▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 2
Company Operating Agreement
EXHIBIT C
COMPANY OPERATING AGREEMENT
▇▇▇▇▇▇▇ HOMES ▇▇▇▇▇▇▇ LOANS, LLC
A Georgia Domestic Limited Liability Company
A Proptech, Fintech, and Consumer tech Emerging Growth Company
REGULATION A, TIER 2 OFFERING
NOTICE:
THE INTERESTS REPRESENTED BY THIS OPERATING COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, NOR QUALIFIED
UNDER APPLICABLE SECURITIES LAWS IN RELIANCE ON EXCEPTIONS THEREFROM UNDER REGULATION D, RULE 506 AND THE SECURITIES ACT OF 1933,
SECTION 4(a)(2). THESE INTERESTS ARE BEING ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH AN INTENT TO DISTRIBUTE OR RESALE NOR
MAY BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH INTERESTS
UNDER THE SECURITIES ACT OF 1933, APPLICABLE REGULATIONS PROMULGATED PURSUANT THERETO, AND COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS AND REGULATIONS (UNLESS EXEMPT THEREFROM). EACH PURCHASER REPRESENTS THAT THE PURCHASER IS PURCHASING FOR THE
PURCHASER OWN ACCOUNT (OR A TRUST ACCOUNT IF THE PURCHASER IS A TRUSTEE) AND NOT WITH A VIEW TO SELL IN CONECTION WITH ANY OTHER.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 2
Company Operating Agreement
Note: (Disclousure) (Amended 7 July 2021) As ▇▇▇▇▇▇▇ Homes - ▇▇▇▇▇▇▇ Loans, LLC seeks qualification for its second, new Offering for
$75,000,000, please be advised that our Company may never raise enough capital to move
forward with its intended business operations.
Table of Contents
1. Organization Formation, Name, Purposes
1.1 Georgia Domestic Limited Liability Company 6
1.2 Name 7
1.3 Place of Business 7
1.4 Manager 7
1.5 Manager Compensation 7
1.6 Members 8
1.7 Nature of Members Interests 8
1.8 Intent to Be Treated as a Partnership 8
1.9 Nature of Business 8
1.10 Objectives 10
1.11 Term(s) 10
1.12 Registered Agent 10
2. Capitalization of the Company
2.1 Member Classes 10
2.2 Percentage Interests 11
2.3 Capital Calls 11
2.4 Time of Capital Contributions; Withdrawal Not Permitted 11
2.5 Capital Accounts 12
3. Manager Advances and Members Loans
3.1 Manager Advances 12
3.2 Member Loans 12
3.3 Right and Priority of Repayment 13
3.4 Third Party Loans 13
4. Cash Distribution to Members
4.1 Cash Distributions during Operations 14
4.2 Withdrawal and Redemption 15
5. Manager Fees and Other Compensation
5.1 Expense Reimbursements 16
5.2 Fees Paid to Manager and/or Third Parties 17
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 3
Company Operating Agreement
6. Rights and Duties of Manager
6.1 Management 18
6.2 Number of Managers, Tenure, and Qualifications 19
6.3 Authority of the Manager 19
6.4 Major Decisions, Restrictions on Authority of Manager 20
6.5 Employment of Affiliated or Unaffiliated Service Providers 21
6.6 Delegation of Duties 21
6.7 Consultation, Quarterly Reports 21
6.8 Manager Reliance on Information Provided by Others 21
6.9 Fiduciary Duties of Manager 22
6.10 Limited Liability of the Members and the Manager 23
6.11 Indemnification of the Manager and the Members 23
6.12 Liability Insurance 24
6.13 Management: His Exclusive or Non Exclusive Duties to Company 24
7. Rights and Obligations of Members
7.1 Limitation of Liability 24
7.2 Company Debt Liability 25
7.3 Authority of the Members; Summary of Voting Rights 25
7.4 Participation 25
7.5 Deadlock 25
8. Resignation or Removal of the Manager
8.1 Resignation 26
8.2 Removal Process; Notice to Perform 26
8.3 Reasons for Removal; Good Cause Defined 26
8.4 Removal Notice Requirements 27
8.5 Effect of Resignation, Removal of Manager, Cash Distributions and Fees 28
8.6 Applicability of Internal Dispute Resolution Procedures 28
8.7 Vacancies 28
9. Meetings of Members
9.1 Annual Meeting 29
9.2 Meetings 30
9.3 Place of Meetings 30
9.4 Notice of Meetings 30
9.5 Meeting of all Members 30
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 4
Company Operating Agreement
9.6 Record Date 31
9.7 Quorum 31
9.8 Manner of Acting 31
9.9 Proxies 32
9.10 Action by Members without a Meeting 32
9.11 Electronic Meetings 32
9.12 Waiver of Notice 32
10. Fiscal Year, Books and Records, Bank Accounts, Tax Matters
10.1 Fiscal Year 32
10.2 Company Books and Records 32
10.3 Bank Accounts 33
10.4 Reports and Statements 33
10.5 Tax Matters 34
11. Voluntary Transfer; Additional and Substitute Members
11.1 Voluntary Withdrawal, Resignation or Disassociation Prohibited 35
11.2 Admission of Additional Members 36
11.3 Transfer Prohibited Except as Expressly Authorized Herein 36
11.4 Conditions for Permissible Voluntary Transfer; Substitution 36
11.5 Voluntary Transfer, Right of First Refusal 36
11.6 Withdrawal After One Year 37
12. Involuntary Transfer; Disassociation
12.1 Disassociation for Cause 38
12.2 Disassociation by Operations of Law 38
12.3 Effect of Disassociation 39
12.4 Sale and Valuation of a Disassociation Member Interest 40
12.5 Closing 40 40
12.6 Payment for a Disassociation Members Interest 41
13. Internal Dispute Resolution Procedure
13.1 Notice of Disputes 42
13.2 Negotiation of Disputes 42
13.3 Alternative Dispute Resolution 43
13.4 Mediation 44
13.5 Arbitration 44
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 5
Company Operating Agreement
14. Dissolution and Termination of the Company
14.1 Dissolution 45
14.2 Termination of a Member Does Not Require Dissolution 46
14.3 Procedure for Winding-Up 46
15. Miscellaneous Provisions
15.1 Notices 46
15.2 Amendments 46
15.3 Binding Effect 47
15.4 Construction 47
15.6 Time 47
15.6 Headings 47
15.7 Agreement Is Controlling 48
15.8 Severability 48
15.9 Incorporation by Reference 48
15.10 Additional Acts and Documents 48
15.11 Georgia Law 49
15.12 Counterpart Execution 49
15.13 Merger 49
Management Signature Page 50
Appendix A: Member Signature and Contact Page 51
Appendix B: Table 1, Class A Members 52
Appendix B: Table 2, Class B Members 53
Appendix C: Capital Accounts and Allocations 54
Appendix D: Definitions 62
NOTE: (Amended) (Disclosure) Please be advised that our Company may never raise enough capital to move forward with our intended business
operations.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 6
Company Operating Agreement
1. Organization Formation, Name, Purposes
This Operating Company Agreement (Agreement) is made and entered into as of the date executed below by and among those persons whose
names and addresses are set forth in Appendix A hereto (the Members), being the Members of ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans LLC,
a Georgia domestic limited liability company (the Company or Equity Endeavors) and operating as a Proptech and Fintech emerging
growth company incorporating real estate, technology and financial services, which the Manager and Members, each of whom represent
and agree as follows:
1.1 Georgia Domestic Limited Liability Company
On December 10, 2015 ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans was organized and founded (inception) in the City of Hattiesburg, State of Mississippi
by ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇, The ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Company and the Hattiesburg University Foundation, as a general partnership and organizers,
which the Internal Revenue Service (IRS) granted our Employer Identification Number (EIN) to operate thereunto. In July of 2016,
the company moved its operations and headquarters to Atlanta, Georgia.
On July 23, 2018, ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC organized under the laws of the State of Georgia as a domestic limited liability
company filing the articles of organization online via the Office of the Secretary of State and by paying of fees as provided by Title 14 of
the Official Code of Georgian Annotated. The LLC was witness, sealed and granted by the State of Georgia on August 6, 2018.
As a LLC, proptech and fintech (real estate, technology and financial services), and emerging growth company, who organized in accordance
with the Georgia Limited Liability Company Act, as codified in the Georgia Code, Title 14, Chapter 11, as may be amended from time to time,
the company may act as a member managed and/or manager managed firm, which the rights and liabilities of the Members shall be as
provided in this Act and Operating Company Agreement herein, as may be modified thereunto, which the Members acknowledge, by their
signatures hereof, that the management of the affairs of the Company shall be vested in the Manager of the Company, as set forth in
Article 6 hereof, subject to any provisions of this Agreement (e.g., Articles 7 or 8), or in the Act restricting, enlarging or
modifying the rights and duties of the Manager or management procedures. Thus, the members shall immediately, and from time to time
hereafter, execute all documents and do all filing, recording and other acts as may be required to comply with the operation of the
Company under the Act, and its acting formation of a member managed and/or manager managed as outlined hitherto.
Each of the signatories to this Agreement shall be referenced herein as a Member(s).
The Members shall immediately execute all documents and filings under the Agreement and Act.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 7
Company Operating Agreement
1.2 Name
The name of the Company is ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans LLC, a Georgia domestic limited liability company, organizing the
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans LLC, Fund.
1.3 Place of Business
The Company (temporary) principal (office) place of business is:
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset Manager
Acting, Chief Executive Officer, Chief Operations Officer, Chief Financial Officer
and Chief Technology Officer
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
1.4 Manager
The initial Manager of the Company is ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans LLC, a Georgia domestic limited liability company (the Manager)
in association with ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Development Co (SEC: 0001350455), a Regulation 506 D. The Asset Manager as well as the
Chief Executive Officer, Chief Operations Officer, Chief Financial Officer and Chief Technology Officer is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
organizing the GH GL, LLC Fund.
The address (temporary) where all correspondences for the Manager should be mailed:
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
1.5 Manager Compensation (Amended) (Disclosure) Please be advised that our Company may never raise enough capital to move forward with our
intended business operations.
The manager will receive direct compensation as in a salary. The manager will receive a 10% fee structured/salary from the capital
raised and invested. Manager shall only receive the fee when projects are in development, built, operating and/or funded. As noted and
disclosed, the Company nor its manager may never raise enough capital to move forward with its intended business operations.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 8
Company Operating Agreement
1.6 Members
Each of the signatories to this Agreement shall be referenced herein as a Member and collectively, as the Members as defined in
Appendix D hereof. The Members shall immediately, and from time to time hereafter, execute all documents and do all filing, recording,
and other acts as may be required to comply with the operation of the Company under the Act.
Every member will be required to complete, execute and return an original Signature Page of this Agreement, the form of which is
attached hereto as Appendix A. The Manager will maintain an updated list of all Members as shown on Appendix B to this Agreement.
1.7 Nature of Members Interests
The Interests of the Members in the Company shall be personal property for all purposes. Legal title to all Company Assets shall be
held in the name of the Company: ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC. Neither any member or a successor, representative, or assignee
of such Member, shall have any right, title or interest in the Company Assets or the right to partition any real property owned by
the Company. Interests may, but are not required to, be evidenced by a certificate of Membership Interest or Receipt and Acknowledgement
issued by the Company, in such form as the Manager may determine.
1.8 Intent to Be Treated as a Partnership
It is the intent of the Manager and the Members that the Company shall always be operated in a manner consistent with its treatment
as a partnership for federal income tax purposes. It is also the intent of the Members that the Company not be operated or treated as
a partnership for purposes of Section 303 of the Federal Bankruptcy Code. No Manager or Member shall take any action inconsistent with
the express intent of the Members.
1.9 Nature of Business (Note: Amended, Disclosure) Our Company may never raise enough capital to move forward with its intended business
operations.
This Offering involves the design, development and distribution of residential real estate (new, ground up construction single family
homes for sale and for rent, building single family subdivisions, building multifamily apartments, as affordable, market rate, student,
co-living, sharing or co-sharing and workforce housing, and condominiums for sale and for rent), and commercial real estate
(new, ground up construction, shopping centers, hotels, mixed use developments, low rises, mid rises, and high rise projects,
retail stores and restaurants such as Can You Spare A Dollar? $1.00 Stores, and Gil $ Mart, which will be big box chain stores around the
U.S., acquiring lands to build, etc., the launch of a television station, social media networks, magazines, TV HIP HOP Awards Show and
channel (Atlanta based). Future plans call for our private label Visa and MasterCard, Insurances and Loans: student, personal, business,
home, mortgages, and car.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 9
Company Operating Agreement
NOTE: (Amended, Disclosure) Please be advised that our Company may never raise enough capital to move forward with its intended
business operations.
The Company will acquire properties (raw land and in cases of old, dilapidated and abandon residential and commercial
buildings such as old single family homes, old apartments, old stores and shopping centers, and its lands), which will be torn down
(tear downs) in order to clear land and make room for new, ground up development projects. ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC will
not fix or flip old properties, fix, flip or sell old properties, fix, flip or sell rehabilitate properties, fix, flip or rent old properties,
acquire other properties, invest in other properties, indiviuals or companies, etc. Our Business Plan is specific: new, ground up
developments and the implementation of new residential and commercial properties as indicated herein.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC will follow its Business Plan at all times and will never deviate from it. We are an emerging growth
company juxtaposed proptech and fintech firm. The objectives, investments, strategies and benchmarks of our company are to BUILD anew and
CREATE residential and commercial real estate, startup businesses such as retail and restaurants, and offering financial services
related to real estate such as our private label Visa and MasterCard, and future products such as loans, insurances and media.
In addition to building and creating, our company is also focused on urban transformation and revitalization with its main focus on
creating jobs, businesses and services, and turning, blighted communities into urban oasis of luxury such as our forthcoming mixed use
developments like ▇▇▇▇▇▇▇ TOWER (see our Offering Circular), which will consist of over 184 retail stores and restaurants (plus or minus),
a 6 level shopping center with ice skating rink, movie theater, a 1,000 seat performing arts center, office spaces, a 100 room, all suite,
boutique hotel with Rolls Royce services, and grocery / pharmacy. These are just some of the examples our Members will
participate in as Stakeholders. We will build all across the United States in select markets and states, which has a large minority and
urban population. Disclosure: Our Company may never raise enough capital to move forward with its intended business operations.
Note: The example scenario of ▇▇▇▇▇▇▇ Tower is for illustration purposes only. There is no guarantee that this Offering will be
successful via raising crucial capital for implementation. The $200,000,000 ▇▇▇▇▇▇▇ TOWER project, if successfully funded, is slated
first for Atlanta, Georgia with plans to scale around the United States in downtown urban areas, which the developments will be
mixed use encompassing retail, restaurants, residential, hotel, office, grocery and entertainment. When our Regulation A Offering
raises $10,000,000 to $20,000,000 (after SEC approval), we will commence the project ▇▇▇▇▇▇▇▇ our equity and accumulating debt to
build, that will include over 270 apartments and condominiums, 184 retail stores and restaurants (plus or minus), 100 hotel rooms,
etc. Your Investment is in the Company and not the specific projects. The company will raise funds in order to build the specific
projects, which returns will commence back to stakeholders. As noted throughout, we may never raise enough funds to implement such.
1.10 Objectives
The Manager intends to accomplish the following objectives for our Members:
* Provide Members with real estate investment opportunities.
* Provide Members with retail and restaurants businesses opportunities.
* Provide Members with real estate related opportunities such as technology and financial
services.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 10
Company Operating Agreement
* Provide Members will limited liability.
