SECOND AMENDED AND RESTATED OPERATING AGREEMENT
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH NOT MATERIAL AND THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL
SECOND AMENDED AND RESTATED OPERATING AGREEMENT
OF
SMOOTH BOURBON, LLC
A NEVADA LIMITED LIABILITY COMPANY EFFECTIVE AS OF APRIL 1, 2022
THE INTERESTS DESCRIBED AND REPRESENTED BY THIS OPERATING AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS (THE “SECURITIES LAWS”) AND MAY BE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES LAWS. TO THE EXTENT THE INTERESTS CONSTITUTE SECURITIES UNDER THE SECURITIES LAWS, THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES LAWS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
TABLE OF CONTENTS
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Article 5. Rights and Duties of Manager; indemnification; officers |
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Manager and Members Have No Exclusive Duty to Company; Fiduciary Duties |
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Article 8. Contributions to the Company and Capital Accounts |
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Withdrawal or Reduction of Members’ Contributions to Capital |
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Article 9. ALLOCATIONS, INCOME TAX, DISTRIBUTIONS, ELECTIONS AND REPORTS |
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Certain Allocations for Income Tax (But Not Book Capital Account) Purposes |
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Additional Conditions to Recognition of Transferee as a Substituted Member |
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Issuance of Additional Membership Interests to Existing Members |
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This Second Amended and Restated Operating Agreement is made and entered into as of the 1st day of April, 2022 (the “Effective Date”), by and among the Company and each of the Members whose signatures appear on the signature page hereof (the “Members”). Reference is hereby made to the original operating agreement of the Company effective as of May 30, 2017, as amended and restated in the First Amended and Restated Operating Agreement of the Company effective as of April 20, 2018, as further amended March 10, 2022 (the “Prior Operating Agreement”). In consideration of the mutual covenants contained herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto desire to continue the Company as a limited liability company in accordance with the Act, to admit the CNTY Member as a Member and to amend and restate the Prior Operating Agreement of the Company in its entirety as set forth in this Agreement, as follows:
Unless the context otherwise specifies or requires, capitalized terms used herein which are not otherwise defined in the text of this Agreement shall have the respective meanings assigned thereto in Addendum I, attached hereto and incorporated herein by reference, for all purposes of this Agreement (such definitions to be equally applicable to both the singular and the plural forms of the terms defined). Unless otherwise specified, all references herein to Articles or Sections are to Articles or Sections of this Agreement.
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2.5 Term. The Company shall continue in existence until it dissolves in accordance with the provisions of this Agreement or the Act. |
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(a) The Members intend that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture, and that no Member be a partner or joint |
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venturer of any other Member by virtue of this agreement, for any purposes other than as set forth in Section 2.6(b), and neither this Agreement nor any document entered into by the Company or any Member shall be construed to suggest otherwise.
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(b) The Members acknowledge and agree that for federal (and, if applicable, state and local) income tax purposes (i) immediately prior to the transactions contemplated by that certain Membership Interest Purchase Agreement (“MIPA”) dated as of February 22, 2022, the Company was wholly-owned by the ▇▇▇▇▇▇▇ Member and was treated as an entity disregarded as separate from its owner, and (ii) the purchase and sale of the Membership Interests in the Company pursuant to the MIPA shall be treated as a transaction described in Revenue Ruling 99-5, Situation 1, with the following consequences: (A) the Company was converted from a disregarded entity to a partnership when the CNTY Member purchased the Membership Interests in the Company from the ▇▇▇▇▇▇▇ Member, (B) the CNTY Member’s purchase of 50% of the Membership Interests in the Company was treated as the purchase of an undivided 50% interest in each of the Company’s assets, and (C) immediately after such purchase and sale, the Marnell Member and the CNTY Member were treated as contributing their respective interests in the assets of the Company to a partnership in exchange for ownership interests in the partnership. |
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(c) Following the First Closing (as such term is defined in the MIPA), the Members intend that the Company shall be treated as a partnership for federal and, if applicable, state or local income tax purposes, and the Company and each Member shall file all tax and information returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment. |
The Company is principally organized for such lawful purposes as the Members may from time to time authorize as permitted under the Act, as may be set forth in any filed Articles of Organization. The Company will have all the powers granted to a limited-liability company under the laws of the State of Nevada, as set forth herein or any filed Articles of Organization.
MEMBERS AND UNITS
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provisions required by Article 8 of the Uniform Commercial Code (under which the Membership Interests shall be deemed “securities”). All membership certificates shall be consecutively numbered or otherwise identified. In case of a lost, destroyed or mutilated membership certificate, a new one may be issued upon such terms, and subject to such indemnity to the Company, as the Manager may prescribe.
RIGHTS AND DUTIES OF MANAGER; INDEMNIFICATION; OFFICERS
▇▇▇▇▇▇▇ GAMING, LLC
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(a) Borrow money for the Company from banks, other lending institutions, the Manager, Members, or Affiliates of the Manager or Members on such terms as the Manager in good ▇▇▇▇▇ ▇▇▇▇▇ appropriate and, in connection therewith, to Hypothecate Company Property to secure repayment of the borrowed sums; |
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(b) Purchase liability and other insurance to protect the Company’s property and business; |
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(c) Execute and deliver all instruments and documents, including checks, |
drafts, notes and other negotiable instruments; mortgages or deeds of trust; security agreements; financing statements; documents providing for the acquisition, mortgage, or disposition of Company property; assignments; bills of sale; leases; partnership agreements; operating (or limited liability company) agreements of other limited liability companies; and any other instruments or documents necessary, in the reasonable opinion of the Manager, to the conduct of the business of the Company, including modifications and amendments thereto;
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(d) Employ accountants, legal counsel, managing agents, other experts, employees and independent contractors to perform services for the Company and to compensate them from Company funds; |
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(e) Execute and file such other instruments, documents, and certificates which may from time to time be required by the laws of Nevada or any other jurisdiction in which the Company shall determine to do business, or any political subdivision or agency thereof, to effectuate, implement, continue, and defend the valid existence of the Company; and |
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(f) Open bank accounts in the name of the Company and to be the sole signatory thereof on behalf of the Company. |
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(a) Sell or otherwise dispose of any material Company Property; |
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(b) Cause the Company to be a party to a Reorganization; |
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(c) Cause the Company to file for Bankruptcy; |
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(d) Liquidate or dissolve the Company, as further provided in Section 12.1; |
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(e) Borrow money for the Company from any Person or Hypothecate Company Property; provided that the incurrence of debt provided for in the Annual Budget shall not require Approval, nor shall the incurrence of debt pursuant to Section 8.2 resulting from the failure by any Member to make an additional Capital Contribution pursuant to that section; |
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(f) Take any action which would result in a change in the amount of Capital Contributions required from any Member; provided that any such action shall also require the approval of any Member whose Capital Contributions would be changed; |
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(g) Take any action which would result in an increase in the personal liability imposed upon any Member; provided that any such action shall also require the approval of any Member whose personal liability would be increased; |
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(h) Amend, alter or repeal any provision of, or add any provision to, the Company’s Articles of Organization or Operating Agreement, or any other equivalent charter documents; |
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(i) Authorize, issue, sell or grant any Units or other securities; |
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(j) Change the rights, preferences or privileges of any Units of the Company; |
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(k) Engage in any business other than the business conducted by the Company on the date hereof; |
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(l) Make any material change in any existing tax method policies, procedures or elections or otherwise change the Company’s fiscal year or make any material tax elections; |
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(m) Enter into any transaction of any kind with any Affiliate of the Company, whether or not in the ordinary course of business, including any transaction requiring payment of any management fees or other amounts (other than reasonable salaries and compensation) to any Affiliate of the Company, provided that the foregoing shall not apply to (i) that certain Lease of even date herewith between the Company and Nugget, or (ii) the incurrence of debt pursuant to Section 8.2 resulting from the failure by any Member to make an additional Capital Contribution pursuant to that section; |
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(n) Subject to Section 5.14, enter into any agreements or transactions with a ROW Party on behalf of the Company in connection with the Right of Way Process, including but not limited to, any agreements or transactions with NDOT and/or FHWA with respect to compensation payable to the Company or Nugget with respect to Nugget Relocated Assets and any agreements or transactions with any other ROW Party with respect to the design, look, feel, aesthetics, scope, location, cost and construction of Nugget Replacement Assets; |
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(o) Cause or permit actual expenses to exceed by more than [***]percent ([***]%) in the aggregate those in the Annual Budget in any one year; |
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(p) Other than in connection with the Right of Way Process, enter into agreements in any Fiscal Year that exceed [***] individually or $[***] in the aggregate; |
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(q) Initiate or settle any litigation or arbitration proceeding involving the Company; |
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(r) Cause the Company to loan money to any other Person; |
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(s) Other than in connection with the Right of Way Process, take any other action that is outside the usual and ordinary course of business of the Company; or |
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(t) Take any other action for which Approval of a Majority Interest is required hereunder. |
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(a) The Manager shall perform its duties in good faith, in a manner it reasonably believes to be in the best interests of the Company, including but not limited to participating in good faith in the Right of Way Process. |
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(b) The Manager does not, in any way, guarantee the return of any Member’s Capital Contributions from the operations of the Company or otherwise. |
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(c) Except as otherwise provided herein, no Manager will be liable to the Company or the Members or other interest holders for any act or omission in connection with the business or affairs of the Company so long as the Manager against whom liability is asserted acted in good faith on behalf of the Company and in a manner reasonably believed by the Manager to be within the scope of authority under this Agreement and in the best interests of the Company, |
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unless such act or omission constitutes gross negligence, intentional or willful misconduct, fraud or a knowing violation of law.
