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Title: |
Operating Agreement |
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Entities: |
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Date: |
2002 |
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Preview shows 13KB of 58KB total |
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$40 |
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ID: |
#1706192 |
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OPERATING AGREEMENT
OF
FLEXCHECK HOLDINGS LLC
A SOUTH CAROLINA LIMITED LIABILITY COMPANY
EFFECTIVE AS OF JANUARY 18, 2002
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ..................................... 1
ARTICLE II FORMATION OF COMPANY ........................... 3
2.1 Formation ............................... 3
2.2 Name .................................... 3
2.3 Principal Place of Business.............. 3
2.4 Registered Office and Registered Agent .. 4
2.5 Term .................................... 4
ARTICLE III BUSINESS OF COMPANY ........................... 4
3.1 Permitted Businesses .................... 4
ARTICLE IV NAMES AND ADDRESSES OF MEMBERS;
OWNERSHIP INTERESTS ............................ 4
4.1 Name and Address ........................ 4
4.2 Units ................................... 5
4.3 Options Outstanding ..................... 5
ARTICLE V RIGHTS AND DUTIES OF MANAGERS ................... 5
5.1 Management .............................. 5
5.2 Number, Tenure and Qualifications ....... 5
5.3 Certain Limitations on the Authority
of the Manager .......................... 6
5.4 Liability for Certain Acts .............. 6
5.5 Managers and Members Have No Exclusive
Duty to Company ......................... 7
5.6 Bank Accounts ........................... 7
5.7 Indemnity of the Managers, Employees and
Other Agents............................. 7
5.8 Resignation ............................. 7
5.9 Removal ................................. 8
5.10 Vacancies ............................... 8
5.11 Compensation............................. 8
i
<PAGE>
Page
ARTICLE VI RIGHTS AND OBLIGATIONS OF MEMBERS .............. 8
6.1 Limitation of Liability ................. 8
6.2 Company Debt Liability .................. 8
6.3 List of Members ......................... 8
6.4 Approval of Sale of All Assets .......... 8
6.5 Company Books ........................... 9
6.6 Priority and Return of Capital .......... 9
6.7 Amendment of Operating Agreement ........ 9
6.8 Non-Competition and Confidentiality
Covenants............................... 9
6.9 Waiver of Enforcement ................... 10
ARTICLE VII MEETINGS OF MEMBERS ........................... 10
7.1 Annual Meeting ........................... 10
7.2 Special Meetings ......................... 10
7.3 Place of Meetings ........................ 10
7.4 Notice of Meetings ....................... 11
7.5 Manner of Acting ......................... 11
7.6 Proxies .................................. 11
7.7 Action by Members Without a Meeting ...... 11
7.8 Waiver of Notice ......................... 12
ARTICLE VIII CONTRIBUTIONS TO THE COMPANY AND CAPITAL
ACCOUNTS ...................................... 12
8.1 Members' Capital Contributions ........... 12
8.2 Capital Accounts ......................... 12
8.3 Withdrawal or Reduction of Members'
Contributions to Capital ................. 13
ARTICLE IX ALLOCATIONS, INCOME TAX, DISTRIBUTIONS,
ELECTIONS AND REPORTS ........................... 14
9.1 Allocations .............................. 14
9.2 Distributions ............................ 14
9.3 Accounting Principles .................... 14
9.4 Interest On and Return of Capital
Contributions............................. 14
9.5 Loans to Company ......................... 15
9.6 Accounting Period ........................ 15
9.7 Records, Audits and Reports .............. 15
9.8 Returns and other Elections .............. 15
9.9 Confidentiality .......................... 16
ARTICLE X TRANSFERABILITY .................................. 16
10.1 General. .................................. 16
10.2 Right of First Refusal ..................... 16
ii
<PAGE>
Page
ARTICLE XI DEATH OF A MEMBER ............................... 17
ARTICLE XII DISSOLUTION AND TERMINATION .................... 18
12.1 Dissolution .............................. 18
12.2 Winding Up, Liquidation and Distribution
of Assets ................................ 18
12.3 Articles of Dissolution .................. 19
12.4 Return of Contribution Nonrecourse to
other Members ............................ 19
ARTICLE XIII MISCELLANEOUS PROVISIONS ...................... 20
13.1 Notices .................................. 20
13.2 Books of Account and Records ............. 20
13.3 Application of South Carolina Law ........ 20
13.4 Waiver of Action for Partition ........... 20
13.5 Execution of Additional Instruments ...... 21
13.6 Construction.............................. 21
13.7 Headings and Pronouns..................... 21
13.8 Waivers................................... 21
13.9 Rights and Remedies Cumulative............ 21
13.10 Severability.............................. 21
13.11 Heirs, Successors and Assigns............. 21
13.12 Creditors................................. 22
13.13 Counterparts ............................. 22
CERTIFICATE ................................................ 23
EXHIBIT A .................................................. 24
iii
<PAGE>
THIS Operating Agreement is made and entered into by and between the
Members whose signatures appear on the signature page hereof.
