Sample Manager Managed Florida Limited Liability Company Operating Agreement

OPERATING AGREEMENT

OF

[REDACTED], LLC

(A Florida Limited Liability Company)

THIS OPERATING AGREEMENT (this “Agreement”) effective as of this [REDACTED] day of [REDACTED], 2022 by and among [REDACTED], LLC, a Florida limited liability company (the “Company”); [REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company (“[REDACTED]”); [REDACTED ENTITY NAME], a [REDACTED STATE]  limited liability company (“[REDACTED]”); and [REDACTED ENTITY NAME], a [REDACTED STATE]  limited liability company (“[REDACTED]”, and together with [REDACTED] and [REDACTED], the “Initial Members”); and the other persons listed from time to time on Schedule I to this Agreement as Members (collectively, the “Additional Members”).

RECITALS

1. The Initial Members have established a business (the “Business”) for purpose of [REDACTED] in the State of Florida pursuant to the laws of the State of Florida; and
2. The Company was formed by the Initial Members pursuant to Articles of Organization (the “Articles”) filed with the Secretary of State of the State of Florida.
3. The Initial Members have agreed to contribute all of their right, title and interest in the Business to the Company.
4. The Company and [REDACTED ENTITY NAME] a Florida corporation (“[REDACTED]”) have entered into a Contract dated as of [REDACTED DATE] (the “[REDACTED]”), pursuant to which the Company has agreed to grant [REDACTED INTEREST HOLDER] a membership interest in the Company in exchange for certain consulting services.
5. [REDACTED NAME] (on behalf of the Company) and [REDACTED NAME] and [REDACTED NAME]  (“Optionors”) have entered into an Option Agreement dated as of [REDACTED DATE] (the “Option Agreement”), pursuant to which the Optionors have granted the Company an option (the “Option”) to purchase [REDACTED AMT] shares (the “[REDACTED]”) of the common stock of [REDACTED ENTITY NAME] a Florida corporation (“[REDACTED]”), for a price of $[REDACTED AMT].
6. The [REDACTED] represent [REDACTED AMT]% of the outstanding shares of [REDACTED].
7. The Company and the Initial Members have agreed to enter into this Agreement for the purpose of: (i) adopting this Agreement as the Operating Agreement of the Company; and (iii) setting forth the rights and duties of the Members of the Company.

 

AGREEMENT

NOW, THEREFORE, the parties hereby agree as follows:

ARTICLE 1: DEFINITIONS

Capitalized Terms. The following capitalized terms used in this Agreement have the meanings set forth below:

“Act” means the Florida Limited Liability Company Act, as the same may be amended from time to time.

“Affiliate” means any Person who directly or indirectly controls, is controlled by, or is under common control with, another Person.

“Agreement” means this Agreement as it may be amended from time to time.

“Articles of Organization” means the Articles of Organization of the Company filed with the Florida Secretary of State in accordance with the Act, as the same may be amended from time to time.

“Bankruptcy” or “Bankrupt” means, with respect to any Member, a Member making an assignment for the benefit of creditors, a Member becoming a party in any manner to any liquidation or dissolution action or proceeding with respect to such Member or any bankruptcy, reorganization, insolvency or other proceeding for the relief of financially distressed debtors with respect to such Member, or a receiver, liquidator, custodian or trustee being appointed for such Member or a substantial part of such Member’s assets, and, if any of the same occur involuntarily, the same not being dismissed, stayed or discharged within ninety (90) business days, or the entry of an order for relief against such Member under Title 11 of the United States Code or any state bankruptcy or insolvency proceeding.  A Member shall be deemed Bankrupt if the Bankruptcy of such Member shall have occurred.

“Capital Account” means, as to any Member, the capital account maintained for each Member in accordance with Section 5.1 of this Agreement.

“Capital Contribution” means, as to each Member, the amount of capital contributed by such Member in accordance with Article 4 of this Agreement.   Any reference in this Agreement to the Capital Contribution of a Member will include the Capital Contributions made by any predecessor in interest of such Member in respect of such Interest of such Member.

“Code” means the Internal Revenue Code of 1986, as amended.

“Entity” means a Person other than a natural person and includes, without limitation, corporations (both non-profit and other corporations), partnerships (both limited, limited liability, general), trusts, joint ventures, limited liability companies, and unincorporated associations.

“Fiscal Year” has the meaning set forth in Section 7.4 of this Agreement.

“Interest” means the limited liability company interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits to which a Member may be entitled under this Agreement, together with the obligations of such Member to comply with all of terms and provisions of this Agreement.

“Manager” means the Person selected to serve as the Manager pursuant to the terms of this Agreement.

“Members” means the Initial Members and all other Persons admitted as Additional Members or substituted Members pursuant to this Agreement, so long as they remain Members.

“Net Cash Flow” means, for any period, the Company’s cash and cash equivalents at the beginning of such period, increased by all cash received by the Company during such period from all sources (other than Capital Contributions), reduced by all cash expenditures during such period (including any principal and interest payments on the Company’s indebtedness during such period and any Management Fees), and further reduced by the amount of a working capital reserve to meet the anticipated working capital requirements of the Company, as established by the Manager.

“Net Income” and “Net Loss” means, for each fiscal year or other period, the taxable income or loss of the Company, or particular items thereof, determined in accordance with the accounting method used by the Company for federal income tax purposes with the following adjustments: (a) all items of income, gain, loss, deduction or expense specially allocated pursuant to this Agreement shall not be taken into account in computing such taxable income or loss; (b) any income of the Company that is exempt from federal income taxation and not otherwise taken into account in computing Net Income and Net Loss shall be added to such taxable income or loss; (c) if the book value of any asset differs from its adjusted tax basis for federal income tax purposes, any gain or loss resulting from a disposition of such asset shall be calculated with reference to such book value; (d) upon an adjustment to the book value of any asset pursuant to the definition of book value, the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (e) if the book value of any asset differs from its adjusted tax basis for federal income tax purposes the amount of depreciation, amortization or cost recovery deductions with respect to such asset for purposes of determining Net Income and Net Loss shall be an amount which bears the same ratio to such book value as the federal income tax depreciation, amortization or other cost recovery deductions bears to such adjusted tax basis (provided that if the federal income tax depreciation, amortization or other cost recovery deduction is zero, the Manager may use any reasonable method for purposes of determining depreciation, amortization or other cost recovery deductions in calculating Net Income and Net Loss); and (f) except for items in (a) above, any expenditures of the Company not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing Net Income and Net Loss pursuant to this definition, shall be treated as deductible items.

“Person” means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors and assigns to such Person as the context may require.

“Treasury Regulations” means the regulations of the U.S. Department of the Treasury promulgated under the Code, as such Treasury Regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Transfer” has the meaning given to such term in Section 9.2 of this Agreement.

ARTICLE 2: ORGANIZATIONAL MATTERS

2. 1. Formation. The Company has been formed as a limited liability company pursuant to the provisions of the Act.  The rights and duties of the Members, and the affairs of the Company, will be governed by the provisions of this Agreement, the Articles of Organization and the Act.

2. 2. Articles of Organization and Related Documents. From time to time, the Members will execute such certificates, qualifications to do business, fictitious name certificates, or similar filings in such jurisdictions as the Manager may determine from time to time to be necessary or appropriate in connection with the conduct of the business of the Company or to provide notification of the limitation of liability of Members under applicable law.

