LIMITED LIABILITY COMPANY AGREEMENT OF RED OAK CAPITAL FUND V, LLC
Exhibit 2(b)
OF
This
Limited Liability Company Agreement, dated March 23, 2020, of Red
Oak Capital Fund V, LLC, a Delaware limited liability company (the
“Company”), is entered into by the Company and Red Oak
Capital GP, LLC, a Delaware limited liability company, the sole
member of the Company (the “Member”).
WHEREAS, the
Company was formed pursuant to the Delaware Limited Liability
Company Act, 6 Del.
C. 18 § 101, et seq., as amended from time to
time (the “Act”) with the filing of the certificate of
formation of the Company (the “Certificate”) on March
23, 2020, with the Secretary of State for the State of Delaware;
and
WHEREAS, the Member
and the Company, by execution of this Agreement, hereby agree as
follows:
ARTICLE I
DEFINITIONS
The
following terms shall have the meanings set forth below unless
otherwise expressly provided herein:
1.01 “Act”
shall mean the Delaware Limited Liability Company Act, 6
Del. C. 18 §
101 et seq., as amended from time to
time.
1.02 “Affiliate”
shall mean any Person that directly or indirectly controls, is
controlled by, or is under common control with another
Person.
1.03 “Agreement”
shall mean this Limited Liability Company Agreement, as originally
executed and as amended from time to time.
1.04 “Capital
Contribution” shall mean any contribution to the
capital of the Company by the Member in cash, property or services,
or a binding obligation to contribute cash, property or services,
whenever made. “Initial Capital
Contribution” shall mean the initial Capital
Contribution of the Member pursuant to this Agreement.
1.05 “Certificate”
shall mean the certificate of formation of the Company, as amended
from time to time.
1.06 “Code”
shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding federal revenue
laws.
1.07 “Company”
shall mean Red Oak Capital Fund V, LLC, a Delaware limited
liability company.
1.08 “Entity”
shall mean any general partnership, limited liability company,
corporation, joint venture, trust, business trust, cooperative or
other association.
1.09 “Limited
Liability Company Interest” shall mean the
Member’s ownership interest in the Company’s capital,
profits and loss and the voting and other rights and obligations
with respect thereto as set forth in this Agreement.
1
1.10 “Member”
shall mean Red Oak Capital GP, LLC, a Delaware limited liability
company, the sole Member of the Company.
1.11 “Person”
shall mean any natural person or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of
such Person where the context so admits.
ARTICLE II
PURPOSE AND POWERS OF COMPANY
2.01
Purpose. The Company is formed
for the object and purpose of, and the nature of the business to be
conducted and promoted by the Company is, engaging in any lawful
act or activity for which limited liability companies may be formed
under the Act and engaging in any and all activities necessary or
incidental to the foregoing, which shall include but not be limited
to originating senior loans
collateralized by commercial real estate in the
U.S.
2.02 Powers.
The Company shall have the power and authority to take any and all
actions necessary, appropriate, advisable, convenient or incidental
to or for the furtherance of the purpose set forth in Section
2.01
ARTICLE III
NAME AND ADDRESS OF SOLE MEMBER
3.01
Name and Address. The name,
address and Limited Liability Company Interest of the Member are as
follows:
|
Name
and Address
|
Limited
Liability Company Interest
|
|
|
|
|
Red Oak
Capital GP, LLC
|
100%
|
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
ARTICLE IV
MANAGEMENT
4.01
In General. The business and
affairs of the Company shall be conducted solely and exclusively by
the Member, as provided herein. The Member shall have all rights
and powers on behalf and in the name of the Company to perform all
acts necessary and desirable to the objects and purposes of the
Company. All determinations, decisions and actions made or taken by
the Member (or its designee(s)) shall be conclusive and binding
upon the Company. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇ are each hereby appointed as an authorized signatory of the
Company and shall each have the authority, acting alone, to execute
on behalf of the Company such agreements, contracts, instruments
and other documents as the Member shall from time to time approve,
such approval to be conclusively evidenced by the execution and
delivery thereof by any of the foregoing designated authorized
signatories. Third parties may conclusively rely upon the
acts of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇ as
evidence of the authority of such persons for all purposes in
respect of their dealings with the Company.
2
ARTICLE V
CAPITALIZATION OF THE COMPANY; ALLOCATIONS AND
DISTRIBUTIONS
5.01
Member Capital Contributions.
The Member, upon the execution of this Agreement, shall contribute
as the Member’s Initial Capital Contribution One Hundred
Dollars ($100.00). The Member may but is not required to make
additional Capital Contributions to the Company.
5.02
Interests and Return of Capital
Contribution. The Member shall not receive any interest on
the Member’s Capital Contribution. Except as otherwise
specifically provided for herein, the Member shall not be allowed
to withdraw or have refunded any Capital Contribution.