* Provide Cash Distributions for the Members.
* Provide for self liquidation of the investment.
* Provide such so Class A Members involvement in real estate management is minimal.
* Provide Members with the highest ethics, honestly, transparency and data of our affairs.
1.11 Term
Members shall remain and required to hold Interests for 12 months, the term. The Offering was filed on May 31, 2019, Amended in July of 2019,
and is anticipating a Qualified ruling from the SEC thereafter. Moreover, the Company as a LLC commenced operations upon the filing of its
Certificate of Organization and shall be perpetual unless sooner terminated under the provisions of Article 14 hereof.
UPDATE / AMENDED: Our first offering closed on this day July 7, 2021. We are seeking a new $75,000,000 Offering for our second fund.
1.12 Registered Agent
The Company initial office and initial registered agent are provided in Certificate of Organization. The Manager may change the
registered agent (or such agent address) from time to time causing the filing of the new address and/or name of the new registered
agent in accordance with the Act. However, the Company shall, at all times maintain a registered agent in the State of Georgia who
shall be authorized to accept service on behalf of the Company.
2. Capitalization of the Company
2.1 Member Classes
Within the structure of ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC Regulation A Offering, there are two (2) classes of Members, Class A and Class B.
The Manager shall record the name and address of each of the Members in Appendix B to this Agreement. Member classes shall be allocated
as provided below.
2.1.1 Class A Members
Investors who contribute capital to the Company through Contributions of Cash in exchange for the purchase of Class A Interests
issued by the Company shall become Class A Members of the Company, once admitted by the Manager.
The Capital Contribution of the Class A Members shall result in fifty percent (50%) of the total interest in the Company.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 11
Company Operating Agreement
Note: The Company may never raise enough capital to move forward with its intended business operations.
The minimum investment amount required of a Class A Investor is SEVENTY FIVE Dollars ($75) or One (1) Interests; however, the
Manager reserves the right to accept less or more than the minimum investment amount from a single Class A Investor in order to achieve
the maximum dollar amount of Interests to the Class A Investors, if less than the minimum investment amount required of each Class A
Investor is needed to do so.
2.1.2 Class B Members
The Manager (or its members and/or their Affiliates) will retain ownership of fifty percent (50%) of the Interests in the Company
in exchange for services to the Company. The Class B Interests shall be subordinate to the Class A Interests. The issuance of Class B
Interests is irrevocable even if ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC is removed or resigns as the Manager of the Company.
The Manager reserves the right to allow the Class B members (or their members or Affiliates) to sell, grant, transfer, or convey
a minority of the Class B Interests to others without permission of the Class A Members as long as doing so does not: a) dilute the
Interests or percentage returns to the Class A Members, or b) allow any Class B Member to exert management control over the Manager.
▇▇▇▇▇▇▇ HOMES ▇▇▇▇▇▇▇ LOANS LLC, its Affiliates or members (and/or their affiliates) may purchase Class A Interests at such
value as may be established from time to time on transfer of a Class A Members Interest per Articles 11 or 12 of this Agreement,
but they may be allowed to invest less than the minimum investment amount required of other Class A Members, at the Managers
sole discretion.
2.2 Percentage Interests
The Manager shall list the number of Units purchased and/or the dollar amount of each Members Capital Contribution and Percentage
Interests in Appendix B. Percentage Interests of the Members will be calculated in relation to the other Members in their Member
class or in relation to the total Interests.
2.3 Capital Calls; (Disclosure) Our Company may never raise enough capital to move forward with its intended business operations.
Although the Manager intends to raise sufficient money from Investors in order to design, develop and distribute our residential
and commercial real estate, it is possible that the Manager may make a capital call in order to raise Additional Capital Contributions
with which the Company objectives and policies as outlined in the Memorandum.
2.3.1 Additional Capital Contributions
No Member shall be required to make an Additional Capital Contribution, if any portion (an Unpaid Portion) of any Members
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 12
Company Operating Agreement
2.3.2 Cash Capital Contributions
Commitment consists of an obligation of such Member to contribute cash or property to the Company in the future, which obligation has
not yet been discharged, the other Members may require such Member to contribute cash in an amount equal to the product of such
members Percentage Interest multiplied by all monies that in the judgement of the other Members are necessary to enable the Company
to operate its business and maintain its assets and to discharge its costs, expense, obligations, and liabilities; provided, however,
that under no circumstances, shall a Member be obligated under this Section to contribute cash in an amount, in excess of the agreed
values (as stated in the Company records) of such Members Unpaid portion. Nothing contained in this Section is or shall be deemed
to be for the benefit of any Person other than Members and the Company, and no such Person shall under any circumstances have any right
to compel any actions or payments by the members.
2.3.3 Failure to Contribute
If a Member (Delinquent Member) does not contribute all or any portion of the Capital Contribution required pursuant to and at the
time required by, such Members Commitment, the Company may sell additional interests in the Company to existing Members on a
Right of First Refusal Basis at a rate of 1.5 times the value of the original investment. If the existing Members of the Company
do not elect to participate in the purchase of additional interests, the Company may sell the interests to a third party at a rate
of 1.5 times the value of the original investment. For example, if there is a Capital Call of $50,000 to which a Member is called
to contribute 10%, and the Member fails to contribute, the dilution will actually count towards their Percentage Interests at a rate
of 1.5 times the value and it will instead be attributed to the value of the purchasing Member or third party.
2.4 Time of Capital Contributions; Withdrawal Not Permitted
Member Capital Contributions shall be made in full on admission to the Company. No portion of the capital of the Company may be
withdrawn until dissolution of the Company, except as otherwise expressly provided in this Agreement.
2.5 Capital Accounts
An individual Capital Account shall be maintained for each Member in accordance with Treasury Regulation section 1.704-1(b)(2)(iv)
and as further described in the attached Appendix C. Calculation of Member Percentage Interests will be determined on close of the
offering to new Investors, and shall be calculated as described in Article 2.2 hereof.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 13
Company Operating Agreement
3. Manager Advances and Member Loans
If required to protect or preserve the Company assets, the Manager has the sole discretion to apply other available Company funds
to pay any Company obligations. However, if sufficient Company funds are not available, the Manager or one or more Members may loan
funds to the Company subject to the following provisions:
3.1 Manager Advances
The Manager may, but is not required to, loan its own funds or defer reimbursement of its out of pocket expenses as an Advance.
The Company shall reimburse the manager for any such Advance from the date of the loan or deferral as soon as is practical together
with the simple annualized interest at ten percent (10%). Interests on Manager Advances shall be an expense of the Company when paid
and shall accrue from the date of inception for a Manager loan, or from the date reimbursement was due for any Advance related to a
deferred reimbursement.
3.2 Member Loans
Alternatively, the Manager may obtain a loan from one or more Members as and when necessary to continue the business of the Company,
which shall earn ten percent (10%) per annum Interest from the date of inception. Additionally, please also be advised that our Company
acting as both a proptech and fintech emerging growth company via ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC (▇▇▇▇▇▇▇ Loans) will offer to the
general public (in the future) as well as Members (in the future) being allowed to apply for one of our loans and insurances products
through ▇▇▇▇▇▇▇ Loans, which will provide private: business, personal, student, car and home loans (mortgages) as well as low cost
renters, life, business, property/home and car insurances (as noted, in the future). Implementation of such will be after three (3) years,
once GH GL, LLC., is in full operations with the required licenses, permits, managers, employees, office facility(s), etc., and/or
when GH GL, LLC is exceptionally capitalize having over $50,000,000 in liquid assets (cash), which will be needed to operate such.
This is a long term goal of the company in the future, but not now, as part of our real estate related transactions.
Note: As discussed throughout, Our Company may never raise enough capital to move forward with its intended business operations.
3.3 Right and Priority of Repayment
Principal and interest payments for a Manager Advance or Member Loan will be paid as an expense of the company as soon as sufficient
Company funds are available, or held for longer in order to build up Company reserves, at the Managers sole discretion.
A Manager or Member that make a loan to the Company shall be deemed an unsecured creditor of the Company for the purpose of
determining its right and priority of repayment of interests and principal of such Advance or Loan, and repayment of the
Principal will be paid in the order the Advance or Loan was made.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 14
Company Operating Agreement
(Amended) (Disclosure): Our Company may never raise enough capital to move forward with its intended business operations.
Note: Please also be advised that Distributions are not assured.
3.4 Third Party Loans
In the event of a failed capital call, or the unavailability of a Manager Advance or Member Loan, the Manager may obtain a loan
and/or credit from one or more third parties as it deems appropriate to further the business objectives of the Company.
Such loan shall be made to the Company on such terms as the Manager deems reasonable and appropriate after taking into account the
urgency and needs for the funds.
Third party loans will be a critical part of our real estate development as an emerging growth company. Based on a successful capital
raise, if any, our Company will participate in borrowing money for our real estate development projects including leveraging our equity.
For example, if the company raises $20,000,000 to $50,000,000 (the maximum) in a successful company raise, that money will be used to
leverage debt financing for ▇▇▇▇▇▇▇ Tower, a $200,000,000 project.
Even if the Company raises $100,000, that amount will be used to leverage a $1,000,000 construction loan to build small 4 to 10 unit
apartment complexes, up to 10 single family homes and/or the launch of our nationwide chain of $1.00 Stores such as Can You Spare a Dollar?
So, third party loans will be crucial to our real estate projects, developments and startup businesses as an emerging growth proptech
and fintech company.
4. Cash Distributions to Members
The Members may receive Distribute Cash from the Company as authorized in the Agreement. In general, the Manager intends to operate
the Company in such a manner as to generate Distributable Cash it can share with the Members.
Distributable Cash shall be determined by the sole discretion of the Manager after sufficient Working Capital and Reserves.
Distributions to Class A Members, when made, will be allocated among them in proportion to their Percentage Interests in the Class
A Interests.
Distributable Cash, if any, will be distributed until expended, in the order described in Sections 4.1 and 4.2 below, depending on
the phase of operation of the Company. Distributions will be evaluated on a quarterly basis, although the Manager anticipates that
there may not be any Distributions until one full year after investing activities have commenced.
4.1 Cash Distributions during Operations
Cash Flow, if any, derived from operation of the Company will be evaluated on a quarterly basis, and disbursed in the order provided
below until expended.
4.1.1 Preferred Return
As noted, Distributions are not assured.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 15
Company Operating Agreement
Note (Amended): Our Company may never raise enough capital to move forward with its intended business operations.
First, to the Members, pro rata in accordance with their percentage interests in the Company as defined in the Operating Agreement
(Percentage Interests), until all Members have received a cumulative, non compounded preferred return per annum on their
Capital Contributions.
4.1.2 Distributions to the Class A and Class B Members
Secondly, fifty percent (50%) to the Members in proportion to their respective percentage interests, and fifty percent (50%) to
the Manager.
4.1.3 No Return of Capital
The payments made pursuant to Section 4.1.1, shall not be deemed a return of any portion of a Members initial capital contribution.
However, the Manager may elect to use such proceeds to use a return of capital to Class A Members instead of distributions so long as
Members receive their promised returns. Such payments may be made if the Manager deems that such payments will present a tax advantage
to Class A Members.
4.1.4 Reserves
Notwithstanding anything contained in the Agreement to the contrary, the Manager, in the Managers sole and absolute discretion,
may use all or a portion of the Company Cash Flow to establish and fund a discretionary reserve(s) from time to time and in such
amounts to be determined in the Managers sole and reasonable discretion taking into account such factors as anticipated current and
future cash requirements of the Company. Such reserve(s) may be used to pay some or all of the distributions, whether accrued or current,
specified in this Section.
4.1.5 Distributable Cash
Distributable Cash, as defined, means, with respect to any period of the Company operations, the gross cash receipts of the Company,
including funds released from reserves, reduced by the sum of the following: (a) all principal and interest payments and other sums
paid on or with respect to any indebtedness of the Company, (b) all cash expenditures incurred incident to the operation of the Company
business, including without limitation, any capital expenditure, (c) all amounts due the Manager, and (d) such cash reserves as the Manager
shall from time to time designate or as may otherwise be required by the terms of the Agreement or loan documents entered into by the
Company in order to establish for working capital, compensating balance requirements, contingencies, payments of Distributions or the
funding of any other cash or capital requirements of the Company.
4.2 Withdrawal and Redemption
No Member may withdraw within the first 12 months of a Members admission to the Company. Thereafter, the Company will use its best
efforts to honor requests for a return of capital subject to, among other things, the Company then available cash flow,
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 16
Company Operating Agreement
financial condition, and approval by the Manager. The maximum aggregate amount of capital that the Company will return to the Members
each calendar year is limited to 10.0% of the value of the assets of the Company as of December 31 of the prior year. Notwithstanding
the foregoing, the Manager may, in its sole discretion, waive such withdrawal requirements if a Member is experiencing undue hardship.
Members may submit a written request for withdrawal as a Member of the Company and may receive a 100% return of capital provided that
the following conditions have been met: (a) the Member has been a Member of the Company for a period of at least twelve (12) months;
and (b) the Member provides the Company with a written request for a return of capital at least ninety (90) days prior to such
withdrawal (Withdrawal Request.).
The Company will not establish a reserve bank from which to fund withdrawals of Members capital accounts and such withdrawals are
subject to the availability of cash in any calendar quarter to make withdrawal distributions (Cash Available for Withdrawals)
only after: (i) all current Company expenses have been paid (including compensation to the Manager, Manager and its affiliates as
described in this Offering Circular); (ii) adequate reserves have been established for anticipated Company operating costs and other
expenses and advances to protect and preserve the Company investments in Properties; and (iii) adequate provision has been made for
the payment of all monthly cash distributions owing to Members.
If at any time the Company does not have sufficient Cash Available for Withdrawals to distribute the quarterly amounts due to all
Members that have outstanding withdrawal requests, the Company is not required to liquidate any of our development Properties for
the purpose of liquidating the capital account of withdrawing Members. In such circumstances, the Company is merely required to
distribute that portion of the Cash Available for Withdrawals remaining in such quarter to all withdrawing Members pro rata based
upon the relative amounts being withdrawal as set forth in the Withdrawal Request.
Notwithstanding the foregoing, the Manager reserves the right to utilize all Cash Available for Withdrawals to liquidate the capital
accounts of deceased members or ERISA plan investors in whole or in part, before satisfying outstanding withdrawal requests from any
other Members. The Manager also reserves the right, at any time, to liquidate the capital accounts of ERISA plan investors to the
extent the Manager determines, in its sole discretion, that any such liquidation is necessary in order to remain exempt from the
Department of Labor (plan asset) regulations. Additionally, the Manager has the discretion to limit aggregate withdrawals during
any single calendar year to not more than 10% of the total Company capital accounts of all Members that were outstanding at the
beginning of such calendar year.
5. Managers Fees or Other Compensation
5.1 Expense Reimbursement
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 17
Company Operating Agreement
Note (Amended): Please be advised that the Company may never raise enough capital to move forward with its intended business purposes.
In addition to the Cash Distributions described in Article 4, the Manager, its members or their Affiliates may earn additional
compensation in the form of Fees, commission, reimbursements, interest or other compensation as further described in the Table
in 5.2 below. Such compensation will be paid as an expense of the Company prior to determining Distributable Cash, Managers Fees
are authorized in Article 5.2 of this Agreement.
The Manager reserves the right to defer collection of any compensation from the time it is earned until sufficient cash is available,
without forfeiting any right to collect, although the Manager may earn interest on any deferred compensation. The maximum amount of
compensation the Manager may receive is 10 percent (10%) that the Offering, Interests and Members Capital raises.
