States Postal Service is unable to deliver the Notice to the Member at that address, all future
Notices shall be deemed to have been duly given without further mailing if they are available for
the Member at the principal executive office of the Company for a period of one year from the
date of the giving of the Notice to all other Members.
17.25.4 In the case of the Company, said address shall be the principal place of
business of the Company.
17.25.5 The Notice shall be deemed given upon the earlier of personal delivery,
date of mailing, date of faxing or date of telegraphing, as the case may be.
The Notice shall contain such information as is specifically required by the
provision of this Agreement under which such Notice is given.
17.26 "Persons" means any individual, Company, corporation, trust, limited liability
Company or other entity.
17.27 "Prime Rate" means the "prime rate" as published in The Wall Street Journal
(Eastern Edition) under its "Money Rates" column and specified as "[t]he base rate on corporate
loans at large U.S. commercial banks," or, if no longer published as such, the rate of interest
announced from time to time by Citicorp, N.A. (or its successors or assigns), as its prime rate, base
rate or reference rate. If The Wall Street Journal (Eastern Edition) publishes more than one "Prime
Rate" under its "Money Rates" column, then the Prime Rate shall be the average of such rates. If
The Wall Street Journal (Eastern Edition) is not published on a date when Prime Rate is to be
26
#929570
determined, then Prime Rate shall be the Prime Rate published on the date which first precedes
the date on which Prime Rate is to be determined.
17.28 "Pro rata" when used with respect to the Members, or some of them (if the proration
is not otherwise specifically identified by a percentage), means (as to an item or amount to be
contributed or to be allocated to them or shared by them, or as to a vote by them), the proportion
that the number of Units held by each Member bears to the total of all outstanding Units held by
all Members (or those Members to whom reference is made).
17.29 "Property" means the 10.001 acres of real property located at 3601 Shell Road,
Georgetown, TX 78628.
17.30 "Regulations" means U.S. Treasury Regulations.
17.31 "Substituted Member" means an Assignee who has obtained the written consent of
the Manager pursuant to Section 12.3 hereof to become a Member. A "Substituted Member" shall
have all the distribution, allocation, voting and other rights and obligations of a Member hereunder.
17.32 "Units" means the Class A Units and the Class B Units and are a means of
evidencing and determining the Members' respective rights to share in the distributions and
allocations of the Company and to vote on certain matters concerning the Company as provided in
this Agreement.
17.33 "Unpaid Class A Preferred Return" means, with respect to any Class A Member as
of any time, the excess (if any) of (i) the cumulative amount of such Member's Class A Preferred
Return accrued through such date over (ii) the aggregate amount of all distributions made to such
Member in the current and all prior years pursuant to Sections 5.1.1 and 5.2.1.
17.34 "Unreturned Capital Contribution" means, with respect to any Member, the excess,
if any, of the aggregate amount of all Capital Contributions contributed by such Member to the
Company, over the aggregate amount of distributions made to such Member pursuant to Section
5.2.2 of this Agreement.
[Remainder of page intentionally left blank.]
27
#92957vl
IN WITNESS WHEREOF, the Members have executed this Agreement effective as of the
date first above written.
CLASS B MEMBER and MANAGER:
Berry Creek Townhomes Management, LLC, a
Delaware limited liability company
PSC Properties, LLC, a South Dakota limited
liability company, its Manager
By: Pain, Gkk
Name: Paul Cink
Title: Manager
and;
2/15/2023
Massive Capital, LLC, a Texas limited
liability company, its Manager
By: 514. !//� 2/15/2023
Name: Shahriar Khan
Title: Manager
Additional Member Signatures Follow:
[SIGNATURE PAGE TO
BERRY CREEK TOWNHOMES LLC OPERATING AGREEMENT]
#92957v1
COUNTERPART SIGNATURE PAGE OF MEMBERS TO
LIMITED LIABILITY COMPANY AGREEMENT OF
BERRY CREEK TOWNHOMES, LLC
DATED AS OF
In accordance with that certain Limited Liability Company Agreement of Berry Creek
Townhomes, LLC, dated as of February 15, 2023 (the "Agreement"), the undersigned, by its
signature hereto, agrees to become a Member of the Company and be bound by all of the terms and
conditions in the Agreement, effective as of the date set forth below, and shall make the Capital
Contribution set forth on such Person's Subscription Agreement executed and delivered to the
Company with this signature page to the Agreement. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Agreement.
The undersigned, subject to acceptance by the Manager, hereby becomes a Member
pursuant to the Agreement and hereby agrees to all of the terms of the Agreement and agrees to be
bound by the terms and provisions thereof, hereby ratifying and approving all actions heretofore
taken by the Manager in respect of the Company.
(Partnership, Corporation, Trust (Individual Signatures)
or Qualified Plan Signature)
Name of Entity (Print)
By
(Signature)
Name (Print)
Title
Business Address:
Street
Printed Name (First, Middle, Last)
(Signature)
Home Address:
Street
City State Zip Code City State Zip Code
Send Notices to (Check One):
Business Address: ❑ Home Address: ❑
Email Address
Taxpayer ID or Social Security Number
(JOINT PURCHASERS SHOULD COMPLETE THE FOLLOWING PAGE)
[COUNTERPART SIGNATURE PAGE TO
BERRY CREEK TOWNHOMES LLC LIMITED LIABILITY COMPANY AGREEMENT]
#92957v1
Joint Purchaser, if any:
Printed Name (First, Middle, Last)
Legal Form of Ownership
Home Address:
Street
City State Zip Code
Signature
Social Security Number
Business Address:
Street
City State Zip Code
ACCEPTED:
Berry Creek Townhomes, LLC,
a Delaware limited liability company
By: Berry Creek Townhomes Management, LLC
a Delaware limited liability company, its Manager
By: PSC Properties, LLC, a South Dakota limited
liability company, its Manager
Date:
By:
Name: Paul Cink
Title: Manager
and;
By: Massive Capital, LLC, a Texas limited
liability company, its Manager
By:
Name: Shahriar Khan
Title: Manager
[COUNTERPART SIGNATURE PAGE TO
BERRY CREEK TOWNHOMES LLC LIMITED LIABILITY COMPANY AGREEMENT]
#92957v1
EXHIBIT A
Tax Allocations and Elections
(Note: Capitalized terms not otherwise defined in this Exhibit A shall have the meaning
set forth in this Agreement.)
1.1 Allocations. Net Income, Gain and Net Loss of the Company shall be allocated to
the Members as provided below:
(a) In General. Except as otherwise provided in this Section 1.1, Net Income,
Gain and Net Loss of the Company for any relevant period shall be allocated to the Members to
cause, to the extent possible, their "Modified Capital Account" balances to equal their respective
"Target Balances." The term "Modified Capital Account" shall mean, for each Member, such
Member's capital account balance increased by such Member's share of "partnership minimum
gain" and of "partner minimum gain" (as determined pursuant to Regulations Sections 1.704-2(g)
and 1.704-2(i)(5), respectively). The term "Target Balance" shall mean, for each Member at any
point in time, either (i) a positive amount equal to the net amount, if any, the Member would be
entitled to receive or (ii) a negative amount equal to the net amount the Member would be required
to pay or contribute to the Company or to any third party, assuming, in each case, that (A) the
Company sold all of its assets for an aggregate purchase price equal to their aggregate carrying
value (assuming for this purpose only that the carrying value of any asset that secures a liability
that is treated as "nonrecourse" for purposes of Regulations Section 1.1001-2 is no less than the
amount of such liability that is allocated to such asset in accordance with Regulations Section
1.704-2(d)(2)); (B) all liabilities of the Company were paid in accordance with their terms from
the amounts specified in clause (A) of this sentence; (C) any Member that was obligated to
contribute any amount to the Company pursuant to this Agreement or otherwise (including the
amount a Member would be obligated to pay to any third party pursuant to the terms of any liability
or pursuant to any guaranty, indemnity or similar ancillary agreement or arrangement entered into
in connection with any liability of the Company) contributed such amount to the Company; (D)
all liabilities of the Company that were not completely repaid pursuant to clause (B) of this
sentence were paid in accordance with their terms from the amounts specified in clause (C) of this
sentence; and (E) the balance, if any, of any amounts held by the Company was distributed in
accordance with Section 5.2 of this Agreement.
(b) Income Tax Allocations. For purposes of Sections 702 and 704 of the Code,
or the corresponding sections of any future federal tax law, or any similar tax law of any state or
other jurisdiction, the Company's profits, gains and losses for federal income tax purposes, and
each item of income, gain, loss or deduction entering into the computation thereof, shall be
allocated among the Members in the same proportions as the corresponding "book" items are
allocated pursuant to this Section 1.1, except as otherwise provided in Section 1.1(e) below
(C) MlnlinUln Gain Charccback. Notwithstanding any other provision in this
Agreement, if there is a net decrease in Company minimum gain (as defined in Regulations Section
1.704-2(b)(2)), during any taxable year, items of Company income and gain shall be allocated in
accordance with the provisions of Regulations Section 1.704-2(f). This Section 1.1(a) is intended
to comply with Regulations Section 1.704-2(e)(3). Any special allocation of items of income or
#92957vl
gain pursuant to this Section 1.1(a) shall be taken into account in computing subsequent allocations
of Net Income or Gain pursuant to this Exhibit A, so that the net amount of any item so allocated
and the Net Income, Gain and Net Loss and other items allocated to each Member pursuant to this
Exhibit A, shall, to the extent possible, be equal to the net amount that would have been allocated
pursuant to the provisions of this Exhibit A if such decrease in minimum gain had not occurred.
(d) Qualified Income Offset. Any Member who unexpectedly receives an
adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5)
or (6), so as to cause or increase a deficit balance in such Member's capital account (in excess of
any limited dollar amount of such deficit balance that such Member is obligated or deemed
obligated to restore within the meaning of Regulations Section 1.704- 1 (b)(2)(ii)(c) and 1.704-2(g),
shall be allocated items of gross income and gain in an amount and manner sufficient to eliminate
such deficit balance as quickly as possible. Any such allocation of items of income or gain
pursuant to this Section 1.1(d) shall be taken into account in computing subsequent allocations of
Net Income or Gain pursuant to this Exhibit A, so that the net amount of any item so allocated and
the Net Income, Gain, Loss and Net Loss and all other items allocated to each Member pursuant
to this Exhibit A shall, to the extent possible, be equal to the net amount that would have been
allocated pursuant to the provisions of this Exhibit A if such unexpected adjustment, allocation or
distribution had not occurred.
(e) Allocations Re 7agr rding Contributed Property. Each item of taxable income,
gain, loss or deduction attributable to any property contributed to the Company ("Contributed
Property") shall be allocated first to the Member that contributed the Contributed Property to the
Company (the "Property Member") in the amount required to take into account the Property
Member's share of the difference between the carrying value of the Contributed Property and its
Adjusted Basis at the time of contribution. In making allocations pursuant to the preceding
sentence, the Managing Member is authorized to apply any method or convention required or
permitted by Section 704(c) of the Code and the Regulations thereunder. The Company shall
apply similar principles with respect to property which has an adjusted tax basis different from its
carrying value due to the operation of Regulation Section 1.704-1(b)(2)(iv)(f).
(f) Interpretation of Allocations. The Members intend (i) that the allocation
provisions contained in this Exhibit A and elsewhere in this Agreement be interpreted so that the
distributions pursuant Section 5.2.4 of this Agreement are in accordance with the final capital
account balances of the Members, and (ii) that the allocation provisions contained in this Exhibit
A and elsewhere in this Agreement be applied and amended by the Manager, if and to the extent
necessary to produce such result even if any such application or amendment requires (A) first,
special allocations of gross income and/or gross deductions for the current fiscal year (or, if
necessary, any other period), and (B) second, if necessary, the amendment of prior tax returns for
the Company. This Section 1.1(f) shall control notwithstanding any reallocation of income, loss
or items thereof by the Internal Revenue Service or any other taxing authority.
1.2 Accounting With Reference to Issuance or Transfer of Company Interest. Upon
the admission of any additional Member of the Company or upon the transfer of any Company
interest (as permitted herein) to an Assignee or to any Person being admitted as a Substituted
Member, the Net Income, Gain, and Net Loss, and each item thereof, for the year in which any
such admission or transfer occurs, attributable to the new interest or the interest transferred, shall
#92957vl
be allocated to the newly admitted Member or between the transferor and transferee (Assignee or
Substituted Member) as the case may be, as follows: all Net Income, Gain, and Net Loss, and each
item thereof, which are to be allocated for the fiscal year in which the admission or transfer occurs
shall be prorated as of the date upon which the admission or transfer is recognized by the Manager
as having occurred, so that for the purpose of making such proration, the items for such year shall
be deemed to have been earned or incurred in equal daily increments, without regard to the date
such items are actually earned or incurred during the periods before and after the date upon which
the admission or transfer occurs.
1.3 Fiscal Year. The fiscal year ("Riscal Year') of the Company shall be the calendar
year.
1.4 Basis Adjustment. In the case of a distribution of Company property or a transfer
of a Company interest, the Manager may cause the Company to file an election under Section 754
of the Code to adjust the basis of the Company's property. As a result of this election, the Manager
shall have the right to require, as a condition to the granting of consent to any transfer, the
reimbursement of expenditures made by the Company for any legal and accounting fees incurred
to make any such basis adjustment. The Manager shall have the right, in its sole and absolute
discretion, to decline to make such an election; and further, the making or failure to make any
election under Section 754 of the Code in connection with any particular transfer of an interest in
the Company shall not affect the right of the Manager to make, or refuse to make, such an election
with respect to any subsequent transfer of an interest in the Company.
1.5 Elections. The Company shall have the right, in the sole and absolute discretion of
the Manager, to make or refuse to make any other elections or determinations required or permitted
for federal or state income tax or other tax purposes. The Manager may rely upon the advice of
the Company's accountants or tax attorneys with respect to the making of any such election.
1.6 Partnership Representative. With respect to each taxable year of the Company: (i)
except as otherwise provided herein, the Bipartisan Budget Act of 2015, P.L. 114-74, as amended,
and the Treasury Regulations promulgated thereunder (collectively, the "BBA") shall apply to the
Company; (ii) this Section 1.6 shall control the Company's handling of matters with the Internal
Revenue Service; and (iii) such provisions shall supersede any conflicting provisions set forth in
this Agreement.
(a) The BBA Opt Out Regime. For any year in which the Company is eligible to make
the election in Section 6221(b) to opt out of Subchapter C of Chapter 63 of the Code (the `BBA
Opt Out Regime"), the Board of Managers, in its discretion, may cause the Company to timely
make such election in accordance with the provisions set forth in Section 6221 of the Code as
amended by the BBA. In such event, the Members hereby acknowledge and agree that any
examination by the Internal Revenue Service shall be conducted at the Member level rather than
the Company level, in accordance with Section 6231, et. seq., of the Code (before amendment by
the BBA).
(b) Appointment of the Partnership Representative,• Authority of the Partnershin
Representative. Effective for all Fiscal Years commencing on or after January 1, 2018, AIGP, or
such other Person as appointed by AIGP is hereby designated as the initial "partnership
#92957vl
representative" of the Company pursuant to Section 6223(a) of the Code as amended by the BBA
(the "Partnership Representative"). AIGP, may, from time to time, designate any other Person as
the Partnership Representative in lieu of the original Partnership Representative in accordance with
Section 6223 of the Code, and any Person so designated shall cease to be the Partnership
Representative whenever the Board of Managers designates any other Person to be the successor
Partnership Representative in accordance with this Section 1.6(b). The Partnership
Representative, in its sole discretion, shall have the right to make on behalf of the Company any
and all elections and take any and all actions that are available to be made or taken by the
Partnership Representative or the Company under the BBA (including an election under Section
6226 of the Code as amended by the BBA), and the Members shall take such actions requested by
the Partnership Representative consistent with any such elections made and actions requested by
the Partnership Representative, including filing amended tax returns and paying any tax due in
accordance with Section 6225(c)(2) of the Code as amended by the BBA.
