THIS OPERATING AGREEMENT (this “Agreement”) effective as of this [REDACTED] day of [REDACTED], 2022 by and among [REDACTED], LLC, a Florida limited liability company (the “Company”); [REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company (“[REDACTED]”); [REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company (“[REDACTED]”); and [REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company (“[REDACTED]”, and together with [REDACTED] and [REDACTED], the “Initial Members”); and the other persons listed from time to time on Schedule I to this Agreement as Members (collectively, the “Additional Members”).
NOW, THEREFORE, the parties hereby agree as follows:
Capitalized Terms. The following capitalized terms used in this Agreement have the meanings set forth below:
“Act” means the Florida Limited Liability Company Act, as the same may be amended from time to time.
“Affiliate” means any Person who directly or indirectly controls, is controlled by, or is under common control with, another Person.
“Agreement” means this Agreement as it may be amended from time to time.
“Articles of Organization” means the Articles of Organization of the Company filed with the Florida Secretary of State in accordance with the Act, as the same may be amended from time to time.
“Bankruptcy” or “Bankrupt” means, with respect to any Member, a Member making an assignment for the benefit of creditors, a Member becoming a party in any manner to any liquidation or dissolution action or proceeding with respect to such Member or any bankruptcy, reorganization, insolvency or other proceeding for the relief of financially distressed debtors with respect to such Member, or a receiver, liquidator, custodian or trustee being appointed for such Member or a substantial part of such Member’s assets, and, if any of the same occur involuntarily, the same not being dismissed, stayed or discharged within ninety (90) business days, or the entry of an order for relief against such Member under Title 11 of the United States Code or any state bankruptcy or insolvency proceeding. A Member shall be deemed Bankrupt if the Bankruptcy of such Member shall have occurred.
“Capital Account” means, as to any Member, the capital account maintained for each Member in accordance with Section 5.1 of this Agreement.
“Capital Contribution” means, as to each Member, the amount of capital contributed by such Member in accordance with Article 4 of this Agreement. Any reference in this Agreement to the Capital Contribution of a Member will include the Capital Contributions made by any predecessor in interest of such Member in respect of such Interest of such Member.
“Code” means the Internal Revenue Code of 1986, as amended.
“Entity” means a Person other than a natural person and includes, without limitation, corporations (both non-profit and other corporations), partnerships (both limited, limited liability, general), trusts, joint ventures, limited liability companies, and unincorporated associations.
“Fiscal Year” has the meaning set forth in Section 7.4 of this Agreement.
“Interest” means the limited liability company interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which a Member may be entitled under this Agreement, together with the obligations of such Member to comply with all of terms and provisions of this Agreement.
“Manager” means the Person selected to serve as the Manager pursuant to the terms of this Agreement.
“Members” means the Initial Members and all other Persons admitted as Additional Members or substituted Members pursuant to this Agreement, so long as they remain Members.
“Net Cash Flow” means, for any period, the Company’s cash and cash equivalents at the beginning of such period, increased by all cash received by the Company during such period from all sources (other than Capital Contributions), reduced by all cash expenditures during such period (including any principal and interest payments on the Company’s indebtedness during such period and any Management Fees), and further reduced by the amount of a working capital reserve to meet the anticipated working capital requirements of the Company, as established by the Manager.
“Net Income” and “Net Loss” means, for each fiscal year or other period, the taxable income or loss of the Company, or particular items thereof, determined in accordance with the accounting method used by the Company for federal income tax purposes with the following adjustments: (a) all items of income, gain, loss, deduction or expense specially allocated pursuant to this Agreement shall not be taken into account in computing such taxable income or loss; (b) any income of the Company that is exempt from federal income taxation and not otherwise taken into account in computing Net Income and Net Loss shall be added to such taxable income or loss; (c) if the book value of any asset differs from its adjusted tax basis for federal income tax purposes, any gain or loss resulting from a disposition of such asset shall be calculated with reference to such book value; (d) upon an adjustment to the book value of any asset pursuant to the definition of book value, the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (e) if the book value of any asset differs from its adjusted tax basis for federal income tax purposes the amount of depreciation, amortization or cost recovery deductions with respect to such asset for purposes of determining Net Income and Net Loss shall be an amount which bears the same ratio to such book value as the federal income tax depreciation, amortization or other cost recovery deductions bears to such adjusted tax basis (provided that if the federal income tax depreciation, amortization or other cost recovery deduction is zero, the Manager may use any reasonable method for purposes of determining depreciation, amortization or other cost recovery deductions in calculating Net Income and Net Loss); and (f) except for items in (a) above, any expenditures of the Company not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing Net Income and Net Loss pursuant to this definition, shall be treated as deductible items.