5.2 Fees Paid to Manager and/or Third Parties
The Manager and/or third parties may earn Fees for services they provide on behalf of the Company as further described below.
All Fees will be paid as an expense of the Company prior to determining Distributable Cash (as described in Article 4 above).
(Amended)
Phase of Operation Basis for Fee Amount of Fee
No Acquisition, Developers and Company N/A N/A $0.00
Management Fees
Asset Management Fee Fees charged to the Company for 10%; Manager will
management of its investments, receive a 10% fee,structed
businesses and real estate salary, allocated per year. This is
projects / properties. also predicated on our projects,
developments, capital and any costs thereof,
from capital raised,
members and interests.
The Manager shall also
be responsible for
hiring any employees or
Managers, to be paid out
out of his 10%; 90%
will remain and be
disbursed to members
and operations.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 18
Company Operating Agreement
(Amended) (See Fees & Salary Structure, Page 17)
6. Rights and Duties of Manager
6.1 Management
The Manager shall manage all business and affairs of the Company. The Manager shall direct, manage, and control the Company to the best
of its ability and shall have full and complete authority, power, and discretion to make any and all decisions and to do any and all
things that the Manager shall deem to be reasonably required to accomplish the business and objectives of the Company.
6.2 Number of Managers, Tenure and Qualifications
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC in association with the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Development Co., dba, GH GL, LLC via this Regulation A
Offering, shall be the initial Manager of the Company. The Manager shall and will hold office until a successor have been elected and
qualified in the future. Successor Manager(s) need not be a Member of the Company or residents in the State of Georgia.
In many of our real estate development projects and startup businesses, managers who are qualified will run the day to day operations,
at our new stores and restaurants via the Mall of Atlanta @ ▇▇▇▇▇▇▇ Tower, our chain of Can You Spare A Dollar? $1.00 Stores, Gil $ Mart,
a general merchandise big box store, etc., for example, which our company will scale around the United States. Our company project(s),
pending on a successful crowdfunding raise, interests and members capital via our Offering from accredited investors and non accredited
investors (limited), will require a large amount of new, hired managers for our 85 company owned subsidiaries and businesses, if and only
if equity (cash) is successful from our Regulation A.
6.3 Authority of the Manager
Except to the extent that such authority and rights have been reserved for the Members elsewhere in this Agreement, the Manager shall
have the obligation and the exclusive right to manage the day to day activities of the Company including, but not limited to performance
of the following activities.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 19
Company Operating Agreement
The Manager may:
* Capitalize the Company via the sale of Units or Interests in the Company as described in
Article 2 hereof;
* Acquire by purchase or otherwise, any real or personal property which may be necessary
convenient, or incidental to the accomplishments of the business of the Company;
* Borrow money and issuing of evidences of indebtedness necessary, convenient, or incidental
to the accomplishments of the purposes of the Company and securing the same by mortgage,
loan, venture, revenue bond, crowdfund, or any other appertaining to our development projects
and properties, including the right (but not the obligation) to personally and voluntarily
guarantee such obligations;
* Open, maintain (and close, as appropriate), all Company bank accounts and (subject to any
limitations set forth herein) drawing checks and other instrument for the payment of funds
associated with acquiring raw land, acquiring land in case of old and abandon residential and
commercial properties occupied on the land (all tear downs), designing, developing and
distributing our new real estate properties and businesses;
* Make all decisions relating to lending and borrowing of the Company and its capital,
management of development properties, management of our business startups, subsidiaries
and companies;
* Employ such relevant agents, employees, managers, architects, general contractors,
independent contractors and attorneys, auditors, etc., as may be reasonably necessary to carry
out the purpose of this Agreement;
* Obtain, negotiate and execute all documents and/or contracts necessary or appropriate to
accomplish any development improvements, our Business Plan, real estate objectives and
transactions, the acquisition and development of properties here in Atlanta, Georgia and
across the United States;
* Establish a reasonable Reserve fund for operations of the Company and potential future or
contingent Company liabilities;
* Pay, collect, compromise, arbitrate or otherwise adjust any and all claims or demands of or
against the Company to the extent that any settlement of a claim does not exceed available
insurance proceeds;
* Work with a CPA firm in is preparation of Company budgets and financial reports, when
necessary or appropriate to the Company operations, including but not limited to, all federal
and state tax returns, reports and periodic financial statements including independent audits
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 20
Company Operating Agreement
submitted to the SEC, for ongoing financial reports;
* Execute and deliver bonds and/or conveyances in the name of the Company provided same
are done in the ordinary course of the Company business; and
* Make an annual calculation of the Estimated Market Value of the Company and report it to
the Members using any commercially acceptable method for doing so.
6.4 Major Decisions; Restrictions on Authority of Manager
The Manager shall not have the authority to, and hereby covenants and agrees that it shall not make or perform any of the following
Major decisions without first having obtained the affirmative vote of a Majority of Interests of all Members:
* Cause or permit the Company to engage in any activity that is not consistent with the
purposes of its Business Plan and the Company as set forth in Articles 1.9 and 1.10 hereof.
* File a lawsuit on behalf of the Company or confess a judgment against the Company in an
amount in excess of insurance proceeds.
* Knowingly perform any act that would subject any Members to liability as a general partner
in any jurisdiction.
* Cause the Company to voluntarily take any action that would cause the detriment or
bankruptcy of the Company.
* Issue, create or authorize for issuance any equity securities (including Units, securities
convertible into or exchangeable for any Units in other equity securities, and equity securities
issued in connection with any debt securities), with rights or preferences as to Distributions
senior to the existing and outstanding Units, or reclassify any existing securities into equity
securities with rights or preferences as to Distributions senior to the existing and outstanding
Units, by means of amendment to this Agreement or by merger, consolidation, operation of
law or otherwise, except as described in Article 2.3 pursuant to a defaulting Member.
* Change the tax status of the Company or take any action inconsistent with Article 1.8 hereof
and Section 3.2 of Appendix C hereto.
* Alter the Percentage Interests applicable to the Units, other than as described in Article 2.2
hereof.
The Members shall have the authority to vote on the matters provided in this Article and specifically provided elsewhere in
this Agreement (see Summary of voting rights in Article 7.4).
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 21
Company Operating Agreement
6.5 Employment of Affiliated or Unaffiliated Service Providers
The Company may employ affiliated or unaffiliated service providers, including, but not limited to real estate brokers,
landlord/retail brokers, property managers, engineers, contractors, architects, title or escrow companies, attorneys, accountants,
bookkeepers, property inspectors, etc., as necessary to facilitate the acquisition of land, development of properties, management,
and the construction and establishment of our concept retail stores and restaurant, etc.
6.6 Delegation of Duties
The Manager shall have the right to perform or exercise any of its rights or duties under this Agreement through delegation to
or contract with affiliate or unaffiliated service providers, agents, or employees of the Manager, provide that all contracts with
Affiliated Persons are on terms at least as favorable to the Company as could be obtained through arms length negotiations with
unrelated third parties; and further provided that the Manager shall remain primarily responsible for the active supervision of such
delegated work.
6.7 Consultation; Quarterly Reports
The Manager agrees to use its best efforts at all times to keep the Members advised of material matters affecting the Company and
to provide periodic reports to the Members, which may be oral or in written form at the Managers discretion. Further, the Manager
will be available for questions during normal business hours as well as communications via email and mail.
6.8 Managers Reliance on Information Provided by Others
Unless the Manager has knowledge concerning the matter in question that makes reliance by the Manager unwarranted, the Manager is
entitled to rely on information, opinions, reports, or statements, including but not limited to financial statements or other
financial data, if prepare or present by:
* One or more Members, Managers, employees, or contractors of the Company whom the
Manager reasonably believes to be reliable and competent in the matter presented;
* Legal counsel, accountants, or other persons as to matter that Manager reasonably believes
are within the persons professional or expert competence; or
* A committee of members or managers of which he or she is not a member if the Manager
reasonably believes the committee merits confidence.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 22
Company Operating Agreement
6.9 Fiduciary Duties of Manager
The fiduciary duties the Manger owes to the Company and the other Members include only the duty of care, the duty of disclosure,
and the duty of loyalty, as set forth below. A Member has a right to expect that the Manager will do the following:
* Use its best efforts when acting on the Company behalf,
* Not act in any manner adverse or contrary to the Company or a Members interests,
* Not act on its own behalf in relation to its own interests unless do so is in the best interests of
the Company and is fair and reasonable under the circumstances, and
* Exercise all of the skill, care, and due diligence at its disposal.
In addition, the Manager is required to make truthful and complete disclosures so that the Members can make informed decisions.
The Manager is forbidden to obtain an advantage at the expense of any of the Members, without prior disclosure to the Company and
the Members.
6.9.1 Duty of Care and the Business Judgement Rule
Just as officers and directors of corporations owe a duty to their shareholders, the Manager is required to perform its duties with
care, skill, diligence, and prudence of like persons in like positions. The Manager will be required to make decisions employing
the diligence, care, and skill an ordinary prudent person would exercise in the management of their own affairs.
The business judgement rule should be the standard applied when determining what constitutes care, skill, diligence, and
prudence of like persons in like positions.
6.9.2 Duty of Disclosure
The Manager has an affirmative duty to disclose material facts to the Members. Information is considered material if there is
a substantial likelihood that a reasonable Investor would consider it important in making an investment decision.
The Manager must not make any untrue statements to the Members and must no omit disclosing any material facts to the Members.
The Manager has a further duty to disclose conflicts of interest that may exist between the interests of the Manager and its Affiliates,
and the interests of the Company or any of the individual Members.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 23
Company Operating Agreement
6.9.3 Duty of Loyalty
The Manager has a duty to refrain from competing with the Company in the conduct of the Company business prior to the dissolution
of the Company, except that the Members understand and acknowledge that the Manager has other interests in similar properties and
companies that may compete for its time and resources, which shall not be considered a violation of this duty.
6.10 Limited Liability of the Members and the Manager
No Person who is a Member, Manager, or officer of the Company shall be personally liable under any judgment of a court, or in
any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract,
tort, or otherwise, solely by reason of being a Member, Manager, or officer of the Company, unless such member, Manager or officer
expressly agrees to be obligated personally for any or all of the debts, obligations, and liabilities of the Company
(e.g., such as a loan guarantor, etc.).
6.11 Indemnification of the Manager and the Members
The Manager or a Member shall not be subject to any liability to the Company for the doing of any such act or the failure to do
any act authorized herein, provided it was performed in good faith to promote the best interests of the Company, including any
liability, without limitation, of any Manager, Member, officer, employee or agent of the Company, against judgments, settlements,
penalties, fines, or expenses of any kind (including attorneys fees and costs) incurred as a result of acting in that capacity.
Nothing in this section shall be construed to affect the liability of a Member of the Company (1) to third parties for the
Members participation in tortious conduct, or (2) pursuant to the terms of a written guarantee or other contractual obligation
entered into by the Member (such as a loan guarantee, etc.).
6.11.1 Indemnity of the Manager
The Manager (including its members, officers, employees, and agents) are specifically excluded from personal liability for any
acts related to the Company, whether they relate to internal disputes with Members, external disputes with third parties or
regulatory agencies, etc., except for cases where a finding is made by a court of law or arbitrator that the Manager engaged in:
* Intentional misconduct including, but not limited to, a knowing violation of the law; or
* For liabilities arising under violation of the Securities Act of 1933, any regulations
promulgated thereto, or any state securities laws (as such indemnification is against public
policy per the SEC).
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans |24
Company Operating Agreement
Except for these exclusions, the Company shall indemnify and hold harmless the Manager from and against any and all loss, cost,
liability, expense, damage or judgment of whatsoever nature to or from any Person or entity, including payment for the Managers
defense (including reasonable attorneys fees and costs) arising from or in any way connected with the conduct of the business of
the Company. See also Article 13.3.4 regarding attorneys fees and costs related to internal disputes.
Further, each Member shall indemnify and hold harmless the Manager, its officers, shareholders, directors, employees and agents
from and against any and all loss, cost, liability, expense, damage or judgment of whatsoever nature to or from any Person or entity,
including reasonable Attorneys fees, arising from or in any way connected with any liability arising from that Members
misrepresentation(s) that it met the Suitability Standards established by the Manager for Membership in the Company prior to its
admission as a Member.
6.12 Liability Insurance
The Company may, at the Managers discretion, and as a Company expense, purchase and maintain insurance on behalf of the Company,
the Manager, a Member, or employee(s) of the Company against any liability asserted against and incurred by the Company, the Manager,
a Member, or employee in any capacity relating to or arising out of the Company, Members, Managers, or employees status as such.
Such insurance may be in the form of Directors and Officers Insurance, Key Man Insurance, Employers Liability Insurance, General Business
Liability Insurance, and/or any other applicable insurance policy.
6.13 Management: His Exclusive or Non Exclusive Duties to Company
The Manager shall not be required to manage the Company as its sole and exclusive function and may have other business interests
and may engage in other activities in addition to those relating to the Company (i.e., such as the 85 companies that will occupy
the Mall of Atlanta, ▇▇▇▇▇▇▇ Tower, etc., which Manager ▇▇▇▇▇▇▇ Founded; (see Company Subsidiaries and Growth Businesses
in the Offering Circular). Neither the Company nor any Member shall have any right, by virtue of this Agreement, to share or
participate in such investments or activities of the Manager or to the income or proceeds derived therefrom, except in the
companies where the split 50/50 occurs and are developed accordingly.
7. Rights and Obligations of Members
7.1 Limitation of Liability
Each Members liability shall be limited to the extent allowable by the Act and other applicable law. The debts, obligations and
liabilities of the company, whether arising from contracts, tort or otherwise, shall be solely the debts obligations and liabilities
of the Company.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 25
Company Operating Agreement
(Disclosure) Please be advised that our Company may never raise enough capital to move forward with its intended business operations.
No Member or Manager shall be obligated personally for such debt, obligation, or liability of the Company, solely by reason of
being a Member of the Company.
7.2 Company Debt Liability
A Member will not be personally liable for any debts or losses of the Company beyond the Members respective Capital Contributions,
except as otherwise required by law or any personal guarantees or financing requirements. Depending on lender requirements, some or
all of the Members may be required to sign personal guarantees for financing of the development properties and may be required to
provide financial documentation of their individual financial condition to the institutional lender.
(Note, this will be limited as the equity (cash) raised in the Offering will leverage the debt to be financed such as shopping centers,
apartments, hotels, etc.)
In commencing debt, many institutional lenders require Investors owning more than twenty percent (20%) of the Interests to be
underwritten during the loan approval process and to execute loan documents. Members Obligation of Good Faith and Fair Dealing
shall be exalted at all times.
Each Member (and the Manager) shall discharge their duties to the Company and exercise any rights consistently with the contractual
obligation of good faith and fair dealing.
7.3 Authority of the Members; Summary of Voting Rights
Pursuant to this Agreement, the Manager has absolute powers to operate the business of the Company. The Members have authority to vote
only on the specific decisions authorized in various provisions of this Agreement, and summarized below.
7.3.1 Votes Requiring Unanimous Approval of All Members
Unanimous consent of all Members is required for any of the following matters:
* To authorize an act that is not in the ordinary course of the business of the Company; and
* To amend the Certificate of Organization or make substantive amendments to this Agreement
(per Article 15.2).
