HomeMy WebLinkAboutMANAGEMENT AGREEMENT0
VASU DEMLA LLC
Management Operating Agreement
I. Preliminary Provisions
(1) Effective Date: This operating agreement of VASU
DEMLA LLC,effective JUNE 28,2011, is adopted by the
members whose signatures appear at the end of this
agreement.
(2) Formation: This limited liability company (LLC) was
formed by filing Articles of Organization, a Certificate
of Formation or a similar organizational document with
LLC filing office of the state of Texas on JUNE 28,
2011. A copy of this organizational document has been
placed in the LLC's records book.
(3) Name: The formal name of this LLC is as stated
above. However, this LLC may do business under a
different name by complying with the state's fictitious
or assumed business name statutes and procedures.
(4) Registered Office and Agent: The registered office
of this LLC and the registered agent at this address are
as follows:
SURAJ DEMLA
3525SANDY TRAIL LN.
PLANO, TX 75023
The registered office and agent may be changed from time
to time as the members or managers may see fit, by
filing a change of registered agent or office form with
the state LLC filing office. It will not be necessary to
amend this provision of the operating agreement if and
when such a change is made.
(5) Business Purposes: The specific business purposes
and activities contemplated by the founders of this LLC
at the time of initial signing of this agreement consist
of the following: To manage, operate, acquire, construct
Hotels /motels and other real estate properties. It is
understood that the foregoing statement of purposes
shall not serve as a limitation on the powers or
abilities of this LLC, which shall be permitted to
engage in any and all lawful business activities. If
this LLC intends to engage in business activities
outside the state of its formation require the
qualification of the LLC in other states, it shall
obtain such qualification before engaging in such out -
of -state activities.
(6) Duration of LLC: The duration of this LLC shall be
until December 31, 2060.
Further, this LLC shall terminate when a proposal to
dissolve the LLC is adopted by the membership of this
LLC or when this LLC is otherwise terminated in
accordance with law.
II. Management Provisions
( . 1) Management by Managers: This LLC will be managed by
the managers listed below. All managers who are also
members of this LLC are designated as "members ";
nonmember managers are designated as "nonmembers."
Name: SURAJ DEMLA [X ] Member [ ] Nonmember
Address:. 3525 SANDY TRAIL LN., PLANO, TEXAS 75023
(2) Nonliability of Managers: No manager of this LLC
shall be personally liable for the expenses, debts,
obligations or liabilities of the LLC, or for claims
made against it.
(3) Authority and Votes of Managers: Except as otherwise
set forth in this agreement, the Articles of
Organization, Certificate of Organization or similar
organizational document, or as may be provided under
state law, all management decisions relating to this
LLC's business shall be made by its managers. Management
decisions shall be approved by majority of the current
managers of the LLC, with each manager entitled to cast
one vote for or against any matter submitted to the
managers for a decision.
(4) Term of Managers: Each manager shall serve until the
earlier of the following events:
(a) the manager becomes disabled, dies, retires or
otherwise withdraws from management;
(b) the manager is removed from office; or
(c) the manager's term expires, if a term has been
designated in other provisions of this agreement.
Upon the happening of any of these events, a new manager
may be appointed to replace the departing manager by
majority of members.
(5) Management Meetings: Managers shall be able to
discuss and approve LLC business informally, and may, at
their discretion, call and hold formal management
meetings according to the rules set forth in the
following provisions of this operating agreement.
Regularly scheduled formal management meetings need not
be held, but any manager may call such a meeting by
communicating his or her request for a formal meeting to
the other managers, noting the purpose or purposes for
which the meeting is called. Only the business stated or
summarized in the notice for the meeting shall be
discussed and voted upon at the meeting.
The meeting shall be held within a reasonable time after
a manager has made the request for a meeting, and in no
event, later than 30 days after the request for the
meeting. A quorum for such a formal managers' meeting
shall consist of majority managers, and if a quorum is
not present, the meeting shall be adjourned to a new
place and time with notice of the adjourned meeting
given to all managers. An adjournment shall not be
necessary, however, and a managers' meeting with less
than a quorum may be held if all nonattending managers
agreed in writing prior to the meeting to the holding of
the meeting. All such written consents to the holding of
a formal management meeting shall be kept and filed with
the records of the meeting.
The proceedings of all formal managers' meetings shall
be noted or summarized with written minutes of the
meeting and a copy of the minutes shall be placed and
kept in the records book of this LLC.
