BLACK ROCK CITY LLC OPERATING AGREEMENT
The below owners and incorporators of Black Rock City LLC, a Nevada Limited Liability Corporation, hereby declare this as their operating agreement. This agreement shall take effect as soon as signed by all owners.
There are 6 owners of Black Rock City LLC (hereafter referred to as the “LLC”). Each shall have an equal interest in the LLC. All initial owners of the LLC shall sit on the Town Council on and are referred to as Managers, one of whom is also the Director. Additional owners may be admitted by a unanimous vote of the Town Council on such terms and conditions as unanimously agreed. Unless otherwise agreed at the time of admission, all subsequent owners admitted by managers of the LLC shall have an equal interest in the LLC and the right to sit as Managers on the Town Council.
The management of the affairs of the LLC shall be by and through the Town Council which shall function as a board of directors. The Town Council shall consist of all the managers one of whom shall be called t he Director of the LLC. Meetings of the Town Council shall be called and presided over by the Director or his designee. The initial Director shall be Larry Harvey. All Managers must agree to any subsequent Director of the LLC.
The Town Council shall have and exercise all management rights, powers, and authority over the business, affairs and operations of the LLC. Such powers shall include without limitation all powers which may be exercised by the directors of an LLC including: the making of expenditures; borrowing money or guaranteeing indebtedness and other liabilities; conducting and compromising litigation; the acquisition or disposition of the assets of the LLC; the negotiation of contracts binding on the LLC, the selection and dismissal of employees, volunteers and independent contractors, with and without cause.
The Town Council shall indemnify and hold harmless the Director and Managers, for all liability they may incur as a result of their involvement in the LLC except for intentional tortious or fraudulent conduct. The Town Council may indemnify and hold harmless employees agents, independent contractors or volunteers for any liability they incur as a result of their involvement in the LLC except for intentional tortious or fraudulent conduct. Only the Town Council acting unanimously may dissolve the LLC, distribute assets, dividends, earnings or property to owners.
Compensation of Managers and employees of the LLC shall be as set by the Town Council.
Members of the Town Council may not be removed from office except for cause. Cause for removal must consist of either a breach of fiduciary duty, intentional tortious misconduct, or being inactive in the operation of the LLC for a significant period of time. In the event of removal or resignation of a member of the Town Council, the LLC must redeem the ownership interest of an owner and the owner must surrender his ownership interest as provided in this agreement. The Town Council shall meet periodically to manage the affairs of the LLC. One Manager shall keep a record of all decisions of the Town Council. The books and records of the LLC shall be kept at its corporate office and each member of the Town Council shall have the unlimited right to inspect and copy such books and records. Decisions of the Town Council shall be made by consensus. In the event of a deadlock, the Director of the LLC may call for a vote of two thirds of managers when in his discretion a vote is necessary for the LLC to operate.
PROPERTY OF THE LLC
Title to all of the LLC’s property, assets, and accounts are to be held in the name of the LLC and no owner, manager, employee, or volunteer can claim any interest in the property, assets, or accounts of the LLC. The Town Council may designate one of its managers to sign such documents necessary to purchase, transfer, or encumber real or personal property.
OWNERS INTERESTS ARE NOT TRANSFERABLE
Except as provided herein, no manager, the director or owner of the LLC may transfer his interest in the LLC. Any attempted transfer shall be void ab initio. To the extent the law requires the managers and LLC to recognize any involuntary transfer — such as an attachment, seizure, lien, garnishment or court order, etc.– the transferee’s rights shall be limited as provided herein and to the full extent of NRS 86.351.
No transferee of an interest in the LLC shall have the right to participate in the Town Council or management unless all other managers, the director, and owners have consented in writing and the transferee has agreed in writing to be bound by this agreement.
All owners of an interest in the LLC agree that their ownership interest may only be transferred to the LLC which may purchase the interest of an owner. In the event of an involuntary transfer, death of an owner, resignation of a manager, or a manager’s termination by the Town Council for cause, the holder of an interest shall immediately transfer the interest to the LLC pursuant to this operating agreement.
The interest of all owners of the LLC shall be valued at $20,000 plus 10% a year after 2000, or the average book value of the owner’s interest in the LLC measured over a 12 month period, whichever is less. If the pro rata average book value of the LLC is negative, the value of the member’s interest shall be $1.00. In the event of a voluntary or involuntary termination of any manager or the director, the LLC shall promptly purchase the interest from the holder. No other form of transfer, redemption, or cancellation shall be valid.
In the event of the dissolution of the LLC all remaining owners of the LLC agree that debts and obligations of the LLC shall be determined and satisfied prior to any assets being distributed to any manager or owner, further unless unanimously agreed by the managers in writing, any remaining assets shall be utilized to further artistic expression and community formation.
This agreement replaces and supersedes all prior written or oral agreements of the owners on subjects covered by this agreement. This agreement is binding on all successors, heirs of owners of an interest in the LLC. Each party to this agreement agrees to execute such additional documents as may be necessary to carry out the terms of this agreement. This agreement may not be amended except by the unanimous written consent of all the owners of the LLC. This agreement shall be governed by the law of the State of Nevada. Dated 5/19/00.