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(d) In performing his or her duties, the Manager shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by the following Persons and groups unless the Manager has knowledge concerning the matter in question that would cause such reliance to be unwarranted: |
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(i) one or more employees or other agents of the Company whom the Manager believes in good faith to be reliable and competent in the matters presented; |
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(ii) legal counsel, public accountants, or other Persons as to matters that the Manager believes in good faith to be within such Persons’ professional or expert competence; or |
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(iii) a committee, upon which the Manager does not serve, duly designated in accordance with the provisions of this Agreement, as to matters within its designated authority, which committee the Manager believes in good faith to merit confidence. |
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(a) Proceeding Other Than By the Company. The Company shall indemnify the Manager or any Member and may indemnify any other Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, whether civil, criminal, administrative or investigative, except an action by or in the right of the Company, by reason of the fact that he is or was a Member, Manager, employee or agent of the Company, or is or was serving at the request of the Company as manager, director, officer, employee or agent of another limited-liability company or corporation, against expenses, including attorneys’ fees, judgment, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the Person did not act in good faith and in a manner which he reasonably believed to be in or not |
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opposed to the best interests of the Company, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
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(b) Proceeding by the Company. The Company shall indemnify the Manager or any Member and may indemnify any other Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a Member, Manager, employee or agent of the Company, or is or was serving at the request of the Company as a Member, Manager, director, officer, employee or agent of another limited-liability company, corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the actions or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company. Indemnification may not be made for any claim, issue or matter as to which such a Person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the Company, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the Person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. |
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(c) Indemnity if Successful. To the extent that a Manager, Member, employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in this Section 5.7, or in defense of any claim, issue or matter therein, the Company will indemnify the Manager, Member, employee or agent against expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense. |
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(d) Expenses. Any indemnification under this Section 5.7, unless ordered by a court or advanced by the Company, must be made by the Company only as authorized in the specific case upon a determination in good faith by the Manager that indemnification of the Member, Manager, employee or agent is proper in the circumstances. |
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5.10 Vacancies. Any vacancy occurring for any reason of one or more Managers shall be filled by a Majority Interest of the Members. |
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5.11 Compensation, Reimbursement, Organization Expenses. Unless otherwise determined by a Majority Interest of the Members, the Manager shall not be entitled to |
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compensation from the Company for services rendered to the Company in its capacity as such. Upon the submission of appropriate documentation, each Manager shall be reimbursed by the Company for reasonable out-of-pocket expenses incurred on behalf, or at the request, of the Company.
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5.14 Right of Way Process. With respect to the Company’s participation in the Right of Way Process with all ROW Parties: |
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(a) The Manager shall communicate and consult with the Members throughout the Right of Way Process with respect to all material aspects of the Right of Way Process, including material decisions that will impact the Company or Nugget, and shall copy the Members on all material correspondence (including material emails by and among the Manager, the Company and other ROW Parties). The Manager shall consider the Members’ comments in connection with the Right of Way Process in good faith. |
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(b) The Manager and the Members shall be entitled to attend and participate in all meetings in connection with the Right of Way Process and to provide input into the foregoing. To the extent any Member does not attend any such meeting, the Manager shall provide reasonably detailed minutes of the meeting within a reasonable period of time thereafter. |
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(c) Whether or not specifically in connection with the Right of Way Process, the Manager and the Members shall be entitled to attend and participate in all meetings with any ROW Party regarding design, look, feel, aesthetics, scope, location, cost and construction of the Nugget Replacement Assets and to provide input into the foregoing. |
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(d) Not less than quarterly during the pendency of the Right of Way Process, the Manager shall schedule a meeting with the Members for the purpose of discussing the then current status of the Right of Way Process and obtaining the Members’ input into the foregoing. Such meetings shall be held via video conference or teleconference unless the CNTY Member requests an in person meeting. |
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(e) The Manager shall use commercially reasonable efforts to obtain compensation payable to the Company from one or more ROW Parties (other than Nugget) for |
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Nugget Relocated Assets that will allow for the construction of Nugget Replacement Assets which are consistent with the design and interior standards of Nugget at such time.
RIGHTS AND OBLIGATIONS OF MEMBERS
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6.2 Members Have No Agency Authority. Except as expressly provided in this Agreement, the Members (in their capacity such) shall have no agency authority on behalf of the Company. |
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7.5 Meeting of all Members. All meetings shall be held at the place and time designated in the notice of the meeting; provided, however, that if all of the Members shall meet at any time |
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and place, and Approve the holding of a meeting at such time and place, such meeting shall be valid without call or notice, and at such meeting lawful action may be taken.
CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS
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(a) No Member shall be obligated to make any additional Capital Contributions or advances to the Company, except each Member shall be required to make such additional Capital Contributions as are (i) set forth in the Annual Budget, (ii) necessary to fully fund the design and construction of the Nugget Replacement Assets to the extent the compensation received by the Company in connection with the Right of Way Process for the Nugget Relocated Assets together with other available assets of the Company is insufficient to do so, or (iii) otherwise Approved by the Members. |
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(b) The Manager shall give written notice to each Member of the amount of any required additional Capital Contribution, and each Member shall deliver to the Company its pro rata share thereof no later than thirty (30) days following the date such notice is given. None of the terms, covenants, obligations or rights contained in this Section 8.2 is or shall be deemed to be for the benefit of any Person other than the Members and the Company, and no such third Person shall under any circumstances have any right to compel any actions or payments by the Manager or the Members. |
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(c) If any Member fails to make an additional Capital Contribution as set forth above in this Section 8.2, (i) the Manager shall give notice of such default to the non-defaulting Members, and within thirty (30) days following the date such notice is given, each non-defaulting Member may, but is not required to, make its pro rata share of such additional Capital Contribution |
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or loan to the Company its pro rata share of the amount of such Additional Capital Contribution on commercially reasonable terms. If the non-defaulting Members do not fully fund such additional Capital Contribution, the Manager may seek such capital from any source from which the Company may borrow additional capital, including, without limitation, any Member, upon such terms as the Manager shall deem reasonably appropriate; provided, however, that no Member shall be obligated to make a loan to the Company. The Manager shall deduct from the defaulting Member’s future Distributions (including Distributions under Section 9.5(a)) the amount of such additional Capital Contribution that such Member failed to contribute hereunder.
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(a) A separate Capital Account shall be maintained for each Member. Each Member’s Capital Account shall be increased by (i) the amount of money contributed by such Member to the Company; (ii) the Gross Asset Value of property contributed by such Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code); (iii) allocations to such Member of Profits; and (iv) any items in the nature of income and gain which are specially allocated to the Member pursuant to Sections 9.2 and 9.3. Each Member’s Capital Account shall be decreased by (1) the amount of money Distributed to such Member by the Company; (2) the Gross Asset Value of property Distributed to such Member by the Company (net of liabilities secured by such Distributed property that such Member is considered to assume or take subject to under Section 752 of the Code); (3) any items in the nature of deduction and loss that are specially allocated to the Member pursuant to Sections 9.2 and 9.3; and (4) allocations to such Member of Losses. |
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(b) Without limiting the other rights and duties of a transferee of a Membership Unit pursuant to this Agreement, in the event of a permitted sale or exchange of a Membership Unit in the Company (except in connection with the sale of Membership Units to the CNTY Member at the First Closing under the MIPA), (i) the Capital Account of the transferor shall become the Capital Account of the transferee to the extent it relates to the transferred Membership Unit in accordance with Section 1.704-1(b)(2)(iv) of the Regulations, and (ii) the transferee shall be treated as the transferor for purposes of allocations and distributions pursuant to Article 9 and Article 12 to the extent that such allocations and distributions relate to the transferred Membership Unit. |
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(c) The manner in which Capital Accounts are to be maintained pursuant to this Section 8.3 is intended to comply with the requirements of Section 704(b) of the Code and the Regulations thereunder. If in the opinion of the Company’s accountants or tax counsel the manner in which Capital Accounts are to be maintained pursuant to the preceding provisions of this Section 8.3 should be modified in order to comply with Section 704(b) of the Code and the Regulations thereunder, then, notwithstanding anything to the contrary contained in the preceding provisions of this Section 8.3, the method in which Capital Accounts are maintained shall be so modified. |
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(d) Upon liquidation of the Company, liquidating Distributions shall be made in accordance with Section 12.3 below, as determined after taking into account all Capital Account adjustments for the Company’s taxable year during which the liquidation occurs. No Member |
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shall have any obligation to restore all or any portion of a deficit balance in such Member’s Capital Account.