(6) Managers' Commitment to LLC: Managers shall devote
their best efforts and energy working to achieve the
business objectives and financial goals of this LLC. By
agreeing to serve as a manager for the LLC, each manager
shall agree not to work for another business, enterprise
or endeavor, owned or operated by himself or herself or
others, if such outside work or efforts would compete
with the LLC's business goals, mission, products or
services, or would diminish or impair the manager's
ability to provide maximum effort and performance to
managing the business of this LLC.
(7) Compensation of Managers: Managers of this LLC may
be paid per- meeting or per -diem amounts for attending
management meetings, may be reimbursed actual expenses
advanced by them to attend management meetings or attend
to management business for the LLC, and may be
compensated in other ways for performing their duties as
managers. Managers may work in other capacities for this
LLC and may be compensated separately for performing
these additional services, whether as officers, staff,
consultants, independent contractors or in other
capacities.
III. Membership Provisions
(1) Nonli ability of Members: No member of this LLC shall
be personally liable for the expenses, debts,-
obligations or liabilities of the LLC, or for claims
made against it.
(2) Reimbursement for Organizational Costs: Members
shall be reimbursed by the LLC for organizational
expenses paid by the members. The LLC shall be
authorized to elect to deduct organizational expenses
and start -up expenditures ratably over a period of time
as permitted by the Internal Revenue Code and as.may be
advised by the LLC's tax advisor_
(3) Members' Percentage Interests: A member's percentage
interest in this LLC shall be computed as a fraction,
the numerator of which is the total of a member's
capital account and the denominator of which is the
total of all capital accounts of all members. This
fraction shall be expressed in this agreement as a
percentage, which shall be called each member's
"percentage interest" in this LLC.
(4) Membership Voting: Except as otherwise may be
required by the Articles of Organization, Certificate of
Formation or a similar organizational document, other
provisions of this operating agreement, or under the
laws of this state, each member shall vote on any matter
submitted to the membership for approval in proportion
to the member's percentage interest in this LLC.
Further, unless defined otherwise for a particular
provision of this operating agreement, the phrase
"majority of members" means the vote of members whose
combined votes equal more than 500 of the votes of all
members in this LLC.
(5) Compensation: Members shall not be paid as members
of the LLC for performing any duties associated with
such membership. Members may be paid, however, for any
services rendered in any other capacity for the LLC,
whether as officers, employees, independent contractors
or otherwise.
(6) Members' Meetings: The LLC shall not provide for
regular members' meetings. However, any member may call
a meeting by communicating his or her wish to schedule a
meeting to all other members. Such notification may be
in person or in writing, or by telephone, facsimile
machine, or other form of electronic communication
reasonably expected to be received by a member, and the
other members shall then agree, either personally, in
writing, or by telephone, facsimile machine or other
form of electronic communication to the member calling
the meeting, to meet at a mutually acceptable time and
place. Notice of the business to be transacted at the
meeting need not be given to members by the member
calling the meeting, and any business may be discussed
and conducted at the meeting.
If all members cannot attend a meeting, it shall be
postponed to a date and time when all members can
attend, unless all members who do not attend have agreed
in writing to the holding of the meeting without them.
If a meeting is postponed, and the postponed meeting
cannot be held either because all members do not attend
the postponed meeting or the non attending members have
not signed a written consent to allow the postponed
meeting to be held without them, a second postponed
meeting may be held at a date and time announced at the
first postponed meeting. The date and time of the second
postponed meeting shall also be communicated to any
members not attending the first postponed meeting. The
second postponed meeting may be held without the
attendance of all members as long as a majority of the
percentage interests of the membership of this LLC is in
attendance at the second postponed meeting. Written
notice of the decisions or approvals made at this second
postponed meeting shall be mailed or delivered to each
nonattending member promptly after the holding of the
second postponed meeting.
Written minutes of the discussions and proposals
presented at a members' meeting, and the votes taken and
matters approved at such meeting, shall be taken by one
of the members or a person designated at the meeting. A
copy of the minutes of the meeting shall be placed in
the LLC's records book after the meeting.
(7) Membership Certificates: This LLC shall be
authorized to obtain and issue certificates representing
or certifying membership interests in this LLC. Each
certificate shall show the name of the LLC, the name of
the member, and state that the person named is a member
of the LLC and is entitled to all the rights granted
members of the LLC under the Articles of Organization,
Certificate of Formation or a similar organizational
document, this operating agreement, and provisions of
law. Each membership certificate shall be consecutively
numbered and signed by one or more officers of this LLC.
The certificates shall include any additional
information considered appropriate for inclusion by the
members on membership certificates.