(c) The BBA Alternative Regime. If the Company receives a notice of final
partnership adjustment with respect to any Fiscal Year (each, a "Reviewed Year"), then, no later
than forty-five (45) days after the receipt of such notice, the Partnership Representative may: (i)
elect the application of Code Section 6226 (the `BBA Alternative Regime"), as amended by the
BBA, to such final partnership adjustment, and (ii) furnish to each Member who was a Member
during such Reviewed Year (each, a "Reviewed Year Member") with the statement required by
Code Section 6226(a), as amended by the BBA. In such event, each Reviewed Year Member
hereby agrees to take any adjustment to income, gain, loss, deduction, or credit (as determined in
the notice of final partnership adjustment) into account to the full extent provided for in Section
6226(b) of the Code (as amended by the BBA) or the applicable corresponding provisions of state,
local or foreign law.
(d) The BBA Default Regime and the Company's Payment of' any lmputed
Underpayments. If, for any Fiscal Year in which the BBA Opt Out Regime does not apply and
for any Fiscal Year in which the Partnership Representative does not elect to have the BBA
Alternative Regime apply with respect to a final partnership adjustment pursuant to Section 1.6(c)
above, the "default regime" under Code Section 6221(a) (the `BBA Default Regime") shall apply
and the Partnership Representative shall, on behalf of the Company, make any and all payments
to the Internal Revenue Service in connection with any imputed underpayment liability. Further,
the Partnership Representative shall use commercially reasonable efforts to: (i) make any
modifications available under Code Section 6225(c)(3), (4) and (5), as amended by the BBA, and
(ii) if requested by a Member, provide to such Member information allowing such Member to file
an amended federal income tax return, as described in Code Section 6225(c)(2) as amended by the
BBA, to the extent that such amended return and payment of any related federal income taxes
would reduce any taxes payable by the Company with respect to the imputed underpayment
amount (after taking into account any modifications described in clause (i)).
(e) Members Reimbursement Obligations to the Company. If the Company pays any
imputed adjustment amount under Code Section 6225 as amended by the BBA, the Manager shall
seek payment from the Members (including any former Member) to whom such liability relates,
and each such Member (including any former Member) hereby agrees to pay such amount to the
Company, and such amount shall not be treated as a Capital Contribution. Any amount not paid
under the preceding sentence by a Member (or former Member) at the time requested by the
#92957vl
Manager shall accrue interest until paid at the prime rate of interest as published in the eastern
edition in the Wall Street Journal as of the day that such amount becomes due to the Company
pursuant to this paragraph, and such Member (or former Member) shall also be liable to the
Company for any damages resulting from a delay in making such payment beyond the date such
payment is requested by the Manager. Without reduction in any Member's (or former Member's)
obligation under the preceding sentences of this Section 1.6(e), any imputed adjustment amount
paid by the Company that is attributable to a Member (or former Member), and that is not paid by
such Member shall be treated as a distribution to such Member (or former Member).
(f) Member Notice and Participation. No later than ten (10) business days after it has
knowledge of any tax audit or tax proceeding, the Partnership Representative shall notify the
Members of the existence of any such tax audit or tax examination of the Company. Each Member
shall have the right to have a tax advisor of its own choosing participate in, but not direct, the
prosecution or defense of such tax audit or tax examination at such Member's sole expense. The
Partnership Representative shall make commercially reasonable efforts to facilitate such tax
advisor's participation.
(g) Indemnity from Former Members. To the extent that a portion of the tax liabilities
imposed under Code Section 6225 as amended by the BBA relates to a former Member of the
Company, the Manager may require a former Member to indemnify the Company for its allocable
portion of such tax. Each Member acknowledges that, notwithstanding the transfer or redemption
of all or any portion of its Company Interest, such Member may remain liable for tax liabilities
with respect to its allocable share of income and gain of the Company for the Company's taxable
years (or portions thereof) prior to such transfer or redemption.
(h) Survival of Obligations. The obligations of each Member or former Member under
this Section 1.6 shall survive the transfer or redemption by such Member of its Company Interest
and the termination of this Agreement or the dissolution of the Company, and shall remain binding
on the Members and former Members for such period of time as necessary to resolve all matters
regarding the federal income taxation of the Company.
(i) Miscellaneous. Each Member agrees in respect of any year in which that Member
had a Capital Account in the Company that, except to the extent the Partnership Representative
expressly agrees otherwise with him or her or it, he or she or it shall not: (i) treat, on his or her or
its individual income tax returns, any item of income, gain, loss, deduction or credit of the
Company in a manner inconsistent with the treatment of that item by the Company, as reflected
on the Schedule K-1 or other information statement the Company provides him or her or it, or (ii)
file any claim for refund relating to any such item based on, or that would result in, any such
inconsistent treatment. Any reasonable costs incurred by the Partnership Representative for
retaining accountants and/or lawyers on behalf of the Company in connection with any Internal
Revenue Service audit of the Company shall be expenses of the Company.
#92957vl
IR SDINEPARTMENT
TERNAL REVENUE ESERVICERY
CINCINNATI OH 45999-0023
BERRY CREEK TOWNHOMES LLC
PAUL CINK MBR
4229 N FM 620 BOX 101 UNIT 336
AUSTIN, TX 78734
Date of this notice: 02-16-2023
Employer Identification Number:
92-2385436
Form: SS-4
Number of this notice: CP 575 B
For assistance you may call us at:
1-800-829-4933
IF YOU WRITE, ATTACH THE
STUB AT THE END OF THIS NOTICE.
WE ASSIGNED YOU AN EMPLOYER IDENTIFICATION NUMBER
Thank you for applying for an Employer Identification Number (EIN). We assigned you
EIN 92-2385436. This EIN will identify you, your business accounts, tax returns, and
documents, even if you have no employees. Please keep this notice in your permanent
records.
Taxpayers request an EIN for their business. Some taxpayers receive CP575 notices when
another person has stolen their identity and are opening a business using their information.
If you did not apply for this EIN, please contact us at the phone number or address listed
on the top of this notice.
When filing tax documents, making payments, or replying to any related correspondence,
it is very important that you use your EIN and complete name and address exactly as shown
above. Any variation may cause a delay in processing, result in incorrect information in
your account, or even cause you to be assigned more than one EIN. If the information is
not correct as shown above, please make the correction using the attached tear -off stub
and return it to us.
Based on the information received from you or your representative, you must file
the following forms by the dates shown.
Form 1065
03/15/2024
If you have questions about the forms or the due dates shown, you can call us at
the phone number or write to us at the address shown at the top of this notice. If you
need help in determining your annual accounting period (tax year), see Publication 538,
Accounting Periods and Methods.
We assigned you a tax classification (corporation, partnership, estate, trust, EPMF,
etc.) based on information obtained from you or your representative. It is not a legal
determination of your tax classification, and is not binding on the IRS. If you want a
legal determination of your tax classification, you may request a private letter ruling
from the IRS under the guidelines in Revenue Procedure 2020-1, 2020-1 I.R.B. 1 (or
superseding Revenue Procedure for the year at issue). Note: Certain tax classification
elections can be requested by filing Form 8832, Entity Classification Election.
See Form 8832 and its instructions for additional information.
A limited liability company (LLC) may file Form 8832, Entity Classification
Election, and elect to be classified as an association taxable as a corporation. If
the LLC is eligible to be treated as a corporation that meets certain tests and it
will be electing S corporation status, it must timely file Form 2553, Election by a
Small Business Corporation. The LLC will be treated as a corporation as of the
effective date of the S corporation election and does not need to file Form 8832.
(IRS USE ONLY) 575B 02-16-2023 BERR B 9999999999 SS-4
IMPORTANT REMINDERS:
* Keep a copy of this notice in your permanent records. This notice is issued only
one time and the IRS will not be able to generate a duplicate copy for you. You
may give a copy of this document to anyone asking for proof of your EIN.
* Use this EIN and your name exactly as they appear at the top of this notice on all
your federal tax forms.
* Refer to this EIN on your tax -related correspondence and documents.
* Provide future officers of your organization with a copy of this notice.
Your name control associated with this EIN is BERR. You will need to provide this
information along with your EIN, if you file your returns electronically.
Safeguard your EIN by referring to Publication 4557, Safeguarding Taxpayer
Data: A Guide for Your Business.
You can get any of the forms or publications mentioned in this letter by
visiting our website at www.irs.gov/forms-pubs or by calling 800-TAX-FORM
(800-829-3676).
If you have questions about your EIN, you can contact us at the phone number
or address listed at the top of this notice. If you write, please tear off the
stub at the bottom of this notice and include it with your letter.
Thank you for your cooperation.
Keep this part for your records. CP 575 B (Rev. 7-2007)
Return this part with any correspondence
so we may identify your account. Please
correct any errors in your name or address.
CP 575 B
9999999999
Your Telephone Number Best Time to Call DATE OF THIS NOTICE: 02-16-2023
( ) - EMPLOYER IDENTIFICATION NUMBER: 92-2385436
FORM: SS-4 NOBOD
INTERNAL REVENUE SERVICE BERRY CREEK TOWNHOMES LLC
CINCINNATI OH 45999-0023 PAUL CINK MBR
4229 N FM 620 BOX 101 UNIT 336
AUSTIN, TX 78734
DocuSign Envelope ID: 20784EB5-F8BD-43DA-8340-B20A30C110B3
AMENDMENT TO LIMITED LIABILITY COMPANY AGREEMENT
Berry Creek Townhomes, LLC
AMENDMENT TO LIMITED LIABILITY COMPANY AGREEMENT (hereinafter
referred to as the "Amendment") is made and entered into this 6th day of March, 2023, by and
between Berry Creek Townhomes, LLC a Delaware limited liability company (`Berry Creek")
and Berry Creek Townhomes Management, LLC a Delaware limited liability company (the
"Manager" and collectively the "Parties").
PREMISES:
A. The Parties entered into the certain Limited Liability Company Agreement dated
February 15, 2023 (the "Agreement"). Exhibit A ofthe Agreement was found to have
a typo that the parties wish to fix with this Amendment.
B. The parties hereto have agreed to modify the Agreement as set forth herein.
AGREEMENT:
NOW THEREFORE, the parties hereto agree as follows:
1. Capitalized 'Perms. All capitalized terms contained in this Amendment and not otherwise
defined herein shall have the same meaning afforded to them in the Agreement.
2. Amendment by the Manager Pursuant to the Agreement. Pursuant to Section 13.2 of the
Agreement, the Manager has the power to amend the Agreement with this Amendment as this
Amendment does not have a material adverse effect on any Member.
3. Section 1.6 of Exhibit A. Section 1.6(b) of Exhibit A is hereby amended to the following:
"(b) Appointment of the Partnership Representative; Authority of the Partnership
Representative. Effective for all Fiscal Years commencing on or after January 1,
2018, Berry Creek Townhomes Management, LLC, or such other Person as appointed
by Berry Creek Townhomes Management, LLC is hereby designated as the initial
"partnership representative" of the Company pursuant to Section 6223(a) of the Code
as amended by the BBA (the "Partnership Representative"). Berry Creek Townhomes
Management, LLC, may, from time to time, designate any other Person as the
Partnership Representative in lieu of the original Partnership Representative in
accordance with Section 6223 of the Code, and any Person so designated shall cease
to be the Partnership Representative whenever the Board of Managers designates any
other Person to be the successor Partnership Representative in accordance with this
Section 1.6(b). The Partnership Representative, in its sole discretion, shall have the
right to make on behalf of the Company any and all elections and take any and all
actions that are available to be made or taken by the Partnership Representative or the
Company under the BBA (including an election under Section 6226 of the Code as
amended by the BBA), and the Members shall take such actions requested by the
#99857vl
DocuSign Envelope ID: 20784EB5-F8BD-43DA-8340-B20A30C110133
Partnership Representative consistent with any such elections made and actions
requested by the Partnership Representative, including filing amended tax returns and
paying any tax due in accordance with Section 6225(c)(2) of the Code as amended by
the BBA."
4. Ratification. Except as expressly amended herein, all of the terms and conditions of the
Agreement remain in full force and effect and are hereby ratified and affirmed by the parties.
IN WITNESS WHEREOF, the Members have executed this Agreement effective as of the
date first above written.
CLASS B MEMBER and MANAGER:
Berry Creek Townhomes Management, LLC, a
Delaware limited liability company
PSC Properties, LLC, a South Dakota limited
liability company, its Manager
DocuSigned by:
By: Pain G
Name: Paul Cink
Title: Manager
#99857vl
State of Delaware
Secretary of State
Dlvlslon of Corporadons
Delivered 12:18 PM 02/15/2023 CERTIFICATE OF FORMATION
FRED 12:18 PM 02/15/2023
SR 20230526972 - FIIeNumber 7298809
OF
Berry Creek Townhomes Management, LLC
FIRST: The name of the limited liability company is Berry Creek
Townhomes Management, LLC.
SECOND: The address of its registered office in the State of Delaware is 108 W.
13th Street, Suite 100, Wilmington, DE 19801 in the County of New
Castle. The name of its registered agent at such address is Vcorp
Services, LLC.
THIRD: Members may be admitted in accordance with the terms of the
Operating Agreement of the limited liability company.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
of Formation on February 15, 2023.
/s/Barbara Quinones
Barbara Quinones, Authorized
Person
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
LIMITED LIABILITY COMPANY AGREEMENT
�fm
BERRY CREEK TOWNHOMES MANAGEMENT, LLC
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933,15 U.S.C. § 15b ET SEQ., AS AMENDED (THE "FEDERAL ACT"), IN
RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
FEDERAL ACT. IN ADDITION, THE ISSUANCE OF THIS SECURITY HAS NOT BEEN QUALIFIED UNDER THE
DELAWARE CORPORATE SECURITIES LAW OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY,
THE "STATE ACTS"), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION
PROVISIONS OF THE STATE ACTS. IT IS UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF
THIS SECURITY OR ANY INTEREST THEREIN TO, OR TO RECEIVE ANY CONSIDERATION THEREFOR FROM,
ANY PERSON WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED SALE OR
OTHER TRANSFER OF THIS SECURITY DOES NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH PROPOSED SALE OR OTHER
TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES LAWS. THE
TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED UNDER THE TERMS OF THIS AGREEMENT.
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
TABLE OF CONTENTS
Page
Section 1. Name and Principal Executive Office; Representations...................................................................4
1.1 Name.................................................................................................................................................4
1.2 Certificate of Formation....................................................................................................................4
1.3 Fictitious Business Name Statement.................................................................................................4
1.4 Representations and Warranties........................................................................................................4
Section2. Purposes and Nature of Business......................................................................................................6
Section3. Term..................................................................................................................................................6
Section 4.