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(e) The Manager shall also: (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for Capital Account purposes, in accordance with Section 1.704-1(b)(2)(iv)(q) of the Regulations, and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Section 1.704-1(b) of the Regulations; provided that, to the extent that any such adjustment is inconsistent with other provisions of this Agreement and would have a material adverse effect on any Member, the Manager may not make such adjustment without the consent of such Member. |
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(a) A Member may not withdraw as a Member at any time. |
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(b) A Member shall not receive a Distribution of any part of its Adjusted Capital Contribution to the extent such Distribution would violate Section 9.7. |
ALLOCATIONS, INCOME TAX, DISTRIBUTIONS, ELECTIONS AND REPORTS
(a) the Company were to sell the assets of the Company for their Gross Asset Values, (b) all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Gross Asset Values of the assets securing such liability), (c) the Company were to Distribute the proceeds of sale pursuant to Section 12.3(b)(iv) and (d) the Company were to dissolve pursuant to Article 12, minus the sum of (1) such Member’s share of Company Minimum Gain or Member Minimum Gain, and (2) the amount, if any, that such Member is obligated (or deemed obligated) to contribute, in its capacity as a Member, to the Company; computed immediately prior to the hypothetical sale of assets.
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(a) In the event that any Member unexpectedly receives any adjustments, allocations or Distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations, which create or increase a Deficit Capital Account of such Member, then items of Company income and gain (consisting of a pro rata portion of each item of Company income, including gross income, and gain for such year) shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Deficit Capital Account so created as quickly as possible. It is the intent that this Section 9.2(a) be |
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interpreted to comply with the alternate test for economic effect set forth in Section 1.704- 1(b)(2)(ii)(d) of the Regulations.
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(b) The Losses allocated pursuant to Section 9.1 hereof shall not exceed the maximum amount of Losses that can be so allocated without causing any Member to have a Deficit Capital Account at the end of any Fiscal Year. In the event that some, but not all, of the Members would have Deficit Capital Accounts as a consequence of an allocation of Losses pursuant to Section 9.1 hereof, the limitation set forth in the preceding sentence shall be applied on a Member- by-Member basis so as to allocate the maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of the Regulations. All Losses in excess of the limitation set forth in this Section 9.2(b) shall be allocated to the Members in proportion to their respective positive Capital Account balances, if any, and thereafter to the Members in accordance with their interests in the Company as determined by the approval of the Manager in its reasonable discretion. In the event that any Member would have a Deficit Capital Account at the end of any Fiscal Year, the Company shall credit the Capital Account of such Member specially with items of Company income (including gross income) and gain in the amount of such excess as quickly as possible. |
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(c) Notwithstanding any other provision of this Section 9.1, if there is a net decrease in the Company Minimum Gain during any Fiscal Year, then the Capital Accounts of each Member shall be specially allocated items of income (including gross income) and gain for such Fiscal Year (and if necessary for subsequent Fiscal Years) equal to that Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Section 1.704-2(g) of the Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. If in any Fiscal Year that the Company has a net decrease in the Company Minimum Gain, if the minimum gain chargeback requirement would cause a distortion in the economic arrangement among the Members and it is not expected that the Company will have sufficient other income to correct that distortion, the Manager may in its discretion (and shall, if requested to do so by a Member that provides sufficient cash to pay the costs and expenses associated with such request) seek to have the Internal Revenue Service waive the minimum gain chargeback requirement in accordance with Section 1.704-2(f)(4) of the Regulations. |
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(d) Notwithstanding any other provision of this Section 9.2 except Section 9.2(c), if there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Member who has a share of the Member Minimum Gain as of the beginning of the Fiscal Year shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) equal to such Member’s share of the net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(4) of the Regulations. A Member shall not be subject to this provision to the extent that an exception is provided by Section 1.704-2(i)(4) of the Regulations and any administrative guidance issued by the Internal Revenue Service with respect thereto. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. Any Member Minimum Gain allocated pursuant to this provision shall consist of first, gains recognized from the disposition of Company property subject to the Member Nonrecourse Debt, and, second, if necessary, a pro rata portion of the Company’s other items of |
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income or gain (including gross income) for that Fiscal Year. This Section 9.2(d) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith.
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(e) Items of Company loss, deduction and expenditures described in Section 705(a)(2)(B) of the Code which are attributable to any nonrecourse debt of the Company and are characterized as partner nonrecourse deductions under Section 1.704-2(i) of the Regulations shall be allocated to the Members’ Capital Accounts in accordance with said Section 1.704-2(i) of the Regulations. |
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(f) Beginning in the first taxable year in which there are allocations of “nonrecourse deductions” (as described in Section 1.704-2(b) of the Regulations), such deductions shall be allocated to the Members, pro rata, in accordance with their Membership Units. |
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(g) Excess nonrecourse liabilities (as described in Section 1.752-3 of the Regulations) shall be allocated to the Members pro rata, in accordance with their Membership Units. |
(i) the Regulatory Allocation had the effect of offsetting a prior Regulatory Allocation or (ii) the Regulatory Allocation likely (in the opinion of the Company’s accountants or tax counsel) will be offset by another Regulatory Allocation in the future (e.g., Regulatory Allocation of “nonrecourse deductions” that likely will be subject to a subsequent “minimum gain chargeback”).
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9.5 Distributions. Except as provided in Sections 8.3(d) (with respect to liquidating Distributions) and 9.6 (with respect to limitations on Distributions): |
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(a) The Company shall Distribute Distributable Cash to each Member in proportion to the federal taxable income of the Company which will be allocated to such Member (other than taxable income incurred in connection with a Reorganization or an Approved Sale or |
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the receipt of a guaranteed payment for services by such Member) (“Tax Profits”) for the current Fiscal Year as reasonably estimated by the Manager no later than 10 days prior to the dates that taxes (including estimated taxes) are due for individuals an amount equal to the remainder, if any, of: (i) the product of the highest marginal income tax rate for such Fiscal Year under the Code multiplied by the estimated Tax Profits allocable to such Member for the applicable period, minus
(ii) the sum of all Distributions made to each such Member pursuant to this Section 9.5(a) or Section 9.5(b) with respect to such Fiscal Year. All Distributions made to the Members pursuant to this Section 9.5(a) shall be treated as an advance of, and applied to reduce, other amounts Distributable to the Members under Section 9.5(b) and under Section 8.3(d).
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(b) The Company may Distribute Distributable Cash at such times and in such amounts as determined by the Manager (subject to the required distributions provided for in Section 9.5(a) above), but no less frequently than on a monthly basis unless otherwise Approved by the Members. All such Distributions shall be made to all Members, pro rata, in accordance with their Membership Units. |
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(c) In the event of a termination of the MIPA pursuant to Section 9.01(e) thereof, the parties acknowledge and agree that (i) the CNTY Member will not be entitled to any distribution of the insurance proceeds of the underlying Substantial Casualty Event (as defined in the MIPA), and (ii) no distribution of any such insurance proceeds of the underlying Substantial Casualty Event will be made to the ▇▇▇▇▇▇▇ Member other than (A) as may be used to partially fund the purchase price to be paid by the Marnell Member or its Affiliate pursuant to Section 9.02(b) of the MIPA, or (B) following consummation of the purchase transaction contemplated in Section 9.02(b) of the MIPA. |
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(d) In the event of a Casualty Event (as defined in the MIPA) that does not result in a termination of the MIPA, (i) any proceeds received by the Company attributable to such Casualty Event will be used solely to repair, replace or otherwise remedy the Casualty Event, and |
(ii) no Distribution of any such insurance proceeds will be made to the Members except to the extent such proceeds exceed the amount necessary under clause (i) above.