7.3.2 Votes Requiring Approval of 75% of the All Members Interests other than the Manager
Consent of the Members holding the seventy five percent (75%) of the Class A and Class B Interests (other than the Manager)
must affirmatively vote to approve any of the following actions:
* To issue a Notice to Perform to the Manager (see Article 8.2); and
* To remove the Manager for Good Cause (see Article 8.3).
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 26
Company Operating Agreement
7.3.3 Votes Requiring Approval of a Majority of Interests of all Members
A vote of a Majority of Interests of all Members is required to:
* Approve any Major Decision (see Article 6.4);
* Fill a vacancy after the Manager has resigned or been removed (see Article 8.7);
* Admit an Additional Member to the Company from the sale of Additional Units (per Article
11.2 hereof);
* Appoint a new tax matters member (per Appendix C, Section 5);
* Exchange the Property(s) for another under Internal Revenue Code Section 1030; and
* Any other matter that a Member or the Manager wishes to put to a vote of the Members.
7.4 Participation
Except as otherwise set forth herein, the Members shall not participate in the day to day management of the business of the Company.
7.5 Deadlock
Unless otherwise expressly set forth herein, in the event the Members are unable to reach agreement on or make a decision with respect
to any matter on which the Members are entitled to vote (as summarized in Article 7.4), the matter shall be subject to the
Internal Dispute Resolution Procedure described in Article 13 hereof.
8. Resignation or Removal of the Manager
8.1 Resignation
The Manager of the Company may resign at any time by giving written notice to the Members. However, this may require approval of a
lender if any loan was consolidated on the qualifications of the Manager. The resignation of the Manager shall take effect
sixty (60) days after receipt of notice thereof or at such other time as shall be specified in such notice, or otherwise agreed
between the Manager and Members. The acceptance of such resignation shall not be necessary to make it effective.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 27
Company Operating Agreement
8.2 Removal Process; Notice to Perform
Prior to initiating a removal action per this Article for Good Cause, all Class A and Class B Members (other than the Manager who
collectively own seventy five percent (75%) or more of the Interests (the requisite Interests) shall issue a Notice to Perform to
the Manager in accordance with the notice provision in Article 15.1 hereof. The Notice to Perform shall describe the matters of concern
to the Members and shall give the Manager up to sixty (60) days to correct the matter of concern to the satisfaction of the voting Members.
If the Manager fails to respond to the concerns or demands contained in such Notice to Perform then;
The Manager may be immediately removed, temporarily or permanently, for Good Cause determined by: (a) a vote of the requisite Members
describe above, or (b) by an arbitrator or judge per Article 13.5.4. Note, however, that removal of the Manager may require approval
of a lender or substitution of a loan guarantor if any loan was conditioned on the qualifications of the Manager.
8.3 Reasons for Removal; Good Cause Defined
The previous Manager must serve until a new Manager is hired or elected. The Class A members hereby agree that any right of removal
shall be exercised only in good faith. Good Cause shall include only the following, as determined by a vote of the requisite Interests
described in Article 8.2 above:
* Any of the acts described in Article 6.11 hereof;
* A breach of a Managers duties or authority hereunder;
* Willful or wanton misconduct;
* Fraud;
* Bad faith;
* Death or disability wherein the Manager (or any members of the Manger with authority to
Manage the Company) dies or becomes physically, mentally, or legally incapacitated such
that it can no longer effectively function as the Manager of the Company or the dissolution,
liquidation or termination of any entity serving as the Manager and no other member, officer,
or director of the Manager is willing or able to effectively perform the Managers duties;
* Disappearance wherein the Manager (or each of the members of the Manager) fail to return
phone calls and/or written correspondence (including email) for more than thirty days (30)
without prior notice of an anticipate absence, or failure to provide the Members with new
contact information;
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 28
Company Operating Agreement
* Issuance of a legal charging order and/or judgement by any judgement creditor against the
Managers Interests in Cash Distribution or Fees from the Company; or
* The Manager become subject to a disqualifying event at any time during operation of the
Company.
8.4 Removal Notice Requirements
Notice of the Managers removal shall be provided in a Removal Notice, duly executed by the requisite Interests (per Article 82).
The Removal Notice shall be sent via express or overnight delivery to the removed Managers record place of business.
The Removal Notice shall designate the newly appointed manager who shall succeed the removed Manager, and/or a Member to
whom the removed Manager must convey all documents and things necessary to continue management of the Company.
Within fifteen (15) business days of such Removal Notice, or such reasonable extension as the removed Manager shall request
(which shall in no case exceed thirty (30) calendar days), the removed Manager shall voluntarily surrender all documents, books,
records, bank accounts, and things (Document and Things) related to management of the Company to the newly appointed Manager or
designated Member. If the removed Manager fails to voluntarily comply with this Article, the Company may seek reimbursement for
any costs associated with obtaining such Documents and Things from the removed Manager or re creating them, by deducting the costs,
including attorneys fees and other necessary costs of collection (on production of receipts therefore) or forensic reconstruction,
from any Distributable Cash or Fees the removed Manager may otherwise be entitled to collect as described in Article 4.
8.4.1 Removal of an Affiliated Property Manager
If the Manager is removed for Good cause, any Affiliate of the Manager then acting as the Property Manager (if one exists) may
be concurrently removed, if the Property Manager is also specified in the Notice to Perform and Notice of Removal provided by
the Class A Members. Removal of any Affiliated Property Manager, if included, shall take effect concurrent with the effective
date of removal of the Manager. If the Affiliated Property Manager is not specified in the Notice to Perform and Notice of Removal,
or if the Property Manager is not affiliated with the Manager, its removal, if desired, must be performed pursuant to the terms of
any contract between the Property Manager and the Company.
8.5 Effect of Resignation or Removal on Managers Cash Distribution and Fees
In the event of removal or resignation of the initial Manager, Distributions and Fees due the Manager will be reallocated between
the former and new Manager as described below:
* Expense Reimbursements: Regardless of resignation or removal, the initial Manager will still
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 29
Company Operating Agreement
be entitled to reimbursements for its costs related to startup and operation, and any interest
due thereon, as described in Article 5.1, even if the amount due remains uncollected at the
time of removal.
* Distributions or Membership Interests of class B Members: The Class B Interests are
irrevocable, and ▇▇▇▇▇▇▇ HOMES ▇▇▇▇▇▇▇ LOANS, LLC Class B Interests will be
unaffected by its resignation or removal as the initial Manager of the Company.
See Articles 4 and 5.
A removed Manager shall be entitled to copies of all financial statements to the Members for so long as it has continued rights to
Fees or Distribution. To the extent a member of the removed Manager or the Manager itself remains Member of the Company, it shall
retain all rights of any other Member entitled to participate in Cash Distributions, telephone calls, voting, and/or correspondence
between the replacement Manager and the Members.
8.6 Applicability of Internal Dispute Resolution Procedure
Nothing in Article 13 (i.e., the Internal Dispute Resolution Procedure) shall prevent any Manager from being immediately removed
pursuant to the procedures described in this Article. However, the removed Manager may request application of the Internal Dispute
Resolution Procedure (as described in Article 13) to settle disputes related to possible reinstatement or a determination of the
amount(s) of Distributable Cash or Fees to which the removed Manager may be entitled.
The removed Manager shall have only ninety (90) days from: (a) removal, or (b) from receipt of Fees/Distributable Cash from which
deductions have been taken, to invoke the Internal Dispute Resolution Procedure described in Article 13 for resolution of any dispute
related to such matters. The removed Managers failure to provide a written objection (per the provisions of Article 13) within
ninety (90) days of the occurrence (a) or (b) above shall be deemed acceptance.
8.7 Vacancies
In the event the Manager has resigned or has been removed or has otherwise ceased to be Manager, the vacancy shall be filled on
the affirmative vote of a majority of Interests of all Members. A Manager elected to fill a vacancy shall be elected for the
unexpired term of its predecessor and shall hold office until the expiration of such term and until the replacement Managers
successor shall be elected and shall qualify or until his earlier death, resignation, removal, liquidation, dissolution or termination.
9. Meetings of Members
9.1 Annual Meeting
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 30
Company Operating Agreement
No Annual Meeting of the Members is required.
9.2 Meetings
A meeting of the Members may be called at any time and for any purpose whatsoever by the Manager or by any of the Members
representing a Majority of Interests, followed by the procedures specified below.
When Members representing a Majority of Interests wish to call a Meeting, they shall notify the Manager, who shall promptly give
notice of the Meeting to the other Members. In the event the Manager fails to give the notice within three (3) days of the receipt
of the request, any Member or group of Members representing a Majority of Interests may provide notice to the other Members.
For purposes of determining the requisite Interests, such notice shall provide the names of the Members calling such vote.
9.3 Place of Meetings
The Manager may designate any place, either within or outside of the State of Georgia, as the place of meetings of the Members.
Meetings my also include video presentations, live chats, etc.
9.4 Notice of Meetings
Except as provided in Article 9.5 below, written notice stating the place, day, and hour of the meeting and the purpose or
purposes for which the meeting is called shall be given at least three (3) days and not more than ninety days before the date
of the meeting. A vote taken at a meeting with less than three (3) days notice will only be valid if all of the Members
provide unanimous written consent.
9.5 Meeting of all Members
If all of the Members meet at any time and place, either within or outside of the State of Georgia, and consent to the holding of
a meeting at such time and place in writing, such meeting shall be valid without call or notice, and at such meeting, a lawful vote
may be taken.
9.6 Record Date
For the purpose of determining: 1) Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof;
2) Members entitled to receive payment of any Cash Distribution; or 3) to make a determination of Members for any other purpose;
the date on which notice of the meeting is mailed or the date on which the resolution declaring such Distribution is adopted,
as the case may be, shall be the record date for such determination of Members.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 31
Company Operating Agreement
9.7 Quorum
Members representing a Majority of Interests, whether represented in person or by proxy, shall constitute a quorum at any duly
noticed meeting of Members (per Article 9.4). In the absence of a quorum at any such meeting, a majority of the Members present
may continue or adjourn (i.e., reschedule) the meeting for a new date to occur within thirty (30) days. A notice of the adjourned
meeting shall be given to each Member of record entitled to vote.
9.8 Manner of Acting
An affirmative vote of the requisite Interests (see summary in Article 7.4) shall be considered an act of the Members on such
matters as they are entitled to vote. Consent transmitted by electronic transmission by a Member or Person authorized to act
for a Member shall be deemed to have been written and signed by the Member, regardless of whether they appeared at a meeting.
9.9 Proxies
At all meetings of Members, a Member may vote in person, by proxy executed in writing by the Member, or by a duly authorized
attorney in fact. Such proxy shall be filed with the Manager of the Company before or at the time of the meetings.
No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxies.
9.10 Action by Members without a Meeting
Action required or permitted to be taken at a meeting of Members may only be taken without a meeting if the action is approved
by written consent of the requisite Percentage Interests describing the action taken, signed by every Member entitled to vote,
and delivered to the Manager of the Company for inclusion in the minutes or filing with the Company records.
Action taken under this Article shall become effective at such time as the requisite Percentage Interests of the Members entitled
to vote have provided written consent (unless the consent specifies a different effective date), regardless of whether the Member
participated in any meeting in which such matters were discussed. The correct date for determining Members entitled to take action
without a meeting shall be the date the first Members signs a written consent.
9.11 Electronic Meetings
Meeting of Members may be held by means of a conference telephone call or conference live calls so that all Persons participating
in the meeting can hear each other. Participation in a meeting held by conference calls shall constitute presence of the Person
at the meeting.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 32
Company Operating Agreement
9.12 Waiver of Notice
When any notice is required to be given to any Member, a waiver thereof in writing signed by the Person entitled to such notice,
whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice.
10. Fiscal Year, Books and Records, Bank Accounts, Tax Matters
10.1 Fiscal Year
The Company, for accounting and income tax purposes, shall operate a Fiscal Year (FY) ending December 31st of each year, and
shall make such income tax elections and use such methods of depreciation as shall be determined by the Manager.
The books and records of the Company will be kept on a tax basis in accordance with sound accounting practices to reflect
all income and expenses of the Company.
10.2 Company Books and Records
During the term of the Company and for seven (7) years thereafter, the Company shall keep at its principal place of business,
the following:
* A current list of the name and last known address of each Member and Manager;
* Copies of records that would enable a Member to determine the relative voting rights, if any,
of the Members;
* A copy of the Certificate of Organization, together with any amendments thereto;
* Copies of the Company federal, state, and local income tax returns, if any, for the seven
(7) most recent years;
* A copy of this Company Agreement and any amendments that are in writing, together with
any amendments thereto; and
* Copies of financial statements, if any, of the Company for the seven (7) most recent years.
A Member may:
* At the Members own expense, inspect and copy any Company record upon reasonable request
during ordinary business hours; and
* Obtain from time to time upon reasonable demand;
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 33
Company Operating Agreement
* True and complete information regarding the state of the business and financial condition
of the Company;
* Promptly after becoming available, a copy of the Company federal, state, and local
income tax returns, if any, for each year; and
* Other information regarding the affairs of the Company as is just and reasonable.
As stated above, a Member shall have the right, during ordinary business hours, to inspect and copy the company documents listed
above at the Members expense. But, the Member must give seven (7) days notice to the Manager of such Members intent to inspect
and/or copy the documents, and may only inspect and copy such Company documents for a purpose reasonably related to the Members
Interest in the Company as approved by the Manager. The Company may impose a reasonable charge, limited to the costs of labor and
material, for copies of records furnished. The Company may elect, at is option, to provide the requested document electronically.
To the extent allowed by law, the Manager shall honor requests of Members to keep their contact information confidential.
10.3 Bank Accounts
All funds of the Company shall be held in a separate bank account(s) in the name of the Company as determined by the Manager.
10.4 Reports and Statements
The Company shall endeavor, at its expense by April 1 of each year, to deliver to the Members the following unaudited financial
statement, which obligation may be satisfied by delivery to the Members of:
* A copy of the Company federal tax return;
* A profit and loss statement for such period; and
* A balance sheet for the Company as of the end of such period;
The Manager shall, at the expense of the Company prepare, or cause to be prepared, for delivery to the Members prior to the due
date thereof (excluding extensions), all federal and any required state and local income tax returns for the Company for each
Fiscal Year of the Company.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 34
Company Operating Agreement
10.5 Tax Matters
The Manager shall have the authority, subject to the provisions of this Agreement, to make any election provided under the Code
or any provision of state or local tax law. Additional information on designation of a tax matters member is provided in
Appendix C, attached hereto. Further, the Manager shall have the authority to direct and/or remit withholding amounts from
a Non-U.S. Persons Distributions, as necessary to comply with the Foreign Investor Real Property Tax Act of 1980 (FIRPTA) or
other U.S. tax obligation of the Non U.S. Person.
11. Voluntary Transfer: Additional and Substitute Members
This Article 11 pertains to the Interests of the Class A Interests in the Company. The Manager has the sole and exclusive authority
to grant, convey, sell, transfer, hypothecate, disassociate or otherwise dispose of all or a portion of its Class B Interests without
input or vote of the Class A Members.
11.1 Voluntary Withdrawal, Resignation or Disassociation Prohibited
A Member may not withdraw, resign or voluntarily disassociate from the Company, unless such Member complies with the transfer provisions
set forth in this Article or withdraw pursuant to Article 4. The provisions of this Article shall apply to all Voluntary Transfers
of a Members Interests outside of the Withdrawal Policy of the Company. Involuntary Transfers are addressed in Article 12.