Capital Contributions and Accounts.................................................................................................6
4.1
Initial Capital Contributions of the Members....................................................................................6
4.2
Subsequent Capital Contributions.....................................................................................................6
4.3
Capital Accounts of Members...........................................................................................................7
4.4
Withdrawal of Capital.......................................................................................................................8
4.5
Interest on Capital Accounts.............................................................................................................8
4.6
Deficit Capital Accounts...................................................................................................................8
4.7
Optional Adjustments to Capital Accounts.......................................................................................8
4.8
Loans.................................................................................................................................................8
Section5. Distributions......................................................................................................................................8
5.1 Distributions of Cash Available for Distribution and Cash From Refinancing, Sale or
OtherDisposition..............................................................................................................................8
5.2 Distribution Upon Termination of the Company..............................................................................8
5.3 Valuation and Distribution of Non -Cash Distributions.....................................................................9
5.4 Discretion in Making Distributions...................................................................................................9
5.5 Limitation on Other Distributions...................................................................................................10
5.6 Tax Distribution..............................................................................................................................10
5.7 Organization Fees; Asset Management Fee....................................................................................10
Section 6. Allocations Of Net Income, Net Loss And Gain.............................................................................10
Section7. Tax Elections..................................................................................................................................10
Section 8. Admission Of Additional Members................................................................................................10
Section9.
Management....................................................................................................................................
10
9.1
In General........................................................................................................................................10
9.2
Qualification and Removal of a Managing Member.......................................................................13
9.3
........................................................................................................................................................13
9.3.
Time Devoted to Business..............................................................................................................14
9.4.
Power to Employ and Contract With Affiliated Entities.................................................................14
9.5.
Company Expenses.........................................................................................................................14
9.6.
Competing Ventures.......................................................................................................................14
9.7.
Managing Members May Also Be Member....................................................................................14
9.8.
Officers...........................................................................................................................................15
9.9.
Compensation of the Managing Members......................................................................................15
Section 10.
Liability and Indemnification..........................................................................................................15
Section 11.
Membership; Voting Rights; Meetings...........................................................................................16
11.1
Membership....................................................................................................................................16
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
11.2 Voting.............................................................................................................................................17
11.3 Member Meetings...........................................................................................................................17
Section 12.
Additional Members; Transfer of Interests of Members.................................................................17
12.1
Additional Members.......................................................................................................................17
12.2
Assignment by Members................................................................................................................17
12.3
Substituted Member........................................................................................................................19
12.4
Payment of Expenses......................................................................................................................19
12.5
Substitution Instrument...................................................................................................................19
12.6
No Dissolution Upon Assignment..................................................................................................19
12.7
Withdrawal of Member; Bankruptcy..............................................................................................20
12.8
Drag Along Right; Buyout Right....................................................................................................20
Section13. Amendment and Power of Attorney...............................................................................................20
13.1 Amendment by Members................................................................................................................20
13.2 Power of Attorney...........................................................................................................................20
13.3 Additional Instruments....................................................................................................................21
Section 14. Records, Reports and Bank Accounts.............................................................................................21
14.1 Records...........................................................................................................................................21
14.2 Amendments...................................................................................................................................22
14.3 Tax Information..............................................................................................................................22
Section 15. Dissolution and Termination of the Company................................................................................22
15.1 Events of Dissolution......................................................................................................................22
15.2 Procedure on Death, Bankruptcy, Dissolution or Incompetency of a Member...............................22
15.3 Liquidation......................................................................................................................................22
15.4 Time for Liquidation.......................................................................................................................23
15.5 No Liability for Return of Capital...................................................................................................23
Section16. General Provisions..........................................................................................................................23
16.1 Survival of Rights...........................................................................................................................23
16.2 Construction....................................................................................................................................23
16.3 Section Headings............................................................................................................................23
16.4 Agreement in Counterparts.............................................................................................................23
16.5 Governing Law...............................................................................................................................23
16.6 Time................................................................................................................................................23
16.7 Additional Documents....................................................................................................................23
16.8 Validity:.......................................................................................................................................... 23
16.9 Pronouns.........................................................................................................................................23
16.10 Descriptions....................................................................................................................................24
16.11 Venue And Attorneys' Fees............................................................................................................24
16.12 Partition...........................................................................................................................................24
16.13 Representative Capacity; Trusts......................................................................................................24
16.14 Joint Ownership..............................................................................................................................24
16.15 Valuation of Non -Cash Assets........................................................................................................25
Section17. Definitions.......................................................................................................................................25
EXHIBIT A A-1
TaxAllocations and Elections...................................................................................................................................A-1
1.1 Allocations................................................................................................................................... A-1
1.2 Accounting With Reference to Issuance or Transfer of Company Interest .................................. A-2
1.3 Fiscal Year................................................................................................................................... A-3
2
#99455v1
DocuSign Envelope ID: 640C4lE9-lE69-4362-823E-4E6EAOCD6185
1.4 Basis Adjustment......................................................................................................................... A-3
1.5 Elections....................................................................................................................................... A-3
1.6 Partnership Representative........................................................................................................... A-3
EXHIBIT B B-i
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
LIMITED LIABILITY COMPANY AGREEMENT
OF
Berry Creek Townhomes Management, LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made and
entered into as of February 15, 2023 by and among the Managing Member, all other Persons listed
in Exhibit B, and any Persons who acquire Units as Members (collectively, the "Members") for
the purposes of forming a limited liability company pursuant to the Act. Certain capitalized terms
used in this Agreement are defined in Section 17 below.
RECITALS
WHEREAS, the Company was formed as a limited liability company under the Delaware
Limited Liability Company Act, as amended (the "Act"), by filing Articles of Organization with
the Delaware Secretary of State on February 15, 2023 (the "Certificate"); and
WHEREAS, the parties hereto desire to enter into this Agreement to reflect the respective
rights, obligations and interests of the Members as a Member -Managed LLC.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members, intending to be legally bound, hereby agree as follows:
Section 1. Name and Principal Executive Office; Representations.
1.1 Name. The name of the Company is Berry Creek Townhomes Management, LLC.
The principal executive office of the Company is 4229 N FM 620, Box 101, Unit 336, Austin, TX
78734, unless changed by the Members.
1.2 Certificate of Formation. The Managing Member shall provide a copy of the
Certificate and any amendment thereof to any Member that requests a copy from the Managing
Member in writing.
1.3 Fictitious Business Name Statement. The Managing Member is authorized to file
and publish a Fictitious Business Name Statement for the Company in any jurisdiction it deems
appropriate.
1.4 Representations and Warranties. Each of the Members hereby makes the following
representations, warranties and covenants with respect to this investment:
1.4.1 The Member understands: (i) That the interests in the Company evidenced
by this Agreement have not been registered under the Securities Act of 1933, 15 U.S.C. § 15b et
seq., or the securities laws of Delaware or any other state (collectively, the "Securities Acts")
because the Company is issuing interests in the Company in reliance upon the exemptions from
the registrations requirements of the Securities Acts providing for issuance of securities not
El
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
involving a public offering; (ii) that the Managing Member and the Company is relying upon the
representations made by the Member herein in determining that such an exemption is available,
and would not be forming the Company in the absence of such representations; (iii) that exemption
from registration under the Securities Acts would not be available if any interest in the Company
was acquired by a Member with a view to distribution and the Member agrees that the Company
is under no obligation to register the interests in the Company or to assist the Member in complying
with any exemption from registration under the Securities Acts if such Member should at a later
date wish to dispose of such Member's interest in the Company; and (iv) that no public market
exists with respect to the interests and no representation has been made that such a public market
will exist at a future date.
1.4.2 The Member hereby represents that such Member is acquiring its interest
in the Company for such Member's own account, for investment and not with a view, or for resale
in connection with, any distribution thereof. No other Person has any interest in or right with
respect to the interest issued to the Member, nor has the Member agreed to give any Person any
such interest or right in the future.
1.4.3 The Member hereby represents that the Member has not received any
advertisement or general solicitation with respect to the sale of interests in the Company.
1.4.4 The Member represents that by reason of such Member's business and
financial experience or the business or financial experience of such Member's financial advisors
(who are not affiliated with the Company), it has the capacity to protect such Member's own
interest in connection with the acquisition of the interest in the Company. Each Member further
acknowledges that such Member is familiar with the financial condition and prospects of the
Company's business, and the current activities of the Company. Each Member believes that the
interests are securities of the kind such Member wishes to purchase and hold for investment, and
that the nature and amount of the interests are consistent with such Member's investment program.
1.4.5 Before acquiring any interest in the Company, the Member has
investigated the Company and its business, and the Company has made available to the Member
all information necessary for the Member to make an informed decision to acquire an interest in
the Company. Without limitation of the foregoing, the Member has (i) read and understood this
Agreement, and (ii) has had the opportunity to retain one or more professional advisers to evaluate
the Company. The Member considers itself to be a Person possessing experience and
sophistication as an investor adequate for the evaluation of the merits and risks of the Member's
investment in the Company.
1.4.6 The Member understands the meaning and consequences of the
representations, warranties and covenants made by it herein and that the Managing Member and
the Company have relied upon such representations, warranties and covenants. Each Member
hereby indemnifies, defends, protects and holds wholly free and harmless the Company from and
against any and all losses, damages, expenses or liabilities arising out of the breach and/or
inaccuracy or any such representation, warranty and/or covenant. All representations, warranties
and covenants contained herein and the indemnification contained in this Section 1.4.6 shall
survive the execution of this Agreement, the formation of the Company, and the liquidation of the
Company.
5
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
Section 2. Purposes and Nature of Business. The purposes of the Company and the business
to be carried on by it, subject to the limitations contained elsewhere in this Agreement, are: (a) to
acquire own and hold equity in Berry Creek Townhomes, LLC and to operate, manage, finance,
lease, develop, and/or dispose of, in part or in its entirety, the Property; (b) engage in any activities
reasonably related to any of the foregoing; and (c) to carry on any other activities necessary to, in
connection with or incidental to the accomplishment of the foregoing purposes of the Company,
as determined by the Managing Member or the Members in accordance with the terms hereof.
Section 3. Term.
The term of the Company shall be perpetual, unless terminated in accordance with the
dissolution and termination provisions of this Agreement, or by law.
Section 4. Capital Contributions and Accounts.
4.1 Initial Capital Contributions of the Members. Each Member shall contribute the
amount set forth in Exhibit B hereto as his or its initial Capital Contribution to the Company and
shall receive the number of Units set forth in Exhibit B. The capital account of a Member shall be
increased by the amount of cash contributed to the Company under this Section 4.1.
4.2 Subsequent Capital Contributions.
4.2.1 Capital Call; Preemptive Rights. No Member shall be required to make
any Capital Contributions to the Company beyond the amounts set forth in Section 4.1. In the
event that at any time (or from time to time) the Members determine that additional funds in excess
of the Members' initial capital contributions described in Section 4.1 hereof are required by the
Company for or in respect of its business or any of its obligations, expenses, costs, liabilities or
expenditures, then the Members may request that the Members make further capital contributions
Pro rata in accordance with their Unit ownership ("Subsequent Capital Contributions"). The
Managing Member shall request Subsequent Capital Contributions by giving Notice to each
Member at least ten (10) days prior to the date on which such Subsequent Capital Contributions
are due (a "Subsequent Draw Date"). Such Notice shall set forth the Subsequent Capital
Contribution requested of each Member, the Subsequent Draw Date, the terms of any additional
Units to be issued in connection with such Subsequent Capital Contribution and the payment terms
for any Subsequent Capital Contributions. Members electing to make Subsequent Capital
Contributions are referred to as "Electing Members."
4.2.2 In the event any Member fails to timely make, or elects not to make, a
Subsequent Capital Contribution (a "Non -Electing Member"), those Electing Members that have
elected to make full Pro rata Subsequent Capital Contributions (the "Fully Electing Members")
shall have a right to elect to make the additional Subsequent Capital Contributions not elected by
the Non -Electing Members, Pro rata based on all Fully Electing Members, until no more elections
are made or all Subsequent Capital Contributions requested by the Managing Member have been
allocated.
4.2.3 In the event the Members do not elect to fund the total amount of
Subsequent Capital Contributions requested by the Managing Member, the Managing Member is
G
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
authorized to issue Units to third parties so long as such offers are for the same equity and on the
same payment terms as is included in the Notice of Subsequent Capital Contribution delivered to
the Members, provided, however, that such an offer of securities to third parties may be open for
longer than ten (10) days, but no longer than sixty (60) days, or a Notice of Subsequent Capital
Contribution must again be delivered to the Members.
4.2.4 The Managing Member is authorized to issue additional Units in
connection with any Subsequent Capital Contributions or sales of Units to third parties in
accordance with this Section 4.2 and shall have the authority to admit any such third parties as
Members of the Company in this circumstance only without the advance approval of the remaining
Members of the Company.
4.2.5 In addition to, or in place of, such a request for Subsequent Capital
Contributions, the Managing Member may, if allowable under the terms of the Loan or any
replacement thereof, cause the Company to borrow such required additional funds, with interest
payable at then prevailing rates, from commercial banks, savings banks and/or other lending
institutions or persons (including Members), or any combination thereof, in its sole discretion
without advance approval from the remaining Members.
4.3 Capital Accounts of Members. An individual capital account shall be determined
and maintained for each Member in accordance with Regulations Section 1.704-1(b)(2)(iv), which
provides that a Member's capital account shall be increased by (i) the amount of cash contributed
to the Company by such Member, (ii) the Fair Market Value of property contributed by such
Member to the Company (net of liabilities secured by such contributed property that the Company
is considered to assume or take subject to under Code Section 752), and (iii) any Company Net
Income or Gain (or item thereof) allocated to such Member (including income and gain exempt
from tax). A Member's capital account shall be decreased by (i) the amount of cash distributed by
the Company to such Member, (ii) the Fair Market Value of property distributed to such Member
by the Company (net of liabilities secured by such distributed property that such Member is
considered to assume or take subject to under Code Section 752), (iii) such Member's allocable
share of Company expenditures described in Code Section 705(a)(2)(B), and (iv) any Company
Net Loss (or item thereof) allocated to such Member. Such Net Income, Gain, and Net Loss shall
be determined in accordance with the federal income tax return filed by the Company, the
allocations provided for in Section 6 of this Agreement, and by reference to the definitions
contained in Section 17, provided that, in any circumstances in which property is reflected on the
books of the Company (as maintained in accordance with Regulations Section 1.704-1(b)(2)(iv))
at a book value that differs from the adjusted tax basis of such property, Net Income, Gain, and
Net Loss (or item thereof) shall be determined by reference to the book value of such property.
Such allocation of book items shall be made in accordance with Regulations Section 1.704-
1(b)(2)(iv)(g). In the event a Member transfers all or any portion of his Company interest, the
transferee shall succeed to the individual capital contributions, capital account and capital account
balance of the transferor to the extent such individual capital contributions, capital account and
capital account balance relate to the transferred interest. Neither contributions to the capital of the
Company nor the Members' capital account balances shall bear interest.
7
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
4.4 Withdrawal of Capital. Without the consent of the other Members, or as otherwise
provided for in this Agreement, no Member shall have any right to withdraw or make a demand
for withdrawal or return of any capital.
4.5 Interest on Capital Accounts. No interest shall be paid on any capital contributions.
4.6 Deficit Capital Accounts. No Member shall have any obligation to restore a deficit
capital account balance.
4.7 Optional Adjustments to Capital Accounts. Upon (i) a contribution of cash or
property (which shall be valued at its Fair Market Value) to the Company by a new or existing
Member for a Company Membership Interest, or (ii) a distribution by the Company to a retiring
or continuing Member for a Company Membership Interest, the Company may, in the discretion
of the Managing Member, increase or decrease the capital accounts of the Members to reflect a
revaluation of Company property on the books of the Company, in accordance with the provisions
of Regulations Section 1.704-1(b)(2)(iv)(f).
