Rights and Obligations of Members; Meetings Flashcards
(21 cards)
How are meeting of the members called?
Manager and any member may call a meeting.
When is a meeting held?
Manager will determine when to hold a meeting.
Where can meetings be held?
Any place manager may determine.
What are the notice requirements for a meeting?
Notice by mail not more than 10 days or less than 1 day. Notice personally, fax or email not more than 1 day.
How does a member waive notice?
In writing, signed by Member or If a member is present at a meeting.
What is a quorum?
Members holding a majority of votes entitled to vote on a matter are a quorum.
How many votes does a member have?
A member has the right to vote in their percentage interest.
How many votes constitute approval of an action?
Generally, over 50% of the percentage interest.
Can members participate by phone?
Yes, so long as all members can hear each other.
Can the parties take action by written consent?
Yes. Can be taken without notice and without a vote. Must be signed by the members with the Percentage Interest required and the writings are filed with the minutes.
Are proxies permitted?
Yes.
Can members bind the company?
Generally no. A member must act by resolution expressly authorizing the action, duly “adopted” by the manager, and approved by the members needing to approve
Are the Members’ liabilities limited?
Yes, except to the extent provided under the Delaware Act. A Member will have no liability of the debts, obligations and liabilities of the Company.
Is a Member’s liability to the other Members or the Company limited?
Yes. A Member’s obligations cannot exceed the amount of the Member’s Capital Contributions.
What actions require the approval of the Local Member?
(i) Amendment of the Agreement (except to the extent the Manager has the right under the Agreement to amend)
(ii) Redeem or repurchase any Units
(iii) Increase the number of Authorized Units
(iv) Authorize or issue any new class of Units (except in connection with the sale of the Company)
(v) Make any new Investment
(vi) Change the nature of the Company’s business
(vii) Enter into any Affiliate Transaction (with exceptions)
(viii) Voluntary liquidation or dissolution
What are the exceptions to Affiliate Transactions that can be entered into without a Local Member’s approval?
(i) Transactions with the Local Operating Company and PDC permitted under the Agreement
(ii) Sale of the Company pursuant to drag-along rights
(iii) Any Capital Contribution or Advance
(iv) An agreement for the provision of services in connection with an Investment.
(v) Affiliate Transactions already approved.
Can a Member voluntarily withdraw?
No, not so long as a Member holds any Units.
Under what circumstances will a Member be deemed withdrawn?
Dissolution of a Member, death of a Member; the Member becoming insolvent.
What happened to a Withdrawn Member?
Such a Member is deemed disassociated with the Company and will be treated as an “Assignee”
What are the rights and obligations of a Withdrawn Member?
(i) The Assignee is entitled to receive Distributions and to transfer it Units.
(ii) The assign is NOT entitle to redemption or repurchase of the Units, or any payment in connection with the “Withdrawal Event”
(iii) An Assignee’s rights are derived only from the rights associated with the Units on or prior to the Withdrawal.
(iv) An Assignee does not have any constructive interest in the Company.
(v) An Assignee does not have any non-economic rights, such as the right to vote, bind the Company, etc.
(vi) The Assignee is still bound to the obligations under the Agreement that inure to the benefit of the Company or any Member.
Is an Assignee of a Withdrawn Member’s interest responsible for Capital Contributions and return of distributions or other payment?
Yes. An assignee is subject to the liabilities and obligations of the transferor Member.
