HomeMy WebLinkAboutZMA201800005 Ownership Documents 2013-06-26 RESOLUTION
AND
AMENDMENT TO SECOND AMENDED AND RESTATED OPERATING AGREEMENT
OF
KIMCO, L.C.
4,
Pursuant to the Second Amended and Restated Operating Agreement(hereinafter,the
"Operating Agreement") of KIMCO, L.C, a Virginia Limited Liability Company, (hereinafter,
the"Company"), and all applicable laws,the Members of the Company hereby adopt the
following resolution as of this3' day of 5 ,2015.
WHEREAS, in compliance with the powers and authority as set forth in Section
8.8 of the Operating Agreement of the Company,the Members,by unanimous agreement, desire
to appoint a co-Manager to serve with the current Manager, E. GRANT COSNER, and further
desire to appoint a co-tax matters partner to serve with the current tax matters partner, E.
GRANT COSNER;
RESOLVED,the Members,by unanimous agreement,hereby appoint
BARBARA H. COSNER, Trustee of the BARBARA H. COSNER REVOCABLE TRUST dated
June 26, 2013, as Co-Manager of the Company to serve with E. GRANT COSNER,Trustee of
the E. GRANT COSNER REVOCABLE TRUST dated June 26,2013, either of which Co-
Manager may act alone on behalf of the Company;
RESOLVED,the Members,by unanimous agreement,hereby appoint
BARBARA H. COSNER,Trustee of the BARBARA H. COSNER REVOCABLE TRUST dated
June 26,2013, as Co-Tax Matters Partner to serve with E. GRANT COSNER, Trustee of the E.
GRANT COSNER REVOCABLE TRUST dated June 26, 2013, either of whom may act as Tax
Matters Partner alone on behalf of the Company;
RESOLVED,that in accordance with the above agreement of the Members,
sections 8.6 and 8.8 of the Operating Agreement are amended to read as follows:
8.6 Tax Matters Partner. E. GRANT COSNER,Trustee of the E. GRANT COSNER
REVOCABLE TRUST dated June 26,2013, and BARBARA H. COSNER,Trustee of the
BARBARA H. COSNER REVOCABLE TRUST dated June 26,2013, either of whom acting
alone, shall be the"tax matters partners"for tax purposes and,as such,will be solely responsible
for representing the Company in all dealings with the Internal Revenue Service and any state,
local, and foreign tax authorities,but the tax matters partners will keep the Members reasonably
• informed of any Company dealings with any tax agency.
8.8 Election and Removal of Managers. The Members hereby elect E. GRANT
COSNER,Trustee of the E. GRANT COSNER REVOCABLE TRUST dated June 26,2013, and
BARBARA H. COSNER,Trustee of the BARBARA H. COSNER REVOCABLE TRUST dated
June 26,2013, as the Company's initial co-Managers, either of whom may act alone on behalf of
the Company. The Members can elect one or more Managers by the affirmative vote of the
Members owning,in the aggregate, a majority of the Membership Interests. The term for any
Manager shall continue until such time as that Manager is removed by the Members as provided
below or upon the death,incapacity, or resignation of the Manager. Any new or replacement
Managers shall be elected by the affirmative vote of the Members owning, in the aggregate, a
Majority of the Membership Interests. Any Manager may be removed by the Members upon the
affirmative vote of the Members owning,in the aggregate, a majority of the Membership
Interests. Any Manager may resign by written notice delivered to the Members or the other
Managers,if any. No substitute Manager shall be required to be elected unless the sole acting
Manager is removed or resigns as Manager_
By,the authorized signatures below, each of the Members of the Company, as well as the
acknowledgment and agreement of the Co-Managers as appointed herein, approve this
Resolution and the Amendment to the Operating A eement.
(Tifid•taVi &-eis-Vi'l
E. GRANT COSNER,Trustee
E. GRANT COSNER REVOCABLE TRUST dated 6-26-
2013,Member and Co-Manager
ARBARA H. COSNER,Trustee
BARBARA H. COSNER REVOCABLE TRUST dated 6-26-
2013,Member and Co-Manager
, I C.
ERLY 0.LILLEY,Membe
KIMBERL OSNER LILLEY, Co-Thus
COSNER FAMILY 2012 IRREVOCABLE TRUST,
Member
‘; e i .1 ...lobe ay— Itasei
GREGOR" J. CI) EY, Co-T I',stee
• COSNER FAMILY 2012 IRREVOCABLE TRUST,
Member
THIRD AMENDED AND RESTATED OPERATING AGREEMENT
of
KIMCO, L.C.
a Virginia limited liability company
THIS THIRD AMENDED AND RESTATED OPERATING AGREEMENT (the
"Agreement") of Kimco, L.C., a Virginia limited liability company (the "Company") is made as
of the2& day of 2018, by and between BARBARAH H. COSNER, co-Trustee of
the E. GRANT OSNER REVOCABLE TRUST AGREEMENT dated June 26, 2013,
BARBARA H. COSNER, Trustee of the BARBARA H. COSNER REVOCABLE TRUST
AGREEMENT dated June 26, 2013, KIMBERLY C. LILLEY, individually, and KIlVIBERLY
COSNER LILLEY and GREGORY J. COOLEY, co-Trustees of THE COSNER FAMILY 2012
IRREVOCABLE TRUST, who by their execution of this Agreement have become and constitute
all of the Members of the Company as of such date.
RECITALS
A. The Members have organized the Company to acquire and own certain real and
personal property and investments and to transact certain business and investment activities.
B. The Members desire to share in the risks, benefits, profits, and losses of the
Company's activities in the manner provided in this Agreement.
C. The Members desire that the then Trustee of the BARBARA H. COSNER
REVOCABLE TRUST and KIMBERLY C. LILLEY, either of whom may act, be the Managers
of the Company.
D. The Members previously entered into an Operating Agreement governing the Company
dated December of 1992, an Amended and Restated Operating Agreement dated September 1,
2012 and a Second Amended and Restated Operating Agreement dated January 1, 2013, and by
their signatures below,now desire and intend to restate in its entirety the Operating Agreement of
the Company.
TERMS
NOW,THEREFORE,in consideration of the foregoing recitals and the mutual promises,
covenants, and conditions herein contained, the receipt and sufficiency of which are hereby
acknowledged,the Members hereby agree as follows:
SECTION 1
DEFINITIONS
The following terms as used in this Agreement shall have the following meanings unless
otherwise expressly provided herein:
1.1 Act The "Act" is the Virginia Limited Liability Company Act, Virginia Code
Section 13.1-1000 et seq., as amended.
Kimco,L.C. 1
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1.2 Agreement The "Agreement" is this Third Amended and Restated Operating
Agreement of KIMCO, L.C., as amended from time to time. The Agreement includes Schedule
A, as amended from time to time as a result of the transfer of Membership Interests and the
admission of new Members.
1.3 Articles. "Articles" means the Articles of Organization of the Company, as
amended.
1.4 Bona Fide Offer. A "Bona Fide Offer" means an offer in writing, signed by the
offeror,who must be a Person or Entity who is financially capable of carrying out the terms of the
offer, in form legally enforceable against the offeror, and binding the offeror to become a party to
and to assume all of the obligations of the transferring Member under this Agreement in the event
the offeror purchases the Offered Interest.
1.5 Capital Account. The"Capital Account"of a Member is the amount of the capital
account as of any date calculated and maintained by the Company for such Member pursuant to
Sections 6 and 7.
1.6 Capital Contribution. The "Capital Contribution" of a Member shall mean any
contribution to the Company Capital by such Member in cash, property or services, or a binding
obligation to contribute cash,property or services,whenever made. "Initial Capital Contribution"
of a Member is the initial contribution of the Company Capital by a Member as set forth in
Schedule A to this Agreement.
1.7 Code. The "Code" is the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding laws.
1.8 Company. The"Company"is KIMCO,L.C., a Virginia limited liability company.
1.9 Company Capital. The "Company Capital" is the total of the Members' Capital
Contributions.
1.10 Entity. An"Entity"is any general partnership,limited partnership,limited liability
company, corporation,trust,joint venture, cooperative, association, or other legal entity.
1.11 Majority of the Membership Interests. A"Majority of the Membership Interests"
means greater than 50% of the membership interests of the Company and, if they are not in
proportion to each other, greater than 50% of the profits interests and greater than 50% of the
aggregate Capital Accounts of the Company.
1.12 Managers. The "Manager(s)"are the persons designated or elected to manage the
business and affairs of the Company and shall be selected as provided herein. The term
"Managers" shall also refer to any sole Manager acting at any time hereunder.
Kimco,L.C. 2
1.13 Member. A "Member" or "Members" shall refer to those Persons identified as
initial Members of the Company or admitted as Members hereunder. A Person shall cease to be a
Member at such time as he or she no longer owns a Membership Interest.
1.14 Membership Interests. The "Membership Interests" are the respective percentage
ownership interests of the Members in the Company, which may, unless the Members otherwise
agree, be expressed as a percentage equal to each Member's Capital Account divided by the
aggregate Capital Accounts of all Members. Each Member's Membership Interest may be
recorded from time to time on Schedule A to this Agreement.
1.15 Net Cash Flow. "Net Cash Flow"is the Company's taxable income computed for
federal income tax purposes, increased by(a) any depreciation or depletion deductions taken into
account in computing taxable income, and (b) any nontaxable income or receipts (other than
Capital Contributions and the proceeds of any Company borrowings), and reduced by (i) any
principal payments on any Company debt, (ii) expenditures to acquire, maintain, replace, or
improve Company assets, and (iii) any reasonable amounts or reserves which the Managers, in
their sole discretion, determine should be retained by the Company as working capital, set aside
or reserved for expenses and future investment and contingencies, having due regard for their
fiduciary duty to act in the best interest of the Members.
1.16 Person. A"Person"includes any natural person or Entity,and the heirs,executors,
administrators, legal representatives, successors, and assigns of any Person where the context so
permits.
1.17 Regulations. The "Regulations" are the U.S. Treasury Regulations, as amended,
or corresponding provisions of subsequent superseding laws.
1.18 Transfer. A "Transfer" of a Membership Interest includes any sale, pledge,
encumbrance, gift, bequest, distribution from any Entity, or other transfer or disposition of, or
permitting to be sold, encumbered, attached, or otherwise disposed of or having ownership
changed in any manner, whether a Voluntary or Involuntary Transfer or by operation of law. An
"Involuntary Transfer" shall mean any lifetime Transfer made on account of a court order or
otherwise by operation of law, including any transfer incident to any divorce or marital property
settlement or any bankruptcy proceeding,assignment for the benefit of creditors,attachment,levy,
the placement of a Member's assets in the hands of a receiver, or the placement of any
encumbrance upon or securing any type of debt or obligation with a Membership Interest. A
"Voluntary Transfer"shall mean any lifetime Transfer other than an Involuntary Transfer.
SECTION 2
NAME
The Company's name is KIMCO, L.C. The Manager may from time to time change the
Company's name by amendment to the Articles.
Kimco,L.C. 3
SECTION 3
PLACE OF BUSINESS AND REGISTERED AGENT
3.1 Place of Business. The Company's principal place of business is 1538 East High
Street, Charlottesville, Virginia 22901. The Managers may from time to time change the
Company's principal place of business to another location and add additional places of business.