“Person” means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors and assigns to such Person as the context may require.
“Treasury Regulations” means the regulations of the U.S. Department of the Treasury promulgated under the Code, as such Treasury Regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“Transfer” has the meaning given to such term in Section 9.2 of this Agreement.
2. 1. Formation. The Company has been formed as a limited liability company pursuant to the provisions of the Act. The rights and duties of the Members, and the affairs of the Company, will be governed by the provisions of this Agreement, the Articles of Organization and the Act.
2. 2. Articles of Organization and Related Documents. From time to time, the Members will execute such certificates, qualifications to do business, fictitious name certificates, or similar filings in such jurisdictions as the Manager may determine from time to time to be necessary or appropriate in connection with the conduct of the business of the Company or to provide notification of the limitation of liability of Members under applicable law.
2. 3 Name. The name of the Company will be “[REDACTED], LLC” or such other name as may be selected from time to time by the Manager.
2.4 Principal Office. The principal office of the Company will be located at such location as the Manager may determine from time to time. The Company will promptly notify the Members of any change in the Company’s principal office.
2.5 Other Offices. The Company may have such other offices as the Manager may determine from time to time.
2.6 Term. The existence of the Company will continue until the Company is dissolved in accordance with the terms of this Agreement or the Act.
2.7 Change of Registered Agent or Registered Office. The registered agent and the registered office may be changed from time to time at the direction of the Manager.
3.1 Purposes of the Company. The purposes of the Company are:
3.2 Powers. The Company will have all powers of a limited liability company under the Act and the power to do all things necessary or convenient to accomplish its purposes as set forth in Section 3.1.
| Name | Number and Type of Interests |
| [REDACTED] | [REDACTED] Class A Interests |
| [REDACTED] | [REDACTED] Class A Interests |
| [REDACTED] | [REDACTED] Class A Interests |
4.2 Rights of Members. The holders of the Interests shall be subject to the terms and conditions of, and shall have the rights and duties set forth in, this Agreement.
4.3 Additional Capital Contributions. No Member will be required to make any additional Capital Contributions to the Company.
5.1 Capital Accounts. A capital account (a “Capital Account”) shall be established and maintained for each Member to which shall be credited the Capital Contributions made by such Member and such Member’s allocable share of Net Income (and items thereof), and from which shall be deducted distributions to such Member of cash or other property and such Member’s allocable share of Net Loss (and items thereof). To the extent not provided for in the preceding sentence, the Capital Accounts of the Members shall be adjusted and maintained in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).
5.2 Allocations to Capital Accounts.
5.3 Distributions of Net Cash Flow. Distributions of Net Cash Flow will be allocated in the following order of priority:
5.5 Distribution of [REDACTED ENTITY STOCK]. In the event that the Company completes the acquisition of the [REDACTED ENTITY STOCK] pursuant to the Option Agreement or otherwise, then the Company will continue to hold the [REDACTED ENTITY STOCK] until such time as the Company has satisfied or been released from all of the liabilities of the Company and/or established reasonable reserves for the payment of such liabilities. At such time, the Company shall distribute the [REDACTED ENTITY STOCK] to the Members as follows:
5.6 Modification of Distribution Provisions upon Issuance of New Classes of Interests. In the event that the Company issues Interests of any additional class of Interests, then the provisions of Section 5.4 and Section 5.5 shall be amended to reflect the issuance of such Interests.