11.2 Admission of Additional Members
Once the Manager closes the offering period for the sale of new Interests, no additional Interests in the Company may be sold,
or any Additional Members admitted, unless a) the admission of an Additional Member is approved by a Majority of Interests of
all Members, or b) a Majority of Interests of all Members approve a capital call per as described in Article 2.3., in which case
the Manager reserves the right to authorize the sale of additional Units to new or existing Members, and to admit new Members
whose Class or Interests may be equal or senior the Class A Interests as necessary to raise the needed capital.
11.3 Transfer Prohibited Except as Expressly Authorized Herein
No Member may voluntarily, involuntarily, or by operation of law assign, transfer, sell, pledge, hypothecate, or otherwise dispose
of (collectively transfer) all or part of its Interests in the Company, except as is specifically permitted by this Agreement or
authorized by the Manager. Any Voluntary Transfer made in violation of this Article shall be void and of no legal effect.
Further, in no event shall any Voluntary Transfer be made within one (1) year of the initial sale of the Interests proposed for
transfer unless the Transferor provides a letter from an attorney,
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 35
Company Operating Agreement
acceptable to the Manager, stating that in the opinion of such attorney, the proposed transfer is exempt from registration under
the Securities Act and under all applicable state securities laws or is otherwise compliant with rule 144 under the Securities
Act of 1933. The Manager is legally obligate to refuse to honor any transfer made in violation of this provision.
11.4 Conditions for Permissible Voluntary Transfer; Substitution
A permitted transfer of any Members Interest shall only be granted as to the Members Economic Interest unless the Manager accepts
a permitted transferee (Transferee) as a Substitute Member. A permitted Transferee shall become a Substitute Member only on
satisfaction of all of the following conditions:
* Filing of a duly executed and acknowledged written instrument of assignment in a form
approved by the Manager specifying the Members Percentage Interest being assigned and
setting for the intention of the assignor that the permitted assignee succeed to the assignors
Economic Interests (or the portion thereof) and/or its Interest as a Member;
* Execution, acknowledgement and delivery by the assignor and assignee of any other
instruments reasonably required by the Manager including an agreement of the permitted
assignee to be bound by the provisions of this Agreement; and
* The Managers approval of the Transferees or assignees admission to the Company as a
Substitute Member and concurrent and complete Disassociation of all of the Membership and
Economic Interests of the Transferor.
11.4.1 Transfer of a Members Interest to an Affiliate
Nothing in this section shall prevent a Member from transferring its entire Membership Interests (Economic and voting rights, etc.)
or any portion thereof to an Affiliate (as defined in Appendix D). Approval of Substituted Membership of an Affiliate shall not be
unreasonably withheld by action of the Manager on the delivery of all requested documents necessary to accomplish such a transfer.
However, any subsequent conveyance or transfer of ownership interests within the Affiliate so that it no longer meets the
definition of an Affiliate with respect to the original Member, shall make its membership in the Company subject to revocation
or Disassociation (per Article 12) by the Manager, Unless the Affiliate requests and is approved by the Manager as a Substitute Member,
an unauthorized Affiliate shall have only the Economic Interest of the former Member;
11.5 Voluntary Transfer; Right of First Refusal
11.5.1 Notice of Sale
In the event any Member (a Selling Member) wishes to sell its Interest, it must first present its
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 36
Company Operating Agreement
offer to sell and proposed price (terms and conditions) in a Notice of Sale submitted in writing to the Manager.
The Manager and/or the Members (Purchasing Members) shall have thirty (30) days to elect to purchase the entire Selling
Members Interest, which shall be offered to each in the order of priority described below:
* First, the Manager (or members of the Manager) may elect to purchase the entire Interest on
the same terms and conditions as contained in the Notice of Sale, but if they do not; then
* Second, all or part of the Member may purchase the entire Selling Members Interest on the
same terms and conditions as contained in the Notice of Sale; the Purchasing Members will
be given priority to purchase in the same ratio as their existing Percentage Interest before
allowing existing Members to purchase disproportionate amounts;
* Third, if the Members elect to purchase less than the entire Interest, the Manager (of the
members of the Manager) may combine in any ratio to purchase the remaining Interest,
providing the overall purchase is of the entire Selling Members Interest and on the same
terms and conditions as contained in the Notice of Sale; and
* Fourth, in the event that the Members and/or the Manager (or its members) fail to respond
within thirty (30) days of the Selling Members Notice of Sale, or if the Manager and/or the
Members expressly elect no to purchase the entire Selling Members Interest, the Selling
Member shall have the right to sell its Interest to the third party on the same terms and
conditions contained in the original Notice of sale.
* In the event the Selling Member receives or obtains a bona fide offer from a third party to
purchase all or any portion of its Interest in the Company, which offer it desires to accept,
then prior to accepting such offer, the Selling Member shall give written notice (the Notice
of Sale) of such offer to the Manager. The Notice of Sale shall set forth the material terms of
such offer, including without limitation the identity of the third party, and the purchase price
of terms of payment.
* If the terms are different than the original Notice of Sale offered to the Manager, the Selling
Member must comply again with the terms of this Article (giving the Manager and Members
the first right to purchase its Interest on the same terms and conditions offered by the third
party) with respect to the existing offer and all subsequent third party offers.
* If the Manager approves the sale to the third party, it must be completed within three (3)
months. If the sale to the third party is not consummated on the terms contained in the
approved Notice of Sale within three (3) months following the date of the Notice of Sale,
then the Member must seek a renewed approval from the Manger, who may require that the
Member again comply with the first right of refusal provision of this Article.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 37
Company Operating Agreement
In any purchase by the Members or the Manager described above, the Manager will automatically adjust the Membership Interests of
the Purchasing Members or the Manager to reflect the respective number and Class of Units or Interests transferred, and the
Manager shall revise Appendix B (attached hereto), as appropriate to reflect such adjustment.
11.5.2 Costs of Conveyance for Voluntary Transfer
In the event that the Manger and/or the Members elect to purchase as provided via this Article, the cost of such transaction,
including without limitation, recording fees, escrow fees, if any, and other fees (excluding attorneys fees which shall be the
sole expense of the party who retained them) shall be divided 50/50 between the Selling Member and the Purchasing Member.
The Purchasing Members shall each contribute their respective share of the transaction costs in proportion with their share of the
purchased Interest. The Selling Member shall deliver all appropriate documents of transfer for approval by the Manager, at least
three (3) days prior to the closing of such sale for its review and approval.
From and after the date of such closing, whether the sale is made to the Members, the Manager, or to the third party, the Selling
Member shall have no further Interest in the Assets or income of the Company and, as a condition of the sale, the Person(s) or
entities purchasing the Interests shall indemnify and hold harmless the Selling Member from and against any claim, demand, loss,
liability, damage or expense, including without limitation, attorneys fees arising from the subsequent operation of the Company.
11.5.3 Rights and Interests of Voluntary Transferee; Adjust of Voting Rights
If a Member transfer its Interest to a third party Transferee pursuant to this Article, such Transferee shall only succeed to the
Members Economic Interest unless and until it complies with the provisions of Article 11.4 and is approved by the Manger as a
Substitute Member.
Until such time, if ever, that the third party Transferee becomes a Substitute Member, the voting Interests of the Remaining
Members (i.e., all Members other than the Selling Member) will be increased proportionate with their Percentage Interests in
the Company as if they had purchased the Selling Members Interest.
The obligations, rights and Interests of the Selling, purchasing, and any Substitute Members shall inure to and be binding upon
the heirs, successors and permitted assignees of such Members subject to the restriction of this Article. A third party Transferee
shall have no right of action against the Manager of the Company for not being accepted as a Substitute Member.
11.6 Withdrawal After One Year
Notwithstanding the foregoing, a Member may make a Withdrawal Request one year after the Members been accepted as a Member of the
Company by the Manager in accordance with Article 4.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 38
Company Operating Agreement
12. Involuntary Transfer; Disassociation
12.1 Disassociation for Cause
A Member may be disassociated (i.e., expelled) from the Company a) pursuant to a judicial determination, or b) on application by the
Manager, another Member of the same class, for Cause (defined in the bullets below); upon a written finding by the Manager or
applicable judicial body that such Member:
* Engaged in wrongful conduct that adversely and materially affected the Company
business;
* Willfully or personally committed a material breach of this Agreement;
* Engaged in conduct relating to the Company business, which makes it not reasonably
practicable to carry on the business with the Member; or
* Engaged in willful misconduct related to its Membership in the Company.
12.2 Disassociation by Operation of Law
Additionally, a Member may be disassociated by operation of law, affected solely by action of the Manager, upon the occurrence of
any of the following triggering events:
* Upon Voluntary or Involuntary Transfer of all or part of a Members Economic Interest;
* Dissolution, suspension, or failure to maintain the legal operating status of corporation,
partnership or limited liability company that is a Member of the Company; or
* In the case of a Member that is a legal entity, the Members:
* Becoming a debtor in Bankruptcy;
* Executing an assignment of all or substantially all of its Economic Interest for the benefit
of creditors;
* The appointment of a trustee, receiver, or liquidator of the Member or all or substantially
all of the Members property including its Interest in the Company pursuant to an action
related to the Members insolvency; or
* In the case of a Member who is an individual;
* The Members death;
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 39
Company Operating Agreement
* Becoming a debtor in Bankruptcy;
* The appointment of a guardian or conservator of the property of the member; or
* A judicial determination of incapacity or other such determination that the Member has
become incapable of performing its duties under this Agreement;
* In the case of a Member that is a trust or trustee of a trust, distribution of the trusts entire
rights to receive Distributions from the Company, but not merely by means of the
substitution of a successor trustee;
* In the case of a Member that is an estate or personal representative of an estate, distribution
of the estates entire rights to receive Distributions from the Company, but not merely the
substitution of a successful personal representative; or
* Termination of the existence of a Member if the Member is not an individual, estate, or trust,
other than a business trust.
12.3 Effect of Disassociation
Immediately on mailing of a notice of Disassociation sent by the Manager to a Members last known address, unless the reason
for Disassociation can be and is cured within sixty (60) days, a Member will cease to be a Member of the Company and shall
henceforth be known as a Disassociated Member. Any successor in Interest who succeeds to a Members Interest by operation of law
(per Article 1.2) shall henceforth be known as an Involuntary Transferee.
Subsequently, the Disassociated Members right to vote or participate in management decisions (as summarized in Article 7.4) will
be automatically terminated. A Disassociated Member (or its legal successor) will continue to receive only the Disassociated
Members Economic Interest in the Company, unless the Disassociated member/Involuntary Transferee elects to sell its Interest
to the Manager or Members (Purchasing Members) or to a third party buyer (Voluntary Transferee) following the procedures
describe in Article 11.5; and/or a Voluntary or Involuntary Transferee seek admission and is approve by the Manager as a
Substitute Member (per Article 11.4).
Until such time, if ever, that the Manager approves the transfer of the entire Disassociated Members Membership Interest to the
Purchasing members or a Substitute Member, the voting interests of the Remaining Members will be proportionately increase as
necessary to absorb the Disassociated Members voting Interests.
If a Members objects to Disassociation, they will be bound to resolve the dispute in accordance with the Internal Dispute
Resolution Procedure described in Article 13, unless the reason for the Disassociation can be resolved within sixty (60) days
to the satisfaction of the Manager, in which
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 40
Company Operating Agreement
case their full Membership Interest will be reinstated. If there is no Involuntary Transferee, and no third party buyer is found
and the Manger or remaining Members do not wish to purchase the Disassociated Members Interest, the Disassociated Member will
only be entitled to receive its Economic Interests (no voting rights), indefinitely, until such time as the Company is dissolved.
12.4 Sale and Valuation of a Disassociated members Interest
If no outside buyers can be found and the Disassociated Member still desires to sell its Interest, which the Remaining Members
and/or Manger (Purchasing Members) wish to purchase, the buyout price for the Disassociated Members Interest may be determined
using one of the following methods:
* Negotiated Price: First, if the Purchasing Members or legal representative of the Disassociated
Member can agree on a negotiated price for the Interest, then that price will be used; if not,
* Estimated Market Value Within 12 Months: Second, the Manger may annually determine the
Estimated Market Value of the Company and report it to the Members (per Article 6.3). An
Estimated Market Value calculated by the Manager in any commercially accepted manner
within the last twelve (12) months shall conclusively be used to determine the value of a
Disassociated Members Interest. The purchase price of shall be the product of the Disassociate
members Percentage Interest in the Company and the Estimated Market Value of the
Company.
12.5 Closing
Unless other terms have been agreed between the Disassociated and Purchasing Members, the following terms shall apply to closing of
a Disassociated Members Interest. After determining value (per Article 11.5 or 12.4 above), the Purchasing Members shall give written
notice fixing the time and date for the closing. The closing shall be conducted at the principal office of the Company or other
agreed location on the date not less than thirty (30) days nor more than sixty (60) days after the date of such notice, or in the
event of Bankruptcy, any request for an extension by any Bankruptcy Court having jurisdiction.
12.6 Payment for a Disassociated Members Interest
At closing, the Purchasing Members shall pay to the Disassociated Member by certified or bank check an amount equal to the
determined value of the Disassociated Members Interest, or, if such value shall be determined to be zero or another amount
pursuant to an agreement of the Members, shall deliver an executed copy of such agreement or a copy of such appraisal report(s),
or a memorandum of the negotiated value (per Article 11.4 above) as applicable.
Notwithstanding the foregoing, at the option of the Purchasing Members, the purchase price may be paid by the delivery of its
promissory note in the principal amount of the purchase price, bearing interest of six percent (6%), repayable early
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 41
Company Operating Agreement
without penalty, in eight (8) equal quarterly installments, or other agreement. Simultaneously therewith the Disassociate member
shall execute, acknowledge and deliver to the Purchasing Members such instruments of conveyance, assignment and releases as shall
be necessary or reasonably desirable to convey all of the right, title and Interest of the Member and the Assets thereof.
Because of the unique and distinct nature of an Interest in the Company, it is agreed that the Purchasing Members damages would
not be readily ascertainable if they elect to purchase the Disassociated Members Interest as aforesaid and the conveyance thereof
were not consummated, and, therefore, in such case the Purchasing Members shall be entitled to the remedy of specific performance
in addition to any other remedies that maybe be available to them in law or in equity.
12.7 Transfer of Economic Interest; Rights of an Involuntary Transferee
If the Purchasing Members do not elect to purchase the Interest of a Disassociated Member as provided in Articles 12.4 through 12.6,
or if by operation of law the Economic Interest of the Disassociated Member transfers to an Involuntary Transferee, the Manager shall
hereby be granted power of attorney by the Disassociated Member to execute such documents as may be necessary and requisite to evidence
and cause the transfer only of the Disassociated Members Economic Interest to the Involuntary Transferee, as applicable and appropriate
for the circumstances.
An Involuntary Transferee shall not be deemed a Member until such time if ever, that they seek admission and are approved as a
Substitute Member(s). Until such time, they shall only succeed to the Economic Interest of the Disassociated Member, including the right
to any Distributionsor return of Capital Contributions shall become due per the terms of this Agreement.
Any Distributions that may be due a Disassociated Member shall be held in trust and no Distributions shall be made to
an Involuntary Transferee until it produces and executes such documentation as the Manager deems necessary to evidence the
Transfer of the Disassociated members Economic Interest, and to indemnify the Company and the Manager for any liability related
to making Distributions directly to the holder of the Economic Interest.
Any further assignment of the Disassociated Members Economic or Membership Interest, or any request of an Involuntary Transferee
to succeed to the Disassociated Members full Membership Interest (i.e., to become a Substituted Member in the Company), shall be
subject to approval of the Manager.