3.2 Registered Agent. The Company's registered agent is E. GRANT COSNER,
whose address is 1538 East High Street, Charlottesville,Virginia 22901.
SECTION 4
BUSINESS
The Company's business and investment purposes are to acquire business interests and
assets, real estate, securities, stocks, partnership interests, membership interests, certificates of
deposit, mutual funds, commodities, investments, and other real, personal, tangible or intangible
assets of any kind to be owned,held, operated,developed,maintained,managed,leased,financed,
refmanced, reinvested, sold, exchanged, traded and disposed of in a manner which is, in the sole
determination of the Managers, consistent with the best interests of the Members. The Company
may invest in,and own interests in other Entities,including without limitation Entities which own,
lease,manage, and sell,real property,as well as Entities in which a Manager or a Member may be
an owner, shareholder, member, general partner, limited partner, trustee, or beneficiary, and the
conduct of any other business or investment activity which the Managers determine to be in the
Company's and the Members'best interests and which will be legal for a limited liability company
to conduct in the Commonwealth of Virginia.
SECTION 5
TERM
The Company's term shall begin on the date its Certificate of Organisation was issued by
the State Corporation Commission of Virginia, and shall continue in perpetuity, unless sooner
terminated as a result of the Company's dissolution and termination under Section 15 hereof.
SECTION 6
CAPITAL AND MEMBERSHIP INTERESTS
6.1 Membership Interest Percentages. Each Member owns a Membership Interest,
which may be set forth in Schedule A to this Agreement from time to time and may, unless the
Members otherwise agree, be expressed as a percentage equal to such Member's Capital Account
divided by the aggregate Capital Accounts of all Members.
6.2 Initial Capital Contribution. The amount of each Member's initial Capital
Contribution is set forth on Schedule A to this Agreement.
6.3 Additional Capital Contributions. No Member will be required to make any
additional Capital Contributions without his or her consent. However,the Managers may request
Kimco,L.C. 4
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additional Capital Contributions from all Members in proportion to their Capital Accounts, if the
Managers determine that the Company's capital is insufficient to meet the reasonable needs of its
business. If any Member refuses or fails to make such a required contribution of additional capital,
the Managers and any other Members may lend any necessary additional sums to the Company,
or the Managers may cause the Company to borrow such additional sums from whatever sources
they deem appropriate, and may pledge the Company assets to secure such loans. Any such loans
to the Company shall bear a reasonable rate of interest, as determined by the Managers, but
otherwise no Member shall receive any interest on his or her Membership Interest. This provision
is not for the benefit of any creditors of the Company or any Member and no such creditors may
obtain any right under this provision to make any claim with respect to the capital of or to
contributions by any Member.
6.4 Adjustments. Each Member's Capital Account will be adjusted whenever
necessary to reflect(1)his or her distributive share of the Company's profits and losses,including
capital gains and losses, (2) his or her additional contributions to the Company, (3) distributions
made by the Company to the Member, and (4) all adjustments required by Section 1.704-
1(b)(2)(iv)of the Regulations, as amended, and Section 7.2 of this Agreement.A Member's loans
to the Company will not be added to his or her Capital Account. Each Member's Capital Account
shall also include a pro rata share of the fair market value of any property contributed by a person
who is not a Member, such value to be the same value reported for federal gift tax purposes if a
gift tax return is filed, and if not, the value in the case of real property shall be determined by an
independent M.A.I. appraiser actively engaged in appraisals of property in the geographic area
where such property is located and selected by the Managers, and otherwise pursuant to Section
12.4.2 of this Agreement.
6.5 No Interest Paid. No Member will receive any interest on his or her Capital
Contributions, Capital Account, or Membership Interest.
6.6 Withdrawal of Capital No Member may demand the return of his or her Capital
Contribution or Capital Account.
6.7 Gratuitous Additions. Immediately following any gratuitous contribution to the
capital of the Company which contribution results in the increase in the amount of the Capital Account
of a Member other than the contributing Member, each donee-Member shall have the right to
withdraw an amount equal to the increase in his or her Capital Account.
6.7.1 Each donee-Member can exercise this demand power by a written request
delivered to a Manager. If any donee-Member is unable to exercise this demand power because of a
legal disability, including minority, his or her legally authorized personal representative, including
(but not limited to)a guardian,committee,or conservator,may make the demand on the beneficiary's
behalf, and, if there be no such legally authorized personal representative, the Managers shall
designate an appropriate adult individual (who may be a Manager, such donee-Member's parent, or
any other person)who may make the demand on such donee-Member's behalf. However,in no event
can the donor of a particular contribution make the demand for any donee-Member,regardless of their
relationship.
Kimco,L.C. 5
6.7.2 The Managers must reasonably notify the person who would exercise a donee-
Member's demand power of its existence and that of any contributions made to the capital of the
Company that are subject to the power.
6.7.3 The maximum amount that any donee-Member may withdraw with respect to
all contributions made by the same donor during a single calendar year shall be the lesser of the total
amount of such contributions and the amount of the federal gift tax annual exclusion in effect on the
date of the earliest of such contributions. If a donor is married on the date of a contribution, the
alternative limitation based on the gift tax annual exclusion shall be two (2)times the amount of the
gift tax annual exclusion. The demand powers created under this section are all noncumulative and
lapse on sixty(60)calendar days following the date of the contribution to which such powers relate.
6.7.4 A donee-Member's withdrawal under this Section 6.7 shall be treated as a
partial redemption of his or her capital, and the Member's Membership Interest shall be reduced
accordingly.
6.8 Transfers. If any Membership Interest in the Company is transferred(whether by
gift,sale,or otherwise)in accordance with the terms of this Agreement,the transferee shall succeed
to the Capital Account of the transferor to the extent it relates to the transferred Membership
Interest.
6.9 Accounting for Contributions and Distributions. The amount of a Member's
contributions of property to the Company and of the Company's distributions of property to a
Member shall be reflected in the Member's Capital Account at the fair market value of the property
on the date of the contribution or distribution,reduced by any liabilities secured by that property,
if those liabilities are treated under applicable federal income tax laws as being assumed by or
taken subject to by the transferee.
6.10 Insurance Policies. Notwithstanding any provision of this Agreement to the
contrary, including without limitation Section 8.2, if the Company shall own any life insurance
policy insuring the life of any Member or possess any incident of ownership with respect to any
such policy, the insured Member shall have no right or power to exercise or to participate in the
exercise of any of the incidents of ownership with respect to such policy,including,but not limited
to, the right to borrow from the insurance company or any other person using such policy as
collateral,to change or to prevent any change in the beneficiary designation under such policy,to
surrender the policy or any portion thereof for its cash surrender value,to cancel or terminate any
such policy,and to terminate or amend any split-dollar agreement,or any other agreement,relating
to such policy. Any exercise of any incident of ownership in any such policy shall be exercised
only by a majority of the Members other than the insured Member. Any decision of the Company
to acquire or dispose of a life insurance policy insuring the life of any Member shall be made by a
majority of the Members other than the insured Member and without any participation by the
insured Member.
6.11 Compliance with Regulations. This Section 6 and the other provisions of this
Agreement relating to Capital Accounts are intended to comply with the requirements of Section
1.704-1(b)of the Regulations and shall be interpreted and applied in a manner consistent therewith.
If the Managers determine that it is prudent to modify the manner in which Capital Accounts are
Kimco,L.C. 6
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computed or maintained to comply with such Regulations, the Managers may make such
modifications; provided, that the Managers determine such modifications are not likely to have a
material effect on the amounts distributable to any Member.
SECTION 7
PROFITS,LOSSES,AND NET CASH FLOW
7.1 Profits and Losses. The Company's net profits and losses will be computed in
accordance with generally accepted accounting principles, consistently applied.
7.1.1 Subject to Section 7.2,the Company's net profits,and every item of income
and gain therein, will be allocated as follows: first,an amount of such net profits or items equal to
the cumulative distributions of Net Cash Flow to the Members during the current year will be
allocated to the Members in proportion to the amount of such distributions received by each;
second, an amount of such net profits or items equal to the cumulative net losses, and every item
of loss, deduction, and credit, allocated to the Members for the current and all prior years,will be
allocated to the Members in proportion to the amount of such net losses and items allocated to
each; and the balance, if any, of such net profits or items will be allocated proportionately among
the Members according to their Membership Interests.
7.1.2 Subject to Section 7.2, the Company's net losses, and every item of
deduction, loss, and credit therein,will be allocated as follows: first, an amount of such net losses
or items equal to the cumulative net profits, and every item of income and gain allocated to the
Members for the current and all prior years,will be allocated to the Members in proportion to the
amount of such net profits and items allocated to each; and the balance, if any, of such net losses
or items will be allocated proportionately among the Members according to their Membership
Interests.
7.1.3 No Member has priority over any other Member as to Company profits.
Notwithstanding any other provision of this Section 7, income, gain, loss, and deductions with
respect to property contributed to the Company by a Member will be shared among the Members
so as to take account of any variation between the basis of the property so contributed and its fair
market value at the time of contribution, in accordance with any applicable Regulations.
7.1.4 If the Managers determine that the allocations under this Section 7 shall not
satisfy the requirements of Section 704(b) of the Code or the Regulations thereunder,
notwithstanding anything to the contrary contained in this Agreement,the Managers shall have the
right, alone and without the consent of the Members, to (a) amend this Agreement in any respect
if such amendment would cause such allocations to satisfy such requirements, and/or(b) allocate
net profits and losses and all items thereof in such manner as to satisfy any such requirements.
7.2 Regulatory Allocations.
7.2.1 If a net decrease occurs in Partnership minimum gain (as such term is
defined in Section 1.704-2(d))of the Regulations during any Company fiscal year or other period,
each Member shall be allocated items of income and gain for such fiscal year or other period to
the extent, in the manner, and at the time required under Section 1.704-2(f) of the Regulations.
Kimco,L.C. 7
This Section is intended to comply with the minimum gain chargeback requirements under Section
1.704-2(f) and shall be interpreted consistently with such intent.
7.2.2 Any item of Company loss, deduction, or nondeductible expenditure under
Section 705(a)(2)(B) of the Code ("Nondeductible Expenditure") that is attributable to a partner
nonrecourse debt pursuant to Section 1.704-2(i)(2) of the Regulations shall be allocated to the
Member or Members who bear the economic risk of loss for such debt in the time and manner
described in Section 1.704-2(i) of the Regulations. If a net decrease occurs in Partnership
minimum gain attributable to a partner nonrecourse debt pursuant to Section 1.704-2(i)(4) of the
Regulations, then any Member with a share in such minimum gain shall be allocated items of
Company income and gain for such fiscal year or other period or, if necessary, for subsequent
fiscal years or periods to the extent required under Section 1.704-2(i) of the Regulations. This
Section is intended to comply with requirements regarding partner nonrecourse debt in Section
1.704-2(i) of the Regulations and shall be interpreted consistently with such intent.
7.2.3 If any Member unexpectedly receives any adjustments, allocations, or
distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5), or(6)of the Regulations, then the
Company shall specially allocate to such Member items of Company income and gain in an amount
and manner sufficient to eliminate, to the extent required by such Regulations, such Limited
Member's deficit in his Modified Capital Account as quickly as possible. For purposes of this
Agreement, Modified Capital Account shall mean the capital account of a Member (a) increased
for the amount a Member is deemed obligated to restore under the penultimate sentences in
Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (b) of the Regulations adjusted for the adjustments
required under Sections 1.704-2(b)(2)(ii)(d)(4), (5) and (6) of the Regulations. This Section is
intended to constitute a "qualified income offset" within the meaning of Section 1.704-
1(b)(2)(ii)(d)(3) of the Regulations and shall be interpreted consistent with such intent.