In addition to the above information, all membership
certificates shall bear a prominent legend on their.face
or reverse side stating, summarizing or referring to any
transfer restrictions that apply to memberships in this
LLC under the Articles of Organization, Certificate of
Formation or a similar organizational document and /or
this operating agreement, and the address where a member
may obtain a copy of these restrictions upon request
from this LLC.
The records book of this LLC shall contain a list of the
names and addresses of all persons to whom certificates
have been issued, show the date of issuance of each
certificate, and record the date of all cancellations or
transfers of membership certificates.
IV. Tax and Financial Provisions
(1) Tax Classification of LLC: The members of this LLC
intend that this LLC be initially classified as a
partnership for federal and, if applicable, state income
tax purposes. It is understood that all members may
agree to change the tax treatment of this LLC by
signing, or authorizing the signature of, IRS Form 8832,
Entity Classification Election, and filing it with the
IRS and, if applicable, the state tax department within
the prescribed time limits.
(2) Tax Year and Accounting Method: The tax year of this
LLC shall be calender. The LLC shall use the cash method
of accounting. Both the tax year and the accounting
period of the LLC may be changed with the consent of all
members or all managers if the LLC qualifies for such
change, and may be effected by the filing of appropriate
forms with the IRS and state tax authorities.
(3) Tax Matters Partner: If this LLC is required under
Internal Revenue Code provisions or regulations, it
shall designate from among its members or member -
managers a "tax matters partner" in accordance with
Internal Revenue Code Section 6231(a)(7) and
corresponding regulations, who will fulfill this role by
being the spokesperson for the LLC in dealings with the
IRS as required under the Internal Revenue Code and
Regulations, and who will report to the members and
managers on the progress and outcome of these dealings.
(4) Annual Income Tax Returns and Reports: Within 60
days after the end of each tax year of the LLC, a copy
of the LLC's state and federal income tax returns for
the preceding tax year shall be mailed or otherwise
provided to each member of the LLC, together with any
additional information and forms necessary for each
member to complete his or her individual state and
federal income tax returns. If this LLC is classified as
a partnership for income tax purposes, this additional
information shall include a federal (and, if applicable,
state) Form K -1 (Form 1065 - Partner's Share of Income,
Credits, Deductions) or equivalent income tax reporting
form. This additional information shall also include a
financial report, which shall include a balance sheet
and profit and loss statement for the prior tax year of
the LLC.
(5) Bank Accounts: The LLC shall designate one or more
banks or other institutions for the deposit of the funds
of the LLC, and shall establish savings, checking,
investment and other such accounts as are reasonable and
necessary for its business and investments. One or more
employees of the LLC shall be designated with the
consent of all managers to deposit and withdraw funds of
the LLC, and to direct the investment of funds from,
into and among such accounts. The funds of the LLC,
however and wherever deposited or invested, shall not be
commingled with the personal funds of any members or
managers of the LLC.
(6) Title to Assets: All personal and real property of
this LLC shall be held in the name of the LLC, not in
the names of individual members or managers.
V. Capital Provisions
(1) Capital Contributions by Members: Members shall make
the following contributions of cash, property or
services as shown next to each member's name below.
Unless otherwise noted, cash and property described
below shall be paid or delivered to the LLC on or by
JUNE 30, 2011. The fair market values of items of
property or services as agreed between the LLC and the
contributing member are also shown below. The percentage
interest in the LLC that each member shall receive in
return for his or her capital contribution is also
indicated for each member.
Name of Member Contribution Fair Market Percentage
Value Interest in .
SURAJ DEMLA $1,000,000 $1,000,000 500
KARUNA DEMLA 1,000,000 1,000,000 500
a
(2) Additional Contributions by Members: The members may
agree, from time to time by unanimous vote, to require
the payment of additional capital contributions by the
members, on or by a mutually agreeable date.
(3) Failure to Make Contributions: If a member fails to
make a required capital contribution within the time
agreed for a member's contribution, the remaining
members may, by unanimous vote, agree to reschedule the
time for payment of the capital contribution by the
late - paying member, setting any additional repayment
terms, such as a late payment penalty, rate of interest
to be applied to the unpaid balance, or other monetary
amount to be paid by the delinquent member, as the
remaining members decide. Alternatively, the remaining
members may, by unanimous vote, agree to cancel the
membership of the delinquent member, provided any prior
partial payments of capital made by the delinquent
member are refunded promptly by the LLC to the member
after the decision is made to terminate the membership
of the delinquent member.
(4) No Interest on Capital Contributions: No interest
shall be paid on funds or property contributed as
capital to this LLC, or on funds reflected in the
capital accounts of the members.