2. 3 Name. The name of the Company will be “[REDACTED], LLC” or such other name as may be selected from time to time by the Manager.

2.4 Principal Office. The principal office of the Company will be located at such  location as the Manager may determine from time to time.  The Company will promptly notify the Members of any change in the Company’s principal office.

2.5 Other Offices. The Company may have such other offices as the Manager may determine from time to time.

2.6 Term. The existence of the Company will continue until the Company is dissolved in accordance with the terms of this Agreement or the Act.

2.7 Change of Registered Agent or Registered Office. The registered agent and the registered office may be changed from time to time at the direction of the Manager.

ARTICLE 3: PURPOSES AND POWERS

3.1 Purposes of the Company. The purposes of the Company are:

• to engage in the Business;
• to engage in such other business as may be approved by the Manager from time to time; and
• to transact any and all lawful business that is incidental, necessary or appropriate to accomplish the foregoing.

3.2 Powers. The Company will have all powers of a limited liability company under the Act and the power to do all things necessary or convenient to accomplish its purposes as set forth in Section 3.1.

ARTICLE 4: INTERESTS AND CAPITAL CONTRIBUTIONS

4.1 Interests.

• • • The Company will initially be authorized to issue up to [REDACTED AMT] Class A Interests, [REDACTED AMT] Class B Interests, [REDACTED AMT] Class C Interests and an unlimited number of Class D Interests.
    • Upon the execution of this Agreement, the Company will issue [REDACTED AMT] Class A Interests as follows:

Name	Number and Type of Interests
[REDACTED]	[REDACTED] Class A Interests
[REDACTED]	[REDACTED] Class A Interests
[REDACTED]	[REDACTED] Class A Interests

 

• The Company is issuing the Class A Interests to the Initial Members in exchange for the contribution of their interests in the Partnership and the Business.
• The parties acknowledge and agree that the Company intends to issue [REDACTED] Class B Interests to [REDACTED INTEREST HOLDER] in exchange for the consulting services under the [REDACTED CONTRACT]. No additional Class B Interests shall be issued.
• The parties acknowledge and agree that the Company intends to issue up to [REDACTED AMT] Class C Interests at a price to be established by the Manager with the consent of Members holding a majority of the Class A Interests. Upon the issuance of any Class C Interests, the number of outstanding Class A Interests will be automatically reduced by an equal number, so that the total number of outstanding Interests in the Company remains at 100,000.  In recognition of the dilution to be absorbed by Members holding Class A Interests, in the event that the Company does not utilize all of the funds received from the sale of the Class C Interests prior to the closing of the transaction with [REDACTED ENTITY STOCK] then the portion of the proceeds from the sale of Class C Interests that have not been utilized to cover accrued expenses will be distributed to Members holding Class A Interests.
• The parties acknowledge and agree that the Company currently plans to issue Class D Interests at prices to be established from time to time by the Manager with the consent of Members holding a majority of the Class A Interests. The issuance of the Class D Interests will proportionately reduce the allocation of distributions of Members holding Class A and Class C Interests, but not the allocation of distributions to Members holding Class B Interests.
• The Manager may establish, with the consent of Members holding a majority of the outstanding Interests, one or more additional classes of Interests, which shall have such rights, duties and privileges as may be determined by the Manager and approved by Members holding a majority of the outstanding Interests, provided that such other classes of Interests will proportionately reduce the allocation of distributions of Members holding Class A and Class C Interests, but not the allocation of distributions to Members holding Class B Interests.
• The number and type of Interests held by each Member will be set forth on Schedule I. The number and type of Interests held by each Member may be revised from time to time as necessary to reflect the Transfer of Interests in accordance with this Agreement and the future issuance of Interests.

4.2 Rights of Members. The holders of the Interests shall be subject to the terms and conditions of, and shall have the rights and duties set forth in, this Agreement.

4.3 Additional Capital Contributions. No Member will be required to make any additional Capital Contributions to the Company.

ARTICLE 5: CAPITAL ACCOUNTS; ALLOCATIONS AND DISTRIBUTIONS

5.1 Capital Accounts. A capital account (a “Capital Account”) shall be established and maintained for each Member to which shall be credited the Capital Contributions made by such Member and such Member’s allocable share of Net Income (and items thereof), and from which shall be deducted distributions to such Member of cash or other property and such Member’s allocable share of Net Loss (and items thereof). To the extent not provided for in the preceding sentence, the Capital Accounts of the Members shall be adjusted and maintained in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).