7.2.4 If the Company makes an election under Section 754 of the Code, to the
extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b)of
the Code is required pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations to be taken into
account in determining capital accounts, the amount of such adjustment to the capital accounts
shall be treated as an item of gain (if the adjustment increases basis) or loss (if the adjustment
decreases basis). Such gain or loss shall be allocated specially to the Members in a manner
consistent with the manner in which capital accounts are required to be adjusted pursuant to such
Section of the Regulations.
7.2.5 The allocations set forth in this Section 7.2 (the "Regulatory Allocations")
are intended to comply with certain requirements of the Regulations including Sections 1.704-1(b)
and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which the
Members intend to divide Company distributions. Accordingly, the Managers are authorized to
cause the Company to allocate future profits,losses, and other items among the Members so as to
prevent the Regulatory Allocations from distorting the manner in which Company distributions
will be divided among the Members pursuant to this Agreement to the extent permitted under the
Regulations.
7.3 Assignment or Death. In the event of an assignment of a Membership Interest or
of a Member's death or expulsion,profits and losses will be allocated based on the number of days
Kimco,L.C. 8
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in the particular year during which each Member owned his or her Membership Interest,or on any
other reasonable basis consistent with applicable federal tax laws and regulations.
7.4 Distributions of Net Cash Flow. The Company shall distribute its Net Cash Flow
to the Members at least annually. All distributions of Company Net Cash Flow will be distributed
to the Members in proportion to their Membership Interests.
SECTION 8
MANAGEMENT AND OPERATIONS
8.1 Management. The responsibility for managing the day-to-day business and affairs
of the Company shall be vested in the Manager(s).
8.2 Authority of Managers. In managing the Company, each Manager, acting alone
(even if more than one) shall have the full and exclusive power on the Company's behalf; and in
its name,to manage,control,administer,and operate its business and affairs,and to do or cause to
be done, anything he or she deems or they deem necessary or appropriate for the Company's
business,including without limitation the powers enumerated in Section 13.1-1009 of the Code of
Virginia, and in addition thereto and without limitation,the power and authority to (a) sell real or
personal property to any person,giving any warranties or assurances deemed appropriate, (b)buy,
lease, or otherwise acquire real or personal property to carry on and conduct the Company's
business,(c)borrow money for the Company's business,(d)issue promissory notes and other debt
instruments (negotiable or non-negotiable), in any amounts and secured by any encumbrance on
all or any part of the Company's assets, (e) assign any debts owing to the Company, (f)engage in
any other means of financing, (g)enter into any agreement for sharing of profits and joint ventures
with any person or entity engaging in any business or venture in which the Company may engage,
(h) manage, administer, conserve, improve, develop, operate, lease, utilize, and defend the
Company's assets,directly or through third parties,(i)execute any type of agreement or instrument
in connection with any other Company power, (j) employ all types of agents and employees
(including lawyers and accountants) as may seem proper, (k) buy or otherwise obtain the use of
any type of equipment or other property that may be convenient or advisable in connection with
any Company business, (1) incur any reasonable expense for travel, telephone, telegraph,
insurance, taxes, and such other things, in carrying on the Company's business, (m) sue and be
sued, complain and defend in the Company's name and on its behalf; (n) quitclaim, release, or
abandon any Company assets with or without consideration,and(o)invest any Company assets in
any accounts,funds, securities, or investment vehicles.
8.3 Member Votes. All decisions or actions requiring,pursuant to the Act,the Articles,
or this Agreement, a vote of the Members, or which the Managers feel, in their sole discretion,
should be made or approved by the Members, will be made by an affirmative vote of a Majority
of the Membership Interests. Such vote shall be evidenced by a writing signed by the Members
casting their affirmative vote on any matter.
8.4 Compensation. For his or her management services provided in the conduct of the
Company's business, each Manager may be paid by the Company such reasonable compensation
as approved from time to time by the vote of a Majority of the Membership Interests.
Kimco,L.C. 9
8.5 Expenses. All reasonable expenses incurred by any Manager in managing and
conducting the Company's business, including but not limited to, overhead, administrative, and
travel expenses, and such professional, technical, administrative, and other services, will be
reimbursed to such Manager by the Company on a monthly basis.
8.6 Tax Matters Partner. BARBARA H. COSNER, Trustee of the Barbara H. Cosner
Revocable Trust or upon her death, incapacity, or resignation as such, KIMBERLY C. LILLEY,
shall be the "tax matters partner" for tax purposes and, as such, will be solely responsible for
representing the Company in all dealings with the Internal Revenue Service and any state, local,
and foreign tax authorities,but the tax matters partners will keep the Members reasonably informed
of any Company dealings with any tax agency.
8.7 Limitation of Liability of Managers and Members. To the full extent that the
Virginia Limited Liability Company Act,as it exists on the date hereof or may hereafter be amended,
permits the limitation(which limitation shall be(i)$1.00 or the minimum amount allowed to be stated
by such Act if a specific dollar amount is required to be stated or(ii)the full extent of the limitation
set forth in such Act if no specific dollar amount is required to be stated)or elimination of the liability
of Managers or Members,a Manager or Member of the Company shall not be liable to the Company
or its Members for monetary damages. Any amendment to or repeal of this Section 8.7 shall not
adversely affect any right or protection of a Manager or Member of the Company for or with respect
to any acts or omissions of such Manager or Member occurring prior to such amendment or repeal.
8.8 Election and Removal of Managers. By their execution of this Agreement, the
Members hereby elect BARBARA H. COSNER, Trustee of the Barbara H. Cosner Revocable
Trust, and KIlVIBERLY C. LILLEY as the Company's initial Managers. In the event of the
incapacity or death of the named Trustee (currently Barbara H. Cosner) of the Barbara H. Cosner
Revocable Trust,the successor Trustee(s)appointed pursuant to the terms of the Barbara H.Cosner
Revocable Trust shall have the right to serve as a Manager of the Company. Further,the Members
can elect one or more Managers by the affirmative vote of the Members owning,in the aggregate,
a majority of the Membership Interests. The term for any Manager shall continue until such time
as that Manager is removed by the Members as provided below or upon the death, incapacity, or
resignation of the Manager. Any new or replacement Managers shall be elected by the affirmative
vote of the Members owning, in the aggregate, a Majority of the Membership Interests. Any
Manager may be removed by the Members upon the affirmative vote of the Members owning, in
the aggregate,a majority of the Membership Interests. Any Manager may resign by written notice
delivered to the Members or the other Managers, if any. No substitute Manager shall be required
to be elected unless the sole acting Manager is removed or resigns as Manager.
8.9 Designation and Election of Officers; Terms. The Managers may, but shall be
under no obligation to, from time to time delegate to one or more Managers such authority and
duties as the Managers deem advisable. The Managers may assign titles (including, without
limitation President, Vice President, Secretary, and Treasurer) to any Manager. Unless the
Managers determine otherwise,if a title assigned to a Manager is one commonly used for officers
of a business corporation formed under Virginia law,the assignment of such title shall constitute
the delegation to such Manager of the authorities and duties that are customarily associated with
that office, subject to any specific delegation of authorities and duties made pursuant to the first
sentence of this Section. Any number of titles (except President and Vice President)may be held
Kimco,L.C. 10
by the same Manager. Any delegation of authority and duties to a Manager or Manager pursuant
to this Section may be revoked at any time by the Managers with or without cause.
8.10 Authority of Members. The Members shall not be entitled to participate in the day-
to-day affairs and management of the Company, but instead, the Member's right to vote or
otherwise participate with respect to matters relating to the Company shall be limited to those
matters as to which the express terms of the Act, the Articles, or this Agreement vest in the
Members. No regular or special meetings of the Members shall be required, provided that the
Managers may,or upon the request of any two Members shall,call a meeting of the Members upon
at least 10 days' prior written notice to each Member. Any such meeting shall be held at a place
and time specified by the Mangers in such notice,provided that Members may participate from a
different location by conference telephone or similar communication equipment.
8.11 Voting of Stock Held by Company. Unless otherwise provided in a unanimous
written consent executed by all of the Members after the date of this Agreement, any shares of
capital stock of a corporation transferred by a Member to the Company which,pursuant to Section
203 6(b) of the Code, constitute voting stock in a controlled corporation and would, absent this
Section 8.11, be included in the transferring Member's federal gross estate under such Section,
shall be voted,in the name and on behalf of the Company,and whether such vote is cast in person
or by proxy at a meeting of the corporation's shareholders, by executing a written consent of
shareholders in lieu of such a meeting,or otherwise,by any Manager(who in connection therewith
may execute and deliver such written proxies, consents, waivers or other instruments as may be
necessary or proper in the premises), but provided that the Members of the Company shall, prior
to such vote, have been given the opportunity to obtain information about, consider and discuss
the matter or matters being voting upon,and shall vote(at a meeting of the Members on by written
consent of the Members) on the issue of how the Company's vote should be cast on the matter or
matters,with each Member have a vote in proportion to his, her or its Membership Interest in the
Company. The Manager voting the shares on behalf of the Company shall vote them in the manner
determined by a Majority in Interest of the Members.
SECTION 9
BOOKS AND RECORDS
9.1 General. The Company's books and records will be kept on the method of
accounting recommended by the Company's certified public accountant and in accordance with
generally accepted accounting principles consistently applied, and will reflect all Company
transactions and be appropriate and adequate for all Company business. The Company books will
be kept on a fiscal year ending December 31. The Company's records and information as
described in Section 13.1-1028 of the Code of Virginia will be maintained at its principal place of
business.
9.2 Financial Statements. Within a reasonable period after the close of each fiscal
year, the Managers, at the Company's expense, will give a written report to each other Member
indicating such Member's share of the Company income, which requirement may be satisfied by
giving each Member a copy of any tax form which includes such information.
Kimco,L.C. 11
i
SECTION 10
BANKING
All Company funds will be deposited in its name in such accounts as the Managers may
designate. The Managers can authorize other persons to draw checks on the Company bank
accounts,but such authority must be in writing and one or more of the Members may require that
such persons be bonded. Each bank in which a Company account is maintained is relieved of any
responsibility to inquire into any Manager's authority to deal with such funds, and absolved of all
liability with respect to withdrawals from such Company accounts by any person duly authorized
by the Managers.
SECTION 11
PARTNERSHIP TAX TREATMENT AND TAX ELECTIONS
The Members intend that the Company be treated as a partnership for all relevant federal,
state, and local income tax purposes. No election will be made to exclude the Company from the
application of the provisions of Subchapter K of the Code or from any similar provisions of state
tax laws. If a Membership Interest is transferred,a Member dies,or Company assets are distributed
to a Member, the Managers in their sole discretion may cause the Company to elect to cause the
basis of the Company's assets to be adjusted for federal income tax purposes, under Sections 734
and 743 of the Code.