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9.7 Limitation Upon Distributions. No Distribution shall be made if such Distribution would violate the Act or this Agreement. |
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9.9 Loans to the Company. Subject to Section 5.4, nothing in this Agreement shall prevent any Member from making secured or unsecured loans to the Company upon the Approval of the Manager. |
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(a) The Manager shall designate the “partnership representative” as defined in Section 6223 of the Code, and if required by law, a “designated individual” as defined in the Regulations. Each Member hereby consents to such designations as the Partnership Representative and shall, upon the request of the Partnership Representative, execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. To the extent the Company is subject to audit for any year beginning before January 1, 2018, the provisions in the Prior Operating Agreement shall apply (in lieu of this Section 9.11) with respect to such audit. |
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(b) In the event the Company is the subject of an income tax audit by any federal, state or local authority, to the extent the Company is treated as an entity for purposes of such audit, including administrative settlement and judicial review, the Partnership Representative is hereby authorized, empowered and directed to act for, and its decision will be final and binding upon, the Company and each Member; provided, however, that, except for audits to which Section 9.11(d) would apply, the Partnership Representative shall not compromise or settle any audit or administrative or judicial proceedings without the unanimous written consent of the Members. For audits to which Section 9.11(d) would apply, the Partnership Representative shall consult with the Members prior to compromising or settling any such audit. The Partnership Representative will provide each Member and each former Member (with respect to a fiscal year during which such former Member held a Membership Interest in the Company) with notice, and keep each such Person reasonably apprised, of each tax proceeding related to the Company and any material developments with respect to such tax proceedings. Except as expressly set forth herein, the Partnership Representative will have the right to extend the statute of limitations for assessing or computing any tax liability against the Company or compromise, settle or concede the amount of any partnership tax item. The Partnership Representative may employ accountants, tax counsel or other professionals in connection with any audit or investigation of the Company by the Internal Revenue Service or any other taxing authority and in connection with all subsequent administrative and judicial proceedings arising out of such audit. The Company shall reimburse the Partnership Representative for or otherwise bear all costs and expenses incurred by the Partnership Representative in its capacity as such as the expenses are incurred. Each Member shall |
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cooperate (which, in the case of a Member that is a partnership for United States federal income tax purposes, shall include obtaining the cooperation of each of its partners or members) with the Partnership Representative and do or refrain from doing (and cause any such member to do or refrain from doing) any and all things reasonably required by the Partnership Representative in connection with such audit or contest, administrative settlement, judicial review, or other resulting administrative or judicial proceedings. The Partnership Representative shall use its reasonable efforts to comply with the responsibilities outlined in the Code and Regulations and in doing so will incur no liability to any Member and shall be indemnified and held harmless by the Company for its efforts in complying with the responsibilities outlined in the Code and Regulations.
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(c) The Company shall elect out of subchapter C, chapter 63, of the Code, pursuant to Code Section 6221(b), unless such election is unavailable for any taxable year. In the case of any adjustment to an item of Company income, gain, loss, deduction or credit, (i) each Person who was a Member during any Reviewed Year whether or not such Person is a Member during the Adjustment Year (each such Person, a “Reviewed Year Member”) shall report his, her or its allocable share of such adjustment on his, her or its federal income tax return pursuant to either the Amended Return Procedures or the Alternative Payment Procedures, as determined by the Partnership Representative in its sole discretion; and (ii) if the Partnership Representative determines not to, or is unable to, elect the Alternative Payment Procedures, each Reviewed Year Member shall indemnify the Company from and against any and all loss attributable to such Reviewed Year Member’s (or such Review Year Member’s transferees’) allocable share of any Imputed Underpayment required to be paid by the Company, including without limitation any interest, penalty, other additions to tax, and all other costs and expenses (including without limitation reasonable attorney’s fees) of any kind or nature that may be sustained or suffered by the Company related thereto. The Company shall be entitled to recover such loss by any lawful means, including without limitation by offsetting such loss against amounts otherwise distributable to the Reviewed Year Member or the Reviewed Year Member’s transferees. |
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(d) With respect to any tax year or portion thereof ending on or before the First Closing under the MIPA, the ▇▇▇▇▇▇▇ Member shall reimburse the Company and each other Member for any losses, fees, costs or expenses reasonably incurred by the Company, such Member or the Partnership Representative in connection with any audit, investigation, examination, settlement, administrative and judicial proceedings or adjustments related to such tax year. |
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(e) The provisions of this Section 9.11 shall survive the termination of the Company or the termination of any Member’s Interest in the Company and shall remain binding on the Members for as long a period of time as is necessary to resolve with the Internal Revenue Service or any other taxing authority any and all matters regarding the taxation of the Company or the Members. |
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(a) In accordance with Section 704(c)(1)(A) of the Code and Section 1.704- 1(b)(2)(iv)(d) of the Regulations, if a Member contributes property with an initial Gross Asset Value that differs from its adjusted basis at the time of contribution, the Company shall allocate income, gain, loss and deductions with respect to the property, solely for federal income tax purposes (and not for Capital Account purposes), among the Members so as to take account of any variation between the adjusted basis of such property to the Company and its Gross Asset Value |
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at the time of contribution pursuant to the traditional method under Section 1.704-3(b) of the Regulations (or such other method under the Regulations as may be selected by Members holding at least a Majority Interest). In the event the Gross Asset Value of any Company asset is adjusted pursuant to clause (b) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset will take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder and such method as may be selected pursuant to the preceding sentence.
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(b) To the extent permitted under applicable law, the Company shall allocate all recapture of income tax deductions resulting from sale or disposition of any or all of the Company Property to the Members to which the deduction that gave rise to such recapture was allocated hereunder to the extent that such Member is allocated any gain from the sale or other disposition of such property. |
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9.13 Inclusion of Assignees. The term “Member” for purposes of this Article 9 shall include an Assignee. |
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(a) A Member shall only have the right to Transfer all or any portion of the Member’s Membership Units if such Transfer is in full compliance with the provisions herein. Notwithstanding anything to the contrary herein, a Member shall not be permitted to Transfer all or any portion of the Member’s Membership Units without the written consent of the Member(s) other than the Transferring Member and its Affiliates, which consent shall not be required if (i) a Transfer is otherwise specifically permitted under this Article 10, or (ii) such Transfer all or any portion of its Membership Units is (A) to the Company, (B) to another Member, (C) to an Affiliate of a Member, or (D) a Permitted Financing Transfer, and any such Transfer pursuant to clause (ii) of this paragraph shall be deemed a “Permitted Transfer” hereunder. |
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(b) Each Member hereby acknowledges the reasonableness of the restrictions on Transfer of Membership Units imposed by this Agreement in view of the Company’s purposes and the relationship of the Members. Accordingly, the restrictions on Transfer contained herein shall be specifically enforceable. |
written offer, letter of intent or other written document signed by the Proposed Transferee(s) setting forth the proposed terms and conditions of the Transfer.
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(a) If the Member(s) other than the Transferring Member and its Affiliates Approve the proposed Transfer (other than a Permitted Transfer, which will require no such approval), a transferee of a Membership Unit, or any portion thereof, shall become a Substitute Member subject to all of the terms, conditions, restrictions and obligations of this Agreement. Such Substitute Member shall execute and deliver to the Company the Statement of Acceptance, attached as Exhibit B. If so admitted, the Substitute Member has all the rights and powers and is subject to all the obligations, restrictions and liabilities of the Member originally assigning the Membership Unit. The admission of a Substitute Member shall not release the Member assigning the Membership Unit from any liability to the Company that existed prior to the approval. |
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(b) If the other Member(s) do not Approve the Transfer of the Transferring Member’s Membership Units to a proposed transferee as provided in Section 10.3(a), then the proposed transferee shall become an Assignee. |
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(c) Upon and contemporaneously with any Transfer of a Member’s Membership Units, the Transferring Member shall cease to have any residual rights associated with the Membership Units Transferred to the transferee. |
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(a) If a Transferring Member Transfers Membership Units to a Person that is not already a Member, the Manager may require the Transferring Member and the proposed successor-in-interest to execute, acknowledge and deliver to the Manager (and the Transferring Member and the proposed successor-in-interest shall execute) such instruments of transfer, assignment and assumption and such other certificates, representations and documents, and to perform all such other acts which the Manager may reasonably deem necessary or desirable to accomplish any one or more of the following: |
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(i) Constitute such successor-in-interest as a Substituted Member and confirm such Substituted Member has accepted, assumed and agreed to be subject to and bound by all of the terms, obligations and conditions of this Agreement, as the same may have been further amended; |
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(ii) Maintain the status of the Company as a partnership for federal tax purposes; and |
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(iii) Assure compliance with any applicable state and federal laws and regulations, including Securities Laws. |
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(b) The Transferring Member hereby indemnifies the Company and the remaining Members against any and all loss, damage, or expense (including tax liabilities or loss of tax benefits) arising directly or indirectly as a result of any Transfer or purported Transfer in violation of this Article 10. All costs and expenses incurred by the Company in connection with any Transfer pursuant to this Article 10 and another Person becoming a Member, in respect of |
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such interest or such part thereof, including the fees and disbursements of counsel, shall be paid by the Transferring Member, including any expenses associated with any part year allocation made pursuant to Section 11.3. Any indemnification or payment due pursuant to this Section 10.5(b) shall be paid at or before the time of the Transfer.
