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HomeMy WebLinkAboutCromwell Court Opportunity Fund Operating AgreementOPERATING AGREEMENT INTRODUCTION, PARTIES AND CONSIDERATION This Operating Agreement (hereinafter referred to as "the Agreement") is hereby entered into on this 12th day of January , 2024 , by and between the following Parties: 1. Mark H. Brown 2. Jill E. Judy The collective term "Parties" or "Members", as utilized herein, shall refer to the persons identified above. For good, sufficient and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties named hereby covenant, contract and agree to each of the following provisions of the Agreement: SECTION ONE FORMATION OF ARKANSAS LIMITED LIABILITY COMPANY 1.1 Purpose for Formation, Name of Company and Initial Members. The Parties to the Agreement formed and are operating, an Arkansas Limited Liability Company named: Cromwell Court Opportunity Fund, LLC (hereinafter referred to as "the Company"). The Company may do business under any other name authorized by law. For purposes of the Agreement, the Parties named herein will hereinafter be collectively referred to as "the Members". The Members shall conduct business under the name of the Company specified herein, or under such additional name as shall be decided by a majority vote of the Members and allowed by applicable law. 1.2 Operation and Tax Structure of the Company. The operation of the Company shall be governed by the terms of this Agreement and any amendment(s) hereto. 1.3 Filing of Articles of Incorporation for Company in the State of Arkansas. The Members caused to be filed Articles of Incorporation and/or Organization (hereinafter referred to as "the Articles") for the Company with the Arkansas Secretary of State. 1.4 Registered Agent and Principal Place of Business. The registered agent for the State of Arkansas for purposes of service of process is Jill E. Judy. The Principal Address listed is 1101 S. CUMBERLAND LITTLE ROCK, AR 72206. 1.5 Tax ID Number/EIN Number, if any. 85-3009647 Operating Agreement of Cromwell Court Opportunity Fund, LLC SECTION TWO AUTHORIZED BUSINESS ACTIVITIES OF THE COMPANY AND GENERAL TERMS OF CORPORATE OPERATION 2.1 Authorized and Stated Business Activities of the Company. The Member has declared that the authorized business activities of the Company shall be as follows: a) To engage in any business in which the Company is allowed to participate pursuant to its status as an Arkansas Professional Limited Liability Company. 2.2 Term and Duration of the Company. The Company will commence business as of the date of filing with the Arkansas Secretary of State and will continue until dissolved pursuant to the terms and conditions of the Agreement. SECTION THREE MEMBERS OF THE COMPANY AND PROVISIONS RELATING TO CONTINUING MANAGEMENT OF THE COMPANY; REFERENCE TO BUY -SELL AGREEMENT 3.1 Members of the Company and Capital Contributions. The Members of the Company, their initial capital contributions, and their percentage interest in the Company shall be as follows: 1. Mark H. Brown, 50% Owner, 50% Capital Contribution 2. Jill E. Judy, 50% Owner, 50% Capital Contribution 3.2 Admission of Additional Members to the Company. No additional members may be admitted to the Company without the prior unanimous written consent of the Members. 3.3 Management of the Company. For purposes of filing with the Arkansas Secretary of State, the operational management of the Company shall not be vested in an appointed Manager. The Members of the Company will maintain all operational control as specified within this Agreement. The Company shall be Member Managed. 3.4 Election of Officers for the Company. From time to time, Members may elect to create and appoint officers as needed for the continued business of the Company. A Member may hold one or more offices. The failure to appoint or re-elect officers pursuant to the Agreement shall not be considered a violation of any of the terms of the Agreement. 3.5 Authority of the Members to Transact Business on Behalf of the Company. The Members, acting unanimously and within the authority granted by the terms of this Agreement, shall have the complete power and authority to manage and operate the Company. 2 Operating Agreement of Cromwell Court Opportunity Fund, LLC 3.6 Reliance by Third Parties. Third parties dealing with the Company shall be entitled to rely conclusively upon the power and authority of the Members to manage and operate the business and affairs of the Company as specified within this Agreement. SECTION FOUR PROVISIONS PERTAINING TO MEMBERSHIP CONTRIBUTIONS, PROFITS, LOSSES, EXPENSES AND DISTRIBUTIONS 4.1 Ownership Interest of the Members of the Company. Each member shall own a percentage interest in the Company as designated in the previous Section of this Agreement. The ownership interest of each Member shall be considered personal property. 