SECTION 12
TRANSFER OF MEMBERSHIP INTERESTS
12.1 Restriction on Transfer/Application. Because a primary objective of the Company
is to keep and maintain the Company's assets and property within the Members'immediate family,
the Members do not want Membership Interests to be made generally available to persons other
than the present Members or their descendants. However, the Members acknowledge that each
Member,as the owner of a Membership Interest in the Company,should have the ability to realize
the fair market value of his or her Membership Interest. Therefore,subject to Section 12.2 hereof,
each Member hereby covenants and agrees that he or she shall not sell, assign, dispose of or
otherwise Transfer(voluntarily or involuntarily),pledge, encumber,make a gift of or bequeath all
or any part of his or her Membership Interest except as permitted under this Section 12 or except
with the prior unanimous written consent of all Members. Each Member agrees that this Section
12 shall apply to any additional Membership Interests acquired by such Member after the date of
this Agreement. Any Transfer or attempted Transfer of all or any portion of a Membership Interest
in violation of or without full compliance with this Section 12 shall be absolutely void ab initio
and without legal effect. Each Member hereby acknowledges the reasonableness of the restrictions
on Transfer imposed by this Agreement in view of the Company's purposes and the relationship
of the Members. Accordingly, the restrictions on Transfer contained herein shall be specifically
enforceable.
12.2 Permitted Transfers. Consistent with the objectives stated in Section 12.1 above,
the provisions of this Section 12 shall not apply to nor restrict any sale, disposition, gift, bequest,
distribution, or other Voluntary Transfer by a Member (or his or her attorney-in-fact, estate or
personal representative) of all or any portion of his or her Membership Interest to any other
Kimco,L.C. 12
Member, or any child or grandchild of a Member, or any trust, custodianship or Entity of which
all or any of such persons are the sole beneficiaries or owners, provided that any such permitted
transferees of their Membership Interests shall agree in writing to assume all of the obligations and
undertakings of the transferor under the terms of this Agreement.
12.3 Right of First Refusal
12.3.1 Subject to Section 12.2 above, no Member may make any Voluntary
Transfer other than pursuant to a Bona Fide Offer. Any Member who (a) wishes to make a
Voluntary Transfer of all or any of his or her Membership Interest pursuant to a Bona Fide Offer,
or(b)has any information which would reasonably lead him to expect that an Involuntary Transfer
could occur or is reasonably foreseeable, shall first give each other Member written notice of his
intent to Transfer such offered Interest or of his knowledge that an Involuntary Transfer could
occur or is reasonably foreseeable. Such notice must contain a description of the portion of his or
her total Membership Interest that would be so Transferred, the consideration that would be paid
(if any), and the terms of Transfer and of any payment of consideration (including, without
limitation, the relative percentages of cash and debt, and the duration, interest rate, and payment
schedule of any debt instruments), and the name, address (both home and office, if any), and
business or occupation of the person to whom such Membership Interest would be Transferred,
and any other facts which are or would be deemed material to the proposed Transfer. Such notice
shall also be accompanied by a copy of the Bona Fide Offer, if applicable. In the case of a
foreseeable Involuntary Transfer, such notice must also describe the circumstances of such
Involuntary Transfer.
12.3.2 Upon the receipt of such notice, each other Member shall have a right to
buy a proportionate share of the offered Membership Interest. Each Member may buy a share of
such Membership Interest bearing the same proportion to the whole of such Membership Interest
as his or her own Membership Interest bears to those of all Members (except the transferring
Member). Each Member may exercise this right of first refusal by giving the transferring Member
written notice within 30 calendar days after his or her receipt of the offer notice described in
Section 12.3.1 above. If some, but fewer than all, of the Members other than the transferring
Member exercise their right of first refusal hereunder, the transferring Member shall give the
exercising Members written notice identifying the non-exercising Members and the portion of the
offered Membership Interest to which they would otherwise have been entitled. Those Members
exercising their rights of first refusal shall be entitled to buy the share or shares of the non-
exercising Member or Members in proportion to their respective Membership Interests by giving
the transferring Member written notice within 30 calendar days after receipt of the notice described
in the preceding sentence.
12.3.3 If the Members do not agree to buy all of the offered Membership Interest,
the transferring Member may complete the intended Transfer as to that portion of the offered
Membership Interest with respect to which the Members do not exercise their rights of first refusal
hereunder,provided that the entire consideration for the Transfer is cash and/or debt instruments
of the transferee and was described as such in the notice under Section 12.3.1. If such Transfer is
not completed within 30 calendar days after the expiration of the last exercise period described in
Section 12.3.2 above, any attempted Transfer will be deemed pursuant to a new offer and this
Section 12 shall again apply.
Kimco,L.C. 13
12.3.4 If the proposed Transfer for which notice is given under Section 12.3.1 is a
Voluntary or Involuntary Transfer for value, and if the proposed transferee proposes to make
payment in cash and/or debt instruments of the transferee, then each Member who elects to buy
part of the offered Membership Interest under this Section 12.3 shall have the individual option to
do so either (a) at the same purchase price and terms, proportionately and respectively, as were
contained in the Bona Fide Offer to the transferring Member, or(b) at the price and on the terms
contained in Section 12.4 below.
12.3.5 If the proposed Transfer is not described in Section 12.3.4, then each
Member who elects to buy all or any part of the offered Membership Interest shall do so at the
price and on the terms contained in Section 12.4 below.
12.3.6 Subject to Section 12.2,upon the death of a Member, such Member's estate
or personal representative shall be required to promptly give each other Member(or,in any event,
shall automatically be deemed to have given and, in such case and for the purposes of Section
12.3.2,the surviving Members shall be deemed to have received the transferring Member's notice
on the 30th day following the date of death)the written notices described in Section 12.3.1 above,
in which case the provisions of Sections 12.3.1 and 12.3.2 shall apply, and each Member who
elects to buy all or any part of the offered Membership Interest shall do so at the price and on the
terms contained in Section 12.4 below. If the other Members do not elect to buy in the aggregate
all of the offered Membership Interest, the deceased Member's Membership Interest shall be
transferred pursuant to the terms of his or her Last Will and Testament, any trust established by
the deceased Member, or the applicable laws of intestate succession. Notwithstanding such
transfer, the provisions of this Agreement shall continue to apply to such Membership Interest,
and the transferees shall execute a written instrument in legal form acceptable to counsel to the
Company agreeing to become bound by the terms and conditions of this Agreement.
12.4 Settlement and Purchase Price.
12.4.1 Closing. The purchase of a Membership Interest pursuant to Section 12.3
will take place at a closing to be held no later than 30 days after the earlier of(a)the date on which
all Members' rights of first refusal have expired, or(b)the earliest date on which the Members in
the aggregate exercise rights of first refusal to buy all of the offered Membership Interest;provided,
however, if the Transfer is described in Section 12.3.5 or 12.3.6 above, that the closing may be
delayed until the accountant shall have finally determined the purchase price of the Membership
Interest as provided in Section 12.4.2 below. The closing will be held during normal business
hours at the offices of the Membership's legal counsel or at any other place to which the parties
agree.
12.4.2 Price Determination. As soon as practicable upon the Managers' receipt of
the notice described in Section 12.3.1 above, the Managers shall select and retain a competent
appraiser or valuation professional qualified to value the Company's business and assets to assist
the Company's regularly employed independent certified public accountant in valuing the
Membership Interest proposed to be Transferred, and to thereby determine the purchase price
hereunder (which purchase price will be substantiated in a written appraisal or report by the
accountant). Alternately, the accountant may proceed alone with valuing the Company on any
Kimco,L.C. 14
reasonable basis if his or her firm has sufficient experience in performing valuations. It is the
purpose of this Section 12.4.2 that the purchase price shall be the fair market value of the
Membership Interest determined consistently with the rules applicable for federal estate and gift
tax purposes. Accordingly, the accountant shall use the same methods as would be used for
determining the estate tax value of the Membership Interest if the transferring Member had died
on the date the deemed offer was made, ignoring any alternate valuation date(under Section 2032
of the Code) or special use valuation (under Section 2032A of the Code). The accountant, with
the assistance of the appraiser if required,shall determine the fair market value of the Membership
Interest, and its determination shall fix the price of such Membership Interest for all relevant
purposes under this Agreement and shall be final and binding upon all of the parties. The Company
shall pay the fees and other charges of the appraiser and accountant.
12.4.3 Payment Terms. The purchase price as determined under Section 12.4.2
above shall be paid by each purchasing Member, proportionately, (a) 10% in cash at closing, and
(b)the balance by an unsecured promissory note, bearing interest on the unpaid principal balance
at an annual rate equal to the annual prime rate prevailing at the primary depository bank of the
Company as of the date of closing, providing for equal quarterly combined installments of
principal and interest and amortization over a term of 15 years,and prepayment at any time without
penalty or premium.
12.5 Right of Transferee to Become Member. Notwithstanding a proper Transfer of a
Membership Interest pursuant to Section 12.2 above,no person to whom a Membership Interest is
Transferred or assigned shall become or be admitted or substituted as a new Member until(a)such
admission has been consented to by Members together owning a Majority of the Membership
Interests (other than the Membership Interest being Transferred), and (b) such person has agreed
in a writing delivered to the Managers to assume all of the obligations and undertakings of the
transferor under, and to be fully bound by the terms of,this Agreement.
SECTION 13
AMENDMENTS
This Agreement may be amended only with the unanimous consent of the Members if the
amendment would change their required contributions,their rights and interest in Company profits
or losses, their rights on liquidation of the Company, the payment of cash flow, income tax
allocations,or the requisite vote needed to expel a Member. Any other provision of this Agreement
may be amended by the affirmative vote of the Members holding a Majority of the Membership
Interests, except that any amendments needed to correct errors in this Agreement or to cause this
Agreement to comply with current or future provisions of federal tax laws and regulations may be
made by the unilateral act of the Managers. Each Member agrees to execute any written instrument
reflecting any such amendments made by the Managers upon the request of the Managers.
SECTION 14
EXPULSION AND RESIGNATION OF MEMBERS
14.1 Expulsion. Any Member may be expelled from the Company upon the unanimous
written consent of all other Members who, as a group, at more than a'Majority of the Membership
Interests, and the Managers. Upon the expulsion of any Member,the Company will be required to
Kimco,L.C. 15
pay to such Member an amount equal to the fair market value of such expelled Member's Interest.
The fair market value of such expelled Member's Membership Interest shall be determined and paid
in the manner described in Section 12.4.2 hereof.
14.2 Resignation. Any Member may elect to resign from the Company and to sell his or
her entire Membership Interest in the Company to the Company at any time by serving written notice
of such election upon the Company. Such notice shall set forth the date upon which such resignation
shall become effective, which shall not be less than 30 nor more than 60 days from the date of the
notice. The purchase price payable by the Company for a resigning Member's entire Membership
Interest shall be One Dollar($1.00).
SECTION 15
DISSOLUTION
15.1 Causes for Dissolution. The Company will be dissolved and its affairs shall be
wound up upon:
(a) the unanimous written consent of the Members;
(b) the entry of a decree of judicial dissolution under Section 13.1-1047 of the
Code of Virginia; or
(c) any event that under the Act or the Articles requires dissolution of the
Company,provided that the death,resignation,expulsion,bankruptcy,or dissolution of a Member
or occurrence of any other event that terminates the continued membership of a Member shall not
cause dissolution of the Company.