4.8 Loans. The Managing Member may determine that additional working capital is
needed by the Company and may invite the Members to loan money to the Company on a Pro rata
basis ("Member Loans"). It is not mandatory that a Member loan any sum of money to the
Company and if one or more of the Members do not make a loan, the shortfall may be picked up
by the other Members wishing to do so, on a Pro rata basis. There will be no adjustment of
ownership as a result of making or not making a loan to the Company. A loan shall be evidenced
by a promissory note from the Company to the lending Member. Any loan to the Company from
any Member shall bear interest at the Prime Rate plus two percent (2%), and shall be repaid in
accordance with the agreed upon terms of such loan to the lending Member before any distribution
of Cash Flow is made to the Members pursuant to Section 5.1.
Section 5. Distributions.
5.1 Distributions of Cash Available for Distribution and Cash From Refinancing, Sale
or Other Disposition. Cash Available for Distribution, Cash From Refinancing and Cash From
Sale or Other Disposition as defined in Section 17, when distributed from time -to -time, shall be
distributed to the Members, in accordance with the following:
5.1.1 First, to the Members on a pro rata basis to the extent of their Unreturned
Capital Contributions, until each Member's Unreturned Capital Contribution has been reduced to
zero; and
5.1.2 Second, to the Members on a pro rata basis.
5.2 Distribution Upon Termination of the Compan. Upon the final termination of the
Company, the Managing Member shall take account of all of the Company's assets and liabilities.
The assets may be liquidated as promptly as is consistent with obtaining a reasonable value
therefor, and the proceeds therefrom together with assets distributed in kind, to the extent thereof,
shall be applied and distributed in the following order:
8
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
5.2.1 To the payment of debts and liabilities of the Company which are then due
(other than any loans or advances that may have been made by any of the Members to the
Company) and the expenses of liquidation.
5.2.2 To any Member for any current or deferred fees, advances, or
reimbursements;
5.2.3 To the setting up of any reserves which the Members may deem
reasonably necessary for any contingent or unforeseen liabilities or obligations or debts or
liabilities not yet payable by the Company which have arisen out of or in connection with the
Company. Such reserves may be held for disbursement by the Managing Member or delivered to
an independent escrow holder, designated by the Company, to be held by such escrow holder for
the purpose of disbursing such reserves in payment of any of the aforementioned contingencies,
debts or liabilities, and, at the expiration of such period as the Managing Member shall deem
advisable, to distribute the balance thereafter remaining in the manner hereinafter provided.
5.2.4 To the repayment of any unpaid loans or advances which are then due and
which have been made by any of the Members to the Company, including any accrued but unpaid
interest thereon, in proportion to the loan amounts, up to the full amounts thereof, and then any
other loans or advances, including any accrued but unpaid interest thereon, in proportion to the
loan amounts, up to the full amounts thereof.
5.2.5 Thereafter, in accordance with Section 5.1. The distribution described in
this Section 5.2.5 shall occur by the end of the taxable year of Company dissolution, or, if later,
within ninety (90) days after the date of such dissolution.
5.3 Valuation and Distribution of Non -Cash Distributions. To the extent that non -cash
assets shall be distributed in kind pursuant to this Section 5.3, the Fair Market Value of such assets
shall first be determined, pursuant to Section 16.15, and the distribution of such assets shall be
made in accordance with such valuation after first allocating to the capital accounts of the Members
the amount of Gain or Net Loss which would have been allocated to said capital accounts if the
non -cash asset had been sold at such Fair Market Value rather than distributed in kind. Any non -
cash assets (including, but not limited to, promissory notes) received by the Company in
connection with a sale or other disposition may be distributed in kind to the Members or to a
collection account with the proceeds to be distributed in accordance with the terms of this Section
5.3 as received. Any such distribution of non -cash assets shall be at the discretion of the Managing
Member. The Managing Member in its absolute discretion may determine the relative proportions
of cash and non -cash assets distributed to each Member. Any non -cash assets distributed shall be
subject to any then -existing agreements or restrictions relating thereto.
5.4 Discretion in Making Distributions. The Company shall distribute, subject to the
discretion of the Managing Member, cash and/or assets in kind from time -to -time, without regard
to whether or not funds represent income for the purpose of determining tax liability, or net profit
for the purpose of Company accounting. Such distributions shall be made in the discretion of the
Managing Member in accordance with good and sound business practices.
0
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
5.5 Limitation on Other Distributions. No distribution shall be made unless such
distribution is permitted under the Act. No Member shall be entitled to receive distributions other
than as specifically provided by this Agreement.
5.6 Tax Distribution. Notwithstanding any other provision of this Agreement, the
Managing Member, in its sole discretion, may cause the Company to make distributions of cash to
each Member on or before April 15 of any year of amounts which are not less than the result
obtained by multiplying the Tax Rate (as hereinafter defined) by the estimated taxable Net Income
and Gain of the Company allocable to such Member under Exhibit A for the previous year. The
"Tax Rate" shall be thirty-five percent (35%). Any amounts distributed under this Section 5.6
shall be taken into account in computing subsequent distributions under Section 5.1, so that the
total amount distributed under Section 5.1 and this Section 5.6 shall be the amount which would
have been distributed under Section 5.1 if the special distribution under this Section 5.6 had not
occurred.
5.7 Acquisition Fee; Organization Fee; Asset Management Fee; Disposition I:e(.-. Any
fee received by the Company shall be split among the Members pro rata with their respective
membership interests.
Section 6. Allocations Of Net Income, Net Loss And Gain. Allocations of Net Income, Net
Loss and Gain of the Company shall be governed by Exhibit A. Allocations shall initially be based
on Membership Interest percentage.
Section 7. Tax Elections. Tax elections of the Company shall be governed by Exhibit A.
Section 8. Admission Of Additional Members.
No additional Members shall be admitted to the Company without the prior written consent
of the Managing Member.
Section 9. N1ana1!ement.
9.1 In General. The Managing Member shall carry out day-to-day operations of the
Company. The initial Managing Member shall be PSC Properties, LLC, a South Dakota
limited liability company.
9.1.1. Fundamental Issues. Notwithstanding any provision of this Agreement to
the contrary, the Managing Member shall not take, or cause the Company, either on its own behalf
or in its capacity as the sole member, to take or implement any of the following actions (each, a
"Fundamental Issue"), without in each instance first obtaining the affirmative vote of Members
comi)risin�_, at least seventy -lire percent (75%) of the Membership Interest:
(a) Adopting or amending the Company's business plans and budgets;
(b) Requesting Subsequent Capital Contributions from the Members;
(c) Entering into a consolidation, reorganization, merger or sale of
substantially all of the assets of the Company or any other similar transaction;
10
#99455vl
DocuSign Envelope I D: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
(d) Acquiring an interest in another Person, firm or business;
(e) pay, extend, renew, modify, adjust, submit to arbitration, prosecute,
defend, or settle, upon such terms as it may deem sufficient, any obligation, suit, liability, cause
of action, or claim, including tax audits, either in favor of or against the Company and/or Berry
Creek Townhomes, LLC;
(f) Amend this Agreement;
(g) Enter into or amend, modify, or terminate any agreement pertaining to
the sale, conveyance, exchange, or other transfer of any assets of the Company, or sell, convey,
exchange, or otherwise transfer any assets of the Company, other than non -material transfers of
personal, tangible, or intangible property in the ordinary course of business; or
(h) Negotiate, enter into and execute contracts in excess of $50,000 with
respect to or on behalf of the Company or Berry Creek Townhomes, LLC including, but not limited
to, contracts and agreements with property managers, architects, contractors, construction
companies and others in connection with the operation, development, construction, rehabilitation,
renovation and repair services
9.1.2 If the Members are unable to reach a decision by the required vote regarding
a Fundamental Issue submitted for consideration by the Members (a "Deadlock"), the Members
shall attempt to resolve such matter within five (5) Business Days (or, if mutually agreed by the
Members, a longer period of time). Any resolution agreed to by the Members shall be final and
binding on the Company and the Members.
9.1.3 During the continuation of any Deadlock, the Company shall continue to
operate in a manner consistent with its prior practices and this Agreement until such time as such
Deadlock is resolved. If the Deadlock is with respect to the approval of the Company's annual
business plan or budget, the Company shall operate its business in accordance with the business
plan or budget then in effect_
9.1.4 Mediation. If the Members are unable reach agreement as to the Fundamental
Issue within the time period set forth in this Section 9.1 (including any agreed extensions), the
Deadlock shall be mediated (the "Mediation") within 15 Business Days from the date a written
request for mediation is made by any Member. The Mediation shall take place over Recorded
Zoom Video Conference Call or at a location mutually agreed upon and shall be in English. The
Mediation shall be conducted before a single mediator to be agreed upon by the Members. If the
Members cannot agree on the mediator, each Member shall select a mediator and such mediators
shall together unanimously select a neutral mediator who will conduct the mediation. Each
Member shall bear the fees and expenses of its mediator and all the Members shall equally bear
the fees and expenses of the final mediator. The decision of the mediator shall be final and binding
on the Members.
9.1.5 Except as otherwise provided in this Agreement, the Managing Member shall
have full power and authority, subject in all cases to the requirements of applicable law or as
otherwise provide to the contrary in Section 9.1(a) hereof, to manage the business and affairs of
11
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
the Company for the purposes herein stated, to make all decisions affecting such business and
affairs and to do all things that the Managing Member deems necessary or desirable in connection
with the conduct of the business and affairs of the Company, including, without limitation, the full
power to (or to vote the interest of the Company to):
(a) manage, operate and control the daily operations of the business of the
Company;
(b) cause the Company to manage the day-to-day operation of the Property
as the "Manager" for Berry Creek Townhomes, LLC;
(c) borrow money and incur indebtedness from third parties (whether
affiliated or unaffiliated with the Managing Member) for the purposes of the Company or Berry
Creek Townhomes, LLC, and to cause to be executed and delivered therefore in the names of the
Company or Berry Creek Townhomes, LLC, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, guarantees, hypothecations or other evidence of debt and securities thereof,
including but not limited to any renewal, extension, modification or other refinancing of the Loan;
(d) in furtherance of the Company's purposes and business, borrow
money, whether on a secured or unsecured basis but without personal recourse to any Member;
(e) perform, or cause to be performed, all of the Company's obligations
under any agreement to which the Company is a party, including this Agreement;
(f) pay any and all reasonable fees and make any and all reasonable
expenditures that it, in its sole discretion, deems necessary or appropriate in connection with the
organization of the Company and Berry Creek Townhomes, LLC, the management of the affairs
of the Company and Berry Creek Townhomes, LLC, and the carrying out of its obligations and
responsibilities under this Agreement;
(g) retain, engage or employ at the expense of the Company, as applicable,
such agents, employees, Managers, accountants, attorneys, consultants, and other Persons
necessary or appropriate to carry out the business and affairs of the Company, whether or not any
such Persons so retained, engaged or employed are Affiliates of the Managing Member or the
Company, and to pay such compensation to such Persons as is competitive with the compensation
paid to unaffiliated Persons in the area for similar services;
(h) appoint such officers of the Company, at the expense of the Company,
as the Managing Member, in its discretion, deem appropriate and to remove any such officers and,
unless the Managing Member decides otherwise, if the title is one commonly used for officers of
a business corporation, the assignment of such title shall constitute the delegation of the authority
and duties that are normally associated with that office, subject to any specific delegation of
authority and duties made by the Managing Member;
(i) fix the salaries or other compensation, if any, of the Persons or entities
engaged by the Managing Member in accordance with this Section 9.1;
12
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
0) purchase and maintain, at Company expense, liability and other
insurance to protect the Managing Member and the Company's assets from third party claims;
provided that, in its judgment, such insurance is appropriate, available and reasonably priced;
(k) establish and maintain accounts with financial institutions, including
federal or state banks, brokerage firms, trust companies, savings and loan institutions, or money
market funds, in such amounts as the Managing Member may deem necessary;
(1) cause to be paid any and all taxes, charges, and assessments that may
be levied, assessed, or imposed upon any of the assets of the Company, unless the same are
contested by the Managing Member;
(m) employ at the expense of the Company or Berry Creek Townhomes,
LLC, as applicable, such agents, employees, accountants, attorneys, consultants, and other Persons
necessary or appropriate to carry out the business and affairs of the Company, whether or not any
such Persons so employed are Affiliates of the Managing Member, and to pay such compensation
to such Persons as is competitive with the compensation paid to unaffiliated Persons in the area
for similar services;
(n) maintain the Company's capitalization table to reflect the admission
or withdrawal of any Member, any change in any Member's Capital Contributions, or any changes
in any Member's address;
(o) establish reserves consistent with the purpose of this Agreement;
(p) determine the amount and timing of distributions to the Members in
accordance with Section 5 hereof and to elect to forego distributions and to invest or reinvest
Company assets in the furtherance of the purposes of the Company;
(q) cause the Company to borrow money from and loan money to the
Members, or borrow monies from third parties for and on behalf of the Company upon such terms
and conditions as the Managing Member may deem advisable and proper;
(r) make, execute, assign, acknowledge, file, and deliver any and all
documents or instruments and amendments thereto, and to take any and all other actions, that the
Managing Member may deem appropriate to carry out the purposes and business of the Company
as set forth herein, on such terms and conditions as it deems proper; and
(s) do any act that is necessary or desirable to carry out any of the
foregoing.
9.2 Oualification and Removal of a Managing, Member.
9.2.1. Oualification of Managing Members. A Managing Member need not be a
natural Person(s).
9.2.2. Removal of Managing Members. A Managing Member may be removed
and replaced only upon a final adjudication by a court of competent jurisdiction that such
13
#99455vl
DocuSign Envelope ID: 640C41E9-1E69-4362-823E-4E6EAOCD6185
Managing Member has committed a material breach of its obligations as a Managing Member
under this Agreement or has engaged in any act of willful misconduct or fraud.
9.2.3. Resignation of a Managing Members. A Managing Member may resign at
any time upon written Notice to the Company, without prejudice to the rights, if any, of the
Company under any contract to which such Managing Member is a party. Such resignation shall
not affect such Managing Member's rights as member. Upon the resignation of a Managing
Member, the Members shall elect a replacement Managing Member by a 75% affirmative vote.
9.2.4. Fiduciary Duties Owed by the Managing Members. The Managing Member
shall not owe fiduciary duties to the Company and the Members to the extent and in the manner
prescribed in the Act and under applicable case law. Otherwise, the Managing Member of the
Company shall NOT be personally liable, responsible or accountable in damages or otherwise to
the Company or to any other Person because of any act or failure to act, except to the extent the
Person's actions constitute willful misconduct or fraud.
9.3. Time Devoted to Business. The Managing Member shall devote such time to the
business affairs of the Company as the Managing Member shall deem to be reasonably required
for its welfare and success.
9.4. Power to Employ and Contract With Affiliated Entities. The Managing Member
shall have the right to employ or contract with a Member or entities in which any Member has an
interest without the prior consent of the Members.
9.5. Company Expenses.
9.5.1. Reimbursable Expenses. All Company expenses shall be billed directly to
and paid by the Company. The Managing Member may be reimbursed, up to an amount agreed
upon or approved by Managing Member, for the following Company expenses: (a) the actual cost
to the Managing Member and their Affiliates of goods and materials used for or by the Company
and obtained from unaffiliated parties; and (b) reasonable expenses incurred in connection with
rendering administrative services necessary to the prudent operation of the Company, including
but not limited to reasonable travel and entertainment expenses.