13. Internal Dispute Resolution Procedure
Because of the nature of the company is to generate Profits on behalf of its Members, it is imperative that a Members dispute
with the manager and/or other Members is allowed and resolved to diminish the Profits available to other Members or resources necessary to
operate the Company.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 42
Company Operating Agreement
Litigation could hamper the diversion of Company Profits to pay attorneys fees or could tie up Company funds necessary for operation of
the Company, impacting the profitability of the investment for all Members. The only way to prevent such needless expense is
to have a comprehensive Internal Dispute Resolution Procedure (Procedure) in place, to which each of the Members have specifically
agreed in advance or membership in the Company. The Procedure described below requires an aggrieved party to make a series of
steps designed to amicably resolve a dispute on terms that will preserve the interests of the Company and the other non disputing
Members, before invoking a costly remedy, such as arbitration.
In the event of a dispute, claim, question, or disagreement between the Members or between the Manager and one or more Members
arising from or relating to this Agreement, the breach thereof, or any associated transaction, or to interpret or enforce any
rights or duties under the Act (hereinafter Dispute), the Manager and Members hereby agree to resolve such Dispute by strictly
adhering to the Procedure provided below. The following procedure has been adapted for purposed of this Agreement from guidelines
and rules published by the American Arbitration Association (AAA):
13.1 Notice of Disputes
Written notice of a Dispute must be sent to the Manager or Member by the aggrieved party as described in the notice requirements
of Article 15.1 below.
13.2 Negotiation of Disputes
The parties hereto shall use their best efforts to settle any Dispute through negotiation before resorting to any other means of resolution.
To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach
a just and equitable solution satisfactory to all parties. If, within a period of sixty (60) days after written notice of such Dispute
has been served by either party on the other, the parties have not reached a negotiated solution, then upon further notice by either
party, the Dispute shall be submitted to mediation administered by the AAA in accordance with the provisions of its Commercial
Mediation Rules. The onus is on the complaining party to initiate each next step in this Procedure as provided below:
13.3 Litigations that May Arise from Investors and our Company, as Amended October 31, 2019, November 19, 2019 and December 5, 2019
All parties reserve the rights to litigate any claims that may arise from our benchmarks and may initiate a small claims action or litigation.
The parties and/or their legal representatives shall act in a Good Faith Effort to remedy any claims that may arise from any legal and valid concerns appertaining
to ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC and its Manager ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the CEO. This includes litigation from investments, projects, developments, businesses
established, management, returns, projections, etc. Investors as well as our company should be advised and aware that litigations are expensive and
time consuming. As an emerging growth business and Regulation A Tier 2, ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans LLC want to reduce this risk to our stakeholders
(investors). As an impactful company, it is our goals and intentions to protect our investors as well as the company from any frivolous, unecessary litigation.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 43
Company Operating Agreement
13.3.1 Preliminary Relief
Any party to the Dispute may seek preliminary relief at any time after negotiation has failed, but prior to arbitration,
in accordance with the Optional Rules for Emergency Measures of Protection of the AAA Commercial Arbitration Rules and
Mediation Procedures. The AAA case manager may appoint an arbitrator who will hear only the preliminary relief issues without
going through the arbitrator selection process described in Article 13.5.1.
13.3.2 Consolidation
Identical or sufficiently similar Disputes presented by more than one Member may, at the option of the Manager be consolidate
into a single Procedure.
13.3.3 Location of Mediation or Arbitration
Any mediation or arbitration shall be conducted in the State of Georgia and each party to such mediation or arbitration must attend
in person.
13.3.4 Attorneys Fees and Costs
Each party shall bear its own costs and expenses (including their own attorneys fees) and an equal share of the mediator or
arbitrators fees and any administrative fees, regardless of the outcome; however, if the Manager is a party, its legal fees
shall be paid by the Company (per the indemnification provision described in Article 6.11).
Exception: The Company may reimburse a Member for attorneys fees and costs in any legal action against the Manager or the
Company in which the Member is awarded such fees and costs as part of a legal action.
13.3.5 Maximum Award
The maximum amount a party may seek during mediation or be awarded by an arbitrator is the amount equal to the partys
Unreturned Capital Contributions or interest to which the party may be entitled. An arbitrator will have no authority to
award punitive or other damages.
13.3.6 AAA Commercial Mediation or Arbitration Rules
Any Dispute submitted for mediation or arbitration shall be subject to the AAAs Commercial Mediation or Arbitration Rules.
If there is a conflict between the Rules and this Article, the Article shall be controlling.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 44
Company Operating Agreement
13.4 Mediation
Any Dispute that cannot be settled through negotiation as describe in Article 13.2, may proceed to mediation.
The parties shall try in good faith to settle the Dispute by mediation, which each of the parties to the Dispute must
attend in person, before resorting to arbitration. If, after no less than three (3) face to face mediation sessions,
mediation proves unsuccessful at resolving the Dispute, the parties may then, and only then, resort to binding arbitration
as described in Article 13.5.
13.4.1 Selection of Mediator
The complaining party shall submit a Request for Mediation to the AAA. The AAA will appoint a qualified mediator to serve on the case.
The preferred mediator shall have specialized knowledge of securities law, unless the Dispute pertains to financial accounting issues,
in which case the arbitrator shall be a CPA, or if no such person is available, shall be generally familiar with the subject matter
involved in the Dispute. If the parties are unable to agree on the mediator within thirty (30 days) days of the Request for Mediation,
the AAA case manager will make an appointment.
If the initial mediation(s) does not complete resolve the Dispute, any party may request a different mediator for subsequent
mediation(s) by serving notice of the request to the other party(ies) for approval, and subject to qualification per the requirements
stated above.
13.5a ARBITRATION
AS AMENDED and RE AMENDED: (October 8, 2019, October 31, 2019, November 19, 2019 and December 5, 2019)
In any legal claims that may arise from ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC, its managment, investments, businesses, projects, finances,
profits, distributions, etc., our investors (stakeholders) and our Company reserve the right to settle any claims in a Good Faith
Effort including accepting any settlements that may also arise from any arbitration efforts and rulings, where applicable, by both
consenting parties.
13.5b Arbitration
Any Dispute that remains unresolved after good faith negotiations and three (3) failed mediations sessions shall be settle by
binding arbitration. Judgment on the award rendered by the arbitrators(s) shall be final and may be entered in any court having
jurisdiction thereof.
13.5.1 Selection of Arbitrator
Prior to arbitration, the complaining party shall cause the appointment of an AAA case manager by filing of a claim with the AAA
along with the appropriate filing fee, and serving it on the defending party. The AAA case manager shall provide each party with
a list of proposed arbitrators who meet the qualifications described below, or if no such person is available, who are generally
familiar with the subject matter involved in the Dispute. Each side will have 14 days to strike any unacceptable names, number the
remaining names in order of preference, and return the list to the AAA. The case manager shall then invite persons to serve from the
names remaining on the list, in the designated order of mutual preference. Should this selection procedure fail for any reason,
the AAA case manager shall appoint an arbitrator as provided in the applicable AAA Commercial Arbitration Rules.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 45
Company Operating Agreement
13.5.2 Qualifications of Arbitrator
The selected or appointed arbitrator shall be selected from available candidates in Georgia and shall have specialized knowledge
of securities law, unless the Dispute pertains to financial accounting issue, in which case the arbitrator shall be a CPA.
Further, the selected arbitrator must agree to sign a certification stating that they have real all of the documents relevant
to this Agreement in their entirety, including any relevant Appendices or Exhibits, this entire Agreement, and the Subscription Booklet.
13.5.3 Limited Discovery
Discovery shall be limited to only those documents pertaining to this Agreement including this entire Agreement
(and any relevant Appendices or Exhibits), the Subscription Booklet (and any relevant Appendices or Exhibits),
the Subscription Booklet (and any relevant Appendices or Exhibits), any written correspondence between the parties,
and any other documents specifically requested by the Arbitrator as necessary to facilitate his/her understanding of the Dispute.
The parties may produce witnesses for live testimony at the arbitration hearing at their own expense. A list of all such witnesses
and complete copies of any documents to be submitted to the arbitrator shall be served on the arbitrator and all other parties
within forty five (45) days of the arbitration hearing, at the submitting party expense.
13.5.4 Findings of Arbitrator
If, in any action against the Manager, the selected or appointed arbitrator, or judge (if applicable) make a specific finding that
the Manager has violated Securities laws, or has otherwise engaged in any of the actions described in Article 6.11 for which the Manager
will not be indemnified, the Manager must bear the cost of its own legal defense. The Manager must reimburse the Company for any such
costs previously paid by the Company. Until the Company has been fully reimbursed, the Manager will not be entitled to receive any
fees or Distributions it may otherwise be due.
14. Dissolution and Termination of the Company
14.1 Dissolution
The Company shall be dissolved upon the disposition of all Company Properties (which may be determined solely by action of the Manager).
The Company will observe any mandatory provisions of the Act upon dissolution. On dissolution, Assets of the Company will be distributed
as described in Article 4.3 hereof.
14.2 Termination of a Member Does Not Require Dissolution
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 46
Company Operating Agreement
The disassociation, withdrawal, death, insanity, incompetency, Bankruptcy, dissolution, or liquidation of any Member or the Manager
will not require dissolution of the Company.
14.3 Procedure for Winding Up
Upon the dissolution and termination of the Company caused by other than the termination of the Company under section 708(b)(1)(B)
of the Code, the Manager shall proceed to wind up the affairs of the Company, During such winding-up process, the Profits, Losses,
and Distributions of the Distributable Cash shall continue to be shared by the Members in accordance with this Agreement.
Upon the dissolution and commencement of the winding up of the Company, the Manager shall cause Articles of Dissolution to be
executed on behalf of the Company and filed with the Secretary of State of the State of Georgia, and the Manager shall execute,
acknowledge and file any and all other instruments necessary or appropriate to reflect the dissolution of the Company.
15. Miscellaneous Provisions
15.1 Notices
All notices and demands which any member is required or desire to give to another Member, the manger shall be given in writing by
email with confirmation, facsimile, certified mail (return receipt requested with appropriate postage prepaid), or by personal
delivery (with confirmation of service) to the address or facsimile transmission to the address set forth in Appendix A hereof
for the respective member, provided that if any Member gives notice of a change of name or address or facsimile number,
notices to that Member shall thereafter be given pursuant to such notice.
All notices and demands so given shall be effective upon receipt by the Member to whom notice or a demand is being given except
that any notice given by certified mail should be deemed delivered three (3) days after mailing provided proof of delivery can be
shown to:
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC
c/o ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Development Co
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset Manager
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
15.2 Amendments
The Certificate of Organization and this Agreement may only be substantively amended by the affirmative vote of all Members
of the company. However, notwithstanding anything to the contrary herein, the Manager may amend this Agreement in a manner not
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 47
Company Operating Agreement
material inconsistent with the principles of this Agreement, without the approval or vote of the Members, including without limitation.
* To issue non substantive amendments to this Agreement to correct minor technical errors;
* To cure any ambiguity or to correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to add other provisions with respect to
matters or questions arising under this Agreement which will not be materially inconsistent
with the provisions of this Agreement.
* To appoint a different tax matters member;
* To take such steps as the Manager deems advisable to preserve the tax status of the Company
as an entity that is not taxable as a corporation for federal or state income tax purposes;
* To delete or add any provisions to this Agreement as requested by the Securities and Exchange
Commission or by state securities officials which is deemed by such regulatory agency or
official to be for the benefit or protection of the Members; or
* To make amendments similar to the foregoing so long as such actions shall not materially and
adversely affect the Members.
15.3 Binding Effect
Except as may be otherwise prohibited by this Agreement, every covenant, term and provision of this Agreement shall be binding upon
and inure to the benefit of the Members and their respective heirs, legatees, legal representatives, successors, transferees, and assigns.
15.4 Construction
Every covenant, term, and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for
or against any Member or the Manager.
15.5 Time
Time is of the essence with respect to this Agreement.
15.6 Headings
Article and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret,
define, or limit the scope, extent, or intent of this Agreement or any provision hereof.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 48
Company Operating Agreement
15.7 Agreement Is Controlling
In the event of a direct conflict between any provision of this Agreement and the Act, the Agreement shall control unless the
conflicting provision of the Act is non waivable, in which case the conflicting provision the Agreement shall become subject to
the severability provisions of Article 15.8 below.
15.8 Severability
Every provision of this Agreement is intended to be severable. If any phrase, sentence, paragraphs, or provision to this Agreement
or its application thereof to any Person or circumstance is unenforceable, invalid, the affected phrase, sentence, paragraph, or
provision shall be limited, construed, and applied in a manner that is valid and enforceable. If the conflict was with a non-waivable
provision of the Act, phrase, sentence, paragraph, or provision shall be modified to conform to the Act. In any event, the remaining
provisions of this Agreement shall be given their full effect without the invalid provision or application. If any term or provision
hereof is illegal or invalid for any reason whatsoever, such legality or invalidity shall not affect the validity or legality of
the remainder of this Agreement.
15.9 Incorporation by Reference
Every Appendix, schedule, and other Exhibit, that is attached to this Agreement or referred to herein, is hereby incorporated in this
Agreement by reference.
15.10 Additional Acts and Documents
The Manager agrees to perform all further acts and execute, acknowledge, and deliver any documents that may be reasonably necessary,
appropriate, or desirable to carry out the provisions of this Agreement.
15.11 Georgia Law
The laws of Georgia shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights
and duties of the Members.
15.12 Counterpart Execution
This Agreement may be executed in any number of counterparts with the same effect as if all of the Members and the Manager had signed
the same document. All the counterparts shall be construed together and shall constitute one agreement.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 49
Company Operating Agreement
15.13 Merger
It is agreed that all prior understandings and agreements between the parties, written and oral, respecting this transaction
are merged in this Agreement, which alone, fully and completely expresses such agreement, and that there are no other agreements
except as specifically set forth in this Agreement.
REST OF PAGE INTENTIONALLY LEFT BLANK
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 50
Company Operating Agreement
(Amended) (Dated): July 7, 2019 RE AMENDED September 9, 2019, October 8, 2019, October 31, 2019, November 19, 2019, and December 5, 2019
UPDATED and AMENDED to Reflect Second Offering, a New Offering for $75,000,000 on this day July 7, 2021.
IN WITNESS WHEREOF, the parties hereto, whose names and contact information follows, have executed this Company Agreement
of ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC as of the dates provided below.
Updated and Amended July 7, 2021
Dated: May 24, 2019 By: ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC
Amended and dated July 7, 2019 A Georgia domestic limited liability company
Re Amended September 9, 2019
Re Amended October 8, 2019
Re Amended October 31, 2019
Re Amended November 19, 2019
Re Amended December 5, 2019
By: Its Manager, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Development Co
Asset Manager, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
_______________________________________________
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Ed.S.
Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer and Chief Technology Officer
ALL SUBSCRIBERS MUST COMPLETE THE FOLLOWING SIGNATURE PAGE (APPENDIX A) AND RETURN THE EXECUTED PAGES ALONG WITH THEIR COMPLETED
SUBSCRIPTION BOOKLET TO THE MANAGER AT THE ADDRESS PROVIDED HEREIN.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 51
Company Operating Agreement
Appendix A: Member Signature and Contact Page
BY SIGNING THE SUBSCRIPTION AGREEMENT, HERETO ATTACHED, THE INVESTOR ACKNOWLEDGES THAT, THEY HAVE READ, UNDERSTAND, AND AGREE TO THE
DISPUTE RESOLUTION PROCEDURE DESCRIBED IN ARTICLE 13 HEREOF; THEY HAVE SOUGHT ADVICE OF THEIR OWN COUNSEL TO THE EXTENT THEY DEEM NECESSARY;
AND ARE GIVING UP THEIR RIGHT TO TRIAL BY JURY AND THEIR RIGHT TO CONDUCT PRETRAIL DISCOVERY.