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(c) Any Member that Transfers Membership Units in accordance with this Agreement shall notify the Company in writing within thirty (30) days of the Transfer, or, if earlier, by March 31 following the Transfer, which notice must include the names and addresses of the transferor and transferee, the taxpayer identification numbers of the transferor and transferee, if known, the date of the Transfer and such other information as may be required by any law applicable to the Company, any Member or both. |
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(a) In the event of a Triggering Event (as defined below), the Company (if approved by a majority in interest of Members other than the Dissociated Member), and, then, the other Members shall have the option to purchase all, but not less than all, of the Membership Units of the Dissociated Member (as hereinafter defined) upon the terms set forth in this Section 10.5. A “Triggering Event” means, with respect to any Member, the occurrence of any of the following events: (i) the execution, attachment, levy or other similar seizure against a Membership Unit of a Member, which is not dismissed or bonded within ninety (90) days; (ii) any involuntary transfer, assignment, or other disposition of a Membership Unit by operation of law; or (iii) the Bankruptcy of such Member, which is not dismissed within ninety (90) days. The Member with respect to which a Triggering Event occurs is sometimes referred to herein as a “Dissociated Member.” |
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(b) In order to exercise such purchase rights, no later than thirty (30) calendar days following its receipt of written notice of the occurrence of a Triggering Event, the Company shall deliver to the Dissociated Member a written notice of intention to exercise the option (the “Dissociation Option”) to purchase all, or part of the Dissociated Member’s Membership Units. If the Company does not exercise the Dissociation Option to purchase all of the Dissociated Member’s Membership Units, then the Company shall notify the other Members in writing, providing the other Members with a copy of the Company’s notice of intention with respect to right to purchase. Thereafter, the other Members shall have the right to purchase the Dissociated Member’s Membership Units not purchased by the Company at the same price and on the terms as available to the Company under this Agreement (the “Dissociation Event Purchasing Member”). To exercise such purchase rights, within thirty (30) calendar days after receiving notice from the Company, the Dissociation Event Purchasing Member shall deliver to all of the Member(s) (including the Dissociated Member) a written notice of intention to exercise the right to purchase so much of the Dissociated Member’s Membership Units not otherwise purchased by the Company as the Dissociation Event Purchasing Member may desire to purchase. If the Dissociation Event Purchasing Member and/or Company do not exercise the Dissociation Option, or do not exercise the Dissociation Option as to all of the Dissociated Member’s Units, then the Dissociated Member, or successor-in-interest, shall remain a Member as to all of the Units held by the Dissociated Member on the date that the Triggering Event occurred, subject to the terms and conditions of this Agreement. |
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(c) The purchase price of the Dissociated Member’s Membership Units shall be for an agreed upon amount, or if no amount can be agreed upon, the amount that would be |
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distributed to such Member if all of the assets of the Company were sold for their fair market value, as determined by an independent qualified appraiser appointed by the Company (or, by the Dissociation Event Purchasing Member, if applicable), and the Dissociated Member (or its representative, as applicable), and the resulting proceeds were used to repay the liabilities of the Company and liquidate the Company in accordance with Article 12. If the parties cannot agree on an appraiser, the Company (or, the Dissociation Event Purchasing Member, as applicable), and the Dissociated Member shall each choose an independent qualified appraiser and the two (2) appraisers shall choose a third independent qualified appraiser who has at least five (5) years’ experience in business valuations and appraisals. The third appraiser shall thereupon determine the fair market value of the Company’s assets. The Dissociated Member shall thereupon be entitled to an amount equal to the purchase price for its Membership Units, to be paid with a down payment of at least [***] percent ([***]%), with the remaining balance payable pursuant to the terms of a promissory note (the “Note”) to be executed by the Company and/or the Dissociation Event Purchasing Member, as applicable. The Note shall provide for monthly payments amortized and due in equal installments over a period of not more than sixty (60) months and interest shall accrue on the declining principal balance at a rate of at least [***]percent ([***]%) per annum, unless otherwise determined by the parties. The Note shall be dated as of the date the down payment is required to be made under this Agreement. The Note shall provide that the maker may prepay all or any portion of the unpaid principal balance and accrued interest at any time, without penalty. The Dissociated Member’s Units in the Company shall be pledged as security for the Note. The value of the Member’s Membership Units shall include the amount of any distributions to which the Member is entitled under this Operating Agreement through the date of the sale of the Member’s Membership Units to the Purchasing Member and/or the Company, based upon the Member’s right to share in distributions from the Company (to the extent that such distributions have not been paid) reduced by any damages sustained by the Company as a result of the occurrence of the Triggering Event, as determined by the Manager in its reasonable discretion. Closing of the purchase of the Dissociated Member’s Membership Units shall occur on or before the date that is thirty (30) days after the determination of the purchase price for its Membership Units. The Dissociated Member and the Purchasing Member and/or the Company shall execute such documents and instruments as may be necessary or appropriate to effect the sale of the Membership Unit pursuant to the terms of this Section 10.5.
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(a) Upon Bankruptcy of the maker of the Note; |
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(b) Upon default in payment of any of the terms by the maker of amounts required to be paid in the Note; |
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(c) In the event the maker is a Member, upon the sale of all, or substantially all, of the Member’s Membership Units; |
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(d) If the maker is the Company, upon the sale of the Company of all or substantially all of the assets of the Company; or |
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(e) A Reorganization in which the Company is a party and in which the Members before such ownership change do not retain, directly or indirectly, at least a majority of the beneficial interest in the voting ownership interests of the Company after such transaction. |
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(a) The purchase price payable by the CNTY Member for the Marnell Member’s Membership Units pursuant to the exercise of the Call Right shall be the Preferred Capital Amount (“Call Right Purchase Price”). |
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(b) The closing of the purchase of the ▇▇▇▇▇▇▇ Member’s Membership Units under this Section 10.7 shall take place on or before the date that is thirty (30) days following notice of CNTY’s exercise of the Call Right. |
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(c) At such closing, the Marnell Member shall deliver to the CNTY Member a duly executed assignment of all of its Membership Units and the CNTY Member shall deliver to the ▇▇▇▇▇▇▇ Member the entire Call Right Purchase Price in cash. |
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(d) In connection with the Call Right sale, the Marnell Member shall not be required to make any representations or warranties except for the following: valid execution and delivery of the assignment, its authority to sell its Units, that it owns the Units free and clear of any liens, and that neither its execution and delivery of documents to be entered into in connection with such transaction, nor the performance of its obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency. Furthermore, it shall be a condition to the exercise of the Call Right that the CNTY Member shall cause the ▇▇▇▇▇▇▇ Member and its applicable Affiliates to be removed from any personal guarantee or similar obligation with respect to any Company indebtedness, agreement or obligation at or prior to the closing of the Call Right transaction. |
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(a) Provided the CNTY Call Right has not been exercised prior to such date and that the Marnell Member still owns Membership Units in the Company, beginning on the earlier of (i) the date that is five (5) years following the Effective Date or (ii) a Permitted Financing Transfer of the type described in clause (ii) or (iii) of the definition of such term, each Member shall have the right, upon written notice to the Manager and the other Member (the “Sale Notice”), to cause (and/or direct the Manager to cause) the Company and the Members to take the actions contemplated in this Section 10.8. Promptly following delivery of the Sale Notice, the Company shall engage a representative reasonably satisfactory to the Members (the “Selling Agent”) to advise the Members on the fair market value of the Company and potential purchasers of the Company or the Membership Units. The Members, acting in good faith, shall seek to agree on a minimum cash sale price for the Company or the Membership Units (the “Minimum Price”). For a period of eighteen (18) months from date on which the Sale Notice is delivered (the “Sale Period”), the Selling Agent shall seek to sell the Company or the Membership Units for not less than the Minimum Price. Such sale may be in the form of a sale of the Company, whether by |
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merger, consolidation, sale of all or substantially all of the assets of the Company or of the Membership Interests of the Company, in one transaction or a series of transactions, which has been Approved by the Members in connection with their agreement on a Minimum Price or thereafter as requested by a prospective purchaser; provided that the Members shall seek to maintain the most favorable tax consequences for the Members in connection with structuring the sale transaction. In connection with a sale transaction, the Members agree as follows:
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(i) The sale will be completed pursuant to one or more definitive purchase agreements in a form customary for transactions of the applicable type, which agreements may include, among other matters, customary representations and warranties, covenants and termination rights, closing conditions and indemnification provisions. |
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(ii) If the sale is structured as a sale of assets or a Reorganization, the Members shall take all actions in their capacity as Members reasonably necessary or appropriate in order to cause the Company to take all action necessary or appropriate to give effect to such transaction and all Members shall approve such transaction in their capacity as Members. |
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(iii) If the sale is structured as a sale of the Membership Interests, the Members shall take all actions reasonably necessary or appropriate in order to cause the sale of all of the Membership Interests in the Company, including, without limitation, any necessary assignment(s) of such Member’s Units sufficient to convey to such buyer good, valid and marketable title to the Units free and clear of any liens. |