9.5.2. Non -Reimbursable Expenses. The Managing Member shall not be
reimbursed by the Company for expenses which are unrelated to the business of the Company.
9.6. Competing Ventures. Any of the Members or the Managing Member may freely
engage in or possess an interest in other business ventures of every nature and description,
independently or with others, including but not limited to, the ownership of assets of the same type
and nature as the assets of the Company, and neither the Company nor any of the Members shall
have any right by virtue of this Agreement in and to such independent ventures or to the income
or profits derived therefrom.
9.7. Managing; Members May Also Be Members. The Managing Members must
purchase and hold Units as Members and shall be treated as a Member as to any such Units held
by it as a Member. Upon the Managing Member ceasing to be a Managing Member for whatever
14
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
reason, such Managing Member shall continue to be a Member with respect to its Unit(s) and the
Company.
9.8. Officers. The Company may, in the discretion of the Managing Member, have
officers, but is not required to do so. The Company may also have, in the discretion of the
Managing Member, one or more vice presidents, a financial officer, and such other officers as may
be appointed in accordance with the provisions of this section. Any number of offices may be held
by the same Person. An officer need not be a Member. Each officer appointed shall have the
duties as prescribed from time -to -time by the Managing Member. The officers of the Company
shall be chosen by the Managing Member, in its discretion, and each shall hold his office until he
or she shall resign or shall be removed by the Managing Member, in their discretion.
9.9. Compensation of the Managing Members. The Managing Member shall not be
entitled to any compensation in addition to any distribution to which the Managing Member is
entitled by virtue of the Units held by the Managing Member, as established in accordance with
Section 5 above.
Section 10. Liability- and Indemnification.
10.1 Limitation on Liability.
10.1.1 Covered Persons. As used herein, the term "Covered Person" shall mean
(i) each Member, (ii) the Managing Member, (iii) each officer, director, stockholder, partner,
member, Affiliate, employee, agent or representative of each Member, and each of their Affiliates;
and (iv) each Officer, employee, agent or representative of the Company.
10.1.2 Standard of Care. No Covered Person shall be liable to the Company or
any other Covered Person for any loss, damage or claim incurred by reason of any action taken or
omitted to be taken by such Covered Person in good faith reliance on the provisions of this
Agreement, so long as such action or omission does not constitute fraud, gross negligence, willful
misconduct or a material breach of this Agreement by such Covered Person or is not made in
knowing violation of the provisions of this Agreement. Good Faith Reliance. A Covered Person
shall be fully protected in relying in good faith upon the records of the Company and upon such
information, opinions, reports or statements (including financial statements and information,
opinions, reports or statements as to the value or amount of the assets, liabilities, Net Income or
Net Losses of the Company or any facts pertinent to the existence and amount of assets from which
distributions might properly be paid) of the following Persons or groups: (i) another Member; (ii)
one or more Officers or employees of the Company; (iii) any attorney, independent accountant,
appraiser or other expert or professional employed or engaged by or on behalf of the Company; or
(iv) any other Person selected in good faith by or on behalf of the Company, in each case as to
matters that such relying Person reasonably believes to be within such other Person's professional
or expert competence.
10.1.4 Limitation of Liability. This Agreement is not intended to, and does not,
create or impose any fiduciary duty on any Covered Person. Furthermore, each of the Members
and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be
implied by Applicable Law, and in doing so, acknowledges and agrees that the duties and
15
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
obligation of each Covered Person to each other and to the Company are only as expressly set forth
in this Agreement and any other written agreement among the parties. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Members to replace such other duties and liabilities
of such Covered Person.
10.2 Indemnification. The Company shall indemnify and hold harmless each Covered
Person, from and against any claim, loss, liability or damage (including attorneys' fees incurred
by any of them in connection with the defense of any action based on any such alleged act or
omission, which attorneys' fees may be paid, as incurred, from Company funds) incurred by reason
of an act performed, or omitted to be performed, by any of them in good faith on behalf of the
Company and in a manner reasonably believed by them to be within the scope of the authority
conferred upon them by this Agreement and in the best interests of the Company, provided that
such indemnification is not prohibited by law or the act or omission does not amount to gross
negligence or willful misconduct. All judgments against the Company or a Covered Person,
whereby the Covered Person is entitled to indemnification as herein provided, shall first be
satisfied from Company assets.
Section 11. Membership; Votim", Ri<(hts; Mectin2s.
11.1 Membership.
11.1.1 Members. The name, present mailing address and taxpayer identification
number of each Member will be kept with the records of the Company maintained in accordance
with this Agreement. Unless named in this Agreement, or unless admitted to the Company as a
substituted or new Member as provided herein, no Person shall be considered a Member, and the
Company need deal only with the Members so named and so admitted. The Company shall not
be required to deal with any other Person by reason of any Transfer or by reason of the dissolution,
death or Bankruptcy of a Member, except as otherwise provided in this Agreement.
11.1.2 Membership Interests. Equity ownership in the Company shall be
represented by Membership Interests, which will be issued in the form of Units.
11.1.3 No Benefit to Third Parties. The provisions of this Agreement are not
intended to be for the benefit of any creditor or other person (other than a Member in its capacity
as a Member) to whom any debts, liabilities or obligations are owed by (or who otherwise has any
claim against) the Company of any of the Members; and no such creditor or other person shall
obtain any right under any such provision against the Company or any of the Members by reason
of any debt, liability or obligation (or otherwise).
11.1.4 Confidentiality. By virtue of being a Member of the Company, a Member
may, from time to time, receive Confidential Information (as hereinafter defined) about the
Company or its Affiliates. Each Member agrees to take all reasonable steps to prevent disclosure
of Confidential Information and not use any Confidential Information except as may be necessary
for the limited purposes set forth in this Agreement; provided that no provision of this Agreement
shall be construed to preclude such disclosure of Confidential Information as may be required by
court order. In the case that Confidential Information shall be required by court order, the affected
16
#99455vl
DocuSign Envelope ID: 640C4lE9-lE69-4362-823E-4E6EAOCD6185
Member shall give written notice to the Managing Member prior to making such disclosure. For
purposes of this Agreement, "Confidential Information" means all information pertaining to the
business, products, services or technology of the Company or its Affiliates, or of any company or
other entity or any asset thereof that is a potential investment of the Company, or a supplier, vendor
or business partner of the Company; provided that Confidential Information shall not include any
information that (1) is in the public domain at the time of disclosure or enters the public domain
following disclosure through no fault of the Member, (2) the Member can demonstrate as already
in its possession prior to disclosure hereunder or is subsequently disclosed to the Member with no
obligation of confidentiality by a third party having the right to disclose it or (3) is independently
developed by the Member without reference to the Company's or its Affiliates' Confidential
Information.
11.2 Votiiw,. Except as otherwise stated in this Agreement or required under the Act,
the Members (other than any Member serving as the Managing Member) shall not take any part in
the day-to-day management or conduct of the business of the Company, nor shall such Members
have any right or authority to act for or bind the Company. Except as otherwise provided in the
Act, the Certificate or this Agreement, whenever any action is to be taken by vote of the Members,
it shall be authorized upon receiving the affirmative vote of the Majority of the Members.
11.3 Member Meetings. The Managing Member may call a meeting of the Members.
The Managing Member shall provide the Members with a Notice specifying the date, time and
place of such meeting. Members collectively holding at least a majority of the outstanding Units,
represented in person, via telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, shall constitute a quorum at any meeting
of Members. In the event that Members collectively holding at least a majority of the outstanding
Units are not in attendance within one (1) hour following the time for which the meeting was
called, the meeting shall be adjourned to the day that is five (5) Business Days following the day
on which the meeting was to be held. The adjourned meeting (the "Adjourned Meeting") shall be
held at the time on such day and place at which the meeting was to be held and shall have the same
agenda as the original meeting. Each Member shall be notified by Notice of the date, time and
place of each adjourned meeting. Any action permitted or required by the Act or this Agreement
may be taken without a meeting if a consent in writing, setting forth the action to be taken, is
signed by not less than the minimum number of Members that would be necessary to take such
action at a meeting at which all Members were present and voted. Such consent shall have the
same force and effect as a vote at a meeting and may be stated as such in any document or
instrument filed with the Secretary of State of the State of Delaware, and the execution of such
consent shall constitute attendance or presence in person at a meeting of the Members. Prompt
notice of the taking of any action without a meeting by less than unanimous written consent will
be given to those Members who did not consent in writing to such action.
Section 12. Additional Members; Tr.rnsfer of Interests of Members.
12.1 Additional Members. No Members shall be admitted to the Company without the
prior consent of the Managing Member, which consent may be granted or withheld in the absolute
discretion of the Managing Member.
12.2 Assignment by Members.
17
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
12.2.1 Unauthorized Assignments Void. The Units of a Member may be
assigned only as permitted by the provisions of this Section 12 and, except as so permitted, no
Member shall assign, sell, dispose of, pledge, give or otherwise transfer (hereinafter referred to
collectively as "assign") such Member's Units or any part thereof or any interest therein or rights
thereof, whether voluntarily, by operation of law, at judicial sale or otherwise, to any Person. Any
attempted assignment prohibited by the provisions of this Section 12 shall be null and void and of
no force or effect.
12.2.2 Conditions to Assignment Generally. In addition to the other requirements
of this Agreement, no Member shall be entitled to assign all or any part of such Member's Units
unless all of the following conditions have been met: (a) if required by the Managing Member, the
Company shall (at its option) have received an attorney's written opinion, in form and substance
reasonably satisfactory to the Company, specifying the nature and circumstances of the proposed
assignment, and based on such facts stating that the proposed assignment will not be in violation
of any of the registration provisions of the Securities Act of 1933, as amended, or any applicable
state securities laws; (b) the Company shall have received from the transferee (and the transferee's
spouse if such spouse will receive a community property interest in the Membership Interest) a
counterpart signature page to, or a written consent to be bound by all of the terms and conditions
of, this Agreement; (c) the assignment will not result in the loss of any license or regulatory
approval or exemption that has been obtained by the Company, or result in a default under or
breach or termination of any loan agreement or other contract to which the Company is a party;
and (d) the Company is reimbursed upon request for its reasonable expenses in connection with
the assignment.
12.2.3 Permitted Transfers. Subject to the requirements of Section 12.2.2, a
Member may assign all or a portion of the economic rights of his Units to a Permitted Transferee
(a "Permitted Transfer"), provided that such Permitted Transferee shall only be entitled to exercise
the assigning Member's other rights under this Agreement, such as the right to vote, upon
execution and delivery of a counterpart signature page to this Agreement and with the approval of
the Managing Member. For purposes of this Agreement, a "Permitted Transferee" of a Member
means (i) such Member's spouse, siblings, (including adoptive relationships and stepchildren) and
the spouses of each such natural persons (collectively, "Family Members"); (ii) a trust under which
the distribution of Units may be made only to such Member and/or any Family Member of such
Member; (iii) a charitable remainder trust, the income from which will be paid to such Member
during his life, (iv) a corporation, partnership or limited liability company, the stockholders,
partners or members of which are only such Member and/or Family Members of such Member, or
(v) by will or by the laws of intestate succession, to such Member's executors, administrators,
testamentary trustees, legatees or beneficiaries. Any Permitted Transferee must be an "accredited
investor," as defined in Regulation D promulgated under the Securities Act, and the Company has
the right to require an opinion of counsel stating that such transfer is permitted under applicable
securities laws. Any Permitted Transfer of all or any portion of a Member's Membership Interest
shall be effective no earlier than the date following the date upon which the requirements of this
Agreement have been met and Notice of such Permitted Transfer has been provided to the
Company.
18
#99455vl
DocuSigR Envelope ID: 640C4l E9-1 E69-4362-823E-4E6EAOCD6185
12.2.4 Other than Permitted Transfers, no Member shall assign all or any portion
of such Member's Units to any Person without the prior written consent of the Managing Member.
12.2.5 Company Right of First Refusal. In the event an assignment of Units,
other than as authorized under Sections 12.2.3 or 12.8, is attempted, whether by sale, exchange,
gift, bequest, devise, pledge, divorce, marital settlement, court proceeding, Bankruptcy, operation
of law or otherwise, the Company shall have the option, but not the obligation, in the discretion of
the Managing Member, to purchase such Units at the price determined under Section 12.2.6. Such
purchase price shall be paid as follows: ten percent (10%) concurrently with the purchase of the
Units and the remaining ninety percent (90%) in equal quarterly installments over a period of two
(2) years from the date of purchase, provided, however, that the Company may prepay such price
at any time. Such option may be exercised by the Company at any time within sixty (60) days
after the date the Company shall have received written notice or actual knowledge that such an
event shall have occurred. While the Company's option is exercisable, the transferee thereof shall
not be entitled to vote such Units or otherwise exercise any of the rights of a registered holder
thereof until the time shall have expired (i) for the exercise of such option or (ii) if such option
shall be exercised, for the completion of settlement of such purchase.
12.2.6 Valuation. The redemption price paid for Units under Section 12.2.5, shall
be the lower of (a) the fair market value of the Company's assets determined in accordance with
Section 16.15, with the Company's accountant determining the transferor Member's capital
account balance which would exist if the Company's assets were sold in a taxable disposition for
a price equal to such fair market value, and (b) any Unreturned Capital Contribution related to
such Units. The per Unit purchase price shall be the amount so determined, divided by the total
Units owned by the transferor Member.
12.3 Substituted Member. No Assignee of any Member's Units shall be entitled to
become a Substituted Member unless the Managing Member shall, in its absolute discretion,
consent thereto in writing, and unless the Assignee shall consent in writing, in a form satisfactory
to the Managing Member, to be bound by the terms of this Agreement in the place and stead of the
assigning Member. Unless and until an Assignee has become a Substituted Member, such
Assignee shall be deemed to be an Assignee only of the right to share in the distributions and
allocations of the Company, and shall have no other rights (including, without limitation, voting
rights) hereunder.
12.4 Payment of Expenses. Neither the Company, nor any Member, shall be bound by
an otherwise valid assignment, and no Assignee of any Member's Units shall be entitled to become
a Substituted Member, unless the Company is reimbursed for all reasonable expenses, including
legal fees, associated with such assignment and substitution.
12.5 Substitution Instrument. Subject to full compliance with the terms and provisions
of this Agreement, any instrument reflecting the assignment of the Company interest of a Member
and the admission of the transferee as a Substituted Member of the Company need only be executed
and acknowledged by the Company, the transferor and the transferee.
12.6 No Dissolution Upon Assignment. An assignment of Units by a Member shall
neither dissolve nor terminate the Company.
19
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
12.7 Withdrawal of Member, Bankrupts. No Member shall be entitled to withdraw or
retire from the Company nor to demand the right to the return of capital until dissolution of the
Company; provided, however, a Member shall cease to be a Member upon the Bankruptcy of the
Member. Upon Bankruptcy, such Member shall be an Assignee only unless its Units are purchased
under Section 12.2.5.
12.8 Draw Along, Right: BLJ ouy t Rieht. Notwithstanding any other provision of this
Agreement to the contrary, the holders of at least seventy-five percent (75%) of the outstanding
Units (for purposes of this Section 12.8, the "Selling Members"), shall have the right, with the
prior written consent of the Managing Member (the "Drag Along Right"), exercisable by notice
(the "Notice of Sale") to the other Members ("Dragged Members"), to require the Dragged
Members to sell all of the Membership Interests owned by the Dragged Members to the purchaser
(who shall be bona fide and named in the Notice of Sale, together with the terms and conditions
of sale, which shall be arm's length), such sale to take place contemporaneously with, and on the
same terms and conditions of, the sale of the Membership Interests by the Selling Members. The
proceeds of a sale made under this Section 12.8 shall be allocated among the Members in a manner
consistent with the manner in which distributions are made under Section 5.1.