4.2 Potential for Additional Contributions to the Company. Members may only be called on to make additional cash contribution(s) to the Company pursuant to the vote or decision of a majority of the Members. 4.3 Profits and Losses of the Company and its Members. The yearly calculated profits and losses of the Company and all additional pertinent tax attributes for the Company shall be allocated to the Members in proportion to each Member's ownership interest in the Company as set forth in this Agreement and as may be amended from time to time in accordance with the regulations of the United States Department of the Treasury. 4.4 Distributions of Assets of the Company. Any distribution of cash or other assets of the Company to any Member shall be made only as to be determined by the unanimous vote or decision of the Members as authorized by this Agreement. 4.5 No Interest on Capital Contributions. Members are not entitled to interest or other compensation for or on account of their capital contributions to the Company. 4.6 No Right to Demand Return of Capital. No Member shall have any right to any return of capital or other distribution except as expressly provided in this Agreement. SECTION FIVE VOTING RIGHTS OF THE MEMBERS AND MAJORITY VOTE AUTHORIZING ACTION OF THE COMPANY 5.1 Voting_by Company Members. Each Member shall be entitled to vote on all matters within this Agreement which specify or reference a majority vote of the Members. Decisions on all matters affecting the Company as specified in this Agreement may be made only by a Member or group of Members maintaining 51 % or more of the outstanding Membership Interest in the Company. 5.2 Decisions by Members on Behalf of the Company. Where any term or provision of this Agreement reference is made to the decision, consent, approval, judgment, or action of 3 Operating Agreement of Cromwell Court Opportunity Fund, LLC the Members, unless otherwise expressly provided in this Agreement, such decision, consent, approval, judgment, or action shall mean a Majority of the Members holding more than 5 1 % ownership interest in the Company as specified within this Agreement. 5.3 Meetings — Written Consent. Action of the Members or Officers may be accomplished without a meeting where authorized by this Agreement. Meetings may be called by any Member owning 51 % or more of the Company. SECTION SIX RESTRICTIONS ON ENCUMBRANCES AND TRANSFERABILITY OF A MEMBERSHIP INTEREST; VALUATION OF MEMBERSHIP INTERESTS; DEATH OF A MEMBER; REFERENCE TO SEPARATE BUY -SELL AGREEMENT 6.1 Encumbrance or Sale of a Company Interest. No Member may voluntarily or involuntarily convey, encumber, sell or otherwise pledge a security interest in the Company absent unanimous consent of the Members, except as provided herein. 6.2 RESERVED 6.3 RESERVED 6.4 Incompetency. Bankruptcy of or Attachment by Creditor against any Member of the Compm. On the adjudicated Incompetency or Bankruptcy of a Member, or upon the successful attachment by a Creditor against a Member, the successor in interest to the Member (whether a creditor, bankruptcy trustee, or otherwise) will receive only the economic right to receive distributions whenever made by the Company and the Member's allocable share of taxable income, gain, loss, deduction, and credit (hereinafter referred to as the "Economic Rights") unless and until a majority of the other Members determined on a per capita basis admit the transferee as a fully substituted Member in accordance with the provisions of this Agreement. 6.4.1 Any transfer of Economic Rights pursuant to Section 6.4 will not include any right to participate in management of the Company, including any right to vote, consent to, and will not include any right to information on the Company or its operations or financial condition. Following any transfer of only the Economic Rights of a Member's Interest in the Company, the transferring Member's power and right to vote or consent to any matter submitted to the Members will be eliminated, and the Ownership Interests of the remaining Members, for purposes only of such votes, consents, and participation in management, will be proportionately increased until such time, if any, as the transferee of the Economic Rights becomes a fully substituted Member. 6.4.2 Upon the death of the last remaining Member, the interest in the Company shall pass to the heirs of the last remaining Member pursuant to the Member's directed testate procedures. 4 Operating Agreement of Cromwell Court Opportunity Fund, LLC SECTION SEVEN TERMINATION OF A MEMBERSHIP INTEREST 7.1 Termination of Membership Interest. A Member's interest in the LLC shall cease upon the occurrence of one or more of the following events: a) A Member provides notice of withdrawal to the LLC thirty (30) days in advance of the withdrawal date; b) A Member dies or there is an entry of an Order by a court of competent jurisdiction adjudicating the Member incompetent (in either which case the provisions of any valid testamentary instruments shall apply); or c) Any of the events provided under applicable State Law that are not inconsistent with the disassociation events above. SECTION EIGHT DUTIES OF MEMBERS AND OFFICERS OF THE COMPANY AND LIMITATIONS OF LIABILITY FOR ACTIONS 8.1 Limitation of Liability. The Members and Officers shall perform their duties in good faith. No Member or Officer shall be liable to the Company or any Member for any loss or damage sustained by the Company or any Member. 