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(b) In furtherance of the foregoing, in connection with any sale transaction conducted under this Section 10.8, each Member (i) will raise no objections against the sale transaction or the process pursuant to which it was arranged, (ii) will and hereby does waive any appraisal or dissenters rights under applicable law and other similar rights, and (iii) will execute all documents containing such terms and conditions as those executed by other Members; provided, that such Members shall not be required to make any representations or warranties except for the following: valid execution and delivery of documents, their authority to sell their respective Units and as to their ownership of their respective Membership Units free and clear of any liens and that neither their execution and delivery of documents to be entered into in connection with such transaction, nor the performance of their obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency). Furthermore, each Member and its applicable Affiliates shall be removed from any personal guarantee or similar obligation with respect to any Company indebtedness, agreement or obligation at or prior to the closing of the sale transaction. |
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(c) Notwithstanding any provision of this Agreement to the contrary, at the closing of a sale pursuant to this Section 10.8, in the event that the aggregate proceeds to the Members of a sale under this Section 10.8 are greater than the Preferred Capital Amount computed as of the date of such closing, the ▇▇▇▇▇▇▇ Member shall be entitled to receive an amount equal to the Preferred Capital Amount computed as of the date of such closing and the CNTY Member shall be entitled to receive the balance of the sales proceeds. In the event that the aggregate proceeds to the Members of a sale under this Section 10.8 are less than or equal to the Call Right Purchase Price computed as of the date of such closing, the ▇▇▇▇▇▇▇ Member shall be entitled to receive all of the proceeds payable to the Members as result of such transaction. |
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(a) The purchase price payable by the CNTY Member for the ▇▇▇▇▇▇▇ Member’s Membership Units pursuant to the exercise of the ▇▇▇▇▇▇▇ Put Right shall be the Preferred Capital Amount (“Put Right Purchase Price”). |
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(b) The closing of the purchase of the ▇▇▇▇▇▇▇ Member’s Membership Units under this Section 10.9 shall take place on or before the date that is thirty (30) days following notice of the ▇▇▇▇▇▇▇ Member’s exercise of the ▇▇▇▇▇▇▇ Put Right. |
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(c) At such closing, the ▇▇▇▇▇▇▇ Member shall deliver to the CNTY Member a duly executed assignment of all of its Membership Units and the CNTY Member shall deliver to the ▇▇▇▇▇▇▇ Member the entire Put Right Purchase Price in cash. |
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(d) In connection with the ▇▇▇▇▇▇▇ Put Right sale, the Marnell Member shall not be required to make any representations or warranties except for the following: valid execution and delivery of the assignment, its authority to sell its Membership Units, that it owns the Membership Units free and clear of any liens, and that neither its execution and delivery of documents to be entered into in connection with such transaction, nor the performance of its obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency. Furthermore, the CNTY Member shall cause the Marnell Member and its applicable Affiliates to be removed from any personal guarantee or similar obligation with respect to any Company indebtedness, agreement or obligation at or prior to the closing of the ▇▇▇▇▇▇▇ Put Right transaction. |
$95,000,000 and, as a condition to the receipt of such amount, the CNTY Member shall deliver to the ▇▇▇▇▇▇▇ Member or its designee good and valid title to all of the CNTY Member’s right, title and interest in and to the CNTY Member’s Units, free and clear of all Encumbrances (other than those restrictions imposed by the Organizational Documents of the Company or applicable securities Laws) pursuant to a conveyance instrument substantially similar to the Assignment and Assumption Agreement. Notwithstanding the foregoing, if the MIPA is terminated by the ▇▇▇▇▇▇▇ Member pursuant to Section 9.01(c) of the MIPA or is terminated by the CNTY Member but as of the date of such termination the CNTY Member or Guarantor, as applicable, was in material uncured breach of any representation, warranty, covenant, obligation or agreement set forth in the MIPA, which breach would give rise to the failure of a condition under Article VII of the MIPA, then the ▇▇▇▇▇▇▇ Member shall have the right, but not the obligation, upon written notice to the CNTY Member, to purchase (or cause the purchase of) the CNTY Member’s Units on the terms
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set forth Section 9.01(b) of the MIPA within one (1) year following such termination. Capitalized terms in this Section 10.10 which are not otherwise defined herein shall have the meanings set forth in the MIPA.
ISSUANCE OF MEMBERSHIP INTERESTS
Each Person acquiring Membership Units in the Company after the Effective Date (other than any existing Member), regardless of the section of this Agreement under which such acquisition takes place, by their execution of or other agreement to be bound by this Agreement, hereby or thereby makes to the Company the representations set forth on Exhibit C of this Agreement in connection with such Person’s acquisition of such Membership Units.
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(a) The Company shall be dissolved only upon the occurrence of any of the following events: |
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(i) |
Approval of such dissolution by the Members; |
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(ii) |
the sale or disposition of all or substantially all of the Company assets in an Approved Sale, and the distribution of the proceeds thereof to the Members; |
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(iii) |
any event which makes it unlawful for the Company’s business to be continued; or |
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(iv) |
the entry of a decree of judicial dissolution. |
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Notwithstanding anything to the contrary in the Act, the Company shall not be dissolved upon the death, retirement, resignation, expulsion, Bankruptcy or dissolution of a Member.
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(b) As soon as possible following the occurrence of any of the events specified in Section 12.1(a) effecting the dissolution of the Company, the Manager shall execute all documents required by the Act at the time of dissolution and file or record such statements with the appropriate officials. |
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(a) Upon dissolution, an accounting shall be made by the Manager of the accounts of the Company and of the Company’s assets, liabilities, and results of operations from the date of the last previous accounting until the date of dissolution. The Manager shall immediately proceed to wind up the affairs of the Company. |
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(b) If the Company is dissolved and its affairs are to be wound up, the Manager |
shall:
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(i) Sell or otherwise liquidate all of the Company Property as promptly as practicable (except to the extent that the Manager may determine to Distribute in kind any assets to the Members pursuant to Section 12.3(b)(iv)); |
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(ii) Allocate any Profit or Loss resulting from such sales to the Members’ Capital Accounts in accordance with Article 9 hereof; |
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(iii) Discharge all liabilities of the Company, including liabilities to Members who are also creditors, to the extent otherwise permitted by law, other than liabilities to Members for Distributions and the return of Capital Contributions, and establish such Reserves as may be reasonably necessary to provide for contingent liabilities of the Company (for purposes of determining the Capital Accounts of the Members, the amounts of such Reserves shall be deemed to be an expense of the Company); and |
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(iv) Distribute the remaining assets to the Members and Assignees, either in cash or in kind, as determined by the Manager, with any Company Property Distributed in kind being valued for this purpose at their fair market value, as follows: |
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(A) to the ▇▇▇▇▇▇▇ Member, on a priority basis, an amount equal to the Preferred Capital Amount computed as of the date of such Distribution; and |
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(B) to the CNTY Member, the balance. |
Any liquidating Distributions to the Members and Assignees shall be made in accordance with the time requirements set forth in Section 1.704-1(b)(2)(ii)(b)(2) of the Regulations. If any Company Property is to be Distributed in kind, the net fair market value of such Company Property as of the date of dissolution shall be determined by agreement of the Members, or, if the Members do not
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agree, by an appraiser selected by the Manager. Such Company Property shall be deemed to have been sold as of the date of dissolution for their fair market value, and the Capital Accounts of the Members shall be adjusted pursuant to the provisions of Section 8.3 of this Agreement to reflect such deemed sale.
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(c) Notwithstanding anything to the contrary in this Agreement, upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations, if any Member has a Deficit Capital Account (after giving effect to all contributions, Distributions, allocations and other Capital Account adjustments for all Fiscal Years, including the year during which such liquidation occurs), such Member shall have no obligation to make any Capital Contribution so as to restore its Capital Account to zero, and the negative balance of such Member’s Capital Account shall not be considered a debt owed by such Member to the Company, to the other Members, or to any other Person for any purpose whatsoever. |
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(d) The Manager shall comply with any requirements of applicable law pertaining to the winding up of the affairs of the Company and the final Distribution of its assets. |
BOOKS AND RECORDS
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13.4 Inspection. Any Member may obtain, inspect and copy records of the Company in accordance with Section 86.241 of the Act. Any request for information must be made in writing |
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and state the purpose of the request, which purpose must be reasonably related to the interest of the Member or group of Members as a Member or Members of the Company. The requested information shall be made available by the Company at the principal place of business of the Company or such other place as agreed to by the requesting Member not later than thirty (30) days after the Manager’s receipt of the request. If an attorney or other agent of a Member or group of Members seeks to exercise any right arising under this Section 13.4 on behalf of such Member(s), the request must be accompanied by a power of attorney signed by the Member(s) authorizing the attorney or other agent to exercise such rights on behalf of the Member(s). The rights authorized by this Section 13.4 may be denied to a Member or group of Members, as the case may be, or to such Person’s attorney or other agent, upon the refusal of the Member(s) to furnish to the Company an affidavit called for under Section 86.243(1) of the Act, as may be in effect from time to time.
MISCELLANEOUS PROVISIONS
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determined pursuant to Section 2.3. Such notice shall be effective, (a) if delivered by messenger or by overnight courier, upon actual receipt (or if the date of actual receipt is not a business day, upon the next business day); (b) if sent by facsimile or electronic mail transmission, upon electronic confirmation of successful transmission (or if the time of such electronic confirmation of successful transmission is later than 5:00 p.m. Pacific time on a business day (or reflects delivery on a non-business day), upon the next business day); or (c) if mailed, upon the earlier of (i) three
(3) business days after deposit in the mail; or (ii) the delivery as shown by return receipt therefor. Any Member or the Company may change its address by giving notice in writing to the Company and the other Members of its new address.