5.7 Return of Capital. Except as herein provided with respect to distributions during the term of the Company or following dissolution, no Member has the right to demand a return of such Member’s Capital Contribution (or the balance of such Member’s Capital Account). Further, no Member has the right (i) to demand and receive any distribution from the Company in any form other than cash (except as provided in Section 5.5), or (ii) to bring an action of partition against the Company or its property.
6.1 Control of Business. Subject to Section 6.4 below and the provisions of the Act, (i) the business and affairs of the Company will be managed or under the direction of the Manager, and (ii) the power to act for and bind the Company will be vested exclusively in the Manager, subject to the authority of the Manager to delegate powers and duties to the Officers as set forth in this Agreement.
6.3 Officers. The Company will have a Chief Executive Officer and such other Officers as the Manager may from time to time appoint with the approval of Members holding a majority of the Class A Interests. Unless otherwise provided in this Agreement, each Officer shall serve the term of office for which he is elected or appointed and until his successor has been elected or appointed or his earlier resignation, removal from office, or death. Any Officer may be removed, with or without cause, at any time by the Manager. Any two or more offices may be held by the same person. The Officers shall have such powers as may be delegated to them from time to time by the Manager.
6.4 Limitation of Authority of the Manager and the Chief Executive Officer.
6.5 Management Services. The Manager will receive a fee of $[REDACTED AMT] per month for a period of up to [REDACTED] Any additional compensation to the Manager will require the approval of Members holding a majority of the Interests (other than the Interests held by the Manager).
6.6 Member Loans. Subject to Section 6.4(a), upon a determination by the Manager that either the Company requires additional capital to meet its obligations or the interests of the Company would be enhanced by access to additional capital, the Manager may request Members to make advances to the Company upon terms to be determined by the Manager (a “Member Advance”).
6.7 Performance of Duties by Manager and Officers.
6.8 Limitations on Liability of Members, Manager and Officers. No Member, the Manager or any Officer of the Company will have any personal liability to the Company or the Members for any losses sustained or liabilities incurred as a result of any act or omission of such person if the person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the interests of the Company and in accordance with this Agreement and the Act.
6.9 Liability to Third Parties. The debts, obligations, and liabilities of the Company, whether arising in contract, tort, or otherwise, will be solely the debts, obligations, and liabilities of the Company, and the Members, Manager and Officers will not be obligated personally for any such debt, obligation, or liability by reason of acting as a Member, Manager or Officer of the Company in accordance with this Agreement and the Act.
7.1 Company Funds. The funds of the Company will be deposited in such bank accounts, or invested in such interest-bearing or noninterest-bearing investments, including, without limitation, federally insured checking and savings accounts, certificates of deposit, government issued or backed securities, or mutual funds investing primarily in such types of securities, as will be designated by the Manager. Such funds will not be commingled with the funds of any other person.
7.2 Checks, Drafts, Orders for Payment. All checks, drafts, or orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Company will be signed by such Officers or other agents of the Company and in such manner as the Manager will from time to time determine.
7.3 Financial Reports. The Company will prepare and distribute to the Members as soon as practicable after the end of each Fiscal Year (and in no event later than ninety (90) days thereafter) unaudited financial statements for such Fiscal Year, prepared in accordance with generally accepted accounting principles, consistently applied.
7.4 Fiscal Year. The Fiscal Year of the Company will end on December 31.
7.5 Tax Matters Member. [REDACTED ENTITY NAME] will serve as the “tax matters” member within the meaning of Section 6231 of the Code.
7.6 Tax Returns. The Manager will cause all tax returns for the Company to be prepared and timely filed by the due date of the returns after the end of each fiscal year, will provide to the Members such information as will be necessary for the preparation by the Members of their federal income tax returns.