5.2 Allocations to Capital Accounts.

• General Rule. Except as provided in Section 5.2(b) or elsewhere in this Agreement, Net Income (and items thereof) and Net Loss (and items thereof) for any fiscal year shall be allocated among the Members in a manner such that the Capital Account of each Member, immediately after giving effect to such allocation, is, as nearly as possible, equal (proportionately) to the amount equal to the distributions that would be made to such Member during such fiscal year pursuant to Section 5.4, if (i) the Company were dissolved and terminated; (ii) its affairs were wound up and each Company asset was sold for cash equal to its book value; (iii) all Company liabilities were satisfied; and (iv) the net assets of the Company were distributed in accordance with Section 5.4 to the Members immediately after giving effect to such allocation. The Manager may, in its sole and absolute discretion, make such other assumptions (whether or not consistent with the above assumptions) as it deems necessary or appropriate in order to effectuate the intended economic arrangement of the Members.
  • • Allocations Relating to Last Fiscal Year. Except as otherwise provided elsewhere in this Agreement, if upon the dissolution and termination of the Company pursuant to Section 10.3 and after all other allocations provided for in Section 5.2 have been tentatively made as if this Section 5.2(b) were not in this Agreement, a distribution to the Members under Section 10.3 would be different from a distribution to the Members under Section 5.4, then Net Income (and items thereof) and Net Loss (and items thereof) for the fiscal year in which the Company dissolves and terminates pursuant to Section 10.3 shall be allocated among the Members in a manner such that the Capital Account of each Member, immediately after giving effect to such allocation, is, as nearly as possible, equal (proportionately) to the amount of the distributions that would be made to such Member during such last fiscal year pursuant to Section 5.4. The Manager  may, in its sole and absolute discretion, apply the principles of this Section 5.2(b) to any fiscal year preceding the fiscal year in which the Company dissolves and terminates (including through application of Section 761(e) of the Code) if delaying application of the principles of this Section 5.2(b) would likely result in distributions under Section 10.3 that are materially different from distributions under Section 5.4 in the fiscal year in which the Company dissolves and terminates.
    • Allocations in Special Circumstances. The following special allocations shall be made in the following order:
      • Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5, if there is a net decrease in partnership minimum gain (as defined in Treasury Regulations Section 1.704-2(b)(2) and (d)) during any fiscal year, the Members shall be specially allocated items of Company income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to the portion of such Member’s share of the net decrease in partnership minimum gain, determined in accordance with Treasury Regulations Section 1.704-2(f) and (g). This Section 5.2(c)(i) is intended to comply with the minimum gain chargeback requirement in such Section of the Treasury Regulations and shall be interpreted consistently therewith.
      • Member Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5, if there is a net decrease in Member nonrecourse debt minimum gain attributable to a Member nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(i)) during any fiscal year, each Member shall be specially allocated items of Company income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to the portion of such Member’s share of the net decrease in Member nonrecourse debt minimum gain attributable to such Member’s nonrecourse debt, determined in accordance with Treasury Regulations Section 1.704-2(i). This Section 5.2(c)(ii) is intended to comply with the minimum gain chargeback requirement in such Section of the Treasury Regulations and shall be interpreted consistently therewith.
      • Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the deficit, if any, in such Member’s Capital Account (as determined under Treasury Regulations Section 1.704-1) as quickly as possible, provided that an allocation pursuant to this Section 5.2(c)(iii) shall be made only if and to the extent that such Member would have such Capital Account deficit after all other allocations provided for in Section 5.2 have been tentatively made as if this Section 5.2(c)(iii) were not in this Agreement. This Section 5.2(c)(iii) is intended to comply with the qualified income offset provisions in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
        • Gross Income Allocation. In the event any Member has a deficit balance in such Member’s Capital Account (as determined after crediting such Capital Account for any amounts that such Member is obligated to restore or is deemed obligated to restore pursuant to Treasury Regulations Section 1.704-2), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate such deficit (as so determined) of such Member’s Capital Account as quickly as possible; provided that an allocation pursuant to this Section 5.2(c)(iv) shall be made only if and to the extent that such Member would have such Capital Account deficit (as so determined) after all other allocations provided for in Section 5.2 (other than Section 5.2(c)(iii)) have been tentatively made as if this Section 5.2(c)(iv) were not in this Agreement.
        • Loss Allocation Limitation. No allocation of Net Loss (or items thereof) shall be made to any Member to the extent that such allocation would create or increase a deficit in such Member’s Capital Account (as determined after debiting such Capital Account for the items described in Treasury Regulations Section 1.704-I(b)(2)(ii)(d)(4),(5) and (6) and crediting such Capital Account for any amounts that such Member is obligated to restore or is deemed obligated to restore pursuant to Treasury Regulations Section 1.704-2).
        • Transfer of or Change in Interests. The Manager is authorized to adopt any convention or combination of conventions likely to be upheld for federal income tax purposes regarding the allocation and/or special allocation of items of Company income, gain, loss, deduction and expense with respect to a newly issued Interest, a transferred Interest and a redeemed Interest. A transferee of an Interest in the Company shall succeed to the Capital Account of the transferor Member to the extent it relates to the transferred Interest.
  • Tax Allocations.
    • • General Rule. Except as otherwise provided in Section 5.3(b), for each fiscal period, items of Company income, gain, loss, deduction and expense shall be allocated, for federal, state and local income tax purposes, among the Members in the same manner as the Net Income (and items thereof) or Net Loss (and items thereof) of which such items are components were allocated pursuant to Section 5.2.
      • Section 704(c) of the Code. Income, gains, losses and deductions with respect to any property (other than cash) contributed or deemed contributed to the capital of the Company shall, solely for income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value at the time of the contribution or deemed contribution in accordance with Section 704(c) of the Code and the Treasury Regulations promulgated thereunder. Such allocations shall be made in such manner and utilizing such permissible tax elections as determined in the sole and absolute discretion of the General Member.
      • Capital Accounts Not Affected. Allocations pursuant to this Section 5.2(d) are solely for federal, state and local tax purposes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or allocable share of Net Income (or items thereof) or Net Loss (or items thereof).
      • Tax Allocations Binding. The Members acknowledge that they are aware of the tax consequences of the allocations made by this Section 5.2(d) and hereby agree to be bound by the provisions of this Section 5.2(d) in reporting their respective shares of items of Company income, gain, loss, deduction and expense.
  • Determinations by Manager. All matters concerning the computation of Capital Accounts, the allocation of items of Company income, gain, loss, deduction and expense for all purposes of this Agreement and the adoption of any accounting procedures not expressly provided for by the terms of this Agreement shall be determined by the Manager in its sole and absolute discretion, provided that any such determination does not conflict with any of the terms of this Agreement. Such determinations shall be final and conclusive as to all the Members. Without in any way limiting the scope of the foregoing, if and to the extent that, for income tax purposes, any item of income, gain, loss, deduction or expense of any Member or the Company is constructively attributed to, respectively, the Company or any Member, or any contribution to or distribution by the Company or any payment by any Member or the Company is recharacterized, the Manager may, in its sole and absolute discretion and without limitation, specially allocate items of Company income, gain, loss, deduction and expense and/or make correlative adjustments to the Capital Accounts of the Members in a manner so that the net amount of income, gain, loss, deduction and expense realized by each relevant party (after taking into account such special allocations) and the net Capital Account balances of the Members (after taking into account such special allocations and adjustments) shall, as nearly as possible, be equal, respectively, to the amount of income, gain, loss, deduction and expense that would have been realized by each relevant party and the Capital Account balances of the Members that would have existed if such attribution and/or recharacterization and the application of this sentence of this Section 5.2(e) had not occurred. Notwithstanding anything expressed or implied to the contrary in this Agreement, in the event the Manager shall determine, in its sole and absolute discretion, that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to effectuate the intended economic sharing arrangement of the Members, the Manager may make such modification.

5.3 Distributions.

• The Company will make distributions to the Members at the times and in the amounts as set forth below:
  • • The Company will make distributions of the Company’s Net Cash Flow to the Members at such times and in such amounts as may be approved by the Manager.
    • The Company will make distributions to the Members upon the liquidation of the Company (which will include any sale of all or substantially all of the assets of the Company).
    • The Company will make distributions of the excess cash proceeds from the sale of the Class C Interests pursuant to Section 4.1(e).
    • The Company will distribute the [REDACTED ENTITY STOCK] pursuant to Section 5.5.

5.3 Distributions of Net Cash Flow. Distributions of Net Cash Flow will be allocated in the following order of priority:

• First, to the Members who have made Member Loans, until such Member Loans have been repaid in full (with such distributions to be allocated to such Members in proportion to the outstanding balance of their Member Loans); and
• Then, (A) [REDACTED] [(%)] to Members holding Class B Interests, and (B) [REDACTED] [(%)] percent to Members holding Class A Interests, the Class C Interests and the Class D Interests, as a group. The distributions to Members holding Class B Interests will be allocated to such Members in proportion to the number of Class B Interests held by them at the time of the distribution. The distributions to Members holding Class A Interests, the Class C Interests and Class D Interests will be allocated among such Members pro rata basis based upon the total number of Class A Interests, Class C Interests and Class D Interests held by them at the time of the distribution.

5.5 Distribution of [REDACTED ENTITY STOCK]. In the event that the Company completes the acquisition of the [REDACTED ENTITY STOCK] pursuant to the Option Agreement or otherwise, then the Company will continue to hold the [REDACTED ENTITY STOCK] until such time as the Company has satisfied or been released from all of the liabilities of the Company and/or established reasonable reserves for the payment of such liabilities. At such time, the Company shall distribute the [REDACTED ENTITY STOCK] to the Members as follows:

• • • The Company will distribute to [REDACTED INTEREST HOLDER] that number of [REDACTED ENTITY STOCK] that represent [REDACTED AMT] [(20%)] of the outstanding shares of [REDACTED ENTITY STOCK] at the time of such distribution (which would be [REDACTED AMT ENTITY STOCK] based on the number of [REDACTED ENTITY STOCK] that are currently outstanding); and
    • The Company will distribute the balance of the [REDACTED ENTITY STOCK] acquired by the Company to Members holding all other classes of Interests on a pro rata basis based upon the total number of such other classes of Interests held by them at the time of the allocation.