5.03
Allocation of Profits and Losses; Tax
Status. The Company’s profits and losses shall be
allocated to the Member. At all times that the Company has only one
member, it is the intention of the Member that the Company be
disregarded for federal, state, local and foreign income tax
purposes.
5.04 Distributions.
All distributions of cash or other property (except upon the
Company’s dissolution, which shall be governed by the
applicable provisions of the Act and Article VI hereof) shall be
made to 100% to the Member; provided, however, that until such time
as all obligations under any bonds issued by the Company pursuant
to an offering thereof have been repaid in full, the Company shall
not make any distributions to the Member pursuant to this Section
5.04, other than as required to offset the Company’s tax
liability for allocations of profits made pursuant to Section 5.03.
All amounts withheld pursuant to the Code or any provisions of
state or local tax law with respect to any payment or distribution
to the Member from the Company shall be treated as amounts
distributed to the Member pursuant to this Section
5.04.
ARTICLE VI
TERM; DISSOLUTION AND TERMINATION
6.01 Term.
The term of the Company shall be perpetual unless the Company is
dissolved and terminated in accordance with this Article
VI.
6.02 Events
of Dissolution. The Company shall be dissolved, and its
affairs shall be wound up, upon the first to occur of the
following: (a) the written consent of the Member, (b) the
occurrence of any event other than the death or incompetency of the
Member that terminates the continued membership of the Member
without the admission of a successor member to the Company or (c)
the entry of a decree of judicial dissolution under Section 18-802
of the Act or any successor statute. In the event of the death or
incompetency of the Member, the Company shall not dissolve but the
personal representative (as defined in the Act) of the Member shall
agree in writing to continue the Company and to the admission of
the personal representative of the Member or its nominee or
designee to the Company as a member, effective as of the death or
incompetency of the Member.
6.03
Liquidation. Upon the
dissolution of the Company, the Member shall wind up its affairs
and distribute its assets in accordance with the Act by either or a
combination of the following methods as the Member (or the Person
or Persons carrying out the liquidation) shall
determine:
(a)
Selling the
Company’s assets and, after the payment of Company
liabilities, distributing the net proceeds therefrom to the Member;
and/or
(b)
Distributing the
Company’s assets to the Member in kind, subject to its
liabilities.
3
6.04
Orderly Liquidation. A
reasonable time as determined by the Member (or the Person or
Persons carrying out the liquidation) not to exceed eighteen (18)
months shall be allowed for the orderly liquidation of the assets
of the Company and the discharge of liabilities to the creditors so
as to minimize any losses attendant upon dissolution.
6.05
Distributions. Upon
liquidation, the Company assets (including any cash on hand) shall
be distributed in the following order and in accordance with the
following priorities:
(a)
First, to the
payment of the debts and liabilities of the Company and the
expenses of liquidation; then
(b)
Second, to the
setting up of any reserves which the Member (or the Person or
Persons carrying out the liquidation) deem reasonably necessary for
any contingent or unforeseen liabilities or obligations of the
Company. At the expiration of such period as the Member (or the
Person or Persons carrying out the liquidation) shall deem
advisable, but in no event to exceed eighteen (18) months, the
Company shall distribute the balance thereof in the manner provided
in the following subsection; then
(c)
Third, 100% to the
Member in accordance with its Limited Liability Company
Interest.
ARTICLE VII
LIABILITY OF MEMBER; OTHER BUSINESS AND TRANSACTIONS
7.01
Liability. The Member shall not
have any liability for the obligations or liabilities of the
Company except to the extent provided in the Act or as otherwise
agreed in contract.
7.02
Outside Business. The Member or
any of its Affiliates may engage in or possess an interest in any
business venture of any nature or description, independently or
with others, similar or dissimilar to the business of the Company,
and the Company shall have no rights by virtue of this Agreement in
and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive
with the business of the Company, shall not be deemed wrongful or
improper. The Member or any of its Affiliates shall not be
obligated to present any particular investment opportunity to the
Company even if such opportunity is of a character that, if
presented to the Company, could be taken by the Company, and the
Member or any of its Affiliate shall have the right to take for its
own account (individually or as a partner, shareholder, fiduciary
or otherwise) or to recommend to others any such particular
investment opportunity.
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
8.01
Exculpation.
(i) The Member, whether
acting as Member or in any other capacity, shall, to the fullest
extent permitted by law, have no liability to the Company or to any
other person for any loss, damage or claim incurred by reason of
any error of judgment, act or omission, other than any act or
omission constituting gross negligence or willful malfeasance,
performed or omitted by the Member.
(ii)
The
Member shall be fully protected in relying in good faith upon the
records of the Company and upon such information, opinions, reports
or statements presented to the Company by any Person as to matters
the Member reasonably believes are within the professional or
expert competence of such person or entity and who or which has
been selected with reasonable care by or on behalf of the Company,
including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or
any other facts pertinent to the existence and amount of assets
from which distributions to the Member might properly be paid. The
foregoing provision shall in no way be deemed to reduce the
limitation on liability of the Member provided in Section
8.01(i).