7.7 Books and Records. The Company will maintain appropriate books and records with respect to the Company’s business. The books and records will include (i) the Company’s books of account; (ii) a current and past list of the full name and last known mailing address of each Member and each Officer and Manager not a Member (all Officers and Manager will be identified as such on the records); (iii) a copy of the Articles of Organization and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any articles of amendment have been executed; (iv) copies of the Company’s federal, state and local income tax returns and reports, if any, for the three (3) most recent years; (v) an executed copy of this Agreement as in effect and all amendments thereto; (vi) recent financial statements of the Company for the three (3) most recent years; and (vii) copies of such other material instruments and documents as the Officers may execute on behalf of the Company. Such books and records will be kept at the principal office of the Company. Each Member will have the right, during ordinary business hours, to inspect and copy any of such records at the requesting Member’s expense.
7.8 Accounting. The books of the Company for financial reporting purposes will be maintained on an accrual basis of accounting in accordance with generally accepted accounting principles, consistently applied. The Company’s books for purposes of maintaining and determining Capital Accounts will be maintained in accordance with the provisions of this Agreement, Section 704 of the Code and, to the extent not inconsistent therewith, the principles described above for financial reporting purposes.
8.1 Limited Liability. No Member will be personally liable for any debts, liabilities, or obligations of the Company; provided that each Member will be responsible for the amount of any distributions made to such Member that must be returned to the Company pursuant to the Act.
8.2 Participation in Management. No Member, as such, will take any part in the management and control of the business of the Company nor will any Member, by reason of its status as such, have any right to transact any business for the Company or any authority or power to sign for or bind the Company. Notwithstanding the foregoing, Members will have the right to approve or disapprove or otherwise consent or withhold consent with respect to such matters as are specified in this Agreement or otherwise in the Act; and provided that Members may take such actions on behalf of the Company and execute documents or otherwise bind the Company to the extent, if any, that such powers are expressly delegated to any such Member by the Manager from time to time.
8.3 Other Activities of the Manager, Members and their Affiliates. Except as limited by Section 8.4, each Member expressly agrees that the Manager, the other Members and each of their respective Affiliates may engage independently or with others, for its or their own account and for the account of others, in other business ventures and activities of every nature and description and neither the Company nor any Member shall have any rights or obligations by virtue of this Agreement in and to such independent ventures and activities or the income or profits derived from such ventures and activities.
8.4 Non-Competition Covenant.
9.1 Restrictions on Transfer. No Member may sell, assign, transfer, pledge, hypothecate, mortgage, encumber or dispose of (a “Transfer“) all or any portion of its Interests except in compliance with the terms of this Agreement. Any attempted Transfer in violation of this Article 9 will be null and void.
9.2 Permitted Transfers. Subject to the requirements of Section 12.17, the Interests of the Members may be Transferred under the following circumstances:
9.3 Option to Purchase of Interests In Certain Events.
9.4 Member Ceasing to be a Member. A Member will cease to be a Member only upon the occurrence of one or more of the following events:
9.5 Right of First Refusal on Dispositions of Interests.
9.6 Withdrawal. Any Member may withdraw from the Company upon notice to the Company and the Manager. Upon any Member’s withdrawal from the Company, such Member shall no longer be entitled to exercise any rights as a Member and shall not be entitled to any other further distributions from the Company.
9.7 Substituted Members. Any transferee acquiring the Interests of a Member as permitted under this Article 9 will be deemed admitted as a substituted Member with respect to the Interests transferred concurrently with the effectiveness of the Transfer (provided that such transferee, unless already a Member, will, as a condition to such admission, execute a counterpart of this Agreement, agreeing thereby to be bound by all of the terms and conditions hereof), and such substituted Member will be entitled to all of the rights and benefits under this Agreement of the transferor of such Interests, subject to the limitations of Section 9.3. Each transferee will reimburse the Company for all reasonable expenses incurred by the Company in connection with such Transfer. No purported Transfer of any Interests, or any portion thereof or interest therein, in violation of the terms of this Agreement (including any Transfer occurring by operation of law) will vest the purported transferee with any rights, powers, or privileges hereunder, and no such purported transferee will be deemed for any purposes as a “Member” hereunder or have any right to inspect Company records to maintain derivative proceedings, to maintain any action for an accounting or to exercise any other rights of a Member hereunder or under the Act. Any Transfer in contravention of any of the provisions of this Article 9 will be void ab initio and of no effect and will not bind or be recognized by the Company.
