Operating Agreement Of Llc Page 7
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17income or proceeds derived therefrom, and the pursuit of other ventures and activities by each
Member, is hereby consented to by each Member and will not be deemed wrongful or improper.
Notwithstanding the foregoing, no Member may engage in any activity that is in direct
competition with Company’s business. Except as otherwise provided in this Agreement, neither
any Member nor any Affiliate of a Member will be obligated to present any particular investment
opportunity to the Company, and each Member and each Affiliate of a Member will have the
right to take for its own account, or to recommend to others, any such particular investment
opportunity.
ii.
As used herein, “Affiliate(s) of a Member” means (1) any partners in that
Member; (2) any person that directly or indirectly (including through any related entity) or in a
fiduciary capacity controls, is controlled by, or is under common control with that Member or
any general partner in that Member; or (3) any other person of which five percent (5%) or more
of the equity interest is held beneficially or of record by that Member or any general partner in
that Member. “Affiliate” also includes any officer or director of that Member, a spouse, ancestor,
or lineal descendant of such officer or director or a trust for the benefit of any of the foregoing.
For purposes of this definition, the term “control” means the possession, directly or indirectly, of
the power to cause the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, family relationships, or otherwise.
d.
Liability; Indemnification. To the maximum extent permitted by the Act and the
other laws and public policies of the State of _______________, [Instructions: Insert the state
of LLC formation] the Members shall not be liable to the Company or to any other person for
any loss, damage or claim incurred by reason of any act or omission performed or omitted to be
performed by the Members in good faith on behalf of the Company in the conduct of the
business and/or affairs of the Company. Further, to the maximum extent permitted by the Act
and the other laws and public policies of the State of ______________, [Instructions: Insert the
state of LLC formation] the Company shall defend, indemnify and hold harmless the Members
and any of the Affiliates of a Member, and any of his or their respective shareholders, members,
directors, officers, employees, agents, attorneys or Affiliates, from and against any and all
liabilities, losses, claims judgments, fines, settlements and damages incurred by the Members, or
by any such person, arising out of any claim based upon any acts performed or omitted to be
performed by the Members, or by any such other person, on behalf of the Members, in
connection with the organization, management, business or property of the Company, including
costs, expenses and attorneys’ fees (which may be paid as incurred) expended in the settlement
or defense of any such claim.
e.
Deadlock. In the event that the Members are divided and are unable to reach
agreement with respect to any proposed course of action, within __________ (__) [Instructions:
Insert the number of days a deadlock must last to trigger this section] days after such request
for action by any Member, a deadlock (the “Deadlock”) shall be deemed to exist. In the event of
a Deadlock the Members shall unanimously agree upon an independent third-party (the “Tie-
Breaker”), who will, after good faith discussions with the Members, resolve the Deadlock
(including, if necessary, by voting in favor of or against a proposed resolution). In the event that
a Tie-Breaker cannot be unanimously agreed, each member shall appoint a Tie-Breaker, and the
Tie-Breakers shall mutually agree upon and appoint a Tie-Breaker, provided that such Tie-
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