Section 13. Amendment and Power of Attorney.
13.1 Amendment by Members. This Agreement may be amended, modified and
changed with the unanimous vote of the Members. No amendment, modification or change shall
effectively reduce the number of Unit(s) held by any particular Member until such Member has
consented in writing to such amendment, modification or change that reduces the Unit(s) held by
such Member.
13.2 Power of Attorney.
13.2.1 Each Member, by its execution hereof, jointly and severally, makes,
constitutes and appoints the Managing Member, or any Person who is a member of the Managing
Member, as its true and lawful agent and attorney -in -fact, with full power of substitution, in its
name, place and stead to make, execute, sign, acknowledge, swear to, record and file, on its behalf
(i) the original Certificate of Formation and all amendments thereto required or permitted by law
or the provisions of this Agreement; (ii) all certificates and other instruments deemed advisable by
the Managing Member to permit the Company to become or to continue as a Membership or
Company wherein the Members have limited liability in any jurisdiction where the Company may
be doing business; (iii) all instruments that effect a change or modification of the Company in
accordance with this Agreement, including without limitation the substitution of Assignees as
Substituted Members pursuant to Section 12; (iv) all conveyances and other instruments deemed
advisable by the Managing Member to effect the dissolution and termination of the Company; (v)
all fictitious or assumed name certificates required or permitted to be filed on behalf of the
Company; and (vi) all other instruments which may be required or permitted by law to be filed on
behalf of the Company.
13.2.2 The foregoing power of attorney:
Iff
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
(a) is coupled with an interest and shall be irrevocable and survive the
death or incapacity of each Member;
(b) may be exercised either by signing separately as attorney -in -fact for
each Member or, after listing all of the Members executing an instrument, by a single signature of
the Person acting as attorney -in -fact for all of them; and
(c) shall survive the delivery of an assignment by a Member of the
whole or any portion of its interest; except that, where the Assignee of the whole of such Member's
interest has been approved by the Managing Member for admission to the Company as a
Substituted Member, the power -of -attorney of the assignor shall survive the delivery of such
assignment for the sole purpose of enabling the Managing Member to execute, acknowledge and
file any instrument necessary to effect such substitution.
13.3 Additional Instruments. Each Member shall execute and deliver to the Managing
Member within five (5) days after receipt of the Company's request therefor such further
designations, powers of attorney and other instruments as the Managing Member deems necessary
to effectuate the purposes of this Section 13.
Section 14. Records. Reports and Bank Accounts.
14.1 Records. The Company shall maintain the following records at its principal
executive office:
14.1.1 A current list of the full name and last known business or residence address
of each Member and Managing Member set forth in alphabetical order together with the capital
contributions and Units of each Member.
14.1.2 A copy of the Certificate and all amendments thereto, together with executed
copies of any powers of attorney pursuant to which the Certificate or any such amendment has
been executed.
14.1.3 Copies of the Company's federal, state, and local income tax or information
returns and reports, if any, for the six (6) most recent taxable years.
14.1.4 Copies of the original Limited Liability Company Agreement and all
amendments thereto.
14.1.5 The Company's books and records for at least the current and past three (3)
fiscal years.
Upon the request of any Member, the Manager shall promptly deliver to the
Member, at the expense of the Company, a copy of any of the information required to be
maintained by the Company under subdivisions 14.1.1, 14.1.2, 14.1.3, 14.1.4, or 14.1.5 of Section
14.1 of this Agreement. Any such information furnished by the Company shall have the personal
information of the other Members redacted. Additionally, Any Member shall have the right up
reasonable request to obtain from the Manager a copy of the Company's federal, state, and local
income tax or information returns for each year promptly after such returns become available.
21
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
Notwithstanding any of the foregoing, such records presented to the requesting Member have the
personal information of the other Members redacted.
14.2 Amendments. The Managing Member shall promptly furnish to any Member a
copy of any amendment to this Agreement executed by the Managing Member pursuant to a power
of attorney from the other Members.
14.3 Tax Information. The Managing Member shall send to each of the Members within
ninety (90) days after the end of each taxable year such information as is necessary to complete
federal and state income tax or information returns, and a copy of the Company's federal, state,
and local income tax or information returns for the year.
Section 15. Dissolution and "Termination of the Compare.
Except as otherwise provided in this Agreement, no Member shall have the right to cause
dissolution of the Company before the expiration of its term.
15.1 Events of I)ISSOIUtion. The Company shall be dissolved upon the first to occur of
the following events:
15.1.1 The sale of all or substantially all of the assets of the Company;
15.1.2 The election by the Members holding at least seventy-five (75%) of the
outstanding Units, with the written consent of the Managing Member; or
15.1.3 The entry of a decree of judicial dissolution under the Act.
15.2 Procedure on Death, Bankruptcy, Dissolution or Incomhemicy of a Member. In
the event any Member shall die, suffer Bankruptcy (as defined in Section 17), be dissolved or
become incompetent with the result that such Member cannot continue to exercise dominion over
its Units, the Company shall not be dissolved. In any such event, the personal representative,
executor, administrator, trustee, guardian, conservator or other successor in interest of the Member
who has been affected by such event, shall be treated as an Assignee of the Company interest of
said affected Member, and upon the winding up and closing of an estate for which the successor
has been acting, it may transfer and assign the Member's Units, subject to Section 12 hereof, to
the Person or Persons entitled thereto, who shall likewise be deemed Assignee(s) of said Units as
to the Units or undivided portions thereof distributed to such Assignee(s), unless and until admitted
as a Substituted Member or Members as provided in this Agreement.
15.3 liquidation. Upon dissolution of the Company, the Members shall promptly
liquidate and wind up the Company in an orderly fashion and distribute the net proceeds of
liquidation on dissolution and termination pursuant to Section 5.2 hereof. A Member may be the
liquidator the vote of Members holding at least seventy-five percent (75%) of the Units. In selling
the Company's assets, the liquidator shall take all reasonable steps to locate potential purchasers
in order to accomplish the sale at the highest attainable price. Nothing herein shall prevent any
Member(s) from, directly or indirectly, purchasing the Company's assets from the liquidator,
provided that the offer of such Member(s) is equal to or higher than the highest attainable price
22
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
from a Person who is not an Affiliate of the Company. The expenses of the liquidator shall be
deemed expenses of the Company.
15.4 Time for Liquidation. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the discharge of liabilities to creditors so as to enable
the Members to minimize the normal losses attendant upon a liquidation.
15.5 No Liability for Return of Capital. No Member, Managing Member or member of
the Managing Member shall be personally liable for the return of all or any part of the contribution
of any other Member to the Company. Any such return shall be made solely from the Company
assets.
Section 16. General Provisions.
16.1 Survival of Rights. This Agreement shall be binding upon and inure to the benefit
of the Members and their respective heirs, legatees, legal representatives, successors and assigns,
subject to the restrictions in Section 12.2.
16.2 Construction. The language in all parts of this Agreement shall be construed
according to its fair meaning and not strictly for or against any of the Members hereto.
16.3 Section Ilcadill2s. The captions of the sections of this Agreement are for
convenience only.
16.4 Agreement in Counterparts. This Agreement, or any amendment hereto, may be
executed in multiple counterparts, each of which shall be deemed an original Agreement, and all
of which shall constitute one (1) Agreement by each of the Members, notwithstanding that all of
the Members are not signatories to the original or the same counterpart, to be effective as of the
day and year first above written.
16.5 Governing Law. This Agreement shall be construed according to the laws of the
State of Delaware.
16.6 Time. Time is of the essence with respect to this Agreement.
16.7 Additional Documents. Each Member shall perform any further acts and execute
and deliver any documents which may be reasonably necessary to carry out the provisions of this
Agreement, including, but not limited to, providing acknowledgment before a Notary Public of
any signature heretofore or hereafter made by a Member.
16.8 Validily. Should any portion of this Agreement be declared invalid and
unenforceable, then such portion shall be deemed to be severable from this Agreement and shall
not affect the remainder hereof.
16.9 Pronouns. All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the Person, Persons, entity or
entities may require.
23
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
16.10 Descriptions. Anything referred to in this Agreement is expressly incorporated
herein by reference as if set forth in full, whether or not attached hereto.
16.11 Venue And Attorneys' Fees. In the event of any litigation concerning any
controversy, claim or dispute between the parties hereto, arising out of or relating to this agreement
or the breach hereof or the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorney's fees and costs incurred in connection
therewith or in the enforcement or collection of any judgment or award rendered therein. The
"prevailing party" means the party determined by the court to have most nearly prevailed (even if
such party did not prevail in all matters), not necessarily the one in whose favor a judgment is
rendered. Further, in the event of any default by a party under this agreement, such defaulting
party shall pay all the expenses and attorneys' fees incurred by the other party in connection with
such default, whether or not any litigation is commenced. Each of the members hereby
acknowledges and agrees that the exclusive venue for any litigation concerning any provision of
this agreement shall be Austin, Texas.
16.12 Partition. The Members agree that the assets of the Company are not and will not
be suitable for partition. Accordingly, each of the Members hereby irrevocably waives any and
all rights that he or she may have, currently or in the future, to maintain any action for partition of
any of the assets of the Company.
16.13 Representative Capacity; Trusts. During any period that any Units are held as
assets of a living trust revocable by the trustees of such trust, such Units shall be treated as owned
by the deemed owner of such trust for income tax purposes, and any acts of the trustee of said
revocable living trust shall be deemed the acts of the deemed owner of such trust for income tax
purposes. The death of the deemed owner of a trust holding Units shall be the death of a Member
for the purposes of Section 15, and the trustee of such a trust shall be the successor for the purposes
of Section 15.
16.14 Joint Ownership. For all purposes hereunder in those cases where two or more
Persons are indicated as a Member, holding Units as joint tenants or community property, the
following shall apply:
16.14.1 To the extent required by law, such Persons shall each be considered as
Members hereunder, each shall be deemed to have contributed an equal amount of the capital
contribution and to own an equal amount of such Units, and each shall be deemed to have an initial
capital interest consisting of an equal amount of the capital contribution as set forth opposite their
respective names.
16.14.2 For purpose of voting upon or consenting to any actions or matters, as
provided herein or by law, (i) if only one votes, such act binds all; (ii) if more than one votes, the
act of a Majority so voting binds all; or (iii) if more than one votes, but the vote is evenly split on
any particular matter, each fraction may vote the Company interest proportionately.
16.14.3 Any notices given to either or any of such Persons shall, unless the
Company is otherwise advised in writing, be deemed notice to all such Persons.
24
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
16.15 Valuation of Non -Cash Assets. For purposes of this Agreement, the procedure for
valuing any non -cash assets shall, unless otherwise provided herein, be as follows:
16.15.1 Assets Other Than Marketable Securities. If the Members cannot
otherwise agree on the value of an asset, the Managing Member shall select a qualified appraiser
who has customarily been engaged in appraising assets similar to the asset in question for a period
of not less than five (5) years. Such valuation shall include a ten percent (10%) discount for costs
of sale. The valuation of the appraiser so selected shall be binding on all Members.
16.15.2 Marketable Securities. Any securities held by the Company which are
traded on an established market shall be valued according to the market price.
Section 17. Definitions.
Capitalized terms used herein and not otherwise defined shall have the following indicated
meanings:
17.1 "Affiliate" means, with respect to any Person, any other Person who, directly or
indirectly (including through one or more intermediaries), controls, is controlled by, or is under
common control with, such Person. For purposes of this definition, "control," when used with
respect to any specified Person, shall mean the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person, whether through ownership of voting
securities or partnership or other ownership interests, by contract or otherwise; and the terms
"controlling" and "controlled" shall have correlative meanings.
17.2 "Agreement" means this Limited Liability Company Agreement.
17.3 "Assignee" means a Person who has acquired all or part of the Units of a Member
but has not been admitted as a Substituted Member. An "Assignee" shall be entitled to the
distributions and allocations accompanying the Company interest, but shall not be have any voting
rights or entitled to any other rights of a Member hereunder.
17.4 `Bankruptcy" with respect to any Member shall be deemed to have occurred when
the Member:
17.5.1 Makes an assignment for the benefit of creditors;
17.5.2 Files a voluntary petition in bankruptcy;
17.5.3 Is adjudged a bankrupt or insolvent, or has entered against the Member an
order for relief, in any bankruptcy or insolvency proceeding;
17.5.4 Files a petition or answer seeking for the Member any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation;
17.5.5 Files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Member in any proceeding of this nature;
25
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
17.5.6 Seeks, consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the Member or of all or any substantial part of the Member's properties; or
17.5.7 120 days after the commencement of any proceeding against the Member
seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without the Member's consent or acquiescence of a trustee,
receiver or liquidator of the Member or of all or any substantial part of the Member's properties,
the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay,
the appointment is not vacated.
17.5 "Business Days" means any day other than Saturday, Sunday or any legal holiday
observed in the state of formation of the Company or the location of the Property.
17.6 "Capital Contribution" shall mean the cash or property contributed to the Company
by a Member pursuant to Code Section 721.
17.7 "Cash Available for Distribution" means Cash Flow less amounts set aside for
restoration or creation of reserves determined by the Managing Member, in its sole and absolute
discretion, to be necessary and desirable, including but not limited to reserves for debt service for
a reasonable period of time, taxes, insurance, increases in working capital and contingencies.
17.8 "Cash Flow" means cash funds provided from operations of the Company, without
deduction for depreciation or amortization expenses, but after deducting funds used to pay all other
expenses, debt payments, capital improvements and replacements.
17.9 "Cash From Refinancing" means the gross proceeds received by the Company upon
the refinancing of the Company assets (less all costs of such refinancing, including the payment
of all obligations refinanced in connection therewith), less amounts set aside for restoration or
creation of reserves determined by the Managing Member, in its sole and absolute discretion, to
be necessary and desirable, including but not limited to, reserves for debt service for a reasonable
period of time, taxes, insurance, increases in working capital and contingencies. This term shall
not include Cash Flow.
17.10 "Cash From Sale or Other Disposition" means the net proceeds received by the
Company upon the sale or other disposition of less than all or substantially all of the Company
assets, less amounts set aside for restoration or creation of reserves determined by the Managing
Member, in its sole and absolute discretion, to be necessary and desirable, including but not limited
to, reserves for debt service for a reasonable period of time, taxes, insurance, increases in working
capital and contingencies. This term shall not include Cash Flow.
17.11 "Code" means the Internal Revenue Code of 1986, as amended.
17.12 "Company" refers to the limited liability company created under this Agreement.
17.13 "Deadlock" has the meaning set forth in Section 9.1.
W
#99455v1
DocuSign Envelope ID: 640C4lE9-lE69-4362-823E-4E6EAOCD6185
17.14 "Default Interest Rate" means the lesser of. (i) the maximum rate allowed by law,
or (ii) the Prime Rate plus five percent (5%) per annum. The Default Interest Rate shall change
from time -to -time with changes in the Prime Rate.
17.15 "Fair Market Value" shall mean that term as defined in Regulations Section 1.704-
1(b)(2)(iv)(h).
17.16 "Majority" shall mean the vote of the Members holding more than 50% of the Units
held by all Members then having the right to vote.
17.17 "Managing Member(s)" shall initially mean PSC Properties, LLC, a South Dakota
limited liability company.
17.18 "Member" means each Person designated on and executing the signature page of
this Agreement as a Member.