5.6 Modification of Distribution Provisions upon Issuance of New Classes of Interests. In the event that the Company issues Interests of any additional class of Interests, then the provisions of Section 5.4 and Section 5.5 shall be amended to reflect the issuance of such Interests.

5.7 Return of Capital. Except as herein provided with respect to distributions during the term of the Company or following dissolution, no Member has the right to demand a return of such Member’s Capital Contribution (or the balance of such Member’s Capital Account).  Further, no Member has the right (i) to demand and receive any distribution from the Company in any form other than cash (except as provided in Section 5.5), or (ii) to bring an action of partition against the Company or its property.

ARTICLE 6: MANAGEMENT OF THE COMPANY

6.1 Control of Business. Subject to Section 6.4 below and the provisions of the Act, (i) the business and affairs of the Company will be managed or under the direction of the Manager, and (ii) the power to act for and bind the Company will be vested exclusively in the Manager, subject to the authority of the Manager to delegate powers and duties to the Officers as set forth in this Agreement.

6.2 Manager.

• • The initial Manager of the Company will be [REDACTED ENTITY NAME]. The members holding a majority of the Interests shall be entitled to appoint or remove the Manager.
  • In the event that the Manager appointed under Section 6.2 should be unwilling or unable to serve as Manager, or be removed as the Manager, its successors will be appointed Members holding a majority of the Interests.

6.3 Officers. The Company will have a Chief Executive Officer and such other Officers as the Manager may from time to time appoint with the approval of Members holding a majority of the Class A Interests. Unless otherwise provided in this Agreement, each Officer shall serve the term of office for which he is elected or appointed and until his successor has been elected or appointed or his earlier resignation, removal from office, or death. Any Officer may be removed, with or without cause, at any time by the Manager.  Any two or more offices may be held by the same person.  The Officers shall have such powers as may be delegated to them from time to time by the Manager.

6.4 Limitation of Authority of the Manager and the Chief Executive Officer.

• • Notwithstanding the general authority of the Manager under Section 6.1 hereof, the matters listed in this Section 6.4 will require the prior approval of Members holding a majority of the Interests:
    • • • The Company’s incurrence or assumption, directly or indirectly, as principal or guarantor, of any indebtedness for borrowed money whether from any third party or any Member or any Affiliate of any Member;
        • The Company’s making of any loans, whether to any third party or any Member or any Affiliate of any Member;
        • The Company’s sale, exchange or other transfer of any asset or group of assets of the Company which has a value in excess of $[REDACTED AMT];
        • The incurrence of any capital expenditure exceeding $[REDACTED AMT];
        • The payment of any compensation to any officer, Manager or Member, or any Affiliate of any Member;
        • Any material change in the Company’s business, or material strategic decision with respect to the Company’s business which deviates from the purpose of the Company described in Section 3.1 hereof;
        • The organization of any subsidiary of the Company or the participation of the Company in any partnership or joint venture;
        • The merger or consolidation of the Company with or into any other entity;
        • The issuance of any additional Interests, excluding the issuance of Interests in connection with the Transfer of an Interest and the admission of additional or substituted Members in accordance with the provisions of Article 9;
        • Undertaking of any assignment for the benefit of creditors by the Company or filing by the Company of any voluntary petition in bankruptcy or similar insolvency proceedings; or
        • Except as otherwise provided in Section 10.1 hereof, the dissolution of the Company.

6.5 Management Services. The Manager will receive a fee of $[REDACTED AMT] per month for a period of up to [REDACTED] Any additional compensation to the Manager will require the approval of Members holding a majority of the Interests (other than the Interests held by the Manager).

6.6 Member Loans. Subject to Section 6.4(a), upon a determination by the Manager that either the Company requires additional capital to meet its obligations or the interests of the Company would be enhanced by access to additional capital, the Manager may request Members to make advances to the Company upon terms to be determined by the Manager (a “Member Advance”).

6.7 Performance of Duties by Manager and Officers.

• • The Manager and Officers will perform their duties in good faith, in a manner reasonably believed by them to be in the best interests of the Company, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. In performing their duties, the Manager and Officers will be entitled to rely upon information, opinions, reports, or statements including financial statements and other financial data, in each case prepared or presented by:
    • • • one or more Officers or agents of the Company whom they reasonably believe to be reliable and competent in the matters presented; or
        • counsel, public accountants or other persons as to matters which they reasonably believe to be within such person’s professional or expert competence.
  • The Manager and Officers will not be considered to be acting in good faith if they have knowledge concerning the matter in question that would cause such reliance described in the preceding paragraph to be unwarranted.

6.8 Limitations on Liability of Members, Manager and Officers. No Member, the Manager or any Officer of the Company will have any personal liability to the Company or the Members for any losses sustained or liabilities incurred as a result of any act or omission of such person if the person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the interests of the Company and in accordance with this Agreement and the Act.

6.9 Liability to Third Parties. The debts, obligations, and liabilities of the Company, whether arising in contract, tort, or otherwise, will be solely the debts, obligations, and liabilities of the Company, and the Members, Manager and Officers will not be obligated personally for any such debt, obligation, or liability by reason of acting as a Member, Manager or Officer of the Company in accordance with this Agreement and the Act.

6.10 Indemnification.

• • To the maximum extent permitted by law, the Company will defend, indemnify and hold harmless the Manager and each Officer of the Company (each, an “Indemnitee”) from and against any and all losses, claims, demands, costs, damages, liabilities, and expenses of any nature (including attorney’s fees and disbursements), judgments, fines, settlements, penalties and other expenses actually and reasonably incurred by the Indemnitee, by reason of the fact that the Indemnitee is or was a Manager or an Officer of the Company, arising out of or incidental to the business of the Company provided (i) the Indemnitee’s conduct did not constitute willful misconduct; (ii) the action is not based on a breach of this Agreement; (iii) the Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company; and (iv) such Indemnitee’s conduct was not unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere, or its equivalent, will not, in and of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified above.
  • The Company shall advance to an Indemnitee the expenses reasonably incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section prior to the final disposition of such claim, demand, action, suit or proceeding, provided that the Indemnitee delivers to the Company an undertaking to repay such amounts if it is ultimately determined that the Indemnitee is not entitled to be indemnified as authorized in this Section.
  • The indemnification provided by this Section will be in addition to any other rights to which the Indemnitee may be entitled under any agreement, as a matter of law or equity, or otherwise, and will inure to the benefit of the successors, assigns, heirs, personal representatives, and administrators of the Indemnitee.

ARTICLE 7: BOOKS, RECORDS, ACCOUNTING AND REPORTS

7.1 Company Funds. The funds of the Company will be deposited in such bank accounts, or invested in such interest-bearing or noninterest-bearing investments, including, without limitation, federally insured checking and savings accounts, certificates of deposit, government issued or backed securities, or mutual funds investing primarily in such types of securities, as will be designated by the Manager.  Such funds will not be commingled with the funds of any other person.

7.2 Checks, Drafts, Orders for Payment. All checks, drafts, or orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Company will be signed by such Officers or other agents of the Company and in such manner as the Manager will from time to time determine.

7.3 Financial Reports. The Company will prepare and distribute to the Members as soon as practicable after the end of each Fiscal Year (and in no event later than ninety (90) days thereafter) unaudited financial statements for such Fiscal Year, prepared in accordance with generally accepted accounting principles, consistently applied.