BY SIGNING THE SUBSCRIPTION AGREEMENT, HERETO ATTACHED, THE INVESTOR HAS EXECUTED THIS COMPANY AGREEMENT ON THE DATE SET FORTH IN
THE SUBSCRIPTION AGREEMENT.
THE SUBSCRIPTION AGREEMENT AND THIS OPERATING AGREEMENT ARE NOT DEEMED ENTER INTO UNTIL SUCH TIME THAT THE MANNER COUNTERSIGNS
SUCH SUBSCRIPTION AGREEMENT.
By: (Please Print)______________________________
(Please Sign)_______________________________
Date of Signature:__________
Note: Please check to ensure that this page, the Operating Agreement and the Subscription Agreement pages have all been signed and
returned to the address on record herein.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 52
Company Operating Agreement
Appendix B: Table 1, Class A Members
Identification of Class A Members and Percentage Interests
(FOR INTERNAL USE ONLY)
Entity Name Capital Number of Ownership of Ownership
Contribution Class A Interest Class A Percentage of
Purchase Interests Total Interests
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
TOTAL 100% 50%
* DUPLICATE THIS PAGE IF NECESSARY
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 53
Company Operating Agreement
Appendix B: Table 2, Class B Members
Identification of Class B Members and Percentage Interest
(FOR INTERNAL USE ONLY)
Ownership
Ownership Percentage
Entity Capital of Class B of Total
Name Contributions Interests Interests
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, $0 100% 50.00%
LLC.
TOTAL $0 100.00% 50.00%
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 54
Company Operating Agreement
Appendix C: Capital Accounts and Allocations
1. Capital Accounts
An individual Capital Account shall be maintained for each Member in accordance with Treasury Regulation, section 1.704-1(b)(2)(iv) and
adjusted with the following provisions:
a. A Members Capital Account shall be increased by that Members Capital Contributions and
that Members share of Profits.
b. A Members Capital Account shall be increased by the amount of any Company liabilities
assumed by that Member subject to and in accordance with Regulation section 1.704-
1(b)(2)(iv)(c).
c. A Members Capital Account shall be decreased by (a) the amount of cash distributed to that
Member and (b) the Gross Asset Value of the assets of the company so distributed, net of
liabilities secured by such disturbed assets that the distribute Member is considered to
assume or to be subject to under Code section 752.
d. A Members Capital Account shall be reduced by the Members share of any expenditures
of the Company described in Code section 705(a)(2)(B) or which are treated as Code section
705(a)(2)(B) expenditures under Treasury Regulation section 1.704-1(b)(2)(iv)(i) including
syndication expense and losses nondeductible under Code sections 267(a)(1) or 707(b).
e. If any Economic Interest (or portion thereof) is transferred, the transferee of such Economic
Interest or portion shall succeed to the transferors Capital Account attributable to such
Interest or portion.
f. Each Members Capital Account shall be increased or decreased as necessary to reflect a
revaluation of the assets in accordance with the requirements of Treasury Regulation section
1.704-1(b)(2)(iv)(f)-(g), including the special rules under Treasury Regulation section 1.701-
1(b)(4), as applicable.
g. In the event the Gross Asset Values of the Company Assets are adjusted pursuant to this
Agreement, the Capital Accounts of all members shall be adjusted simultaneously to reflect
the aggregate net adjustment as if the Company had recognized gain or loss equal to the
amount of such aggregate net adjustment and the resulting gain or loss had been allocated
amount the Members in accordance with this Agreement.
h. The foregoing provisions and other provision of this Agreement relating to the maintenance
of Capital Accounts are intended to comply with the code and applicable Treasury
Regulations and shall be interpreted and applied in a manner consistent therewith. In the
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 55
Company Operating Agreement
event the Manager shall determine, after consultation with competent legal counsel, that it is
prudent to modify the manner in which the Capital Accounts or any debits or credits thereto
are allocated or computed in order to comply with such applicable federal law, the Manager
shall make such modification without the consent of any other Member, provided the
Manager determines in good faith that such modification is not likely to have a material
adverse effect on the amounts property distributable to any Member and that such
modification will not increase the liability of any Member to third parties.
Note: (Amended) Please be advised that our Company may never raise enough capital to move forward with its intended business operations.
2. Division of Profits and Losses for Income Tax Purposes
Division of Profits and Losses after giving effect to the special allocations set forth in Sections 2.2 and 2.3 of this Appendix,
Profits and Losses of the Company shall be allocated as follows:
2.1 Fiscal Year
After giving effect to the special allocations set forth in Sections 2.2 and 2.3, Profits and Losses of the Company shall be allocated
as follows:
2.1.1 Net Profits
Net Profits (which in the excess of Profits over Losses) for each Fiscal Year of the Company shall be allocated as follows:
a. First to reverse any Net Losses allocated to a Member solely as a result of the application of
the limitation of Section 2.1.2(b) to another Member; thereafter
b. To the Members, in proportion to the Distributions received by the Members under Section
3 for the Fiscal Year.
2.1.2 Net Losses
Net Losses (which the excess of Losses over Profits) for each Fiscal Year of the Company shall be allocated:
a. To and among the Members pro-rate according to their respective Percentage Interests;
however;
b. Net Losses allocated pursuant to Section 2.1.2(a) hereof shall not exceed the maximum
Amount of Losses that can be so allocated without causing any Member to have an adjusted
Capital Account deficit at the end of any Fiscal Year. In the event some but not all of the
Members would have adjusted Capital Account deficits as a consequence of an allocation of
Net Losses pursuant to Section 2.1.2(a), the limitation set forth in this Section 2.1.2(b)
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 56
Company Operating Agreement
shall be applied on a Member by Member basis so as to allocate the maximum permissible
Net Losses to each Member under Treasury Regulation section 1.704-1(b)(2)(ii)(d).
2.2 Special Allocations
2.2.1 Non-Recourse Deductions
Non-Recourse Deductions for any Fiscal Year shall be allocated to the Members in accordance with their Percentage Interests.
2.2.2 Member Non Recourse Deductions
Member Nonrecourse Deductions for any Fiscal year of the Company shall be allocated to the Members in the same proportion as
Profits are allocated under Section 2.1.1, provided that any Member Nonrecourse Deductions for any Fiscal Year or other period
shall be allocated to the Member who bears (or is deemed to bear) the economic risk of loss with respect to the Member Nonrecourse
Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulation section 1.704-2(i)(2).
2.2.3 Allocation of Tax Items
To the extent permitted y section 1.704-1(b)(4)(i) of the Treasury Regulations, all items of income, gain, loss and deduction for
federal and state income tax purposes shall be allocated to the Members in accordance with the corresponding book items thereof;
however, all items of income, gain, loss and deduction with respect to Assets to which there is a difference between book value
and adjusted tax basis shall be allocated in accordance with the principles of section 704(c) of the Code and section 1.704-1(b)(4)(i)
of the Treasury Regulations, if applicable.
When a disparity exists between the book value of an Asset and its adjusted tax basis, then solely for tax purposes
(and not for purposes of computing Capital Accounts), income, gain, loss, deduction and credit with respect to such Asset shall
be allocated among the Members to take such difference into account in accordance with section 704(c)(i)(A) of the Code
and Treasury Regulation section 1.704-1(b)(4)(i). The allocations eliminating such disparities shall be made using any
reasonable method permitted by the Code, as determined by the Manager.
2.3.4 Acknowledgment
The Members are aware of the income tax consequences of the allocations made by this Section and hereby agree to be bound by
the provisions of this Section in reporting their share of Company income and loss for income tax purposes.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 57
Company Operating Agreement
3. Treatment of Distribution of Cash for Tax Purposes
3.1 Distribution of Cash
In the event that the Company generates Distributable cash from Capital Transactions, the Company will make Cash Distributions
to the Members as described in Article 4 of the Agreement.
3.2 In Kind Distribution
Except as otherwise expressly provided herein, without the prior approval of the Manager, assets of the Company, other than cash,
shall not be distributed inkind to the Members. If any assets of the Company are distributed to the Members in kind for purposes
of this Agreement, such assets shall be valued on the basis of the Gross Asset Value thereof (without taking into account section
7701(g) of the Code) on the date of Distribution; and any Member entitled to any Interests in such Assets shall receive such Interest
as a tenant in common with the other Member(s) so entitled with an undivided Interest in such assets in the amount and to the extent
provided for in Articles 4 and 2.2 of the Agreement.
Upon such Distribution, the Capital Accounts of the Members shall be adjusted to reflect the amount of gain or loss that would have
allocated to the Members pursuant to the appropriate provision of this Agreement had the Company sold the Assets being distributed
for their Gross Asset Value (taking into account section 7701(g) of the Code) immediately prior to their Distribution.
3.3 Company Election Regarding 1031 Exchange of its Property
The company may elect (by a vote of a Majority of Interests), at the time of a potential sale of one of our future properties,
where applicable and feasible, to have the Company exchange the Property for another property, in compliance with the section 1031
of the Code, in which case recognition of the gain on the sale of the Property may be deferred.
If this action is approved but there are individual Members who do not want to participate in the exchange, they will have the
option of and relinquishing their Membership Interests in the Company and taking a Cash Distribution at the time of the sale,
as described in Article 4.2 of the Agreement.
3.4 Prohibited Distribution; Duty to Return
A Distribution to any Member may not be made it if would cause the Company total liabilities to exceed their fair value of
the Company total Assets. A Member receiving a Distribution in violation of this provision is required to return it,
if the Member had knowledge of the violation.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 58
Company Operating Agreement
4. Other Tax Matters
4.1 Company Tax Returns
The Manager shall use it best efforts to cause the Company tax return to be prepared prior to April 1 of each year.
4.2 Tax Treatment of Additional or Substituted Members
No Additional or Substituted Class A Members (described below) shall be entitled to any retroactive allocation of Losses, income,
or expense deduction incurred by the Company.
The Manager may, at its option, at the time an Additional or Substituted Member is admitted, close the Company books
(as though the Company tax year had ended) or make pro rata allocations of loss, income, and expense deductions to the
Additional or Substituted Member for that portion of the Company tax year in which the Additional Member was admitted in
accordance with the provisions of section 706(d) of the Code and the Treasury Regulations promulgated thereunder.
4.3 Allocation and Distributions between Transferor and Transferee
Upon the transfer of all or any part of a Class A Members Interests as herein provided, Profits and Losses shall be allocated
between the transferor and transferee on the basis of the computation method which in the reasonable discretion of the Manager
is in the best interest of the Company, provided such method is in conformity with the methods prescribed by Section 706 of the
Code and Treasury Regulation section 1.704-a(c)(2)(ii). Distributions shall be made to the holder of record of the Class A
Members Interest on the date of Distribution.
Any transferee of a Member Interest shall succeed to the Capital Account of the transferor Member to the extent it relates
to the transferred Interests; provided, however, that if such transfer causes a termination of the Company pursuant to
section 708(b)(1)(B) of the Code, the Capital Accounts of all Class A Members, including the transferee, shall be
re determined as of the date of such termination in accordance with Treasury Regulation section 1.704 1(b).
5. Tax Matters Member
The Manager, so long as it is a Member, shall serve as the tax matters member for federal income tax purposes.
In the event the Manager is no longer a Member in the Company, he tax matters member shall be the Majority Interests
owner from amongst the Class B Members. If the Majority Class B Member is unable or unwilling to serve, the tax matters
member shall be appointed from amongst the remaining Members by a Majority of Interests of the Class A Members.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans 59
Company Operating Agreement
The tax matters member is authorized and required to represent the Company in connection with all examinations of the
Company affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company
funds for professional services and costs associated therewith. The tax matters member shall have the final decision
making authority with respect to all federal income tax matters involving the Company. The Members agree to cooperate
with the tax matters member and to do or refrain from doing any or all things reasonably required by the tax matters member
to conduct such proceedings. Any reasonable direct out of pocket expense incurred by the tax matters member in carrying out
its obligations hereunder shall be allocated to and charged to the Company as an expense of the Company for which the tax
matters member shall be reimbursed.
6. Tax Matters Related to Foreign Investors
6.1.1 Non U.S. Investors
The discussion below is applicable solely to Non-U.S. Persons investing directly with the Company.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC (the Company) will be required to withhold U.S. Federal income tax at the rate of up to
thirty percent (30%), or lower treaty rate, if applicable on a Non U.S. Persons distributive share of any U.S. source
Distributions the Company realizes and certain limited types of U.S. source interest. Withholding generally is not
currently required with respect to gain from the sale of portfolio securities. The Company will, however, be required
to withhold on the amount of gain realize on the disposition of a U.S. real property interest included in a Non U.S.
Persons Distribution at a rate of up to thirty nine percent (39%). Each Non U.S. Person that invests in this Offering
will be required to file a U.S. Federal income tax return reporting such gain. The Gain realized on the sale of all or
any portion of a Membership Interest will, to the extent such gain is attributable to U.S. real property interests,
be subject to U.S. income tax.
The Company will be required to withhold U.S. Federal income tax at the highest rate applicable for any
effectively connected taxable income (as that term is defined by the IRS) allocated to a
Non U.S. Person, and the amount withheld will be available as a credit against the tax shown on such Persons return.
The computation of income effectively connected with the Company may be different from the computation of the
Non U.S. Persons effectively connected income (because, for example, when computing the Companys effectively
connected income, net operating Losses from prior years are not available to offset the Companys current income),
so in any given year the Company may be required to withhold tax with respect to its Non U.S. Person Investors in
excess of their individual Federal income tax liability for the year.
If a Non U.S. Person invests through an entity, it may be subject to the thirty percent (30%) branch profits tax on its
effective connected income. The branch profits tax is a tax on the dividend equivalent amount of a non U.S. corporation
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 60
Company Operating Agreement
(which may apply in the case of limited liability company), which is approximately equal to the amount of such Company
earnings and profits attributable to effectively connected income that is not treated as reinvested in the U.S.
The effect of the branch profits tax is to increase the maximum U.S. Federal income tax rate on effectively connected income
from thirty five percent (35%) to over fifty percent (50%). Some U.S. income tax treaties provide exemptions from, or
reduced rates for, the branch profits tax for qualified residents of the treaty country. The branch profits tax may also
apply if a Non U.S. Person claims deductions against their effectively connected income from the Company for interest on
indebtedness of its non U.S. Member.
The Company is authorized to withhold and pay any withholding taxes and treat such withholding as a payment to the Non U.S.
Person if the withholding was required. Such payment will be treated as a Distribution to the extent that the Non U.S.
Person is then entitled to receive a Distribution. To the extent that the aggregate of such payments to a Non U.S.
Person for any period exceeds the Distributions to which they are entitled for such period, the company will notify
the Non U.S. Person as to the amount of such excess and the amount of such excess will be treated as a loan by the
Company to the Non U.S. Person. If a Non U.S. Person owns a Membership Interest directly on the date of death, its
estate could be further subject to U.S. estate tax with respect to such Interest.