17.19 "Members" refers collectively to the Members as a whole, and reference to a
"Member" means any one of the Members.
17.20 "Membership Interest" shall mean the entire legal and equitable ownership interest
of a Member in the Company at any particular time, including (if and only if the same is provided
for hereunder) the right to participate in the management of the business and affairs of the
Company, including the right to vote on, consent to or otherwise participate in any decision or
action of or by the Members granted pursuant to the terms and provisions of this Agreement or the
Act. This may be expressed as a percentage.
17.21 "Net Income," "Net Loss," and "Gain" mean, respectively, the following amounts
as designated on the Company's informational tax return filed for federal income tax purposes, as
determined by the tax attorney(s) or accountant(s) employed by the Company: (i) ordinary income,
(ii) ordinary loss, plus net long-term capital loss, net short-term capital loss, and Section 1231 loss;
and (iii) net long-term capital gain, net short-term capital gain, and other net gain under Section
1231. In the event that property is reflected on the books of the Company (as maintained in
accordance with Regulations Section 1.704-1(b)(2)(iv)) at a book value that differs from the
adjusted tax basis of such property, Net Income, Gain and Net Loss (or item thereof) shall be
determined by reference to the book value of such property. Such allocation of book values shall
be made in accordance with Regulations Section 1.704-1(b)(2)(iv)(g).
17.22 "Notice" means any notice or other communication which satisfies the following
requirements:
17.23.1 The Notice must be in writing.
17.23.2 The Notice must be delivered personally, by prepaid first class mail, via
facsimile or by telegraph to the last known address furnished by the addressee.
17.23.3 In the case of any Member, said address shall be as reflected in this
Agreement unless the Member has given the Company Notice of a different address. If any Notice
addressed to a Member at the address of a Member appearing on the books of the Company is
27
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
returned to the Company by the United States Postal Service marked to indicate that the United
States Postal Service is unable to deliver the Notice to the Member at that address, all future
Notices shall be deemed to have been duly given without further mailing if they are available for
the Member at the principal executive office of the Company for a period of one year from the
date of the giving of the Notice to all other Members.
17.23.4 In the case of the Company, said address shall be the principal place of
business of the Company.
17.23.5 The Notice shall be deemed given upon the earlier of personal delivery,
date of mailing, date of faxing or date of telegraphing, as the case may be.
17.23.6 The Notice shall contain such information as is specifically required by
the provision of this Agreement under which such Notice is given.
17.23 "Persons" means any individual, Company, corporation, trust, limited liability
Company or other entity.
17.24 "Prime Rate" means the "prime rate" as published in The Wall Street Journal
(Eastern Edition) under its "Money Rates" column and specified as "[t]he base rate on corporate
loans at large U.S. commercial banks," or, if no longer published as such, the rate of interest
announced from time to time by Citicorp, N.A. (or its successors or assigns), as its prime rate, base
rate or reference rate. If The Wall Street Journal (Eastern Edition) publishes more than one "Prime
Rate" under its "Money Rates" column, then the Prime Rate shall be the average of such rates. If
The Wall Street Journal (Eastern Edition) is not published on a date when Prime Rate is to be
determined, then Prime Rate shall be the Prime Rate published on the date which first precedes
the date on which Prime Rate is to be determined.
17.25 "Pro rata" when used with respect to the Members, or some of them (if the proration
is not otherwise specifically identified by a percentage), means (as to an item or amount to be
contributed or to be allocated to them or shared by them, or as to a vote by them), the proportion
that the number of Units held by each Member bears to the total of all outstanding Units held by
all Members (or those Members to whom reference is made).
17.26 "Property" means the real property located at 3601 Shell Road, Georgetown, Texas
78628 which will be known as "Berry Creek Townhomes".
17.27 "Regulations" means U.S. Treasury Regulations.
17.28 "Substituted Member" means an Assignee who has obtained the written consent of
the Managing Member pursuant to Section 12.3 hereof to become a Member. A "Substituted
Member" shall have all the distribution, allocation, voting and other rights and obligations of a
Member hereunder.
17.29 "Units" means the Units and are a means of evidencing and determining the
Members' respective rights to share in the distributions and allocations of the Company and to
vote on certain matters concerning the Company as provided in this Agreement.
28
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
17.30 "Unreturned Capital Contribution" means, with respect to any Member, the excess,
if any, of the aggregate amount of all Capital Contributions contributed by such Member to the
Company, over the aggregate amount of distributions made to such Member pursuant to Section
6.2.2 i i i of this Agreement.
[Remainder of page intentionally left blank.]
29
#99455v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
IN WITNESS WHEREOF, the Members have executed this Agreement effective as of the
date first above written.
MEMBERS:
Massive Capital, LLC
a Texas limited liability company
LS
B y:3C2AEZA01 C42-7_-
Name: Shahriar Khan
Title: Member
PSC Properties, LLC
a South Dakota limited liability company
DocuSigned by:
Pau bA
By: F1Rna9nZ666474----
Name: Paul Cink
Title: Manager
BCTD Holdings, LLC
a Texas limited liability company
DocuSigned by
1�
By: S6FG7-2F9948484�—
Name: Rick Rivkin
Title: Member
[SIGNATURE PAGE TO
BERRY CREEK TOWNHOMES MANAGEMENT, LLC LIMITED LIABILITY COMPANY AGREEMENT]
#99455vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
EXHIBIT A
Tax Allocations and Elections
(Note: Capitalized terms not otherwise defined in this Exhibit A shall have the meaning
set forth in this Agreement.)
1.1 Allocations. Net Income, Gain and Net Loss of the Company shall be allocated to
the Members as provided below:
(a) In General. Except as otherwise provided in this Section 1.1, Net Income,
Gain and Net Loss of the Company for any relevant period shall be allocated to the Members to
cause, to the extent possible, their "Modified Capital Account" balances to equal their respective
"Target Balances." The term "Modified Capital Account" shall mean, for each Member, such
Member's capital account balance increased by such Member's share of "partnership minimum
gain" and of "partner minimum gain" (as determined pursuant to Regulations Sections 1.704-2(g)
and 1.704-2(i)(5), respectively). The term "Target Balance" shall mean, for each Member at any
point in time, either (i) a positive amount equal to the net amount, if any, the Member would be
entitled to receive or (ii) a negative amount equal to the net amount the Member would be required
to pay or contribute to the Company or to any third party, assuming, in each case, that (A) the
Company sold all of its assets for an aggregate purchase price equal to their aggregate carrying
value (assuming for this purpose only that the carrying value of any asset that secures a liability
that is treated as "nonrecourse" for purposes of Regulations Section 1.1001-2 is no less than the
amount of such liability that is allocated to such asset in accordance with Regulations Section
1.704-2(d)(2)); (B) all liabilities of the Company were paid in accordance with their terms from
the amounts specified in clause (A) of this sentence; (C) any Member that was obligated to
contribute any amount to the Company pursuant to this Agreement or otherwise (including the
amount a Member would be obligated to pay to any third party pursuant to the terms of any liability
or pursuant to any guaranty, indemnity or similar ancillary agreement or arrangement entered into
in connection with any liability of the Company) contributed such amount to the Company; (D)
all liabilities of the Company that were not completely repaid pursuant to clause (B) of this
sentence were paid in accordance with their terms from the amounts specified in clause (C) of this
sentence; and (E) the balance, if any, of any amounts held by the Company was distributed in
accordance with Section 5.2 of this Agreement.
(b) Income Tax Allocations. For purposes of Sections 702 and 704 of the Code,
or the corresponding sections of any future federal tax law, or any similar tax law of any state or
other jurisdiction, the Company's profits, gains and losses for federal income tax purposes, and
each item of income, gain, loss or deduction entering into the computation thereof, shall be
allocated among the Members in the same proportions as the corresponding "book" items are
allocated pursuant to this Section 1.1, except as otherwise provided in Section 1.1(e) below
(c) Minimum Gain Char e� back. Notwithstanding any other provision in this
Agreement, if there is a net decrease in Company minimum gain (as defined in Regulations Section
1.704-2(b)(2)), during any taxable year, items of Company income and gain shall be allocated in
accordance with the provisions of Regulations Section 1.704-2(f). This Section 1.1(a) is intended
to comply with Regulations Section 1.704-2(e)(3). Any special allocation of items of income or
#92781vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
gain pursuant to this Section 1.1(a) shall be taken into account in computing subsequent allocations
of Net Income or Gain pursuant to this Exhibit A, so that the net amount of any item so allocated
and the Net Income, Gain and Net Loss and other items allocated to each Member pursuant to this
Exhibit A, shall, to the extent possible, be equal to the net amount that would have been allocated
pursuant to the provisions of this Exhibit A if such decrease in minimum gain had not occurred.
(d) Qualified Income Offset. Any Member who unexpectedly receives an
adjustment, allocation or distribution described in Regulations Section 1. 704-1 (b)(2)(ii)(d)(4), (5)
or (6), so as to cause or increase a deficit balance in such Member's capital account (in excess of
any limited dollar amount of such deficit balance that such Member is obligated or deemed
obligated to restore within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c) and 1.704-2(g),
shall be allocated items of gross income and gain in an amount and manner sufficient to eliminate
such deficit balance as quickly as possible. Any such allocation of items of income or gain
pursuant to this Section 1.1(d) shall be taken into account in computing subsequent allocations of
Net Income or Gain pursuant to this Exhibit A, so that the net amount of any item so allocated and
the Net Income, Gain, Loss and Net Loss and all other items allocated to each Member pursuant
to this Exhibit A shall, to the extent possible, be equal to the net amount that would have been
allocated pursuant to the provisions of this Exhibit A if such unexpected adjustment, allocation or
distribution had not occurred.
(e) Allocations Regarding Contributed Property. Each item of taxable income,
gain, loss or deduction attributable to any property contributed to the Company ("Contributed
Pro e ") shall be allocated first to the Member that contributed the Contributed Property to the
Company (the "Property Member") in the amount required to take into account the Property
Member's share of the difference between the carrying value of the Contributed Property and its
Adjusted Basis at the time of contribution. In making allocations pursuant to the preceding
sentence, the Managing Member is authorized to apply any method or convention required or
permitted by Section 704(c) of the Code and the Regulations thereunder. The Company shall
apply similar principles with respect to property which has an adjusted tax basis different from its
carrying value due to the operation of Regulation Section 1.704-1(b)(2)(iv)(f).
(f) Interpretation of Allocations. The Members intend (i) that the allocation
provisions contained in this Exhibit A and elsewhere in this Agreement be interpreted so that the
distributions pursuant Section 5.2.4 of this Agreement are in accordance with the final capital
account balances of the Members, and (ii) that the allocation provisions contained in this Exhibit
A and elsewhere in this Agreement be applied and amended by the Manager, if and to the extent
necessary to produce such result even if any such application or amendment requires (A) first,
special allocations of gross income and/or gross deductions for the current fiscal year (or, if
necessary, any other period), and (B) second, if necessary, the amendment of prior tax returns for
the Company. This Section 1.1(f) shall control notwithstanding any reallocation of income, loss
or items thereof by the Internal Revenue Service or any other taxing authority.
1.2 Accounting With Reference to Issuance or Transfer of Company Interest. Upon
the admission of any additional Member of the Company or upon the transfer of any Company
interest (as permitted herein) to an Assignee or to any Person being admitted as a Substituted
Member, the Net Income, Gain, and Net Loss, and each item thereof, for the, year in which any
such admission or transfer occurs, attributable to the new interest or the interest transferred, shall
#92781vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
be allocated to the newly admitted Member or between the transferor and transferee (Assignee or
Substituted Member) as the case may be, as follows: all Net Income, Gain, and Net Loss, and each
item thereof, which are to be allocated for the fiscal year in which the admission or transfer occurs
shall be prorated as of the date upon which the admission or transfer is recognized by the Manager
as having occurred, so that for the purpose of making such proration, the items for such year shall
be deemed to have been earned or incurred in equal daily increments, without regard to the date
such items are actually earned or incurred during the periods before and after the date upon which
the admission or transfer occurs.
1.3 Fiscal Year. The fiscal year ("Fiscal Year") of the Company shall be the calendar
year.
1.4 Basis Adiustment. In the case of a distribution of Company property or a transfer
of a Company interest, the Manager may cause the Company to file an election under Section 754
of the Code to adjust the basis of the Company's property. As a result of this election, the Manager
shall have the right to require, as a condition to the granting of consent to any transfer, the
reimbursement of expenditures made by the Company for any legal and accounting fees incurred
to make any such basis adjustment. The Manager shall have the right, in its sole and absolute
discretion, to decline to make such an election; and further, the making or failure to make any
election under Section 754 of the Code in connection with any particular transfer of an interest in
the Company shall not affect the right of the Manager to make, or refuse to make, such an election
with respect to any subsequent transfer of an interest in the Company.
1.5 Elections. The Company shall have the right, in the sole and absolute discretion of
the Manager, to make or refuse to make any other elections or determinations required or permitted
for federal or state income tax or other tax purposes. The Manager may rely upon the advice of
the Company's accountants or tax attorneys with respect to the making of any such election.
1.6 Partnership Representative. With respect to each taxable year of the Company: (i)
except as otherwise provided herein, the Bipartisan Budget Act of 2015, P.L. 114-74, as amended,
and the Treasury Regulations promulgated thereunder (collectively, the "BBA") shall apply to the
Company; (ii) this Section 1.6 shall control the Company's handling of matters with the Internal
Revenue Service; and (iii) such provisions shall supersede any conflicting provisions set forth in
this Agreement.
(a) The BBA Opt Out Regime. For any year in which the Company is eligible to make
the election in Section 6221(b) to opt out of Subchapter C of Chapter 63 of the Code (the "BBA
Opt Out Regime"), the Board of Managers, in its discretion, may cause the Company to timely
make such election in accordance with the provisions set forth in Section 6221 of the Code as
amended by the BBA. In such event, the Members hereby acknowledge and agree that any
examination by the Internal Revenue Service shall be conducted at the Member level rather than
the Company level, in accordance with Section 6231, et. seq., of the Code (before amendment by
the BBA).
(b) Appointment of the Partnership Representative; Authority of the Partnership
Representative. Effective for all Fiscal Years commencing on or after January 1, 2018, Berry
Creek Townhomes Management, LLC, or such other Person as appointed by Berry Creek
#92781v1
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
Townhomes Management, LLC is hereby designated as the initial "partnership representative" of
the Company pursuant to Section 6223(a) of the Code as amended by the BBA (the "Partnership
Representative"). Berry Creek Townhomes Management, LLC, may, from time to time, designate
any other Person as the Partnership Representative in lieu of the original Partnership
Representative in accordance with Section 6223 of the Code, and any Person so designated shall
cease to be the Partnership Representative whenever the Board of Managers designates any other
Person to be the successor Partnership Representative in accordance with this Section 1.6(b). The
Partnership Representative, in its sole discretion, shall have the right to make on behalf of the
Company any and all elections and take any and all actions that are available to be made or taken
by the Partnership Representative or the Company under the BBA (including an election under
Section 6226 of the Code as amended by the BBA), and the Members shall take such actions
requested by the Partnership Representative consistent with any such elections made and actions
requested by the Partnership Representative, including filing amended tax returns and paying any
tax due in accordance with Section 6225(c)(2) of the Code as amended by the BBA.