15.2 Upon Dissolution. Upon its dissolution, the Company will terminate and
immediately commence and wind up its affairs. The Members will continue to share in profits and
losses during liquidation in the same manner and proportions as they did before dissolution. The
Company's assets may be sold, if a price deemed reasonable by Members together owning a
Majority of the Membership Interests can be obtained. The proceeds from liquidation of Company
assets will be applied as follows:
15.2.1 First, all of the Company's debts and liabilities will be paid and discharged
in the order of priority as provided by law; and
15.2.2 Second, all remaining assets will be distributed proportionately among the
Members, first,in proportion to their positive Capital Account balances and, second, in the ratios
of their respective Membership Interests.
15.3 Gain or Loss. Any gain or loss on the disposition of Company properties in the
process of liquidation will be credited or charged to the Members in proportion to their
Membership Interests;provided,however,that gain or loss with respect to property contributed to
the Company by a Member will be shared among the Members so as to take account of any
variation between the basis of the property so contributed and its fair market value at the time of
contribution, in accordance with any applicable U.S. Treasury Regulations. Any property
Kimco,L.C. 16
distributed in kind in the liquidation will be valued and treated as though it were sold and the cash
proceeds distributed. The difference between the value of property distributed in kind and its book
value will be treated as a gain or loss on the sale of property,and will be credited or charged to the
Members accordingly.
15.4 Company Assets Sole Source. The Members will look solely to the Company's
assets for the payment of any debts or liabilities owed by the Company to the Members and for the
return of their Capital Contributions and liquidation amounts. If the Company property remaining
after the payment or discharge of all of its debts and liabilities to persons other than Members is
insufficient to return the Members' Capital Contributions, they will have no recourse therefor
against the Company or any other Members, except to the extent that such other Members may
have outstanding debts or obligations owing to the Company.
15.5 Winding Up. The winding up of Company affairs and the liquidation and
distribution of its assets will be conducted by the Managers,who are hereby authorized to do any
and all acts and things authorized by law in order to effect such liquidation and distribution of the
Company's assets.
SECTION 16
POWER OF ATTORNEY
16.1 General' To facilitate the convenient and efficient operation of the Company's
business, each Member names each Manager while they are serving and each successor Manager
while he or she is serving as his or her attorney-in-fact, and gives each Manager full power and
authority, in place of such Member and acting alone or together with any other Manager, to file
and record (a) any amendment to the Articles of Organization, (b) any documents of any kind
required by any state in which the Company is doing business, (c) any other documents deemed
advisable by the Manager, (d)any documents required to continue the Company,admit additional
or substituted Members or Manager (and upon any change in the ownership of Membership
Interests hereunder by virtue of Transfers permitted under this Agreement, each Manager shall be
authorized to execute a revised Schedule A to be attached to this Agreement and to discard the
Schedule A being replaced thereby), dissolve or terminate the Company or any interest in it
(provided that any such dissolution or termination shall have been consented to by all Members in
accordance with Section 15.1(a)), (e) any documents required to obtain or settle any loan, and(f)
any documents that may be required to Transfer any Company assets.
16.2 Power With an Interest. The power of attorney granted under the preceding
subsection (a) is a power coupled with an Interest, (b) is irrevocable and survives the Member's
incompetency and shall not terminate upon the disability of the Member, (c)may be exercised by
any Manager by a facsimile signature or by listing all of the Members executing the instrument
with a signature of such Manager as the attorney-in-fact for all of them,(d)survives the assignment
of any Member's Membership Interest, and(e) empowers each Manager to act to the same extent
for such successor Member.
Kimco,L.C. 17
SECTION 17
MISCELLANEOUS
17.1 Notices. Any notice or payment required or permitted under this Agreement will
be given and served either by personal delivery to the party to whom it is directed,or by registered
or certified mail,postage and charges prepaid, and if it is sent to a Member, addressed with his or
her address as it appears on Schedule A hereto. Any notice is deemed given on the date on which
it is personally delivered, or,if mailed,the date it is deposited in a regularly maintained receptacle
for the deposit of United States mail, addressed and sent as required in this Section. Any Member
may change his or her address for all purposes of this Agreement by giving notice in writing stating
his or her new address to a Manager. Such a change of address will be effective fifteen(15)days
after the notice is received by such Manager.
17.2 Non-Waiver. Any party's failure to seek redress for violation of or to insist upon
the strict performance of any provision of this Agreement will not prevent a subsequent act,which
would have originally constituted a violation, from having the effect of an original violation.
17.3 Severability. Every provision of this Agreement is intended to be severable. If any
term or provision hereof is invalid for any reason whatsoever, its invalidity will not affect the
validity of the remainder of this Agreement.
17.4 Arbitration. All disputes and controversies between the parties hereto arising out of
or in connection with this Agreement shall be submitted to arbitration pursuant to the following
procedure.Either party may,by written notice to the other within thirty(30)days after the controversy
has arisen,hereunder, appoint an arbitrator who shall be either an attorney or accountant. The other
party shall, by written notice,within fifteen (15) days after receipt of such notice by the first party,
appoint a second arbitrator who shall also be an attorney or accountant,and in default of such second
appointment the first party shall apply to the Circuit Court for the City of Charlottesville,Virginia,to
appoint the second arbitrator pursuant to the provisions of Section 8.01-581.03 of the Virginia Code.
When two arbitrators have been appointed as hereinabove provided, they shall agree on a third
arbitrator and shall appoint him or her by written notice signed by both of them and a copy mailed to
each party hereto within fifteen(15)days after such appointment.On appointment of three arbitrators
as hereinabove provided,such arbitrators shall hold an arbitration hearing within thirty(30)days after
such appointment.At the hearing the three arbitrators shall allow each party to present his or her case,
evidence and witnesses, if any, in the presence of the other party, and shall render their award,
including a provision for payment of costs and expenses of arbitration to be paid by one or both of
the parties hereto,as the arbitrators deem just. The decision of the majority of the arbitrators shall be
binding on the parties hereto(although each party shall retain his or her right to appeal any questions
of law arising at the hearing),and judgment may be entered thereon in any court having jurisdiction.
17.5 Good Faith. The doing of any act or the failure to do any act by a Member or the
Company, the effect of which causes any loss or damage to the Company, will not subject such
Member or the Company to any liability, if done pursuant to the advice of the Company's legal
counsel or in good faith to promote the Company's best interests.
17.6 Governing Law. This Agreement is to be construed according to the laws of the
Commonwealth of Virginia without reference to its choice of law provisions. •
Kimco,L.C. 18
17.7 Cumulative Rights. The rights and remedies provided in this Agreement are
cumulative and the use of any right or remedy does not limit a party's right to use any or all other
remedies. All rights and remedies in this Agreement are in addition to any other legal rights the
parties may have, including those enforcement rights contained in Section 13.1-1023(C) of the
Code of Virginia.
17.8 Other Activities. Every Member may also engage in whatever activities he or she
chooses without having or incurring any obligation to offer any interest in such activities to any
party hereof.
17.9 Confidentiality. No Member may, without a Manager's express written consent,
divulge to others any information not already known to the public pertinent to the assets,
investments, business, affairs, or operations of the Company, whether before or after the
Company's dissolution.
17.10 Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all parties hereto had all signed the same document. All counterparts
will be construed together and will constitute one agreement.
17.11 Binding Effect. The terms of this Agreement are binding upon and inure to the
benefit of the parties and, to the extent permitted by this Agreement, their heirs, executors,
administrators, legal representatives, successors, and assigns.
17.12 Personal Property. The Membership Interest of each Member in the Company is
personal property.
17.13 Gender and Number. Unless the context requires otherwise,the use of a masculine
pronoun includes the feminine and the neuter, and vices versa, and the use of the singular includes
the plural, and vices versa.
SECTION 18
LEGAL COUNSEL
This Agreement was prepared by Julie A. King PLC, counsel to the Company ("Counsel'),
with the consent of each Member. Each Member acknowledges that he or she was advised by
Counsel that a potential conflict exists among the individual interests of the Members with respect
to this Agreement and that each Member should seek the advice of independent counsel. Each
Member further acknowledges that Counsel has provided no advice or representations to them
regarding the tax consequences of this Agreement to any individual Member.
Kimco,L.C. 19
1 '
IN WITNESS WHEREOF,the undersigned have executed this Agreement,under seal, on
the date written above.
aJj oz-d
ARBARAH H. COSNER, co-Trustee,
E. GRANT COSNER REVOCABLE TRUST,Member
BARBARA H. COSNER,Trustee,
BARBARA H. COSNER REVOCABLE TRUST,Manager and
Member
e .
KIMBERLY ILLEY, Manager Member
ERL OSNER LILLEY, Co-T stee,
COSNER FAMILY 2012 IRREVOC E TRUST,
Member
I/ 9/
4 r v 4 4 /
GREGO'Y J. 0 EY, Co-Tres ee,
COSNER FAMILY 2012 IRREVOCABLE TRUST,
Member
Kimco,L.C. 20
THIRD AMENDED AND RESTATED OPERATING AGREEMENT
OF
KIMCO,L.C.
SCHEDULE A
Member Name Membership % Interest
E. GRANT COSNER REVOCABLE TRUST 35.4052%
BARBARA I-I. COSNER REVOCABLE TRUST 2.6745 %
KINIBERLY C. LILLEY 13.9203 %
COSNER FAMILY 2012 IRREVOCABLE TRUST 48 %
Kimco,L.C. 21
ARTICLES OF ORGANIZATION
OF
KIMCO, L.C.
Pursuant to Chapter 12 of Title 13. 1 of the Code of Virginia
the undersigned states as follows:
1. The name of the Limited Liability Company is KIMCO, L.C.
2 . The address of the initial registered office in Virginia
is 1538 East,High Street, Charlottesville, Virginia 22901, located
in the City of Charlottesville.
3. A. The registered agent is E. Grant Cosner whose
business address is identical with the registered office.
B. The registered agent is an individual who is a
resident of Virginia and the manager of the Limited Liability
Company. - -
4 . The post office address for the principal office where the
records will be maintained pursuant to Virginia Code Section 13.1-
1028 is 1538 East High Street, Charlottesville, Virginia 22901.
5. The period of duration of the Limited Liability Company
is thirty (30) years.
IN WITNESS WHEREOF the undersigned has hereunto set his name
and seal this day of 4,0-y nh-ram. , 1992 .
�
(SEAL)
reg ry M. Jot , son, Organizer
SECOND AMENDED AND RESTATED OPERATING AGREEMENT
of
KIMCO, L.C.
a Virginia limited liability company
THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT (the
"Agreement") of Kimco, L.C., a Virginia limited liability company (the "Company") is made as
of the 1 St day of January,2013,by and between E. GRANT COSNER,BARBARA H. COSNER,
and KIMBERLY C. LILLEY and the COSNER FAMILY 2012 IRREVOCABLE TRUST, who
by their execution of this Agreement have become and constitute all of the Members of the
Company as of such date.
RECITALS
A. The Members have organized the Company to acquire and own certain real and
personal property and investments and to transact certain business and investment activities.
B. The Members desire to share in the risks, benefits, profits, and losses of the
Company's activities in the manner provided in this Agreement.
C. The Members desire that E. GRANT COSNER be the initial Manager of the
Company.
D. The Members previously entered into an Operating Agreement governing the
Company dated December of 1992, and an Amended and Restated Operating Agreement dated
September 1, 2012, and by their signatures below,now desire and intend to restate in its entirety
the Operating Agreement of the Company.
