NEWCO, LLC OPERATING AGREEMENT (10/19/04)
THE LIMITED LIABILITY COMPANY OPERATING AGREEMENT is made as of ________________, 2004, by _________________and _______________ (the parties acting who are collectively herein after referred to as the “Member”). WITNESSETH: WHEREAS, the Members desire to own and operate a limited liability company under the laws of the state of Florida, which limited liability is to be known as _________________LLC (the “Company”); and WHEREAS, the Members desire to reduce the agreements and understandings relating to the company to writing as more particularly hereinafter set forth. NOW, THEREFORE, in consideration of the premises hereinafter contained, the Members do hereby state as follows: ARTICLE 1 FORMATION, NAME & PURPOSES 1.1 Formation. Pursuant to the Florida Limited Liability Company Act (the “Act”), the parties filed Articles of Organization for “Newco, LLC”, (the “Company”), with the Florida Department of State on ________________, 2004. The parties shall immediately, and from time-to-time hereafter, as may be required by law, execute all amendments of the Articles of Organization, and do all filing, recording and other acts as may be appropriate to company with operation of the Company under the Act. 1.2 Intent. It is the intent of the Members that the company shall always be operated in a manner consistent with its treatment as a “partnership” for federal and state income tax purposes. No member shall take any action inconsistent with the express intent of t he parties. 1.3 Name. The name of this Company shall be “Newco, LLC” 1.4 Place of Business and Registered Office. The principal place of business of the company shall be at such location as may be selected from time to time by the members. The registered place of business of the Company in the State of Florida shall be 3621 South Federal Hwy, Boynton Beach, Florida 33435, or such other place as the members shall determine. 1.5 Purpose. (a) The sole and exclusive purpose of the Company shall be to acquire the Property and to take such customary and reasonable actions necessary to (i) obtain such site plan approvals and other permits, variances, orders and consents from governmental and other third parties to plat, sub-divide and/or otherwise develop all or portions of the property as twelve residential units (the “Units”), (ii) complete all site development work for the property, including infrastructures, roads and recreational facilities thereon, and to hold, sell, exchange or otherwise dispose of lots, units, sites, tracks or other portions of the property, individually or in groups, (iii) mortgage, place liens upon or otherwise encumber all or any part of the Property, to make developments or improvements thereon, (iv) market, offer for sale, and sell the Units, and (v) engage in such other activities as reasonably incidental to the foregoing. Except by the decision of all of the Members, evidenced in writing, the company shall not engage in any other business or activity (vi) In no event shall this Agreement be held or construed to imply the existence of a general partnership or joint venture among the members with regard to matters, trades or businesses or enterprises outside the scope of this company, and no member shall have any power or authority under this agreement to act as the agent or representative of the company or any other member with regard to any matter beyond the scope of this. Notwithstanding the foregoing, it is the intention and agreement of the Members that the company shall be capable of holding title to the property as a Florida limited liability company.
(vii) Nothing contained in this agreement shall be deemed to restrict in any way the rights of any member or any director, officer, shareholder or affiliate of any member, to engage i n, or to conduct any other activity or trade or business, independently or with others, including, without limitation, the ownership, operation and management, of other real estate ventures, including developments similar to or the same as that of the company or its affiliates, and whether or not any such activity, trade or business is adverse to, competes with or is complementary with, the business of the company, its affiliates or the other members, and neither the company, its affiliates, nor any other member shall have any rights in or to any such trade or business or activity or the income or profits derived therefrom. Without limiting the foregoing, the parties hereto acknowledge that they invest in and are otherwise involved in various real estate projects (and/or may hereafter invest in or become involved in such other projects). Each of the parties hereto, and any member hereafter admitted into any of such persons on the grounds that such activities may be competitive, directly or indirectly, with the purposes and businesses of the company. ARTICLE 2 CAPITAL CONTRIBUTIONS, MEMBER INTERESTS & CAPITAL ACCOUNTS 2.1 Capital Contributions (a) This member shall make an Initial Capital Contribution to the Company in the amount of $___________, The Initial Capital Contributions of the members shall be used to pay for this acquisition of said property, plus all legal, architectural, surveying and engineering fees of the company, plus any costs incurred during the due diligence period…No member shall be required to contribute to any additional capital to the company.(i) The members anticipate that approximately seventy-five percent (75%) of the cost of the Project shall be paid from the proceeds of one or more bank financings to be obtained by McClintock for the company. 2.2 Issuance of Additional Interests. In order to raise additional capital, acquire assets, or redeem or retire debt of the Company or for any other purpose, the company may issue interests in addition to those initially issued pursuant hereto to any member or any other person, and may admit such other persons to the company as members, for consideration, and on terms and conditions, as determined by all of the members. ARTICLE 3 TRANSFERABILITY OF INTERESTS Unless otherwise unanimously agreed to by the members, as set forth in Section 2.2(iii), if all the other members of the company other than the member proposing to dispose of his or her interest do not approve of the proposed transfer or assignment by unanimous written consent, the transferee of the interest of the member shall have no right to participate in the management of the business and affairs of the company or to become a member of the company. The transferee shall be entitled to receive only the return of the contributions to which that member otherwise would have been entitled to had he remained as a member of the company. ARTICLE 4 DEFAULT AND DISSOLUTION Upon the death, retirement, resignation, expulsion, bankruptcy, or dissolution of a member or upon the occurrence of any other event which terminates the continued membership of a member in the company, the business of the company shall nonetheless be continued unless a majority of the remaining members of the company elect within 60 days of such event to discontinue the business of the company.