(c) The BBA Alternative Regime. If the Company receives a notice of final
partnership adjustment with respect to any Fiscal Year (each, a "Reviewed Year"), then, no later
than forty-five (45) days after the receipt of such notice, the Partnership Representative may: (i)
elect the application of Code Section 6226 (the "BBA Alternative Regime"), as amended by the
BBA, to such final partnership adjustment, and (ii) furnish to each Member who was a Member
during such Reviewed Year (each, a "Reviewed Year Member") with the statement required by
Code Section 6226(a), as amended by the BBA. In such event, each Reviewed Year Member
hereby agrees to take any adjustment to income, gain, loss, deduction, or credit (as determined in
the notice of final partnership adjustment) into account to the full extent provided for in Section
6226(b) of the Code (as amended by the BBA) or the applicable corresponding provisions of state,
local or foreign law.
(d) The BBA Default Regime and the Company's Payment of any Imputed
Underpayments. If, for any Fiscal Year in which the BBA Opt Out Regime does not apply and
for any Fiscal Year in which the Partnership Representative does not elect to have the BBA
Alternative Regime apply with respect to a final partnership adjustment pursuant to Section 1.6(c)
above, the "default regime" under Code Section 6221(a) (the "BBA Default Regime") shall apply
and the Partnership Representative shall, on behalf of the Company, make any and all payments
to the Internal Revenue Service in connection with any imputed underpayment liability. Further,
the Partnership Representative shall use commercially reasonable efforts to: (i) make any
modifications available under Code Section 6225(c)(3), (4) and (5), as amended by the BBA, and
(ii) if requested by a Member, provide to such Member information allowing such Member to file
an amended federal income tax return, as described in Code Section 6225(c)(2) as amended by the
BBA, to the extent that such amended return and payment of any related federal income taxes
would reduce any taxes payable by the Company with respect to the imputed underpayment
amount (after taking into account any modifications described in clause (i)).
(e) Members Reimbursement Obligations to the Company. If the Company pays any
imputed adjustment amount under Code Section 6225 as amended by the BBA, the Manager shall
seek payment from the Members (including any former Member) to whom such liability relates,
and each such Member (including any former Member) hereby agrees to pay such amount to the
Company, and such amount shall not be treated as a Capital Contribution. Any amount not paid
#92781vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
under the preceding sentence by a Member (or former Member) at the time requested by the
Manager shall accrue interest until paid at the prime rate of interest as published in the eastern
edition in the Wall Street Journal as of the day that such amount becomes due to the Company
pursuant to this paragraph, and such Member (or former Member) shall also be liable to the
Company for any damages resulting from a delay in making such payment beyond the date such
payment is requested by the Manager. Without reduction in any Member's (or former Member's)
obligation under the preceding sentences of this Section 1.6(e), any imputed adjustment amount
paid by the Company that is attributable to a Member (or former Member), and that is not paid by
such Member shall be treated as a distribution to such Member (or former Member).
(f) Member Notice and Participation. No later than ten (10) business days after it has
knowledge of any tax audit or tax proceeding, the Partnership Representative shall notify the
Members of the existence of any such tax audit or tax examination of the Company. Each Member
shall have the right to have a tax advisor of its own choosing participate in, but not direct, the
prosecution or defense of such tax audit or tax examination at such Member's sole expense. The
Partnership Representative shall make commercially reasonable efforts to facilitate such tax
advisor's participation.
(g) Indemnity from Former Members. To the extent that a portion of the tax liabilities
imposed under Code Section 6225 as amended by the BBA relates to a former Member of the
Company, the Manager may require a former Member to indemnify the Company for its allocable
portion of such tax. Each Member acknowledges that, notwithstanding the transfer or redemption
of all or any portion of its Company Interest, such Member may remain liable for tax liabilities
with respect to its allocable share of income and gain of the Company for the Company's taxable
years (or portions thereof) prior to such transfer or redemption.
(h) Survival of Obligations. The obligations of each Member or former Member under
this Section 1.6 shall survive the transfer or redemption by such Member of its Company Interest
and the termination of this Agreement or the dissolution of the Company, and shall remain binding
on the Members and former Members for such period of time as necessary to resolve all matters
regarding the federal income taxation of the Company.
(i) Miscellaneous. Each Member agrees in respect of any year in which that Member
had a Capital Account in the Company that, except to the extent the Partnership Representative
expressly agrees otherwise with him or her or it, he or she or it shall not: (i) treat, on his or her or
its individual income tax returns, any item of income, gain, loss, deduction or credit of the
Company in a manner inconsistent with the treatment of that item by the Company, as reflected
on the Schedule K-1 or other information statement the Company provides him or her or it, or (ii)
file any claim for refund relating to any such item based on, or that would result in, any such
inconsistent treatment. Any reasonable costs incurred by the Partnership Representative for
retaining accountants and/or lawyers on behalf of the Company in connection with any Internal
Revenue Service audit of the Company shall be expenses of the Company.
#92781vl
DocuSign Envelope ID: 640C41 E9-1 E69-4362-823E-4E6EAOCD6185
EXHIBIT B
Initial Capital Contributions of Members
Member and Address
Initial Capital
Ownership Interest in the
Contribution
Profits (%)
Massive Capital, LLC
401 Century Pkwy, Box 2266,
$100.00
15.00%
Allen, TX 75013
PSC Properties, LLC
7406 S Grand Arbor Court
$100.00
70.00%
Sioux Falls, SD 57108-8246
BCTD Holdings LLC
204 Settlers Valley Dr.
$100.00
15.00%
Pflugerville, TX 78660
#99455vl
TRCtDEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
CINCINNATI OH 45999-0023
BERRY CREEK TOWNHOMES MANAGEMENT
LLC
PAUL CINK MBR
4229 N FM 620 BOX 101 UNIT 336
AUSTIN, TX 78734
Date of this notice: 03-03-2023
Employer Identification Number:
92-2690994
Form: SS-4
Number of this notice: CP 575 B
For assistance you may call us at:
1-800-829-4933
IF YOU WRITE, ATTACH THE
STUB AT THE END OF THIS NOTICE.
WE ASSIGNED YOU AN EMPLOYER IDENTIFICATION NUMBER
Thank you for applying for an Employer Identification Number (EIN). We assigned you
EIN 92-2690994. This EIN will identify you, your business accounts, tax returns, and
documents, even if you have no employees. Please keep this notice in your permanent
records.
Taxpayers request an EIN for their business. Some taxpayers receive CP575 notices when
another person has stolen their identity and are opening a business using their information.
If you did not apply for this EIN, please contact us at the phone number or address listed
on the top of this notice.
When filing tax documents, making payments, or replying to any related correspondence,
it is very important that you use your EIN and complete name and address exactly as shown
above. Any variation may cause a delay in processing, result in incorrect information in
your account, or even cause you to be assigned more than one EIN. If the information is
not correct as shown above, please make the correction using the attached tear -off stub
and return it to us.
Based on the information received from you or your representative, you must file
the following forms by the dates shown.
Form 1065
03/15/2024
If you have questions about the forms or the due dates shown, you can call us at
the phone number or write to us at the address shown at the top of this notice. If you
need help in determining your annual accounting period (tax year), see Publication 538,
Accounting Periods and Methods.
We assigned you a tax classification (corporation, partnership, estate, trust, EPMF,
etc.) based on information obtained from you or your representative. It is not a legal
determination of your tax classification, and is not binding on the IRS. If you want a
legal determination of your tax classification, you may request a private letter ruling
from the IRS under the guidelines in Revenue Procedure 2020-1, 2020-1 I.R.B. 1 (or
superseding Revenue Procedure for the year at issue). Note: Certain tax classification
elections can be requested by filing Form 8832, Entity Classification Election.
See Form 8832 and its instructions for additional information.
A limited liability company (LLC) may file Form 8832, Entity Classification
Election, and elect to be classified as an association taxable as a corporation. If
the LLC is eligible to be treated as a corporation that meets certain tests and it
will be electing S corporation status, it must timely file Form 2553, Election by a
Small Business Corporation. The LLC will be treated as a corporation as of the
effective date of the S corporation election and does not need to file Form 8832.
(IRS USE ONLY) 575B 03-03-2023 BERR B 9999999999 SS-4
IMPORTANT REMINDERS:
* Keep a copy of this notice in your permanent records. This notice is issued only
one time and the IRS will not be able to generate a duplicate copy for you. You
may give a copy of this document to anyone asking for proof of your EIN.
* Use this EIN and your name exactly as they appear at the top of this notice on all
your federal tax forms.
* Refer to this EIN on your tax -related correspondence and documents.
* Provide future officers of your organization with a copy of this notice.
Your name control associated with this EIN is BERR. You will need to provide this
information along with your EIN, if you file your returns electronically.
Safeguard your EIN by referring to Publication 4557, Safeguarding Taxpayer
Data: A Guide for Your Business.
You can get any of the forms or publications mentioned in this letter by
visiting our website at www.irs.gov/forms-pubs or by calling 800-TAX-FORM
(800-829-3676).
If you have questions about your EIN, you can contact us at the phone number
or address listed at the top of this notice. If you write, please tear off the
stub at the bottom of this notice and include it with your letter.
Thank you for your cooperation.
Keep this part for your records. CP 575 B (Rev. 7-2007)
Return this part with any correspondence
so we may identify your account. Please
correct any errors in your name or address.
CP 575 B
9999999999
Your Telephone Number Best Time to Call DATE OF THIS NOTICE: 03-03-2023
( ) - EMPLOYER IDENTIFICATION NUMBER: 92-2690994
FORM: SS-4 NOBOD
INTERNAL REVENUE SERVICE BERRY CREEK TOWNHOMES MANAGEMENT
CINCINNATI OH 45999-0023 LLC
PAUL CINK MBR
4229 N FM 620 BOX 101 UNIT 336
AUSTIN, TX 78734
ELECTRONICALLY RECORDED 2023021519
Williamson County, Texas Total Pages: 4
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING
INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN
REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
SPECIAL WARRANTY DEED WITH VENDOR'S LIEN
Independence Title GF# 2252265-COM GMH
STATE OF TEXAS
COUNTY OF WILLIAMSON
Date: MARCH ZV , 2023
Grantor: GTSHELLROAD, LLC
Grantee: BERRY CREEK TOWNHOMES, LLC, A DELAWARE LIMITED LIABILITY
COMPANY
Address: 4229 N F 620 BOX 101 UNIT 336
AUSTIN, TEXAS 78734
TRAVIS COUNTY
Consideration:
(a) The sum of Ten and No/100 Dollars ($10.00) and other good and valuable cash
consideration in hand paid by Grantee to Grantor, the receipt and sufficiency of
which is hereby acknowledged, and for the payment of which no lien, express or
implied, is retained against the Property.
(b) Part of the consideration for the Property was paid by A + FEDERAL CREDIT
UNION (Lender) at the instance and request of Grantee, the receipt of which is
hereby acknowledged, as evidence of which consideration Grantee has executed and
delivered its one certain promissory note (herein called the "Note") dated of
approximately even date herewith, in the principal sum $2,692,500.00 payable to the
order of Lender as therein provided, reference being made to the Note for all
relevant purposes. To secure the payment of the Note, Grantor does hereby
expressly retain a Vendor's Lien and Superior Title upon and against the Property to
the extent that proceeds of the Note are used towards the payment of the purchase
price of the Property until said amount of proceeds under the Note is fully paid
according to the face, tenor, effect and reading of said Note, whereupon this Deed
shall become absolute. The said Vendor's Lien and Superior Title herein retained are
2023021519 Page 2 of 4
hereby transferred, assigned, sold and conveyed to LENDER, its successors and
assigns, the payee named in the Note, without recourse or warranty. The Note is
further and additionally secured by a Deed of Trust to A + FEDERAL CREDIT
UNION, Trustee, of even date herewith, executed by Grantee covering the Property,
to which reference is here made for all relevant purposes.
Property (including any improvements):
Lot 3, SHELL WEST RESERVE, according to the map or plat thereof, recorded in
Document No. 2017085616, Official Public Records, Williamson County, Texas.
Reservations from and Exceptions to Conveyance and Warranty:
This conveyance is made and accepted subject to the following matters, to the extent
same are in effect at this time: (i) any and all restrictions, reservations, covenants and
easements, if any, relating to the Property, but only to the extent they are still in
effect, and shown of record in the hereinabove mentioned county and state; and (ii) to
all zoning laws, regulations and ordinances of municipal and/or other governmental
authorities, if any, but only to the extent that they are still in effect and relating to the
Property.
Grantor, for the consideration and subject to the reservations from and exceptions to the conveyance
and warranty set forth herein, has GRANTED, SOLD AND CONVEYED and does hereby
GRANT, SELL AND CONVEY to Grantee all of the Property, together with all and singular the
improvements located thereon and all rights and appurtenances pertaining thereto, including all
right, title and interest of Grantor in and to adjacent streets, alleys, rights -of -way, roadways, strips
and gores, easements and in -the -ground utilities. TO HAVE AND TO HOLD the Property to
Grantee, Grantee's heirs, executors, administrators, legal representatives, successors and assigns
forever. Grantor binds Grantor and Grantor's heirs, executors, administrators, legal representatives,
successors and assigns to warrant and forever defend all and singular the Property to Grantee and
Grantee's heirs, executors, administrators, legal representatives, successors and assigns against
every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through
and under Grantor but not otherwise, and except as to the reservations from and exceptions to
conveyance and warranty set forth above.
Whenever the content of this Deed so requires, the singular shall include the plural, the
plural shall include the singular and any gender shall include all other genders. Taxes for 2023 and
subsequent years having been prorated, payment thereof is assumed by Grantee.
2
2023021519 Page 3 of 4
GRANTOR:
GTShellRoad LLC, a Texas limited
liability company
By: JaMAutala,Atuithorized
Member
STATE OF TEXAS ❑
COUNTY OF TRAVIS ❑
This instrument was acknowledged before me on MARCH ZO , 2023, by Nanda
Mutala, Authorized Member of GTSHELLROAD, LLC, a Texas limited liability company, on
behalf of said company.
Notary Public, State of Texas
p MRON LIPPE
ti
f My Notary ID # 126376811
?Explree FebNary 26, 2027
AFTER RECORDING, PLEASE RETURN TO:
3
2023021519 Page 4 of 4
ELECTRONICALLY RECORDED
OFFICIAL PUBLIC RECORDS
2023021519
Pages: 4 Fee: $34.00
03/21 /2023 09:51 AM
LMUELLER
\i�M.►u� �f
Nancy E. Rister, County Clerk
Williamson County,Texas
00
fV
-0 00
N ro r-
0
or x
o V) o
i
a O -1 ,
� w
ro
0
v
(N
a)
O M
N
C: O
O O
41 f— N
E fM
z v �
+� U v
U
Q) i
O cr
i Q) U
a. m Q
J O
J ++
f0
Vf �
� v
* E 'm m
*± o v
W t ul
C OLD M
y C 'c N
I o N
c v " rn
U W
i J
� J
m lJJ
0
U
J
J
C
N
E
av
OD
f0
C
fc0
C
N
E
O
t
C
3
O
H
Y
N
a
U
L
v
co
d
oD
A
c
co
2
u
J J
+� J
C Yl
D1 �
D1 LE
c OD CL
GI
�, v o
' ro rncn a`
0 -J
J
0 o p ^j v
c s rn s
O L E
�� wU
Y OD
w C
� �oA
v m
f0
v �
m
L
rn
J C
J O
Q .7
�U
N O
L-
a) Cl)
C
L
O�-
N N J
O C
Q m N
G c
� G cu
� I �
L O N
N
CD
C N
O cC c6
co ca
I � �
E a
s0U
J
J
O O
.a)
N
O
UUa
a� a� co
coma