TERMS
NOW,THEREFORE,in consideration of the foregoing recitals and the mutual promises, •
covenants, and conditions herein contained, the receipt and sufficiency of which are hereby
acknowledged,the Members hereby agree as follows:
SECTION 1
DEFINITIONS
The following terms as used in this Agreement shall have the following meanings unless
otherwise expressly provided herein:
1.1 Act The "Act" is the Virginia Limited Liability Company Act, Virginia Code
Section 13.1-1000 et seq.,as amended.
1.2 Agreement. The "Agreement" is this Second Amended and Restated Operating
Agreement of KIMCO, L.C., as amended from time to time. The Agreement includes Schedule
A, as amended from time to time as a result of the transfer of Membership Interests and the
admission of new Members.
1.3 Articles. "Articles" means the Articles of Organization of the Company, as
amended.
1.4 Bona Fide Offer. A "Bona Fide Offer"means an offer in writing, signed by the
offeror, who must be a Person or Entity who is financially capable of carrying out the terms of
the offer, in form legally enforceable against the offeror, and binding the offeror to become a
party to and to assume all of the obligations of the transferring Member under this Agreement in
the event the offeror purchases the Offered Interest.
1.5 Capital Account. The "Capital Account" of a Member is the amount of the
capital account as of any date calculated and maintained by the Company for such Member
pursuant to Sections 6 and 7.
1.6 Capital Contribution. The "Capital Contribution" of a Member shall mean any
contribution to the Company Capital by such Member in cash,property or services, or a binding
obligation to contribute cash, property or services, whenever made. "Initial Capital
Contribution"of a Member is the initial contribution of the Company Capital by a Member as set
forth in Schedule A to this Agreement.
1.7 Code. The "Code" is the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding laws.
1.8 Company. The "Company" is 'CIVICO, L.C., a Virginia limited liability
company.
1.9 Company Capital. The "Company Capital" is the total of the Members' Capital
Contributions.
1.10 Entity. An "Entity" is any general partnership, limited partnership, limited
liability company, corporation,trust,joint venture, cooperative, association, or other legal entity.
1.11 Majority of the Membership Interests. A"Majority of the Membership Interests"
means greater than 50% of the membership interests of the Company and, if they are not in
proportion to each other, greater than 50% of the profits interests and greater than 50% of the
aggregate Capital Accounts of the Company.
1.12 Managers. The "Manager(s)" are the persons designated or elected to manage
the business and affairs of the Company and shall be selected as provided herein. The term
"Managers"shall also refer to any sole Manager acting at any time hereunder.
1.13 Member. A "Member" or "Members" shall refer to those Persons identified as
initial Members of the Company or admitted as Members hereunder. A Person shall cease to be
a Member at such time as he or she no longer owns a Membership Interest.
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1.14 Membership Interests. The"Membership Interests" are the respective percentage
ownership interests of the Members in the Company, which may,unless the Members otherwise
agree, be expressed as a percentage equal to each Member's Capital Account divided by the
aggregate Capital Accounts of all Members. Each Member's Membership Interest may be
recorded from time to time on Schedule A to this Agreement.
1.15 Net Cash Flow. "Net Cash Flow"is the Company's taxable income computed for
federal income tax purposes,increased by(a)any depreciation or depletion deductions taken into
account in computing taxable income, and (b) any nontaxable income or receipts (other than
Capital Contributions and the proceeds of any Company borrowings), and reduced.by (i) any
principal payments on any Company debt, (ii) expenditures to acquire, maintain, replace, or
improve Company assets, and (iii) any reasonable amounts or reserves which the Managers, in
their sole discretion, determine should be retained by the Company as working capital, set aside
or reserved for expenses and future investment and contingencies, having due regard for their
fiduciary duty to act in the best interest of the Members.
1.16 Person. A "Person" includes any natural person or Entity, and the heirs,
executors,administrators, legal representatives, successors, and assigns of any Person where the
context so permits.
1.17 Regulations. The "Regulations"are the U.S. Treasury Regulations, as amended,
or corresponding provisions of subsequent superseding laws.
1.18 Transfer. A "Transfer" of a Membership Interest includes any sale, pledge,
encumbrance, gift, bequest, distribution from any Entity, or other transfer or disposition of, or
permitting to be sold, encumbered, attached, or otherwise disposed of or having ownership
changed in any manner,whether a Voluntary or Involuntary Transfer or by operation of law. An
"Involuntary Transfer" shall mean any lifetime Transfer made on account of a court order or-
otherwise by operation of law, including any transfer incident to any divorce or marital property
settlement or any bankruptcy proceeding, assignment for the benefit of creditors, attachment,
levy, the placement of a Member's assets in the hands of a receiver, or the placement of any
encumbrance upon or securing any type of debt or obligation with a Membership Interest. A
"Voluntary Transfer"shall mean any lifetime Transfer other than an Involuntary Transfer.
SECTION 2
NAME
The Company's name is KIMCO, L.C. The Manager may from time to time change the
Company's name by amendment to the Articles.
SECTION 3
PLACE OF BUSINESS AND REGISTERED AGENT
3.1 Place of Business. The Company's principal place of business is 1538 East High
Street, Charlottesville, Virginia 22901. The Managers may from time to time change the
Company's principal place of business to another location and add additional places of business.
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3.2 Registered Agent. The Company's registered agent is E. GRANT COSNER,
whose address is 1538 East High Street, Charlottesville,Virginia 22901.
SECTION 4
BUSINESS
The Company's business and investment purposes are to acquire business interests and
assets, real estate, securities, stocks, partnership interests, membership interests, certificates of
deposit, mutual funds, commodities, investments, and other real, personal,tangible or intangible
assets of any kind to be owned, held, operated, developed, maintained, managed, leased,
financed, refinanced, reinvested, sold, exchanged, traded and disposed of in a manner which is,
in the sole determination of the Managers, consistent with the best interests of the Members. The
Company may invest in, and own interests in other Entities,including without limitation Entities
which own, lease, manage, and sell, real property, as well as Entities in which a Manager or a
Member may be an owner, shareholder, member, general partner, limited partner, trustee, or
beneficiary, and the conduct of any other business or investment activity which the Managers
determine to be in the Company's and the Members' best interests and which will be legal for a
limited liability company to conduct in the Commonwealth of Virginia.
SECTION 5
TERM
The Company's term shall begin on the date its Certificate of Organization was issued by
the State Corporation Commission of Virginia, and shall continue in perpetuity, unless sooner
terminated as a result of the Company's dissolution and termination under Section 15 hereof.
SECTION 6
CAPITAL AND MEMBERSHIP INTERESTS
6.1 Membership Interest Percentages. Each Member owns a Membership Interest,
which may be set forth in Schedule A to this Agreement from time to time and may, unless the
Members otherwise agree,be expressed as a percentage equal to such Member's Capital Account
divided by the aggregate Capital Accounts of all Members.
6.2 Initial Capital Contribution. The amount of each Member's initial Capital
Contribution is set forth,on.Schedule A to this Agreement.
6.3, Additional Capital Contributions. No Member will be required to make any
additional Capital Contributions without his or her consent. However,the Managers may request
additional Capital Contributions from all Members in proportion to their Capital Accounts, if the
Managers determine that the Company's capital is insufficient to meet the reasonable needs of its
business. If any Member refuses or fails to make such a required contribution of additional
capital, the Managers and any other Members may lend any necessary additional sums to the
Company, or the Managers may cause the Company to borrow such additional sums from
whatever sources they deem appropriate, and may pledge the Company assets to secure such
loans. Any such loans to the Company shall bear a reasonable rate of interest, as determined by
the Managers, but otherwise no Member shall receive any interest on his or her Membership
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Interest. This provision is not for the benefit of any creditors of the Company or any Member
and no such creditors may obtain any right under this provision to make any claim with respect
to the capital of or to contributions by any Member.
6.4 Adjustments. Each Member's Capital Account will be adjusted whenever
necessary to reflect (1) his or her distributive share of the Company's profits and losses,
including capital gains and losses, (2) his or her additional contributions to the Company, (3)
distributions made by the Company to the Member, and (4) all adjustments required by Section
1.704-1(b)(2)(iv) of the Regulations, as amended, and Section 7.2 of this Agreement.-A
Member's loans to the Company will not be added to his or her Capital Account. Each
Member's Capital Account shall also include a pro rata share of the fair market value of any
property contributed by a person who is not a Member, such value to be the same value reported
for federal gift tax purposes if a gift tax return is filed, and if not, the value in the case of real
property shall be determined by an independent M.A.I. appraiser actively engaged in appraisals
of property in the geographic area where such property is located and selected by the Managers,
and otherwise pursuant to Section 12.4.2 of this Agreement.
6.5 No Interest Paid. No Member will receive any interest on his or her Capital
Contributions,Capital Account,or Membership Interest.
6.6 Withdrawal of Capital. No Member may demand the return of his or her Capital
Contribution or Capital Account.
6.7 Gratuitous Additions. Immediately following any gratuitous contribution to the
capital of the Company which contribution results in the increase in the amount of the Capital
Account of a Member other than the contributing Member, each donee-Member shall have the right
to withdraw an amount equal to the increase in his or her Capital Account.
6.7.1 Each donee-Member can exercise this demand power by a written request
delivered to a Manager. If any donee-Member is unable to exercise this demand power because of a
legal disability, including minority,his or her legally authorized personal representative,including
(but not limited to) a guardian, committee, or conservator, may make the demand on the
beneficiary's behalf, and, if there be no such legally authorized personal representative, the
Managers shall designate an appropriate adult individual (who may be a Manager, such donee-
Member's parent,or any other person)who may make the demand on such donee-Member's behalf.
However, in no event can the donor of a particular contribution make the demand for any donee-
Member,regardless of their relationship.
6.7.2 The Managers must reasonably. notify the person who would exercise a
donee-Member's demand power of its existence and that of any contributions made to the capital of
the Company that are subject to the power.
6.7.3 The maximum amount that any donee-Member may withdraw with respect
to all contributions made by the same donor during a single calendar year shall be the lesser of the
total amount of such contributions and the amount of the federal gift tax annual exclusion in effect
on the date of the earliest of such contributions. If a donor is married on the date of a contribution,
the alternative limitation based on the gift tax annual exclusion shall be two (2)times the amount of
the gift tax annual exclusion. The demand powers created under this section are all noncumulative
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and lapse on sixty(60) calendar days following the date of the contribution to which such powers
relate.
6.7.4 A donee-Member's withdrawal under this Section 6.7 shall be treated as a
partial redemption of his or her capital, and the Member's Membership Interest shall be reduced
accordingly.
6.8 Transfers If any Membership Interest in the Company is transferred (whether by
gift, sale, or otherwise) in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the transferred
Membership Interest.
6.9 Accounting for Contributions and Distributions. The amount of a Member's
contributions of property to the Company and of the Company's distributions of property to a
Member shall be reflected in the Member's Capital Account at the fair market value of the
property on the date of the contribution or distribution,reduced by any liabilities secured by that
property, if those liabilities are treated under applicable federal income tax laws as being
assumed by or taken subject to by the transferee.