4
8.02
Duties and Liabilities of the
Member.
(i) To the extent that,
at law or in equity, the Member has duties (including fiduciary
duties) and liabilities relating thereto to the Company or to any
other person, the Member, acting under this Agreement, shall not be
liable to the Company or to any other Person for its reliance on
the provisions of this Agreement. The provisions of this Agreement,
to the extent that they restrict the duties and liabilities of the
Member otherwise existing at law or in equity, are agreed to
replace such other duties and liabilities of the
Member.
(ii) Whenever
in this Agreement the Member is permitted or required to make a
decision (a) in his “discretion” or under a grant of
similar authority or latitude, the Member shall be entitled to
consider only such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to given
any consideration to any interest of or factors affecting the
Company or any other Person, or (b) in its “good faith”
or under another express standard, the Member shall act under such
express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable
law.
8.03 Indemnification. To
the fullest extent permitted by applicable law, the Member
(irrespective of the capacity in which it acts) shall be entitled
to indemnification from the Company for any loss, damage or claim
incurred by the Member by reason of any error of judgment, act or
omission, other than an act or omission constituting gross
negligence or willful malfeasance, performed or omitted by it on
behalf of the Company; provided, however, that any indemnity under
this Section 8.03 shall be provided out of and to the extent of
Company assets only, and the Member shall not have any personal
liability on account thereof.
8.04 Expenses.
To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by the Member in defending any
claim, demand, action, suit or proceeding shall, from time to time,
be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding.
8.05 Insurance.
The Company may purchase and maintain insurance, to the extent and
in such amounts as the Member shall, in its sole discretion, deem
reasonable, against any liability that may be asserted against or
expenses that may be incurred by any such person or entity in
connection with the activities of the Company or such indemnities,
regardless of whether the Company would have the power to indemnify
such person or entity against such liability under the provisions
of this Agreement.
8.06
Other. The Member and the
Company may enter into indemnity contracts with any other Person
granting such Person rights of indemnification and may adopt
written procedures pursuant to which arrangements are made for the
advancement of expenses and the funding of obligations under this
Article VIII and containing such other procedures regarding
indemnification, all as the Member determines in its sole
discretion.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.02
Amendments. No amendment or
modification of this Agreement shall be effective unless approved
in writing by the Member.
5
9.03
Construction. Whenever the
singular number is used in this Agreement and when required by the
context, the same shall include the plural, and the masculine
gender shall include the feminine and neuter genders, and vice
versa.
9.04
Headings. The headings in this
Agreement are inserted for convenience only and are in no way
intended to describe, interpret, define, or limit the scope, extent
or intent of this Agreement or any provision hereof.
9.05
Severability. If any provision
of this Agreement or the application thereof to any Person or
circumstance shall be invalid, illegal or unenforceable to any
extent, the remainder of this Agreement and the application thereof
shall not be affected and shall be enforceable to the fullest
extent permitted by law.
9.06
Heirs, Successors and Assigns.
Each and all of the covenants, terms, provisions and agreements
herein contained shall be binding upon and inure to the benefit of
the parties hereto and, to the extent permitted by this Agreement,
their respective heirs, legal representatives, successors and
assigns.
9.07
Creditors. None of the
provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Company.
9.08
Entire Agreement. This
Agreement sets forth all of the promises, agreements, conditions
and understandings between the parties respecting the subject
matter hereof and supersedes all prior or contemporaneous
negotiations, conversations, discussions, correspondence, memoranda
and agreements between the parties concerning such subject
matter.
6
The
undersigned, being the sole Member, hereby agrees, acknowledges and
certifies that the foregoing Limited Liability Company Agreement
constitutes the sole and entire Limited Liability Company Agreement
of the Company, adopted by the sole Member of the Company effective
as of the date first written above, and shall be binding on the
Company notwithstanding that the Company has only a single
Member.
SOLE
MEMBER:
RED OAK CAPITAL GP,
LLC,
a
Delaware limited liability company
By: Red
Oak Capital Group, LLC,
a
Delaware limited liability company
Its: Sole
Member
By:
Name:
▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Manager
By:
Name:
▇▇▇▇▇▇
▇▇▇▇▇
Its:
Manager
By:
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇
Its:
Manager
The
Company hereby executes this Limited Liability Company Agreement
for purposes of becoming a party hereto and agreeing to perform its
obligations and duties hereunder and being entitled to enjoy its
rights and benefits hereunder.
COMPANY:
a
Delaware limited liability company
By: Red
Oak Capital GP, LLC,
a
Delaware limited liability company
Its: Sole
Member
By: Red
Oak Capital Group, LLC,
a
Delaware limited liability company
Its: Sole
Member
By:
Name:
▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Manager
By:
Name:
▇▇▇▇▇▇
▇▇▇▇▇
Its:
Manager
By:
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇
Its:
Manager
7