(5) Capital Account Bookkeeping: A capital account shall
be set up and maintained on the books of the LLC for
each member. It shall reflect each member's capital
contribution to the LLC, increased by each member's
share of profits in the LLC, decreased by each member's
share of losses and expenses of the LLC, and adjusted as
required in accordance with applicable provisions of the
Internal Revenue Code and corresponding income tax
regulations.
(6) Consent to Capital Contribution Withdrawals and
Distributions: Members shall not be allowed to withdraw
any part of their capital contributions or to receive
distributions, whether in property or cash, except as
otherwise allowed by this agreement and, in any case,
only if such withdrawal is made with the written consent
of all members.
(7) Allocations of Profits and Losses: No member shall
be given priority or preference with respect to other
members in obtaining a return of capital contributions,
distributions or allocations of the income, gains,
losses, deductions, credits or other items of the LLC.
The profits and losses of the LLC, and all items of its
income, gain, loss, deduction and credit shall be
allocated to members according to each member's
percentage interest in this LLC.
(8) Allocation and Distribution of Cash to Members: Cash
from LLC business operations, as well as cash from a
sale or other disposition of LLC capital assets, may be
distributed from time to time to members in accordance
with each member's percentage interest in the LLC, as
may be decided by majority of the managers.
(9) Allocation of Noncash Distributions: If proceeds
consist of property other than cash, the majority of
managers shall decide the value of the property and
allocate such value among the members in accordance with
each member's percentage interest in the LLC. If such
noncash proceeds are later reduced to cash, such cash
may be distributed among the members as otherwise
provided in this agreement.
(10) Allocation and Distribution of Liquidation
Proceeds: Regardless of any other provision in this
agreement, if there is a distribution in liquidation of
this LLC, or when any member's interest is liquidated,
all items of income and loss shall be allocated to the
members' capital accounts, and all appropriate credits
and deductions shall then be made to these capital
accounts before any final distribution is made. A final
distribution shall be made to members only to the extent
of, and in proportion to, any positive balance in each
member's capital account.
VI. Membership Withdrawal and Transfer Provisions
(1) Withdrawal of Members: A member may withdraw from
this LLC by giving written notice to all other members
at least 30 days before the date the withdrawal is to be
effective.
(2) Restrictions on the Transfer of Membership: A member
shall not transfer his or her membership in the LLC
unless all nontransferring members in the LLC first
agree to approve the admission of the transferee into
this LLC. Further, no member may encumber a part or all
of his or her membership in the LLC by mortgage, pledge,
granting of a security interest, lien or otherwise,
unless the encumbrance has first been approved in
writing by all other members of the LLC.
Notwithstanding the above provision, any member shall be
allowed to assign an economic interest in his or her
membership to another person without the approval of the
other members. Such an assignment shall not include a
transfer of the member's voting or management rights in
this LLC, and the assignee shall not become a member of
the LLC.
VII. Dissolution Provisions
(1) Events.That Trigger Dissolution of the LLC: The
following events shall trigger a dissolution of the LLC,
except as provided:
(a) the death, permanent incapacity, bankruptcy,
retirement, resignation or expulsion of a member, except
that within of the happening of any of these
events, all remaining members of the LLC may vote to
continue the legal existence of the LLC, in which case
the LLC shall not dissolve;
(b) the expiration of the term of existence of the
LLC if such term is specified in the Articles of
Organization, Certificate of Formation or a similar
organizational document, or this operating agreement;
(c) the written agreement of all members to dissolve
the LLC;
(d) entry of a decree of dissolution of the LLC under
state law.
VIII. General Provisions
(1) Officers: The managers of this LLC may designate one
or more officers, such as a President, Vice President,
Secretary and Treasurer. Persons who fill these
positions need not be members or managers of the LLC.
Such positions may be compensated or noncompensated
according to the nature and extent of the services
rendered for the LLC as a part of the duties of each
office. Ministerial services only as a part of any
officer position will normally not be compensated, such
as the performance of officer duties specified in this
agreement, but any officer may be reimbursed by the LLC
for out -of- pocket expenses paid by the officer in
carrying out the duties of his or her.office.
(2) Records: The LLC shall keep at its principal
business address a copy of all proceedings of membership
meetings, as well as books of account of the LLC's
financial transactions. A list of the names and
addresses of the current membership of the LLC also
shall be maintained at this address, with notations on
any transfers of members' interests to nonmembers or
persons being admitted into membership in the LLC. A
list of the current managers' names and addresses shall
also be kept at this address.