6.1.2 Foreign Person Withholding
The Company shall comply with all reporting and withholding requirements imposed with respect to Non U.S. Persons, as
defined in the Code, an any Member that is a Non U.S. Person shall be obligated to contribute to the Company any funds necessary to
enable the Company (to the extent not available out of such Members share of Distributable Cash or Net Proceeds of Capital Transactions)
to satisfy any such withholding obligations. In the event any Member shall fail to contribute to the Company any funds necessary
to enable the Company to satisfy any withholding obligation, the Manager shall have the right to offset against any payments due
and owing to such Member, or its Affiliates, the amounts necessary to satisfy such withholding obligation, or, in the event the
Company shall be required to borrow funds to satisfy any withholding obligation, or, in the event the Company shall be required
to borrow funds to satisfy any withholding obligation by reason of a Members failure to contribute such funds to the Company,
the Manager shall have the right to offset against said Members present and future Distributions, an amount equal to the amount
so borrowed plus the greater of (i) the Company actual cost of borrowing such funds, or (ii) the amount borrowed, multiplied
by fifteen percent (15%).
6.1.3 Non U.S. Taxes
The Company may be subject to withholding and other taxes imposed by, and the Non U.S. Person might be subject to, taxation and
reporting requirements in non U.S. jurisdictions. It is possible that tax conventions between such countries and the U.S.
(or another jurisdiction in which a Non U.S. Member is a resident) might reduce or eliminate certain of such taxes.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 61
Company Operating Agreement
It is also possible that in some cases, if the Non U.S. Person is a taxable Member, it might be entitled to claim U.S. tax credits
or deduction with respect to such taxes, subject to certain limitations under applicable law. The Company will treat any such tax
withheld from or otherwise payable with respect to income allocated to the Company as cash the Company received and will treat
the Non U.S. Person as receiving a payment equal to the portion of such tax that is attributable to it. Similar provisions would
apply in the case of taxes the Company is required to withhold.
REST OF PAGE INTENTIONALLY LEFT BLANK
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 62
Company Operating Agreement
Appendix D: Definitions
The following definitions are an integral and intermingled part of ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC in your understanding of the
terms, meaning, this Agreement and other Agreement(s), and the relevant Regulation A Offering appertaining thereunto.
These defined terms are capitalized in this Agreement. The singular form of any term defined below shall include the plural form and
the plural form shall include the singular. Whenever they appear capitalized in this Agreement, the following terms shall have the
meanings set forth below unless the context clearly requires a different interpretation:
Act
means Georgia Limited Liability Company Act, as codified in the Georgia Code, Title 14, Chapter 11 and may be amended from time to time,
unless a superseding Act governing limited liability companies is enacted by the state legislature and given retroactive effect or repeals
this Act in such a manner that it can no longer be applied to interpret this Agreement, in which case Act shall automatically refer to
the new Act.
Additional Capital Contributions
mean any contribution to the capital of the Company in cash, property, or services by a Member made
subsequent to the Members initial Capital Contribution.
Additional Member
means any Person that is admitted to the Company as a new or additional member, based on the affirmative vote of
the Class A Members holding a majority of the Class A Percentage Interests, (except in the event of a failed capital call
see Article 2.3 and Article 11.2), after offering of Interests to new Members has been closed by the Manager.
Advance, Advances, or Member Loans
shall have meanings as provided in Article 3 hereof.
Affiliate or Affiliated
means any Person controlling or controlled by or under common control with the Manger or a Member wherein
the Manager or Member retains greater than fifty percent (50%) control of the Affiliate if an entity.
Agreement or Company Agreement
means this written agreement, which shall govern the affairs of the Company and the conduct of its
business consistent with the Act or the Certificate of Organization, including all amendments thereto. No other document or other
agreement between the Members shall be treated as part or superseding this Agreement unless it has been signed by all of the Members.
This Company Agreement will supersede any prior versions of the Company Agreement.
Article
when capitalized and followed by a number refers to the sections of the Company Agreement and its Appendices.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 63
Company Operating Agreement
Asset or Company Asset
means any real or personal property owned by the Company.
Bankrupt or Bankruptcy
means, with respect to any Person, being the subject of an order for relief under title 11 of the United States
Code, or any successor statue or other statute in any foreign jurisdiction having like import or effect.
Capital Account
means the amount of the capital interest of a Member in the Company consisting of that Members original contribution,
as (1) increased by an additional contributions and by that Members share of the Company Profits, and (2) decreased by any Distribution
to that Member and by that Members share of the Company Losses.
Capital Contribution or Contributions
mean any contribution to the capital of the Company in cash, property, or services by a
Member whenever made.
Capital Transaction
means the sale or disposition of a Company Asset.
Certificate of Organization
means the legal document filed with the Georgia Secretary of state pursuant to the formation of the Company,
and any amendments thereto or restatements thereof.
Class A Members
mean those Members who have purchased Class A Interests.
Class A Interests
mean the Units purchased by the Class A Members. The Class A Interests shall comprise fifty percent (50%) of the
total Interests sold.
Class A Percentage Interests
shall be determined by calculating the ratio between each Class A Members Capital Account in relation
to the total capitalization of the Company provided by the Class A Members.
Class B Interests
mean fifty percent (50%) of the total Interests in the Company, which shall be issued to ▇▇▇▇▇▇▇ HOMES ▇▇▇▇▇▇▇ LOANS,
LLC (in concert with the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ Development Co or its members or their Affiliates) in exchange for services.
Class B Members
shall initially mean ▇▇▇▇▇▇▇ HOMES ▇▇▇▇▇▇▇ LOANS, LLC (or its Affiliates and/or members), but may include others
to whom the Manager may grant or allow to purchase Class B Interests. Issuance of Class B Units is irrevocable even if
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is removed as the Manager of the Company.
Code
means the Internal Revenue Service Code of 1986, as amended from time to time.
Company
shall refer to ▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans, LLC, a Georgia domestic limited liability company and an emerging growth
proptech and fintech company (real estate, technology and financial services).
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 64
Company Operating Agreement
Company Minimum Gain
has the meaning set forth in sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.
Defaulting Member
means a Member who fails to make any portion of its Capital Contribution, including any Additional Capital
Contribution the Member has elected to make within the time period permitted hereunder.
Disassociation
means an action of the Manager to remove a Members right to participate in management (i.e., removal of its voting Interest)
for cause (per Article 12.1) or by operation of law (per Article 12.2).
Disassociated Member
means a Member who has been involuntarily dissociated from the Company by one of the actions described in
Article 12.1 or 12.2, or by Voluntary Transfer of its Membership Interest to a Voluntary Transferee as described in
Articles 11.3 through 11.5.
Dispute,
when capitalized, shall have the meaning set forth in Article 13 hereof.
Distributable Cash
means all cash of the Company derived from Company operations or Capital Transactions and miscellaneous
sources (whether or not in the ordinary course of business) reduced by: (a) the amount necessary for the payment of all current
installments of interest and/or principal due and owing with respect to third party debts and liabilities of the Company during
such period, including but not limited to any real estate commissions, property management fees, marketing fees, utilities,
closing costs, holding costs, construction costs, development costs, acquisitions of lands costs, etc., incurred by or on
behalf of the Company; (b) the repayment of Advances, plus interest thereon; and (c) such additional reasonable amounts as
the Manager, in the exercise of sound business judgment, determines to be necessary or desirable as a Reserve for the operation
of the business and future or contingent liabilities of the Company. Distributable Cash may be generated through either
operations or Capital Transactions.
Distribution, Distributions or Cash Distributions
mean the disbursement of cash or other property to the Manager or Members
in accordance with the terms of this Agreement.
Economic Interest means
a Persons right to share in the income, gains, losses, deductions, credit, or similar items of,
and to receive Distributions from, the Company, but does not include any other rights of a Member, including, without
limitation, the right to vote or to participate in management, except as provided in the Act, and any right to information
concerning the business and affairs of the Company.
Estimated Market Value means the estimated market value of the Company, which shall be determined annually by the Manager and
reported to the Members.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 65
Company Operating Agreement
Fee(s)
mean an amount earned by the Manager or an Affiliate as compensation for various aspects of operation of the Company,
as described in Article 5.2 hereof.
Fiscal Year
means the Company fiscal year, which shall be the calendar year.
Good Cause
shall have the meaning set forth in Article 8.3 hereof.
Gross Asset Value
means the assets adjusted basis for federal income tax purposes, except as follows: the initial Gross
Asset Value of any asset contributed by a Member to the Company shall be the gross Estimated Market Value of such asset as
determined annually by the Manager. Gross Asset Value may be adjusted pursuant to Code sections 734 and 754 whenever it is
determined by the Manager that such adjustment is appropriate and advantageous.
Interest or Membership Interest
means a Members rights in the Company including the Members Economic Interest, plus any
additional right to vote or participate in management, and any right to information concerning the business and affairs of
the Company provided by the Act and/or described in this Agreement.
Investor
means a Person(s) who is contemplating the purchase of Class A Interests in our Company (and/or its development projects).
Involuntary Transfer
means any transfer not specifically authorized under Article 11.
Involuntary Transferee
means a Members heirs, estate, or creditors that have taken by foreclosure, receivership, or
inheritance and not as a result of a Voluntary Transfer.
Losses
mean, for each Fiscal Year, the losses and deductions of the Company determined in accordance with accounting principles
consistently applied from year to year under the cash method of accounting and as reported, separately or in the aggregate as appropriate,
on the Company information tax return filed for federal income tax purposes plus any expenditures described in section 705(a)(2)(B)
of the Code.
Major Decisions
mean those decisions listed in Article 6.4 hereof.
Majority of Interests
mean Members whose collective Percentage Interests represent more than fifty percent (50%) of the Interests,
whether in the Company or in a particular Class, as specified in specific provisions of this Agreement. Where no class is specified,
a Majority of Interests refers to Members having a majority of the total interests in the Company, regardless of class.
Manager
initially refers to ▇▇▇▇▇▇▇ HOMES ▇▇▇▇▇▇▇ LOANS LLC, a Georgia domestic limited liability company and an emerging growth
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 66
Company Operating Agreement
proptech and fintech company and each of its officers, shareholders, directors, employees and agents or any other Person or
Persons, as well as any of its Affiliates that may become a Manager pursuant to this Agreement as further described in Article 1.4
of this Agreement or any other Manager who shall be qualified and elected per Article 8 of this Agreement.
(Asset Manager also means Manager as defined herein).
Member
means only a Person who: (1) has been admitted to the Company as a Member in accordance with the Certificate of Organization
or this Agreement, or an assignee of an Interest in the Company who has become a Member: (2) who has not resigned, withdrawn, or
been expelled as a Member or, if other than an individual, been dissolved. Member does not include a Person who succeeds to
the Economic Interest of a Member, unless such Person is admitted as a new, Substitute or Additional Member, in accordance with
the provisions for such admission as further described herein.
Member Nonrecourse Debt Minimum Gain
means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain
that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with
section 1.704 2(i)(3) of the Treasury Regulations.
Member Nonrecourse Deductions
has the meaning set forth in Treasury Regulation section 1.704 2(i)(2). For any Fiscal Year of the
Company, the amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt equals the net increase during
that Fiscal Year in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt during that Fiscal Year,
reduced (but not below zero) by the amount of any Distributions during such year to the Member bearing the economic risk of
loss for such Member Nonrecourse Debt if such Distributions are both from the proceeds of such Member Nonrecourse Debt and are
allocable to an increase in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, all as determined
according to the provisions of Treasury Regulation section 1.704 2(i)(2). In determining Member Nonrecourse Deductions, the ordering
rules of Treasury Regulation section 1.704-2(j) shall be followed.
Nonrecourse Deductions
has the meaning set forth in Treasury Regulation section 1.704-2(c). The amount of Nonrecourse Deductions
for a Company Fiscal Year equals the net increase in the amount of Company Minimum Gain during that Fiscal Year, reduced
(but not below zero) by the aggregate amount of any Distributions during that Fiscal Year of proceeds of a Nonrecourse Liability
that are allocable to an increase in Company Minimum Gain.
Nonrecourse Liability
has the meaning set forth in section 1.704-2(b)(3) of the Treasury Regulations.
Notice of Sale
has the meaning set forth in Article 11.5.1, pertaining to a Voluntary Transfer of a Members Interest.
Notice to Perform
has the meaning set forth in Article 8.2
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 67
Company Operating Agreement
Organization Expenses
mean legal, accounting, and other expenses incurred in connection with the formation and organization of the Company.
Percentage Interest
means the ownership interest in the Company of a Member, which shall be calculated by dividing the number
of Units purchased by the Member by the total number of Units (Class A or B) issued. See Article 2.2 of this Agreement; see also
definition of Class A Percentage Interests above and Appendix B, Tables 1 and 2, attached to this Agreement.
Person
means an individual, a partnership, a domestic or foreign limited liability company, a trust, an estate, an association,
a corporation, or any other legal entity.
Preferred Return means
a pre tax non cumulative annual return of ten percent (10%) (interest) on the outstanding amount of each
such Class A Members initial capital contribution.
Procedure,
when capitalized, refer to the Internal Dispute Resolution Procedure described in Article 13 hereof.
Profits
mean, for each Fiscal Year, the income and gains of the Company determined in accordance with accounting principles
consistently applied from year to year under the cash method of accounting and as reported, separately or in the aggregate as
appropriate, on the Company informational tax return file for federal income tax purposes plus any income described in
section 705(a)(1)(B) of the Code.
Property, Properties or Company Property
means the residential and commercial real estate throughout the United States to be
acquired such as raw land or land with old and dilapidated abandon buildings, in order to tear down, and build our
single family homes, condominiums, shopping centers, hotels, concept stores and restaurants, chain of dollar stores and
big box general merchandise stores, low rises, mid rises and high rises mixed use developments, apartments, etc.
Our goal is to OWN, build and create properties and businesses.
Proptech and Fintech
mean properties, residential and commercial, referring to real estate (proptech), technology, and financial services
(fintech) intertwined and intermingled, as an emerging growth company.
Purchasing Member
means any current Member (or member of the Manager) contemplating the purchase of all or any portion of the rights
of membership in the Company of a Member, including the Members Economic Interest and/or voting rights referenced in Articles 11 and 12.
Remaining Member
has the meaning set forth in Articles 11.5.3 and 12.3 hereof.
Removal Notice
has the meaning set forth in Article 8.4 hereof.
▇▇▇▇▇▇▇ Homes ▇▇▇▇▇▇▇ Loans | 68
Company Operating Agreement
Section,
when capitalized and followed by a number, refers to the sections of the Appendices to this Company Agreement.
Selling Member
means any Member that sells, assigns, hypothecates, pledges, or otherwise transfers all or any portion of its
rights of membership in the Company, including its Economic Interest and/or voting rights.
Substitute Member or Substituted Member
means any Person or entity admitted to the Company, after approval by the Manager,
with all the rights of a Member pursuant to Article 11.4 of this Agreement and Section 4.3 of Appendix C to this Agreement.
Transferee,
when capitalized, has the meaning set forth in Article 11.4 hereof.
Treasury Regulations
mean the Regulations issued by the United States Department of the Treasury under the Code.
Unit
means the incremental dollar amount established by the Manager for sale of Interests that Investors can purchase
in order to become Members of the Company. Note: Units issued by the Company are personal property and not
real property Interests, thus, may be ineligible for exchange under federal tax law or 1031 exchange rules.
Unreturned Capital Contributions
mean all Capital Contributions made by a Class A Member less any returned capital.
Voluntary Transfer
has the meaning set forth in Article 11.
Working Capital and Reserves, Reserve or Reserved
means, with respect to any fiscal period, funds set aside or amounts allocated during such period to Reserves that shall
be maintained in amounts deemed sufficient by the Manager for working capital and to pay taxes, insurance, debt service,
or other cost or expenses incidental to the ownership or operation of the Company business.