6.10 Insurance Policies. Notwithstanding any provision of this Agreement to the
contrary, including without limitation Section 8.2, if the Company shall own any life insurance
policy insuring the life of any Member or possess any incident of ownership with respect to any
such policy,the insured Member shall have no right or power to exercise or to participate in the
exercise of any of the incidents of ownership with respect to such policy, including, but not
limited to,the right to borrow from the insurance company or any other person using such policy
as collateral, to change or to prevent any change in the beneficiary designation under such
policy, to surrender the policy or any portion thereof for its cash surrender value, to cancel or
terminate any such policy, and to terminate or amend any split-dollar agreement, or any other
agreement,relating to such policy. Any exercise of any incident of ownership in any such policy
shall be exercised only by a majority of the Members other than the insured Member. Any
decision of the Company to acquire or dispose of a life insurance policy insuring the life of any
Member shall be made by a majority of the Members other than the insured Member and without
any participation by the insured Member.
6.11 Compliance with Regulations. This Section 6 and the other provisions of this
Agreement relating to Capital Accounts are intended to comply with the requirements of Section
1.704-1(b) of the Regulations and shall be interpreted and applied in a manner consistent
therewith. If the Managers determine that it is prudent to modify the manner in which Capital
Accounts are computed or maintained to comply with such Regulations,the Managers may make
such modifications; provided, that the Managers determine such modifications are not likely to
have a material effect on the amounts distributable to any Member.
SECTION 7
PROFITS,LOSSES,AND NET CASH FLOW
7.1 Profits and Losses. The Company's net profits and losses will be computed in
accordance with generally accepted accounting principles,consistently applied.
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7.1.1 Subject to Section 7.2, the Company's net profits, and every item of
income and gain therein,will be allocated as follows: first,an amount of such net profits or items
equal to the cumulative distributions of Net Cash Flow to the Members during the current year
will be allocated to the Members in proportion to the amount of such distributions received by
each;second,an amount of such net profits or items equal to the cumulative net losses, and every
item of loss, deduction, and credit, allocated to the Members for the current and all prior years,
will be allocated to the Members in proportion to the amount of such net losses and items
allocated to each; and the balance, if any, of such net profits or items will be allocated
proportionately among the Members according to their Membership Interests.
7.1.2 Subject to Section 7.2, the Company's net losses, and every item of
deduction, loss, and credit therein, will be allocated as follows: first, an amount of such net
losses or items equal to the cumulative net profits, and every item of income and gain allocated
to the Members for the current and all prior years, will be allocated to the Members in proportion
to the amount of such net profits and items allocated to each; and the balance, if any, of such net
losses or items will be allocated proportionately among the Members according to their
Membership Interests.
7.1.3 No Member has priority over any other Member as to Company profits.
Notwithstanding any other provision of this Section 7, income, gain, loss, and deductions with
respect to property contributed to the Company by a Member will be shared among the Members
so as to take account of any variation between the basis of the property so contributed and its fair
market value at the time of contribution, in accordance with any applicable Regulations.
7.1.4 If the Managers determine that the allocations under this Section 7 shall
not satisfy the requirements of Section 704(b) of the Code or the Regulations thereunder,
notwithstanding anything to the contrary contained in this Agreement, the Managers shall have
the right, alone and without the consent of the Members, to (a) amend this Agreement in any
respect if such amendment would cause such allocations to satisfy such requirements,and/or(b)
allocate net profits and losses and all items thereof in such manner as to satisfy any such
requirements.
7.2 Regulatory Allocations.
7.2.1 If a net decrease occurs in Partnership minimum gain (as such term is
defined in Section 1.704-2(d)) of the Regulations during any Company fiscal year or other
period, each Member shall be allocated items of income and gain for such fiscal year or other
period to the extent, in the manner, and at the time required under Section 1.704-2(f) of the
Regulations. This Section is intended to comply with the minimum gain chargeback
requirements under Section 1.704-2(f)and shall be interpreted consistently with such intent.
7.2.2 Any item of Company loss,deduction,or nondeductible expenditure under
Section 705(a)(2)(B) of the Code ("Nondeductible Expenditure") that is attributable to a partner
nonrecourse debt pursuant to Section 1.704-2(i)(2) of the Regulations shall be allocated to the
Member or Members who bear the economic risk of loss for such debt in the time and manner
described in Section 1.704-2(i) of the Regulations. If a net decrease occurs in Partnership
minimum gain attributable to a partner nonrecourse debt pursuant to Section 1.704-2(i)(4) of the
Regulations, then any Member with a share in such minimum gain shall be allocated items of
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Company income and gain for such fiscal year or other period or, if necessary, for subsequent
fiscal years or periods to the extent required under Section 1.704-2(i) of the Regulations. This
Section is intended to comply with requirements regarding partner nonrecourse debt in Section
1.704-2(i)of the Regulations and shall be intezpreted consistently with such intent.
7.2.3 If any Member unexpectedly receives any adjustments, allocations, or
distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations, then the
Company shall specially allocate to such Member items of Company income and gain in an
amount and manner sufficient to eliminate, to the extent required by such Regulations, such
Limited Member's deficit in his Modified Capital Account as quickly as possible. For purposes
of this Agreement, Modified Capital Account shall mean the capital account of a Member (a)
increased for the amount a Member is deemed obligated to restore under the penultimate
sentences in Sections 1.704-2(g)(1)and I.704-2(i)(5), and(b)of the`Regulations adjusted for the
adjustments required under Sections 1.704-2(b)(2)(ii)(d)(4), (5) and(6) of the Regulations. This
Section is intended to constitute a "qualified income offset" within the meaning of Section
1.704-1(b)(2)(ii)(d)(3)of the Regulations and shall be interpreted consistent with such intent.
7.2.4 If the Company makes an election under Section 754 of the Code, to the
extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b)
of the Code is required pursuant to Section 1.704-l(b)(2)(iv)(m) of the Regulations to be taken
into account in determining capital accounts, the amount of such adjustment to the capital
accounts shall be treated as an item of gain (if the adjustment increases basis) or loss (if the
adjustment decreases basis). Such gain or loss shall be allocated specially to the Members in a
manner consistent with the manner in which capital accounts are required to be adjusted pursuant
to such Section of the Regulations.
7.2.5 The allocations set forth in this Section 7.2 (the"Regulatory Allocations")
are intended to comply with certain requirements of the Regulations including Sections 1.704-
1(b) and 1.704-2_ The Regulatory Allocations may not_be consistent with the manner in which
the Members intend to divide Company distributions. Accordingly,the Managers are authorized
to cause the Company to allocate future profits,losses,and other items among the Members so as
to prevent the Regulatory Allocations from distorting the manner in which Company
distributions will be divided among the Members pursuant to this Agreement to the extent
permitted under the Regulations.
7.3 Assignment or Death. In.the event of an assignment of a Membership Interest or
of a Member's death or expulsion, profits and losses will be allocated based on the number of
days in the particular year during which each Member owned his or her Membership Interest, or
on any other reasonable basis consistent with applicable federal tax laws and regulations.
7.4 Distributions of Net Cash Flow. The Company shall distribute its Net Cash Flow
to the Members at least annually. All distributions of Company Net Cash Flow will be
distributed to the Members in proportion to their Membership Interests.
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SECTION 8
MANAGEMENT AND OPERATIONS
8.1 Management. The responsibility for managing the day-to-day business and
affairs of the Company shall be vested in the Manager(s).
8.2 Authority of Managers. In managing the Company, each Manager, acting alone
(even if more than one) shall have the full and exclusive power on the Company's behalf, and in
its name, to manage, control, administer, and operate its business and affairs, and to do or cause
to be done, anything he or she deems or they deem necessary or appropriate for the Company's
business, including without limitation the powers enumerated in Section 13.1-1009 of the Code
of Virginia,and in addition thereto and without limitation,the power and authority to (a)sell real
or personal property to any person, giving any warranties or assurances deemed appropriate, (b)
buy, lease,or otherwise acquire real or personal property to carry on and conduct the Company's
business, (c) borrow money for the Company's business, (d) issue promissory notes and other
debt instruments (negotiable or non-negotiable), in any amounts and secured by any
encumbrance on all or any part of the Company's assets, (e) assign any debts owing to the
Company, (f)engage in any other means of financing, (g)enter into any agreement for sharing of
profits and joint ventures with any person or entity engaging in any business or venture in which
the Company may engage, (h) manage, administer, conserve, improve, develop, operate, lease,
utilize,and defend the Company's assets,directly or through third parties, (i) execute any type of
agreement or instrument in connection with any other Company power, (j) employ all types of
agents and employees (including lawyers and accountants) as may seem proper, (k) buy, or
otherwise obtain the use of any type of equipment or other property that may be convenient or
advisable in connection with any Company business, (1) incur any reasonable expense for travel,
telephone, telegraph, insurance, taxes, and such other things, in carrying on the Company's
business, (m) sue and be sued, complain and defend in the Company's name and on its behalf,
(n) quitclaim, release, or abandon any Company assets with or without consideration, and
(o)invest any Company assets in any accounts,fiords, securities,or investment vehicles.
8.3 Member Votes. All decisions or actions requiring, pursuant to the Act, the
Articles, or this Agreement, a vote of the Members, or which the Managers feel, in their sole
discretion, should be made or approved by the Members, will be made by an affirmative vote of
a Majority of the Membership Interests. Such vote shall be evidenced by a writing signed by the
Members casting their affirmative vote on any matter.
8.4 Compensation. For his or her management services provided in the conduct of
the Company's business, each Manager may be paid by the Company such reasonable
compensation as approved from time to time by the vote of a Majority of the Membership
Interests.
8.5 Expenses. Ali reasonable expenses incurred by any Manager in managing and
conducting the Company's business, including but not limited to, overhead, administrative, and
travel expenses, and such professional, technical, administrative, and other services, will be
reimbursed to such Manager by the Company on a monthly basis.
&.6 Tax Matters Partner. E. GRANT COSNER, or upon his death, incapacity, or -
resignation as such, BARBARA H. COSNER, or upon her death, incapacity, or resignation as
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such, KIMBERLY C. LILLEY, shall be the "tax matters partner" for tax purposes and, as such,
will be solely responsible for representing the Company in all dealings with the Internal Revenue
Service and any state, local, and foreign tax authorities, but the tax matters partners will keep the
Members reasonably informed of any Company dealings with any tax agency.
8.7 Limitation of Liability of Managers and Members. To the full extent that the
Virginia Limited Liability Company Act, as it exists on the date hereof or may hereafter be
amended, permits the limitation (which limitation shall be (i) $1.00 or the minimum amount
allowed to be stated by such Act if a specific dollar amount is required to be stated or(ii) the full
extent of the limitation set forth in such Act if no specific dollar amount is required to be stated)or
elimination of the liability of Managers or Members, a Manager or Member of the Company shall
not be liable to the Company or its Members for monetary damages. Any amendment to or repeal
of this Section 8.7 shall not adversely affect any right or protection of a Manager or Member of the
Company for or with respect to any acts or omissions of such Manager or Member occurring prior
to such amendment or repeal.
8.8 Election and Removal of Managers. By their execution of this Agreement, the
Members hereby elect E. GRANT COSNER as the Company's initial Manager. Unless she shall
otherwise consent in. writing, E. GRANT COSNER shall be Manager so long as he is a
Members. The Members can elect one or more Managers by the affirmative vote of the
Members owning, in the aggregate, a majority of the Membership Interests. The term for any
Manager shall continue until such time as that Manager is removed by the Members as provided
below or upon the death, incapacity, or resignation of the Manager. Any new or replacement
Managers shall be elected by the affirmative vote of the Members owning, in the aggregate, a
Majority of the Membership Interests. Any Manager may be removed by the Members upon the
affirmative vote of the Members owning, in the aggregate, a majority of the Membership
Interests. Any Manager may resign by written notice delivered to the Members or the other
Managers, if any. No substitute Manager shall be required to be elected unless the sole acting
Manager is removed or resigns as Manager.