9.8 Repurchase of Interests for Regulatory Reasons.
10.1 Events of Dissolution. Each of the following will be an “Event of Dissolution” causing the Company to dissolve:
The affirmative vote or affirmative written consent of the Manager of the Company and Members holding a majority of the Interests;
10.2 Effect of Death, Withdrawal, Bankruptcy or Dissolution of Member. Notwithstanding anything to the contrary contained in the Act, the Company will not dissolve upon the death, withdrawal, Bankruptcy or dissolution of a Member.
11.1 Meetings of Members. Meetings of the Members may be held whenever called by the Manager, the Chief Executive Officer or by the written demand of the Members holding fifty percent (50%) or more of the Interests. Any written demand by the Members will state the purpose or purposes of the proposed meeting, and business to be transacted at any such meeting will be confined to the purposes stated in the notice thereof, and to such additional matters as the Manager may determine to be germane to such purposes. The Manager will serve as the chairman of any meetings of Members.
11.2 Place of Meetings. Meetings of the Members will be held at the principal office of the Company, or such other place as the Manager may determine.
11.3 Notice of Meetings. Written notice stating the place, day, and hour of any meeting of the Members and the purpose or purposes for which the meeting is called will be delivered not less than one (1) day nor more than fifty (50) days before the date of the meeting, either personally, by facsimile, email, or by mail, by or at the direction of the person calling the meeting, to each Manager and each Member. Any party may waive notice of any meeting. The attendance of a party at any meeting will constitute a waiver of notice of such meeting except where a party attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened.
11.4 Quorum. At any meeting of the Members a quorum will require, the presence in person or by proxy of Members holding a majority of all outstanding Interests.
11.5 Voting. If a quorum is present at a meeting of Members, the affirmative vote of the Members holding a majority of the Interests will be the act of the Members, unless a greater percentage or voting by a separate class is required by this Agreement or the Act.
11.6 Proxies. At meetings of the Members and any adjournments thereof, a Member may vote in person or by proxy executed in writing by the Member or by his duly authorized attorney‑in‑fact. Such proxy will be filed with the Company before or at the time of the meeting. No proxy will be valid after sixty (60) days from the date of its execution, unless otherwise provided in the proxy. The burden of proving the validity of any undated, irrevocable, or otherwise contested proxy will rest with the person seeking to exercise the same.
11.7 Meetings by Telephone. The Manager and any Member may participate in any meeting of Members, as the case may be, by means of a conference telephone or similar communication equipment whereby the Manager and all Members participating in such meeting can hear one another. Such participation will constitute attendance in person.
11.8 Record of Meetings. The Company will prepare minutes for each meeting of Members.
11.9 Action Without a Meeting.
12.1 Notices. Any notice, demand, request or report required or permitted to be given or made under this Agreement will be in writing and will be deemed given or made when delivered in person or five (5) days after the date when sent by certified or registered mail to: (i) a Member, when addressed to such Member at the address file with the Company or such other address as the Member may hereafter provide to Company in writing; and (ii) the Company, when addressed to the Company at its principal office.
12.2 Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of the State of Florida, without reference to its principles of conflicts of laws.
12.3 Venue. All disputes among or between the Members, the Manager and/or the Company arising out of or in any way related to the Company or this Agreement shall be adjudicated in the state and federal courts located within Alachua County, Florida. Venue for all such matters shall lie exclusively in those courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have, including, but not limited to, any claim of forum non conveniens, to venue in the courts located in the County of Alachua, State of Florida. Each of the parties agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
12.4 Headings. The Article and Section headings of this Agreement are for convenience only, do not form a part of this Agreement, and will not in any way affect the interpretation hereof.