(g) the headings of provisions contained in this Agreement are solely for convenience of reference and do not control the meaning or interpretation of any provision of this Agreement, and (h) any reference to a monetary amount is a reference to lawful money of the United States. Any reference herein to a “day” or number of “days” (without the explicit qualification of “business”) will be deemed to refer to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular day, and such calendar day is not a business day, then such action or notice may be taken or given on the next succeeding business day.
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expressly referenced in this Agreement, and, except to the extent that a provision of this Agreement expressly incorporates federal income tax rules by reference to sections of the Code or Regulations or is expressly prohibited or ineffective under the Act, this Agreement shall govern, even when inconsistent with, or different than, the provisions of the Act or any other law or rule. In the event that the Act is subsequently amended or interpreted in such a way to make valid any provision of this Agreement that was formerly invalid, such provision shall be considered to be valid from the effective date of such interpretation or amendment. The duties and obligations imposed on the Members as such shall be those set forth in this Agreement, which is intended to govern the relationship among the Company and the Members, notwithstanding any provision of the Act or common law to the contrary.
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14.13 No Third-party Beneficiaries; Creditors. Except as specifically provided otherwise herein, this Agreement is for the sole benefit of the parties hereto and their respective successors |
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and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company.
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(a) All bills of sale, assignment forms or other appropriate transfer documents necessary to effectuate Transfers of a Member’s Membership Units effected in accordance with Article 10; |
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(b) All instruments, documents, and certificates which may from time to time be required by the laws of Nevada or any other jurisdiction in which the Company shall determine to do business, or any political subdivision or agency thereof, to effectuate, implement, continue, and defend the valid existence of the Company; and |
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(c) All instruments, documents, and certificates which the Manager deems necessary or desirable in connection with a Reorganization or the dissolution and termination of the Company, either of which has been authorized in accordance with the terms of this Agreement. |
This power of attorney shall not be affected by and shall survive the Bankruptcy, insolvency, death, incompetency, or dissolution of a Member and shall survive the delivery of any assignment by the Member of the whole or any portion of its Membership Units. Each Member hereby releases the Manager from any liability or claim in connection with the exercise of the authority granted pursuant to this power of attorney, and in connection with any other action taken by such Manager pursuant to which such Manager purports to act as the attorney-in-fact for one or more Members, if the Manager believed in good faith that such action taken was consistent with the authority granted to it pursuant to this Section 14.16.
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[SIGNATURE PAGE FOLLOWING]
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THE UNDERSIGNED, being all of the Members of the Company, hereby evidence their approval, adoption and ratification of the foregoing Operating Agreement, which shall be effective as of the date first written above. Each Member further understands that its execution hereof shall constitute its acknowledgement and agreement with the arbitration provisions of Section 14.17 hereof.
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▇▇▇▇▇▇▇ GAMING, LLC |
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By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III |
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Name: |
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III |
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Title: |
Chief Executive Officer |
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CENTURY NEVADA ACQUISITION, INC. |
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By: |
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
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Name: |
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
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Title: |
Chief Financial Officer |
[SMOOTH BOURBON, LLC Operating Agreement Signature Page]
ADDENDUM I
DEFINITIONS
Act. The Nevada Limited Liability Company Act at Nevada Revised Statutes Chapter 86, as amended.
Adjusted Capital Contributions. The sum of all Capital Contributions made by a Member, less any Distributions made by the Company to such Member.
Adjustment Year. Any “adjustment year” of the Company as defined in Section 6225 of the Code, as amended by the RPAP.
Affiliate. In the case of an individual, the spouse, estate, heirs, devisees, lineal descendants or the spouse of a lineal descendant of that individual, or a trust or other Entity formed by the individual for the benefit of the individual or his spouse or lineal descendants or the spouse of a lineal descendant of that individual and in which day-to-day voting control is directly or indirectly held by the individual, and in the case of a Person other than an individual, (a) any Person directly or indirectly controlling, controlled by, or under common control with such Person, (b) any Person owning or controlling Ten percent (10%) or more of the outstanding equity interests of such Person, (c) any officer, director, manager, or general partner of such Person, or (d) any Person who is an officer, director, manager, general partner, trustee, or holder of Ten percent (10%) or more of the equity interests of any Person described in clauses (a) through (c) of this sentence. For purposes of this definition, the term “control,” “controls,” “controlling,” “controlled by,” or “under common control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. No Member or Manager shall be deemed to be an Affiliate of another Member or Manager due solely to such Person’s status as a Member or Manager of the Company. For purposes of this definition, “lineal descendants” includes adopted children.
Agreement. This Operating Agreement as originally executed and as amended from time to time.
Alternative Payment Procedures. The procedures described in Section 6226 of the Code, as amended by the RPAP.
Amended Return Procedures. The procedures described in Section 6225(c)(2) of the Code, as amended by the RPAP.
Annual Budget. A budget for operating expenses (as defined under generally accepted accounting principles), and capital expenditures for the Company for each calendar year (or part thereof).
Approve or Approval. With respect to Members, such Members’ approval expressed by the Members holding the requisite Membership Interests at a meeting of the Members or expressed by written consent by Members holding the requisite Membership Interests as provided for in Article 7 of this Agreement.
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Approved Sale. The sale of the Company, whether by merger, consolidation, sale of all or substantially all of the assets of the Company or of all or substantially all of the Membership Interests of the Company, in one transaction or a series of transactions, which has been approved by (i) the Manager of the Company, and (ii) Members holding a Majority Interest.
Assignee. A transferee of a Membership Unit who has not been admitted as a Member pursuant to Section 10.3. An Assignee shall have no voting rights in the Company with respect to its Membership Unit, including, without limitation, any and all rights to participate in the management of the business and affairs of the Company and to vote on any matters as to which a Member is entitled to vote. The Assignee is only entitled to a Capital Account, to receive the Distributions and return of capital, and to be allocated the Profits and Losses attributable to the assigned Membership Unit or portion thereof.
Articles of Organization. The articles of organization of the Company as filed with the Secretary of State as the same may be amended from time to time.
Bankruptcy. With respect to a Person, the occurrence of any of the following events: (a) such Person makes an assignment for the benefit of creditors; (b) such Person files a voluntary petition in bankruptcy; (c) such Person is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceeding; (d) such Person files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (e) such Person files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature; (f) such Person seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of such Person or of all or any substantial part of its properties; or (g) one hundred twenty (120) days after the commencement of any proceeding against such Person seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, if the proceeding has not been dismissed, or if within ninety (90) days after the appointment without its consent or acquiescence of a trustee, receiver, or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated.
Capital Account. As of any given date, the capital account of each Member as described in Section 8.3 and maintained to such date in accordance with this Agreement.
Capital Contribution. Any contribution to the capital of the Company in cash or property by a Member whenever made.
CNTY Member. Century Nevada Acquisition, Inc. and any other Person (other than the Company or the ▇▇▇▇▇▇▇ Member) that receives Century Nevada Acquisition, Inc.’s Membership Units in a Permitted Transfer (which, for purposes of this definition, shall be deemed not to include, prior to the foreclosure, transaction in lieu of foreclosure or other actual transfer of the Membership Units to the lender, financial institution or designee thereof, any deemed Transfer under clause (i) of the definition of Permitted Financing Transfer).
Code. The Internal Revenue Code of 1986, as amended from time to time.
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Company. SMOOTH BOURBON, LLC, a Nevada limited-liability company.
Company Minimum Gain. “Partnership minimum gain,” as defined in Section 1.107- 2(b)(2) of the Regulations and as determined in accordance with Section 1.704-2(d) of the Regulations.
Company Property. All assets (real or personal, tangible or intangible, including cash) of the Company.
Deficit Capital Account. With respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the Fiscal Year, after giving effect to the following adjustments:
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(a) Credit to such Capital Account the amount, if any, which such Member is obligated to restore under Section 1.704-1(b)(2)(ii)(c) of the Regulations, as well as any addition thereto pursuant to the next to last sentence of Sections 1.704-2(g)(1) and (i)(5) of the Regulations, after taking into account thereunder any changes during such year in Company Minimum Gain and in any Member Minimum Gain; and |
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(b) Debit to such Capital Account the items described in Sections 1.704- 1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations. |
This definition of Deficit Capital Account is intended to comply with the provisions of Sections 1.704-1(b)(2)(ii)(d) and 1.704-2 of the Regulations, and shall be interpreted consistently with those provisions.
Distributable Cash. All cash, whether revenues or other funds received by the Company, less the sum of the following to the extent paid or set aside by the Company: (a) all principal and interest payments on indebtedness of the Company and all other sums paid to lenders; (b) all cash expenditures incurred incident to the normal operation of the Company’s business; and
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(c) |
Reserves. Any funds released from a Reserve shall be considered a cash receipt by the Company for purposes of this definition. |
Distribution or Distribute. Any transfer of Distributable Cash from the Company to or for the benefit of a Member or an Assignee by reason of such Member’s Membership Units or such Assignee’s interest in the Company.