8.2 Protection of Members, Managers and Officers. Members and Officers of the company acting under this Agreement shall not be liable to the Company for good faith reliance on the provisions of this Agreement, the records of the Company, or such other information presented to the Company by any persons as to matters the Member or Officer reasonably believes are within such other person's professional or expert level of competency. 8.4 Indemnification by the Company. The Company shall indemnify any Member who was or is a party defendant or is threatened to be made a party defendant to any pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Company) by reason of the fact that he is or was a Member of the Company, Officer, employee or agent of the Company, or is or was serving at the request of the Company, against expenses (including attorney's fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the Members determine that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Company, and with respect to any criminal action proceeding, has no reasonable cause to believe his/her conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of "no contest" or its equivalent, shall not in itself create a presumption that the person did or did not act in good faith and in a manner which he reasonably 5 Operating Agreement of Cromwell Court Opportunity Fund, LLC believed to be in the best interest of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his/her conduct was lawful. SECTION NINE DISSOLUTION OF THE COMPANY, WINDING UP OF THE BUSINESS OPERATIONS OF THE COMPANY, AND FINAL DISTRIBUTIONS 9.1 Dissolution of the Company. The Company will be dissolved upon the occurrence of any of the following events: a) The Sale, transfer, or other disposition of the Company; b) The agreement by a unanimous vote of all of the Members; c) By operation of law; or d) The terms of any testamentary instruments by the Members. 9.2 Winding up the Business Operations of the Company. Upon the dissolution of the Company, the Members must take full account of the Company's assets and liabilities, and the assets will be liquidated as promptly as is consistent with obtaining their fair value, and the proceeds, to the extent sufficient to pay the Company's obligations with respect to the liquidation, will be applied and distributed, after any gain or loss realized in connection with the liquidation has been allocated in accordance with the provisions of this Agreement, and the Members' Capital Accounts have been adjusted to reflect the allocation and all other transactions through the date of the distribution, in the following order: 9.2.1 To the payment and discharge of the expenses of liquidation and of all the Company's debts and liabilities to persons or organizations other than the Members of the Company; 9.2.2 To the payment and discharge of any Company debts and liabilities owed to the Members of the Company; and 9.2.3 To the Members of the Company in the amount of their respective adjusted Capital Account balances on the date of distribution. SECTION TEN MISCELLANEOUS PROVISIONS 10.1 Amendment. Except as otherwise provided in this Agreement, any amendment to this Agreement may be proposed by any Member. A proposed Amendment shall be adopted and become effective upon approval in writing by a vote of a majority of the Members. 6 Operating Agreement of Cromwell Court Opportunity Fund, LLC 10.2 Applicable Law. To the extent permitted, this Agreement and the obligation of the parties hereto shall be construed in accordance with and governed by the laws of the State of Arkansas. 10.3 Entire Agreement; Modifications to the Agreement. This Agreement constitutes the entire understanding and agreement between the Members with respect to the subject matter of this Agreement. No modification or amendment of any provision of this Agreement will be binding on any Member unless in writing and signed by all the Members. 10.4 Severability. If any term or provision of this Agreement is held to be void or unenforceable, that term or provision will be severed from this Agreement, the balance of the Agreement will survive, and the balance of this Agreement will be reasonably construed to carry out the intent of the parties as evidenced by the terms of this Agreement. IN WITNESS WHEREOF, the parties to this Agreement execute this Operating Agreement as of the date and year first above written. MEMBERS: Z'/4 ark H. Brown Jill udy 7 Operating Agreement of Cromwell Court Opportunity Fund, LLC