12.5 Power of Attorney. Subject to the terms and conditions hereof, each Member hereby irrevocably constitutes and appoints each of the Manager his true and lawful attorney-in-fact and agent with full power and authority to act in his name, place and stead to execute, acknowledge, swear to, deliver, file, record and publish any document requisite to carrying out the intention and purposes enumerated below, including, but not limited to, the execution, acknowledgment, swearing to, delivery, filing, recording and publication of this Agreement and amendments thereto, documents, conveyances, leases, contracts, loan documents and/or counterparts thereof, and all other documents which such person reasonably deems necessary or appropriate:
No person will take any action as an attorney-in-fact of any Member which would in any way increase the liability of such Member beyond the liability expressly set forth in this Agreement nor is any Member bound by such action taken. This power of attorney will be irrevocable.
12.6 Parties in Interest. Nothing in this Agreement will be construed to be for the benefit of or enforceable by any Person not a party to this Agreement, including, but not limited to, any creditor of the Company, other than the Persons entitled to indemnification under Section 6.10.
12.7 Further Assurances. The Members will execute and deliver such further instruments and do such further acts and things as may reasonably be required to carry out the intent and purposes of this Agreement.
12.8 Remedies Cumulative. Except as otherwise provided herein, no remedy conferred upon or reserved to the Company or any Member by this Agreement is intended to be exclusive of any other remedy. Except as otherwise provided herein, each and every such remedy will be cumulative and will be in addition to any other remedy given to the Company or any Member hereunder or now or hereafter existing at law or in equity or by statute.
12.9 Successors and Assigns. Subject to the restrictions on Transfer set forth in Article 9, this Agreement will bind and inure to the benefit of the parties hereto and their respective successors and assigns.
12.10 Legal Fees. In the event that any party should commence legal proceedings with respect to the rights and duties of the parties to this Agreement, the prevailing party in such legal proceedings will be entitled to reimbursement from the non-prevailing party of all legal fees and expenses incurred in such proceedings.
12.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which will constitute one and the same agreement.
12.12 Entire Agreement. The terms and conditions of this Agreement constitutes the entire agreement between the Members concerning the subject matter hereof, and will supersede all previous communications, either oral or written, between the parties hereto, and no agreement or understanding modifying this Agreement will be binding upon any Member unless such modification is in writing and signed by such Member.
12.13 Appraisal Rights. Each Member hereby waives any right to cause the Company to pay the fair value of its Interest if and as required pursuant to the Act.
12.14 Amendment. This Agreement may be amended from time to time with the prior written consent of the Manager and Members holding a majority of the Interests, provided that the following amendments will require the additional consents noted below:
12.15 Confidentiality. Each of the parties hereto shall maintain in strict confidence, and will cause their officers, directors, managers, employees, agents, shareholders, partners, members, accountants, consultants, legal counsel and other advisors and representatives to maintain in strict confidence all, and not disclose to any third party any, information they have with respect to (i) the Company and its business, assets, liabilities, results of operations and financial condition (the “Confidential Information”) and (ii) the terms of this Agreement, unless such information is already known to such third party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party or unless the furnishing of such information (a) is authorized by the Manager, (b) is necessary to conduct the Company’s business, (c) is made to their lenders and their respective officers, directors, managers, employees, agents, shareholders, partners, members, accountants, consultants, legal counsel and other advisors and representatives, (d) is required by or necessary in the conduct of the prosecution or defense of any legal proceeding or (e) is required or necessary in connection with the preparation and filing of any tax return or to comply with any applicable legal requirement in effect from time to time. Notwithstanding anything to the contrary in this Agreement, any Member may disclose the terms of this Agreement and any information such Member has with respect to the Company and its Business, assets, liabilities, results of operations and financial condition to potential purchasers of such Member’s Interests, provided such Member notifies the Manager before such disclosure and, if required by the Manager, the potential purchasers execute and deliver to the Company a confidentiality agreement in a form reasonably acceptable to the Manager.
12.16 Member Representations. Each Member makes the following representations and warranties to the Company, to each of the other Members and the Manager of the Company:
12.17 Additional Regulatory Representations and Covenants.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first-above written.
[REDACTED], LLC