7.4 Fiscal Year. The Fiscal Year of the Company will end on December 31.

7.5 Tax Matters Member. [REDACTED ENTITY NAME] will serve as the “tax matters” member within the meaning of Section 6231 of the Code.

7.6 Tax Returns. The Manager will cause all tax returns for the Company to be prepared and timely filed by the due date of the returns after the end of each fiscal year, will provide to the Members such information as will be necessary for the preparation by the Members of their federal income tax returns.

7.7 Books and Records. The Company will maintain appropriate books and records with respect to the Company’s business.  The books and records will include (i) the Company’s books of account; (ii) a current and past list of the full name and last known mailing address of each Member and each Officer and Manager not a Member (all Officers and Manager will be identified as such on the records); (iii) a copy of the Articles of Organization and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any articles of amendment have been executed; (iv) copies of the Company’s federal, state and local income tax returns and reports, if any, for the three (3) most recent years; (v) an executed copy of this Agreement as in effect and all amendments thereto; (vi) recent financial statements of the Company for the three (3) most recent years; and (vii) copies of such other material instruments and documents as the Officers may execute on behalf of the Company.  Such books and records will be kept at the principal office of the Company.  Each Member will have the right, during ordinary business hours, to inspect and copy any of such records at the requesting Member’s expense.

7.8 Accounting. The books of the Company for financial reporting purposes will be maintained on an accrual basis of accounting in accordance with generally accepted accounting principles, consistently applied.  The Company’s books for purposes of maintaining and determining Capital Accounts will be maintained in accordance with the provisions of this Agreement, Section 704 of the Code and, to the extent not inconsistent therewith, the principles described above for financial reporting purposes.

ARTICLE 8: RIGHTS AND OBLIGATIONS OF MEMBERS

8.1 Limited Liability. No Member will be personally liable for any debts, liabilities, or obligations of the Company; provided that each Member will be responsible for the amount of any distributions made to such Member that must be returned to the Company pursuant to the Act.

8.2 Participation in Management. No Member, as such, will take any part in the management and control of the business of the Company nor will any Member, by reason of its status as such, have any right to transact any business for the Company or any authority or power to sign for or bind the Company.  Notwithstanding the foregoing, Members will have the right to approve or disapprove or otherwise consent or withhold consent with respect to such matters as are specified in this Agreement or otherwise in the Act; and provided that Members may take such actions on behalf of the Company and execute documents or otherwise bind the Company to the extent, if any, that such powers are expressly delegated to any such Member by the Manager from time to time.

8.3 Other Activities of the Manager, Members and their Affiliates. Except as limited by Section 8.4, each Member expressly agrees that the Manager, the other Members and each of their respective Affiliates may engage independently or with others, for its or their own account and for the account of others, in other business ventures and activities of every nature and description and neither the Company nor any Member shall have any rights or obligations by virtue of this Agreement in and to such independent ventures and activities or the income or profits derived from such ventures and activities.

8.4 Non-Competition Covenant.

• • During the period that any Person is a Member of the Company and for a period of three (3) years after such Person ceases to be a Member (the “Restricted Person”), the Restricted Person shall not, for his or her own account or jointly with another, directly or indirectly, for or on behalf of any individual, partnership, corporation, or other legal entity (except for the Company or an Affiliate of the Company), as a principal, agent or otherwise:
    • • own, control, manage, be employed by, consult with, or otherwise participate in, any business in the Trade Area (as defined below) which competes with the Company and its affiliates, including, but not limited to, any business which is engaged in the business of production and sale of marijuana (the “Restricted Business”);
      • solicit or attempt to solicit any person who is an employee, consultant or advisor of the Company or its Affiliates (or who has served in this capacity during the twelve (12) months preceding the solicitation) by the Company or any of its Affiliates to terminate its services to the Company or its Affiliates, whether or not such services are pursuant to a written contract; or
      • solicit, contact or deal with any person who was a customer or prospective customer of the Company or any of its Affiliates for the purpose of providing services or products which are competitive with the services or products provided by the Company or its Affiliates (for purpose of this provision, a customer or prospective customer is any person to whom the Company or its Affiliates provided products or services, or with whom the Company or its Affiliates had material contacts for the purposes of soliciting business, at any time during the one-year period prior to termination of Agreement).
  • Trade Area. As used herein, the term “Trade Area” means the northeastern Florida region under Section 381.986, Florida Statutes.

ARTICLE 9: TRANSFER OF INTERESTS

9.1 Restrictions on Transfer. No Member may sell, assign, transfer, pledge, hypothecate, mortgage, encumber or dispose of (a “Transfer“) all or any portion of its Interests except in compliance with the terms of this Agreement. Any attempted Transfer in violation of this Article 9 will be null and void.

9.2 Permitted Transfers. Subject to the requirements of Section 12.17, the Interests of the Members may be Transferred under the following circumstances:

• • any Member who is an individual may Transfer all or any of his Interests to a trust, family limited partnership or limited liability company for the benefit of such Member, his spouse or his lineal descendants or ancestors, provided that such Member retains the sole right to control the exercise all rights under this Agreement with respect to such Interests;
  • any Member who is an individual may Transfer all or any of his Interests, upon his death, by will or the laws of descent and distribution, subject to the provisions of Section 9.3;
  • any Member who is an individual may Transfer all or any of his Interests to any Entity in which the Member owns and retains all of the outstanding equity interests; or
  • any Member may Transfer all or any of his Interests with the prior consent of a majority of the Manager and Members holding a majority of the Class A Interests

9.3 Option to Purchase of Interests In Certain Events.

• • In the event of (i) the Bankruptcy of any Member, (ii) the death of any individual who is a Member; (iii) any involuntary Transfer to a Member’s spouse as a result of their divorce, or (iv) the withdrawal of the Member, then the Company will have the right to acquire the Interests of such Member, in accordance with the provisions of this Section 9.3.
  • The Member subject to this Section 9.3 (the “Affected Member“), his or her personal representative, or his or her spouse, as applicable, must make an offer to sell the Interests (the “Offer to Sell“) to the Company in writing within thirty (30) days after the Company receives notice of the occurrence of such event. The Company will have the right to acquire the Interests at the Value of the Interests as determined pursuant to Section 9.3(d) of this Agreement. Failure of an Affected Member or its representative to deliver a notice of the Offer to Sell pursuant to this Section 9.3 will not affect the right of the Company to exercise its right to purchase under this Section 9.3.
  • The Company will have the option to purchase all, but not less than all, of the Interests of the Affected Member by delivery of written notice of its intention to purchase the Interests at any time during the period commencing upon the occurrence of the event triggering the Company’s right to purchase and ending twenty (20) days after the Company’s receipt of the required Offer to Sell. If the Company elects to purchase the Affected Member’s Interests, the Company will consummate this purchase within sixty (60) days after the Company delivers such written notice to the Affected Member, provided that the closing will be delayed in the event that the determination of the Value has not been completed.  The Affected Member must transfer the Interests to the Company free and clear of all liens, claims and encumbrances.  The Company may pay the purchase price for the Interests either in cash or pursuant to a promissory note which provides for twelve (12) equal quarterly payments of principal and interest (calculated at 8.0% per annum) amortized over a period of three years.
  • The “Value” of the Interests of an Affected Member will be an amount determined to be the fair market value of such Interests by an independent appraiser retained by the Company at the Company’s expense, and computed without a minority discount or a discount for lack of marketability. If the Affected Member disagrees with the Value as determined within 30 days by the Company’s appraiser, the Affected Member can, at Affected Member’s expense, retain its own appraiser. If Affected Member’s appraiser computes a Value which is within five percent (5%), plus or minus, of the Value computed by the Company’s appraiser, the Company’s appraisal will be used to compute the purchase price.  If, the Affected Member’s appraiser computes a Value which is not within five percent (5%) of the appraisal done by the Company’s appraiser, then the two appraisers will select a third appraiser, at the joint expense of the Company and Affected Member, who will calculate the Value of the Company.  If the third appraisal is within five percent (5%) of either of the prior two appraisals, then third appraisal will be used as the Value.  If the third appraisal is not within five percent (5%) of either of the prior two appraisals, then Value will be the average of the three appraisals.  The Company may elect not to proceed with any purchase under this Section 9.3 after the Value is established by delivering notice of such election within 15 days after the Value is established.

