Common use of Restrictions on the Authority of the Manager Clause in Contracts

Restrictions on the Authority of the Manager. Notwithstanding anything contained in this Agreement to the contrary, provided so long as ▇▇▇▇▇▇▇ Invest is the legal and beneficial owner of all then-outstanding Preferred Units, the Manager may not take (or cause the Company to take) any of the decisions listed below (each, a “Major Decision”) without the prior approval or written consent of the Preferred Members, and such vote or consent is sufficient to authorize any Major Decision. All other decisions regarding the business of the Company may be made by the Manager and/or any duly appointed officer of the Company, unless this Agreement expressly provides otherwise or unless such decision falls outside of the scope of the official duties of such officer, as determined by the Manager in its discretion. (a) Engage in business other than owning and operating the Project or take any act that would prohibit or make it impossible to carry on the ordinary business of the Company; (b) Acquire or own a material asset other than the Project and incidental personal property; (c) Sell the Project and/or otherwise trigger the disposition of the Project or any portion thereof, except as provided for in this Agreement and/or the Senior Loan; (d) ▇▇▇▇▇ ▇ ▇▇▇▇ or encumbrance on any Company assets, including, but not limited to, the Project, except as required by the Senior Loan, the Senior Lender, the Loan Documents and/or such other documents related thereto; (e) Appoint, elect or remove any manager, employee or officer of the Company (other than removal for cause) and/or delegate any authority to such employees outside of their normal scope of authority; (f) Approve each Annual Business Plan, make any modifications thereto that result in a material increase of the original budget in such Annual Business Plan, or expend funds in a manner inconsistent with the approved Annual Business Plan, but excluding expending funds for an emergency action upon (g) Make any material change in the design or strategy of the Project which deviates from the initial plans and specifications, including any proposed change that would result in a material increase in the budget for the development and construction of the Project (the “Project Budget”); (h) Terminate the Project property manager or replace the Project property manager with another Person, except for termination for cause or the property manager’s exercise of any termination rights provided in the property management agreement or similar document governing the relationship between the Project property manager and the Company; (i) Approve of the execution of any lease of any part or all of the Project, provided that no such approval will be required for leases of units of the Project in the ordinary course of business at then market rates (taking into account any concessions mutually agreed upon by the Company (or the Manager, on behalf of the Company) and the property manager); (j) Other than as permitted by the property management agreement or similar document governing the relationship between the Project property manager and the Company;, approve, terminate, reduce or modify insurance for the Company, including establishing limits and coverages under the Company’s insurance policies and any changes thereto; (k) causing zoning, permitting or material design changes affecting the Project or entering into any easement agreement or similar agreement with respect to the Project; (l) Subject to the requirements of the Loan Documents, if there is a material casualty to any part or all of the Project, approval of any decision not to repair and restore the Project following such material casualty; (m) Commingle Company assets with the assets of any other Person, or maintain Company assets in a way difficult to segregate and identify; (n) Fail to hold itself out to the public as a legal entity separate from any other; (o) Fail to conduct business solely in its name; (p) Fail to maintain records, accounts or bank accounts separate from any other Person or entity; (q) File or consent to a petition pursuant to applicable bankruptcy, insolvency, liquidation or reorganization statutes, or make an assignment for benefit of creditors; (r) Fail to remain solvent and/or pay its own debts and liabilities from Company assets (to the extent of such funds and assets), as the same shall become due; (s) Incur additional liabilities or indebtedness except for the Senior Loan and/or any additional indebtedness permitted under the Senior Loan; (t) Making any loans to any Member, any Affiliate of a Member or any other Person; (u) Assume or guaranty the debts of any other Person, will not hold itself out to be responsible for the debts of any other Person, and will not otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person; (v) Admit any Persons as additional Members except as provided for in SECTION 5.2; (w) Issue or authorize the issuance of any additional Units except as provided for in SECTION 5.3; (x) Transfer or dispose of, whether directly or indirectly, or any attempt thereof, any Common Units held by the Manager; (y) Form any subsidiary of the Company; (z) Change the legal status of the Company or dissolve, liquidate, consolidate, merge or sell all or substantially all of its assets; (aa) Approve any changes to the initial tax elections of the made for federal, state, or local purposes; (bb) Electing or varying any depreciation or accounting methods, changing the Fiscal Year of the Company or making any other material change regarding the treatment of any transaction for bookkeeping and/or tax purposes except as set forth in this Agreement; (cc) Violate or cause to be violated the assumptions made with respect to Company, and its direct or indirect constituent entities in any opinion letter pertaining to substantive consolidation delivered to Senior Lender in connection with financing of the Project, including, but not limited to, the Senior Loan, if any; or (dd) Modify, amend or revise its organizational documents (including, but not limited to the Articles of Organization and/or this Agreement). Whenever the Manager desires to take any action with respect to any matter described in this SECTION 6.5 or which otherwise requires the approval or written consent of the Preferred Members, the Manager shall notify the Preferred Members in writing and shall include in such notice information as is reasonably necessary for the Preferred Members to make an informed decision with respect to such action. In the event any Preferred Member fails to timely notify the Manager of its approval or disapproval within seven Business Days, the action shall be deemed to be approved by such Preferred Member. Upon any approval, each Preferred Member hereby acknowledges and agrees to memorialize upon request, in an executed written action, the action so approved or deemed approved.