ARTICLE 5 PURCHASE OF THE PROPERTY, DEVELOPMENT & MANAGEMENT OF THE PROJECT 5.1 This agreement and the obligations of the parties hereto are expressly contingent upon the agreement of the seller of the property to the assignment to and assumption by the company of the purchase and sale agreement for the property between Venture Realty, Inc the contract purchaser of the Property, and __________________., the seller of the property, dated___________. 5.2 The purchase price of the property is $________________which will be paid by the company from the proceeds of bank financing and member loans, are more particularly set forth in Article 2 hereof. 5.3 The company will construct _____________________on the property and Venture Realty, Inc will market and sell such units to the public. 5.4 The company will employ the following professionals in connection with the project: (a)Architects,_____________________(b)Engineering firm_______________________ 5.5 Management. Venture Realty, Inc/McClintock will be the manager of the project. Venture/McClintock will be compensated with 15% of the shares distributed. Venture will handle the day-to-day management of the business and affairs of the company and will prepare a development plan for the property, subject to investment Group’s approval. ARTICLE 6 6.1 Approvals. The members intent to file for approval of the site plan for the project, which will be called “___________________,” and to purchase the property on which the construction portion of the project will be built immediately after all requisite approvals have been obtained on a final basis. The approvals will be sought for ________________ and, subsequently, for the demolition of existing structures on the property. 6.2 Bids. Solicit bids with respect to each phase of the project and analyze such bids and report to the investment group, the results of such bids together with a recommendation for the award of any and all contracts. No contract will be awarded without McClintock’s prior approval. 6.3 Coordination. Provide management, control, administration, planning, and scheduling and coordination of the overall activities of the various subcontractors and maintain control of the development progress in accordance with the development plans approved by the members. 6.4 Support. Provide supervision and organization of all support activities at the project. 6.5 Accounting. Provide accounting services which shall be in accordance with generally accepted accounting principles (“GAAP”) standards. An audited statement shall be provided annually. The choice of accountant is subject to McClintock’s approval. 6.6 Site Plan, Business Plan, and Budget. Commencing, ______________ for the calendar year which began January 1, 2004, and on each November 30 thereafter (commencing November 30, 2004), McClintock shall present to the investment group for it’s approval a site plan (or, after the first site plan is submitted and approved, any amendments to the site plan), a business plan for the company for the succeeding calendar year, and a budget for the company for the succeeding year. 6.7 Cash Flow. Prepare and periodically update the cash flow requirements for the entire project. Prepare estimates of cost, including estimated of increases and decreases, in connection with changes in the plans and specifications and development changes as indicated by job conditions, changes in the cost of material and changes in labor cost. 6.8 General Management. Generally manage all activities of the project and act on the company’s behalf on all matters related to development of the property subject to constant communication with McClintock.
6.9 Certain Matters subject to McClintock’s Approval. McClintock shall make all necessary commitments or awards to purchase orders, contracts, subcontracts or other agreements, engage counsel, architects, engineers, land planners, interior designers, or other professional advisors necessary for the successful development and completion of said project, all of which are available for member’s review. 6.10 Marketing and Sales. Venture Realty, Inc shall be responsible for marketing and sales of the project, and be compensated 6% if all sales. Additionally, Venture will be responsible for the hiring of ad agencies, designing and placing ads, brochures, and all other collateral material needed for the successful sales and marketing of the project. McClintock shall include the cost of such marketing and sales program in the budget to be prepared by him and submitted to the partners for Approval. 6.11 Members Have No Exclusive Duty to Company. McClintock/Venture is not required to manage the company as his sole and exclusive function and either may have other business interests and may engage in other activities. 6.12 Bank Accounts. McClintock/Venture may from time to time open bank accounts in the name of the company. GENERAL This agreement represents the entire understanding and agreement between the parties with respect to the subject matter hereof, and supersedes all other negotiations, understandings and representations if any made by and between the parties. No representations, inducements, promises or agreements, oral or otherwise, if any, not embodied herein shall be denied of any force or effect. The provisions of this agreement may be amended, supplemented, waived or changed, but only by a written document signed by the manager and approved by the unanimous consent of the members. All of the terms and provisions of this agreement, whether so expressed or not, shall be binding upon, inure to the benefit of, and be enforceable by the parties and their respective personal representatives, legal representatives, heirs, successors and permitted assigns. If any legal action or other proceeding is brought for the enforcement of this agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any provision of this agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees, court costs and all expenses even if not taxable as court costs (including, without limitation, all such fees, costs and expenses incident to arbitration, appellate, bankruptcy and post-judgment proceedings), incurred in that action or proceeding, in addition to any other relief to which such party or parties may be entitled. Attorneys’ fees include paralegal fees, administrative costs, investigative costs, costs of expert witnesses, court reporter fees, sales and use taxes, if any and all other charges billed by the attorneys to the prevailing party. This agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Confirmation of execution by telex or by telecopy facsimile signature page shall be binding upon any party so confirming or telecopying.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals, the day and year first written above HARVEY MCCLINTOCK Managing Member____________________________ WITNESS__________________________________
NEW MEMBER_____________________________ WITNESS _________________________________