9.4 Member Ceasing to be a Member. A Member will cease to be a Member only upon the occurrence of one or more of the following events:

• • A Transfer of all of the Member’s Interests in accordance with the provisions of this Article 9; or
  • The purchase of all of the Member’s Interests in accordance with the provisions of this Article 9; or
  • Withdrawal of a Member from the Company.

9.5 Right of First Refusal on Dispositions of Interests.

• • Any Member (the “Selling Member“) will be entitled to sell all or any of its Interests, provided that such sale is made pursuant to a Qualifying Offer (as defined below) and complies with the requirements of Section 9.2(d) and this Section 9.5. For avoidance of doubt, the parties acknowledge that no Member may Transfer its Interests under this Section 9.5 without the prior consent of a majority of Manager and the Members holding a majority of the Class A Interests (as provided in Section 9.2(d)), and (ii) the provisions of this Section 9.5 do not apply to any Transfer under Sections 9.2(a), (b) or (c), or any sale of Class A Interests made prior to the issuance of any Class C Interests.
  • For purposes of this Agreement, a “Qualifying Offer” means a bona fide offer from an unaffiliated third party to purchase such Interests for cash. The Qualifying Offer must be contained in a binding written agreement, and accompanied by financial statements or other evidence which reasonably demonstrates the ability of the Proposed Transferee to purchase the Offered Interests of the Selling Member.
  • If at any time a Selling Member desires to sell or otherwise Transfer all or any of its Interests pursuant to a Qualifying Offer from a third party (the “Proposed Transferee“), the Selling Member will submit a written offer (the “Offer“) to sell such Interests (the “Offered Interests“) to the other Members. The Offer will: (i) contain the same terms and conditions, including price, as the Qualifying Offer; and (ii) be accompanied by a copy of the Qualifying Offer.  The Offer will further state that the non-selling Members may acquire, in accordance with the provisions of this Agreement, all of the Offered Interests for the price and on the terms set forth therein.
  • Each of the non-selling Members will have the right to purchase its pro rata portion of the Offered Interests, as well as all or any portion of the Offered Interests which are not purchased by the other non-selling Members, in accordance with reasonable procedures to be adopted by the Manager.
  • The non-selling Members as a group will have thirty (30) days from the date the Offer was made to elect to purchase all, but not less than all, of the Offered Interests.
  • Each non-selling Member which elects to purchase all or any of the Offered Interests will communicate in writing its election to purchase such Offered Interests to the Selling Member and to the Company and other non-selling Members, which communication will state the number of the Offered Interests that the non-selling Member desires to purchase. Such communication will, when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale and purchase of such number of the Offered Interests (or the portion allocated to such non-selling Member if over-subscribed); provided, however, that if the non-selling Members do not in the aggregate elect to purchase all of the Offered Interests, then non-selling Members may not purchase any of the Offered Interests.   The sale of the Offered Interests will be consummated at the offices of the Company within 45 days following the date the Offer was made.
  • If the non-selling Members as a group do not purchase all of the Offered Interests, then all, but not less than all, of the Offered Interests may be sold by the Selling Member at any time within 105 days after the date the Offer was made. Any such sale will be to the Proposed Transferee, at not less than the price and on other terms, if any, not more favorable to the Proposed Transferee than those specified in the Qualifying Offer.  If all of the Offered Interests are not sold within such 105-day period, then the Offered Interests will continue to be subject to the requirement of a prior offer pursuant to this Section 9.5.  If Offered Interests are sold pursuant to this Section 9.5 to any purchaser who is not a party to this Agreement, the purchaser of such Offered Interests will execute a counterpart of this Agreement as a precondition of the purchase of the Offered Interests and any Offered Interests sold to such purchaser will continue to be subject to the provisions of this Agreement

9.6 Withdrawal. Any Member may withdraw from the Company upon notice to the Company and the Manager.  Upon any Member’s withdrawal from the Company, such Member shall no longer be entitled to exercise any rights as a Member and shall not be entitled to any other further distributions from the Company.

9.7 Substituted Members. Any transferee acquiring the Interests of a Member as permitted under this Article 9 will be deemed admitted as a substituted Member with respect to the Interests transferred concurrently with the effectiveness of the Transfer (provided that such transferee, unless already a Member, will, as a condition to such admission, execute a counterpart of this Agreement, agreeing thereby to be bound by all of the terms and conditions hereof), and such substituted Member will be entitled to all of the rights and benefits under this Agreement of the transferor of such Interests, subject to the limitations of Section 9.3.  Each transferee will reimburse the Company for all reasonable expenses incurred by the Company in connection with such Transfer.  No purported Transfer of any Interests, or any portion thereof or interest therein, in violation of the terms of this Agreement (including any Transfer occurring by operation of law) will vest the purported transferee with any rights, powers, or privileges hereunder, and no such purported transferee will be deemed for any purposes as a “Member” hereunder or have any right to inspect Company records to maintain derivative proceedings, to maintain any action for an accounting or to exercise any other rights of a Member hereunder or under the Act.  Any Transfer in contravention of any of the provisions of this Article 9 will be void ab initio and of no effect and will not bind or be recognized by the Company.

9.8 Repurchase of Interests for Regulatory Reasons.

• • In the event of: (i) any Member or its beneficial owners should breach any of the representations, warranties and covenants set forth in Section 12.17 of this Agreement (any such breach, a “Regulatory Event”), then such Member (the “Affected Member“), or his or her personal representative, guardian or spouse, as applicable, shall be required to sell, and the Company shall have the option to purchase the Interests of the Affected Member in accordance with the provisions of this Section 9.8.
  • Upon the occurrence of a Regulatory Event, the Affected Member shall no longer have an right to vote on any matter or otherwise participate in the management of the Company.
  • The Company may exercise its option by delivering written notice to the Affected Member within ninety (90) days after the Company determines that a regulatory Event has occurred. If the Company exercises the option, then the Company shall purchase the Interests of the Affected Member at a closing (the “Closing”) to be held at the offices of the Company on a date selected within sixty (60) days of the exercise of the option.
  • At the Closing, the Affected Member must transfer the Interests to the Company free and clear of all liens, claims and encumbrances.
  • The purchase price of the Interests shall be an amount equal to the Fair Market Value of the Interests, as determined in accordance with Section 9.3.
  • The Company shall pay the purchase price for the Interests pursuant to the terms of a promissory note (the “Note”). The Note shall provide for the repayment of the original principal amount in [REDACTED AMT] (AMT) equal quarterly payments of principal and interest (calculated at [REDACTED AMT]% per annum) amortized over a period of [REDACTED]

ARTICLE 10: DISSOLUTION

10.1 Events of Dissolution. Each of the following will be an “Event of Dissolution” causing the Company to dissolve:

The affirmative vote or affirmative written consent of the Manager of the Company and Members holding a majority of the Interests;

• • the entry of a decree of judicial dissolution under the Act; or
  • The sale of all or substantially all the assets of the Company and distribution of the proceeds to the Members.