Copies of the LLC's Articles of Organization,
Certificate of Formation or a similar organizational
document, a signed copy of this operating agreement, and
the LLC's tax returns for the preceding three tax years
shall be kept at the principal business address of the
LLC. A statement also shall be kept at this address
containing any of the following information that is
applicable to this LLC:
• the amount of cash or a description and value of
property contributed or agreed to be contributed as
capital to the LLC by each member;
• a schedule showing when any additional capital
contributions are to be made by members to this LLC;
• a statement or schedule, if appropriate, showing the
rights of members to receive distributions representing
a return of part or all of members' capital
contributions; and
• a description of, or date when, the legal existence of
the LLC will terminate under provisions in the LLC's
Articles of Organization, Certificate of Formation or a
similar organizational document, or this operating
agreement.
If one or more of the above items. is included or listed
in this operating agreement, it will be sufficient to
keep a copy of this agreement at the principal business
address of the LLC without having to prepare and keep a
separate record of such item or items at this address.
Any member or manager may inspect any and all records
maintained by the LLC upon reasonable notice to the LLC.
Copying of the LLC's records by members and managers is
allowed, but copying costs shall be paid for by the
requesting member or manager.
(3) All Necessary Acts: The members, managers and
officers of this LLC are authorized to perform all acts
necessary to perfect the organization of this LLC and to
carry out its business operations expeditiously and
efficiently. The Secretary of the LLC, or other
officers, or one or more managers or all members of the
LLC, may certify to other businesses, financial
institutions and individuals as to the authority of one
or more members, managers or officers of this LLC to
transact specific items of business on behalf of the
LLC.
(4) Mediation and Arbitration of Disputes Among Members:
In any dispute over the provisions of this operating
agreement and in other disputes among the members, if
the members cannot resolve the dispute to their mutual
satisfaction, the matter shall be submitted to
mediation. The terms and procedure for mediation shall
be arranged by the parties to the dispute.
If good -faith mediation of a dispute proves impossible
or if an agreed -upon mediation outcome cannot be
obtained by the members who are parties to the dispute,
the dispute may be submitted to arbitration in
accordance with the rules of the American Arbitration
Association. Any party may commence arbitration of the
dispute by sending a written request for arbitration to
all other parties to the dispute. The request shall
state the nature of the dispute to be resolved by
arbitration, and, if all.parties to the dispute agree to
arbitration, arbitration shall be commenced as soon.as
practical after such parties receive a copy of the
written request.
All parties shall initially share the cost of
arbitration, but the prevailing party or parties may be
awarded attorney fees, costs and other expenses of
arbitration. All arbitration decisions shall be final,
binding and conclusive on all the parties to
arbitration, and legal judgment may be entered based
upon such decision in accordance with applicable law in
any court having jurisdiction to do so.
(5) Entire Agreement: This operating agreement
represents the entire agreement among the members of
this LLC, and it shall not be amended, modified or
replaced except by a written instrument executed by all
the parties to this agreement who are current members of
this LLC as well as any and all additional parties who
became members of this LLC after the adoption of this
agreement. This agreement replaces and supersedes all
prior written and oral agreements among any and all
members of this LLC.
(6) Severability: If any provision of this agreement is
determined by a court or arbitrator to be invalid,
unenforceable or otherwise ineffective, that provision
shall be severed from the rest of this agreement, and
the remaining provisions shall remain in effect and
enforceable.
IX. Signatures of Members, Members' Spouses and
Managers
(1) Execution of Agreement: In witness whereof, the
members of this LLC sign and adopt this agreement as the
operating agreement of this LLC.
Date:JUNE 28,
Signature:_
Printed Name:
Date:JUNE 28,
Signature:_
Printed Name:
2011
SURAJ DEMLA, Member
2011
KARUNA DEMLA, Member
2) Consent of Spouses: The undersigned are spouses of
members of this LLC who have signed this operating
agreement in the preceding provision. These spouses have
read this agreement and agree to be bound by its terms
in any matter in which they have a financial interest,
including restrictions on the transfer of memberships
and the terms under which memberships in this LLC may be
sold or otherwise transferred.
Date:JUNE 28, 2011
Signature - . ra /
Printed Name:SURAJ tEMLA
Spouse of:KARUNA DEMLA
Date:JUNE 28, 2011
Signature: Q QIjIz
Printed Name:KARUNA DEMLA
Spouse of:SURAJ DEMLA
(3) Signatures of Managers: The undersigned managers of
this limited liability company have read this agreement
and agree to be bound by its terms in discharging their
duties as managers.
Date:JUNE 28, 2011
Signature -
Printed Name: SVRAJ DEMLA, Manager