Entity. Any general partnership (including a limited liability partnership), limited partnership (including a limited liability limited partnership), limited liability company, corporation, joint venture, trust, business trust, cooperative, association, foreign trust, or foreign business organization or other juridical Person.
FHWA. The United States Federal Highway Administration.
Fiscal Year. The taxable year of the Company as determined under the Code.
Gross Asset Value. With respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:
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(a) The initial Gross Asset Value of any asset contributed by a Member to the Company will be the gross fair market value of such asset on the date of contribution, as determined by the contributing Member and the Manager, provided that the initial Gross Asset Values of the assets contributed (or deemed contributed) to the Company pursuant to Section 8.1 hereof be as set forth in Exhibit A, and provided further that, if the contributing Member is a Manager, the determination of the fair market value of any other contributed asset will require the Approval of the other Members holding a Majority Interest (determined without regard to the voting interest of such contributing Member); |
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(b) The Gross Asset Values of all Company assets will be adjusted to equal their respective gross fair market values (taking into account Section 7701(g) of the Code), as determined by the Manager as of the following times: (i) the acquisition of an interest by any new Member or an additional interest by an existing Member in exchange for more than a de minimis contribution of property (including money); (ii) the Distribution by the Company to a Member of more than a de minimis amount of property as consideration for an Ownership Interest; (iii) the liquidation of the Company within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and (iv) the grant of an Ownership Interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in the capacity of a Member or by a new Member acting in the capacity of a Member or in anticipation of being a Member; provided, however, that adjustments pursuant to clauses (i) and (ii) above will be made only if the Manager determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company; |
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(c) The Gross Asset Value of any Company asset Distributed to any Member will be adjusted to equal the gross fair market value of such asset on the date of Distribution as determined by the distributee and the Manager, provided that, if the distributee is a Manager, the determination of the fair market value of the Distributed asset will require the Approval of the other Members holding a Majority Interest (determined without regard to the voting interest of the distributee Member); and |
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(d) The Gross Asset Values of Company assets will be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations and Section 9.3 and subparagraph (g) under the definition of Profits and Losses; provided, however, that Gross Asset Values will not be adjusted pursuant to this subparagraph (d) of this definition to the extent that the Manager determines that an adjustment pursuant to subparagraph (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d). |
If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (a), (b), or (d) of this definition, then such Gross Asset Value will thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.
Imputed Underpayment. The “imputed underpayment” within the meaning of the RPAP.
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Hypothecate or Hypothecation. A lien, pledge, hypothecation, mortgage, grant of a security interest, or effecting an encumbrance as security for repayment of a liability.
Losses. For each Fiscal Year of the Company an amount equal to the Company’s net taxable loss for such year as determined for federal income tax purposes (including separately stated items) in accordance with the accounting method and rules used by the Company and in accordance with Section 703 of the Code.
Majority or Majority Interest. One or more of the Membership Interests of the Members which taken together exceed fifty percent (50%) of the outstanding Units. With respect to the Managers, if there is more than one Manager, Majority shall mean more than fifty (50%) of the Managers in office at the time.
Marnell Member. ▇▇▇▇▇▇▇ Gaming, LLC, a Nevada limited liability company.
Member. Each of the parties who executes a counterpart of this Agreement as an initial Member and each Person who may hereafter become a Member or Substitute Member pursuant to the terms and conditions of this Agreement.
Member Minimum Gain. “Partner nonrecourse debt minimum gain,” as defined in Section 1.704-2(i)(2) of the Regulations and as determined under Section 1.704-2(i)(3) of the Regulations.
Member Nonrecourse Debt. Partner nonrecourse debt as defined under Section 1.704- 2(b)(4) of the Regulations.
Membership Interest. A Member’s entire interest in the Company as determined by Membership Units held by such Member, and affording such other rights and privileges that a Member may enjoy by being a Member under this Agreement.
Membership Unit. Unit of measure by which a Member’s entitlement to participate in the Profits, Losses, Distributions, and other economic rights in the Company is measured and by which a Member’s right to vote is measured, as set forth herein. Any Transfer of a Membership Unit shall constitute a transfer of the Membership Interest associated therewith. Membership Units will be set forth on Exhibit “A,” attached hereto, as updated from time to time in connection with the issuance of additional Membership Units.
NDOT. The State of Nevada Department of Transportation.
NDOT Lease. That certain [***].
NDOT Lease Area. The ground surface and airspace leased to Nugget pursuant to the NDOT Lease.
Nugget. Nugget Sparks, LLC, a Nevada limited liability company, dba Nugget Casino
Resort.
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Nugget Relocated Assets. The real property interests and other assets of the Company that are within the NDOT Lease Area, are impacted by the proposed reconstruction and expansion of Interstate 80 by NDOT, and that are within the scope of the Right of Way Process.
Nugget Replacement Assets. The real property interests and other assets of the Company that are to be designed and constructed in replacement of or modification to the Nugget Relocated Assets.
Partnership Representative. The “partnership representative” and, as applicable, the “designated individual”.
Permitted Financing Transfer. (i) Any grant of a lien, pledge, hypothecation, mortgage, security interest or other Hypothecation by the CNTY Member of its Membership Interest to secure indebtedness incurred by the CNTY Member or an Affiliate of the CNTY Member, (ii) any foreclosure, transaction in lieu of foreclosure or other exercise of remedies pursuant to which any lender, financial institution or designee thereof acquires or otherwise obtains such Membership Interest and (iii) the first transfer of such Membership Interest by any such lender, financial institution or designee thereof (it being understood that any subsequent transfer of such Membership Interest by the transferee of such first transfer shall not constitute a Permitted Financing Transfer).
Person. Any individual or Entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such “Person” where the context so permits.
Preferred Capital Amount. One Hundred Five Million and No/100ths Dollars ($105,000,000) plus an interest factor computed from the Effective Date hereof at the rate of two percent (2%) per annum, compounded annually, less any amounts owed to the Company in respect of the ▇▇▇▇▇▇▇ Member’s Membership Units.
Profits. For each Fiscal Year of the Company an amount equal to the Company’s net taxable income for such year as determined for federal income tax purposes (including separately stated items) in accordance with the accounting method and rules used by the Company and in accordance with Section 703 of the Code.
Regulations. The proposed, temporary, and final regulations promulgated under the Code in effect as of the date of filing the Articles of Organization and the corresponding sections of any regulations subsequently issued that amend or supersede such regulations.
Regulatory Allocations. The allocations made pursuant to Sections 9.2(a), 9.2(b), 9.2(c), 9.2(d), 9.2(e), 9.2(f), and 9.3.
Reorganization. The merger, consolidation or conversion of the Company, the sale or other disposition of all or substantially all of the assets of the Company, the sale or other disposition of all or substantially all of the Membership Units, or any other transaction pursuant to which one or more Persons acquire all or substantially all of the assets of, or Membership Units in, the Company in a single or series of related transactions, including a merger or conversion of the Company into a corporation or other Entity, whether or not such corporation or other Entity has the same owners as the Company and whether or not additional capital is contributed to such corporation or other Entity.
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Reserves. With respect to any fiscal period, funds set aside or amounts allocated during such period to reserves which shall be maintained in amounts deemed sufficient by the Manager, acting in good faith, for any Company purpose, including, but not limited to, working capital and for payment of taxes, insurance, debt service, and any other costs or expenses incident to the ownership or operation of the Company’s business.
Reviewed Year. Any “reviewed year” of the Company as defined in Section 6225 of the Code, as amended by the RPAP.
Right of Way Process. With respect to Nugget and the Nugget Relocated Assets, the process by which NDOT and the FHWA administer relocation, acquisition and management of real property interests pursuant to applicable statutes, regulations and policies, including but not limited to, Chapter 342 of the Nevada Revised Statutes, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601 et seq), the regulations set forth in 23 CFR part 710 and the regulations set forth in 49 CFR part 24.
ROW Parties. NDOT, FHWA, Nugget and such other Persons as may become involved with the Company in connection with the Right of Way Process and/or the design, scope, location, cost and construction of the Nugget Replacement Assets.
RPAP. Sections 6221 through 6241 of the Code, as originally enacted in P.L. 114-74, and as may be amended, and including any Regulations or other administrative guidance promulgated thereunder.
Securities Laws. Any Federal securities acts and laws as well as the securities acts and laws of any state, including the Securities Act of 1933, as amended.
Substitute Member. A transferee of Membership Units who has been admitted to all of the rights of a Member as to such Membership Units pursuant to Article 10.
Transfer. A voluntary sale, transfer, encumbrance, assignment, exchange, Hypothecation, gift, devise, bequest, or other disposition, whether or not for consideration.
Transferring Member. A Member who voluntarily sells, transfers, encumbers, assigns, exchanges, Hypothecates, or otherwise disposes of all or any part of the Member’s Interest in the Company to any third Person or entity.
Unit. A Membership Unit.