10.2 Effect of Death, Withdrawal, Bankruptcy or Dissolution of Member. Notwithstanding anything to the contrary contained in the Act, the Company will not dissolve upon the death, withdrawal, Bankruptcy or dissolution of a Member.

10.3 Liquidation.

• • Upon dissolution of the Company, the Manager will designate a person (such person being herein referred to as the “Liquidator”) to wind up the business and affairs of the Company in accordance with the terms hereof and the requirements of the Act. A reasonable amount of time will be allowed for the period of winding up in light or prevailing market conditions and so as to avoid under loss in connection with any sale of the assets of the Company.  The Liquidator will have all of the rights in connection with the liquidation and termination of the Company that that the Manager and the Officers would have had with respect to the assets and liabilities of the Company during the term of the Company, and the Liquidator is hereby expressly authorized and empowered to effectuate the liquidation and termination of the Company and the transfer of any assets and liabilities of the Company.  The Liquidator will have the right from time to time, by revocable powers of attorney, to delegate to one or more persons any or all of such rights and powers and the authority and power to execute documents in connection therewith, and to fix the reasonable compensation of each such person, which compensation will be charged as an expense of liquidation.  The Liquidator is also expressly authorized to distribute the Company’s property to the Members, subject to satisfaction of any liens.  This Agreement will remain in full force and effect during the period of winding up, except that the Members will not have the right to make withdrawals of capital or additional Capital Contributions or to retire from the Company.
  • In connection with the winding up of the Company, before the later to occur at the end of the Fiscal Year of the Company or the ninetieth day after the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), the assets of the Company will be distributed as follows:
    • to creditors, including Members who were creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof); and
    • thereafter, to Members in the priorities set forth in Section 5.4.
  • If distributions are insufficient to return any Member the full amount of such Member’s Capital Contributions, such Member will have no recourse against any other Member or any Manager. No Member will have any obligation to restore, or otherwise pay to the Company, any other Member, or any third party, the amount of any deficit balance in such Member’s Capital Account upon dissolution and liquidation.  Following the completion of the winding up of the affairs of the Company and the distribution of its assets, the Company will be deemed terminated and the Liquidator will file a certificate of cancellation in the Secretary of State of the State of Florida as required by the Act.
  • Each Member will be furnished with a statement prepared by the Liquidator which will set forth the assets and liabilities of the Company as at the date of complete liquidation, and each Member’s share thereof. Upon completion of the liquidation, each Member will cease to be a Member of the Company.

ARTICLE 11: MEETINGS OF MEMBERS

11.1 Meetings of Members. Meetings of the Members may be held whenever called by the Manager, the Chief Executive Officer or by the written demand of the Members holding fifty percent (50%) or more of the Interests.  Any written demand by the Members will state the purpose or purposes of the proposed meeting, and business to be transacted at any such meeting will be confined to the purposes stated in the notice thereof, and to such additional matters as the Manager may determine to be germane to such purposes.  The Manager will serve as the chairman of any meetings of Members.

11.2 Place of Meetings. Meetings of the Members will be held at the principal office of the Company, or such other place as the Manager may determine.

11.3 Notice of Meetings. Written notice stating the place, day, and hour of any  meeting of the Members and the purpose or purposes for which the meeting is called will be delivered not less than one (1) day nor more than fifty (50) days before the date of the meeting, either personally, by facsimile, email, or by mail, by or at the direction of the person calling the meeting, to each Manager and each Member.  Any party may waive notice of any meeting.  The attendance of a party at any meeting will constitute a waiver of notice of such meeting except where a party attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened.

11.4 Quorum. At any meeting of the Members a quorum will require, the presence in person or by proxy of Members holding a majority of all outstanding Interests.

11.5 Voting. If a quorum is present at a meeting of Members, the affirmative vote of the Members holding a majority of the Interests will be the act of the Members, unless a greater percentage or voting by a separate class is required by this Agreement or the Act.

11.6 Proxies. At meetings of the Members and any adjournments thereof, a Member may vote in person or by proxy executed in writing by the Member or by his duly authorized attorney‑in‑fact.  Such proxy will be filed with the Company before or at the time of the meeting. No proxy will be valid after sixty (60) days from the date of its execution, unless otherwise provided in the proxy.  The burden of proving the validity of any undated, irrevocable, or otherwise contested proxy will rest with the person seeking to exercise the same.

11.7 Meetings by Telephone. The Manager and any Member may participate in any meeting of Members, as the case may be, by means of a conference telephone or similar communication equipment whereby the Manager and all Members participating in such meeting can hear one another.  Such participation will constitute attendance in person.

11.8 Record of Meetings. The Company will prepare minutes for each meeting of Members.

11.9 Action Without a Meeting.

• • Any action required to be taken at any meeting of Members or any action which may be taken at any meeting of Members, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, will be signed by the Members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Interests entitled to vote thereon were present and voted.
  • Any consents under this Section may: (i) be signed in counterparts; and (ii) may have faxed signatures, copies of which will be effective when received by the Company. Within ten (10) days after first obtaining such authorization by written consent, notice must be given to the Manager and all Members.

ARTICLE 12: GENERAL PROVISIONS

12.1 Notices. Any notice, demand, request or report required or permitted to be given or made under this Agreement will be in writing and will be deemed given or made when delivered in person or five (5) days after the date when sent by certified or registered mail to: (i) a Member, when addressed to such Member at the address file with the Company or such other address as the Member may hereafter provide to Company in writing; and (ii) the Company, when addressed to the Company at its principal office.

12.2 Governing Law. This Agreement will be governed by and interpreted in accordance with the laws of the State of Florida, without reference to its principles of conflicts of laws.

12.3 Venue. All disputes among or between the Members, the Manager and/or the Company arising out of or in any way related to the Company or this Agreement shall be adjudicated in the state and federal courts located within Alachua County, Florida.  Venue for all such matters shall lie exclusively in those courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have, including, but not limited to, any claim of forum non conveniens, to venue in the courts located in the County of Alachua, State of Florida.  Each of the parties agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

12.4 Headings. The Article and Section headings of this Agreement are for convenience only, do not form a part of this Agreement, and will not in any way affect the interpretation hereof.

12.5 Power of Attorney. Subject to the terms and conditions hereof, each Member hereby irrevocably constitutes and appoints each of the Manager his true and lawful attorney-in-fact and agent with full power and authority to act in his name, place and stead to execute, acknowledge, swear to, deliver, file, record and publish any document requisite to carrying out the intention and purposes enumerated below, including, but not limited to, the execution, acknowledgment, swearing to, delivery, filing, recording and publication of this Agreement and amendments thereto, documents, conveyances, leases, contracts, loan documents and/or counterparts thereof, and all other documents which such person reasonably deems necessary or appropriate:

• • To qualify or continue the Company as a limited liability company;
  • To effect the dissolution and termination of the Company; or
  • To effect transfers, admissions, withdrawals and substitutions of Members as specifically provided under the terms of this Agreement, including any amendment to Schedule A necessary to reflect the same.