RECITALS:
A. Filed articles of organization for Flexcheck Holdings LLC
with the Secretary of State of South Carolina on January 18, 2002 and amended on
March 29, 2002.
B. Initially, it was anticipated that the Company would be owned
80% by HomeGold Financial, Inc. ("HomeGold") and 20% by Brendan R.
Carpenter ("Carpenter"). Negotiations between HomeGold and Carpenter as to the
ownership of the Company were not finalized until August, 2002, at which time
the parties agreed that Carpenter would be the sole owner of the Company from
its inception (with HomeGold holding an option to acquire an 80% interest) and
that HomeGold would loan funds to the Company pursuant to Revolving Line of
Credit referred to hereinafter (which would also relate back to and be effective
as the first funding by HomeGold in January, 2002) and thereafter HomeGold and
Carpenter agreed that both this Operating Agreement and the Revolving Line of
Credit would relate back to and be effective as of January 18, 2002.
C. The parties agree as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Operating Agreement shall have the
following meanings (unless otherwise expressly provided herein);
(a) "Articles of Organization" shall mean the Articles of Organization
of Flexcheck Holdings LLC as filed with the Secretary of State of South Carolina
as the same may be amended from time to time.
(b) "Capital Account" as of any given date shall mean the Capital
Contribution to the Company by a Member as adjusted up to the date in question
pursuant to Article VIII.
(c) "Capital Contribution" shall mean any contribution to the capital
of the Company in cash or property by a Member whenever made. "Initial Capital
Contribution" shall mean a majority in interest of the contribution to the
capital of the Company pursuant to this Operating Agreement.
(d) "Code" shall mean the Internal Revenue Code of 1986 or
corresponding provisions of subsequent superseding federal revenue laws.
(e) "The Act" shall mean the South Carolina Limited Liability Company
Act of 1996.
(f) "Company" shall refer to Flexcheck Holdings LLC.
(g) "Distributable Cash" means all cash, revenues and funds received by
the Company, less the sum of the following to the extent paid or set aside by
the Company: (i) all principal and interest payments on indebtedness of the
Company and all other sums paid to lenders; (ii) all cash expenditures incurred
1
<PAGE>
incident to the normal operation of the Company's business; (iii) such Reserves
as the Managers deem reasonably necessary to the proper operation of the
Company's business.
(h) "Entity" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association or any foreign trust or foreign business
organization.
(i) "Fiscal Year" shall mean the Company's fiscal year, which shall be
the calendar year.
(j) "Majority in Interest of the Members" shall mean those Members
holding a majority of the issued and outstanding Units.
(k) "Manager" shall mean one or more managers. References to the
Manager in the singular or as him, her, it, itself, or other like references
shall also, where the context so requires, be deemed to include the plural or
the masculine or feminine reference, as the case may be.
(l) "Member" shall mean each of the parties who executes a counterpart
of this Operating Agreement as a Member and each of the parties who may
hereafter become Members. To the extent a Manager has purchased Membership
Interests in the Company, he will have all the rights of a Member with respect
to such Membership Interests, and the term "Member" as used herein shall include
a Manager to the extent he has purchased such Membership Interests in the
Company. If a Person is a Member immediately prior to the purchase or other
acquisition by such Person of an Economic Interest, such Person shall have all
the rights of a Member with respect to such purchased or otherwise acquired
Membership Interest or Economic Interest, as the case may be.
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