No person will take any action as an attorney-in-fact of any Member which would in any way increase the liability of such Member beyond the liability expressly set forth in this Agreement nor is any Member bound by such action taken.  This power of attorney will be irrevocable.

12.6 Parties in Interest. Nothing in this Agreement will be construed to be for the benefit of or enforceable by any Person not a party to this Agreement, including, but not limited to, any creditor of the Company, other than the Persons entitled to indemnification under Section 6.10.

12.7 Further Assurances. The Members will execute and deliver such further instruments and do such further acts and things as may reasonably be required to carry out the intent and purposes of this Agreement.

12.8 Remedies Cumulative. Except as otherwise provided herein, no remedy conferred upon or reserved to the Company or any Member by this Agreement is intended to be exclusive of any other remedy.  Except as otherwise provided herein, each and every such remedy will be cumulative and will be in addition to any other remedy given to the Company or any Member hereunder or now or hereafter existing at law or in equity or by statute.

12.9 Successors and Assigns. Subject to the restrictions on Transfer set forth in Article 9, this Agreement will bind and inure to the benefit of the parties hereto and their respective successors and assigns.

12.10 Legal Fees. In the event that any party should commence legal proceedings with respect to the rights and duties of the parties to this Agreement, the prevailing party in such legal proceedings will be entitled to reimbursement from the non-prevailing party of all legal fees and expenses incurred in such proceedings.

12.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which will constitute one and the same agreement.

12.12 Entire Agreement. The terms and conditions of this Agreement constitutes the entire agreement between the Members concerning the subject matter hereof, and will supersede all previous communications, either oral or written, between the parties hereto, and no agreement or understanding modifying this Agreement will be binding upon any Member unless such modification is in writing and signed by such Member.

12.13 Appraisal Rights. Each Member hereby waives any right to cause the Company to pay the fair value of its Interest if and as required pursuant to the Act.

12.14 Amendment. This Agreement may be amended from time to time with the prior written consent of the Manager and Members holding a majority of the Interests, provided that the following amendments will require the additional consents noted below:

• • Any amendment which would require any Member to make additional Capital Contributions to the Company will require the prior written consent of such Member;
  • Any amendment which would modify the priority of distributions to Members holding Class B Interests shall require the prior written consent of Members holding a majority of the Class B Interests;
  • Any amendment which would modify the priority of distributions to Members holding Interests (other than the Class B Interests) shall require the prior written consent of Members holding a majority of all Interests (other than the Class B Interests); and
  • Any amendment which imposes any additional liability on any Member will require the prior written consent of such Member.

12.15 Confidentiality. Each of the parties hereto shall maintain in strict confidence, and will cause their officers, directors, managers, employees, agents, shareholders, partners, members, accountants, consultants, legal counsel and other advisors and representatives to maintain in strict confidence all, and not disclose to any third party any, information they have with respect to (i) the Company and its business, assets, liabilities, results of operations and financial condition (the “Confidential Information”) and (ii) the terms of this Agreement, unless such information is already known to such third party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party or unless the furnishing of such information (a) is authorized by the Manager, (b) is necessary to conduct the Company’s business, (c) is made to their lenders and their respective officers, directors, managers, employees, agents, shareholders, partners, members, accountants, consultants, legal counsel and other advisors and representatives, (d) is required by or necessary in the conduct of the prosecution or defense of any legal proceeding or (e) is required or necessary in connection with the preparation and filing of any tax return or to comply with any applicable legal requirement in effect from time to time. Notwithstanding anything to the contrary in this Agreement, any Member may disclose the terms of this Agreement and any information such Member has with respect to the Company and its Business, assets, liabilities, results of operations and financial condition to potential purchasers of such Member’s Interests, provided such Member notifies the Manager before such disclosure and, if required by the Manager, the potential purchasers execute and deliver to the Company a confidentiality agreement in a form reasonably acceptable to the Manager.

12.16 Member Representations. Each Member makes the following representations and warranties to the Company, to each of the other Members and the Manager of the Company:

• • The Member has acquired its Interest in the Company for investment solely for its own account with the intention of holding the Interest for investment, without any intention of participating in any distribution of any portion of the Interest, and without the financial participation of any other Person.
  • The Member is aware that its Interest in the Company has not been registered under any securities laws, and the Interests may not be offered for sale, pledged, assigned, or transferred except in compliance with the terms of Article 9 hereof and in a transaction which is exempt from registration under applicable securities laws. The Member further acknowledges that its representations and warranties contained in this Section are relied upon by the Company and by the other Members as the basis for the exemption of the purchase of an Interest in the Company from the registration requirements of applicable securities laws.  The Company shall not and has no obligation to recognize any sale, transfer, or assignment of all or any part of a Member’s Interests in the Company to any Person unless and until the provisions of Article 9 are satisfied.

12.17 Additional Regulatory Representations and Covenants.

• • Each Member makes the following representations and warranties to the Company, to each of the other Members and the Manager:
    • If the Member is a natural person, then the Member is at least 21 years of age.
    • The Member has never been convicted of any felony of any kind or charged, convicted or adjudicated delinquent of any crime listed or described in Florida Statutes Section 435.04.convicted of any felony of any kind and any crime listed in Florida Statutes Section 435.04 (a copy of which is attached as Exhibit A to this Agreement).
    • If the Member is an entity, then each owner, director and officer of the Member is at least 21 years of age and neither the Member nor any owner, director and officer of the Member has ever been convicted of any felony of any kind and any crime listed in Florida Statutes Section 435.04 (a copy of which is attached as Exhibit A to this Agreement).
    • Neither the Member nor any owner, director and officer of the Member is a law enforcement official of the State of Florida, or any other federal, state or local law enforcement agency,
    • Neither the Member nor any owner, director and officer of the Member is an employee or contractor of the State of Florida Department of Health.
  • Each Member shall immediately notify the Company in the event that any of the representations and warranties under Section 12.17(a) should become inaccurate at any time, or if any governmental agency or authority should commence or threaten to commence any legal proceeding in which it alleges that the Member or any owner, director and officer of the Member has committed a felony or any crime listed in Florida Statutes Section 435.04 or any other act in violation of any of the licensing requirements of the State of Florida applicable to the Company or any of its subsidiaries.
  • Each Member undertakes, on behalf of itself and each of its owners, directors and officers of the Member as follows:
    • to comply at all time with all licensing requirements of the State of Florida applicable to the Company or any of its subsidiaries;
    • to promptly provide the Company, at its request, with all information, documents and certifications that the Company may request in order to comply with all licensing requirements of the State of Florida applicable to the Company or any of its subsidiaries, including the completion of a Level 2 screening under Florida Statutes Section 435.04.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first-above written.

	COMPANY: [REDACTED], LLC By:                                         Name:                                    Title:
	INITIAL MEMBERS:
	[REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company By:                                         Name:                                    Title:                                      [REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company By:                                         Name:                                    Title:
	[REDACTED ENTITY NAME], a [REDACTED STATE] limited liability company By:                                         Name:                                    Title:

 

SCHEDULE A 

The number and type of Interests held by each Member until such time as the Company’s products are being offered for retail in accordance with the Company’s purpose as set forth in this Agreement.

 

 

Name and Address	Number and Type of Interests