8.9 Designation and Election of Officers; Terms. The Managers may, but shall be
under no obligation to, from time to time delegate to one or more Managers such authority and
duties as the Managers deem advisable. The Managers may assign titles (including, without
limitation President, Vice President, Secretary, and Treasurer) to any Manager. Unless the
Managers determine otherwise, if a'title assigned to a Manager is one commonly used for
officers of a business corporation formed under Virginia law, the assignment of such title shall
constitute the delegation to such Manager of the authorities and duties that are customarily
associated with that office, subject to any specific delegation of authorities and duties made
pursuant to the first sentence of this Section. Any number of titles (except President and Vice
President) may be held by the same Manager. Any delegation of authority and duties to a
Manager or Manager pursuant to this Section may be revoked at any time by the Managers with
or without cause.
8.10 Authority of Members. The Members shall not be entitled to participate in the
day-to-day affairs and management of the Company, but instead, the Member's right to vote or
otherwise participate with respect to matters relating to the Company shall he limited to those
matters as to which the express terms of the Act, the Articles, or this Agreement vest in the
Members. No regular or special meetings of the Members shall be required, provided that the
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Managers may, or upon the request of any two Members shall, call a meeting of the Members
upon at least 10 days' prior written notice to each Member. Any such meeting shall be held at a
place and time specified by the Mangers in such notice,provided that Members may participate
from a different location by conference telephone or similar communication equipment.
8.11 Voting of Stock Held by Company. Unless otherwise provided in a unanimous
written consent executed by all of the Members after the date of this Agreement, any shares of
capital stock of a corporation transferred by a Member to the Company which, pursuant to
Section 2036(b) of the Code, constitute voting stock in a controlled corporation and would,
absent this Section 8.11,be included in the transferring Member's federal gross estate under such
Section,shall be voted, in the name and on behalf of the Company, and whether such vote is cast
- in person or by proxy at a meeting of the corporation's shareholders, by executing a written
consent of shareholders in lieu of such a meeting, or otherwise, by any Manager (who in
connection therewith may execute and deliver such written proxies, consents, waivers or other
instruments as may be necessary or proper in the premises), but provided that the Members of
the Company shall, prior to such vote, have been given the opportunity to obtain information
about, consider and discuss the matter or matters being voting upon, and shall vote(at a meeting
of the Members on by written consent of the Members) on the issue of how the Company's vote
should be cast on the matter or matters, with each Member have a vote in proportion to his, her
or its Membership Interest in the Company. The Manager voting the shares on behalf of the
Company shall vote them in the manner determined by a Majority in Interest of the Members.
SECTION 9
BOOKS AND RECORDS
9.1 General. The Company's books and records will be kept on the method of
accounting recommended by the Company's certified public accountant and in accordance with
generally accepted accounting principles consistently applied, and will reflect all Company
transactions and be appropriate and adequate for all Company business. The Company books
will be kept on a fiscal year ending December 31. The Company's records and information as
described in Section 13.1-1028 of the Code of Virginia will be maintained at its principal place
of business.
9.2 Financial Statements. Within a reasonable period after the close of each fiscal
year, the Managers, at the Company's expense, will give a written report to each other Member
indicating such Member's share of the Company income,which requirement may be satisfied by
giving each Member a copy of any tax form which includes such information.
SECTION 10
BANKING
All Company funds will be deposited in its name in such accounts as the Managers may
designate. The Managers can authorize other persons to draw checks on the Company bank
accounts,but such authority must be in writing and one or more of the Members may require that
such persons be bonded. Each bank in which a Company account is maintained is relieved of
any responsibility to inquire into any Manager's authority to deal with such funds, and absolved
of all liability with respect to withdrawals from such Company accounts by any person duly
authorized by the Managers.
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SECTION 11
PARTNERSHIP TAX TREATMENT AND TAX ELECTIONS
The Members intend that the Company be treated as a partnership for all relevant federal,
state,and local income tax purposes. No election will be made to exclude the Company from the
application of the provisions of Subchapter K of the Code or from any similar provisions of state
tax laws. If a Membership Interest is transferred, a Member dies, or Company assets are
distributed to a Member,the Managers in their sole discretion may cause the Company to elect to
cause the basis of the Company's assets to be adjusted for federal income tax purposes, under
Sections 734 and 743 of the Code. •
SECTION 12
TRANSFER OF MEMBERSHIP INTERESTS
12.1 Restriction on Transfer/Application. Because a primary objective of the
Company is to keep and maintain the Company's assets and property within the Members'
immediate family, the Members do not want Membership Interests to be made generally
available to persons other than the present Members or their descendants. However, the
Members acknowledge that each Member, as the owner of a Membership Interest in the
Company, should have the ability to realize the fair market value of his or her Membership
Interest. Therefore, subject to Section 12.2 hereof, each Member hereby covenants and agrees
that he or she shall not sell, assign, dispose of or otherwise Transfer (voluntarily or
involuntarily), pledge, encumber, make a gift of or bequeath all or any part of his or her
Membership Interest except as permitted under this Section 12 or except with the prior
unanimous written consent of all Members. Each Member agrees that this Section 12 shall apply
to any additional Membership Interests acquired by such Member after the date of this
Agreement. Any Transfer or attempted Transfer of all or any portion of a Membership Interest
in violation of or without full compliance with this Section 12 shall be absolutely void ab initio •
and without legal effect. Each Member hereby acknowledges the reasonableness of the
restrictions on Transfer imposed by this Agreement in view of the Company's purposes and the
relationship of the Members. Accordingly,the restrictions on Transfer contained herein shall be
specifically enforceable.
12.2 Permitted Transfers. Consistent with the objectives stated in Section 12.1 above,
the provisions of this Section 12 shall not apply to nor restrict any sale,disposition,gift, bequest,
distribution, or other Voluntary Transfer by a Member (or his or her attorney-in-fact, estate or
personal representative) of all or any portion of his or her Membership Interest to any other
Member, or any child or grandchild of a Member, or any trust, custodianship or Entity of which
all or any of such persons are the sole beneficiaries or owners, provided that any such permitted
transferees of their Membership Interests shall agree in writing to assume all of the obligations
and undertakings of the transferor under the terms of this Agreement.
12.3 Right of First Refusal.
12.3.1 Subject to Section 12.2 above, no Member may make any Voluntary
Transfer other than pursuant to a Bona Fide Offer. Any Member who (a) wishes to make a
Voluntary Transfer of all or any of his or her Membership Interest pursuant to a Bona Fide Offer,
12
or (b) has any information which would reasonably lead him to expect that an Involuntary
Transfer could occur or is reasonably foreseeable, shall first give each other Member written
notice of his intent to Transfer such offered Interest or of his knowledge that an Involuntary
Transfer could occur or is reasonably foreseeable. Such notice must contain a description of the
portion of his or her total Membership Interest that would be so Transferred, the consideration
that would be paid (if any), and the terms of Transfer and of any payment of consideration
(including, without limitation, the relative percentages of cash and debt,and the duration,interest
rate, and payment schedule of any debt instruments), and the name, address (both home and
office, if any), and business or occupation of the person to whom such Membership Interest
would be Transferred, and any other facts which are or would be deemed material to the
proposed Transfer. Such notice shall also be accompanied by a copy of the Bona Fide Offer, if
applicable. In the case of a foreseeable Involuntary Transfer, such notice must also describe the
circumstances of such Involuntary Transfer.
12.3.2 Upon the receipt of such notice, each other Member shall have a right to
buy a proportionate share of the offered Membership Interest. Each Member may buy a share of
such Membership Interest bearing the same proportion to the whole of such Membership Interest
as his or her own Membership Interest bears to those of all Members (except the transferring
Member). Each Member may exercise this right of first refusal by giving the transferring
Member written notice within 30 calendar days after his or her receipt of the offer notice
described in Section 12.3.1 above. If some, but fewer than all, of the Members other than the
transferring Member exercise their right of first refusal hereunder, the transferring Member shall
give the exercising Members written notice identifying the non-exercising Members and the
portion of the offered Membership Interest to which they would otherwise have been entitled.
Those Members exercising their rights of first refusal shall be entitled to buy the share or shares
of the non-exercising Member or Members in proportion to their respective Membership
Interests by giving the transferring Member written notice within 30 calendar days after receipt
of the notice described in the preceding sentence..
12.3.3 If the Members do not agree to buy all of the offered Membership Interest,
the transferring Member may complete the intended Transfer as to that portion of the offered
Membership Interest with respect to which the Members do not exercise their rights of first
refusal hereunder, provided that the entire consideration for the Transfer is cash and/or debt
instruments of the transferee and was described as such in the notice under Section 12.3.1. If
such Transfer is not completed within 30 calendar days after the expiration of the last exercise
period described in Section 12.3.2 above, any attempted Transfer will be deemed pursuant to a
new offer and this Section 12 shall again apply.
12.3.4 If the proposed Transfer for which notice is given under Section 12.3.1 is
a Voluntary or Involuntary Transfer for value, and if the proposed transferee proposes to make
payment in cash and/or debt instruments of the transferee, then each Member who elects to buy
part of the offered Membership Interest under this Section 12.3 shall have the individual option
to do so either(a)at the same purchase price and terms,proportionately and respectively,as were
contained in the Bona Fide Offer to the transferring Member, or(b)at the price and on the terms
contained in Section 12.4 below.
13
12.3.5 If the proposed Transfer is not described in Section 12.3.4, then each
Member who elects to buy all or any part of the offered Membership Interest shall do so at the
price and on the terms contained in Section 12.4 below.
12.3.6 Subject to Section 12.2, upon the death of a Member, such Member's
estate or personal representative shall be required to promptly give each other Member (or, in
any event,shall automatically be deemed to have given and,in such case and for the purposes of
Section 12.3.2, the surviving Members shall be deemed to have received the transferring
1Vlember's notice on the 30th day following the date of death) the written notices described in
Section 12.3.1 above,in which case the provisions of Sections 12.3.1 and 12.3.2 shall apply, and
each Member who elects to buy all or any part of the offered Membership Interest shall do so at
the price and on the terms contained in Section 12.4 below. If the other Members do not elect to
buy in the aggregate all of the offered Membership Interest, the deceased Member's Membership
Interest shall be transferred pursuant to the terms of his or her Last Will and Testament,any trust
established by the deceased Member, or the applicable laws of intestate succession.
Notwithstanding such transfer,the provisions of this Agreement shall continue to apply to such
Membership Interest, and the transferees shall execute a written instrument in legal form
acceptable to counsel to the Company agreeing to become bound by the terms and conditions of
this Agreement.
12.4 Settlement and Purchase Price.
12.4.1 Closing. The purchase of a Membership Interest pursuant to Section 12,3
will take place at a closing to be held no later than 30 days after the earlier of(a) the date on
which all Members' rights of first refusal have expired, or (b) the earliest date on which the
Members in the aggregate exercise rights of first refusal to buy all of the offered Membership
Interest; provided, however, if the Transfer is described in Section 12.3.5 or 12.3.6 above, that
the closing may be delayed until the accountant shall have finally determined the purchase price
of the Membership Interest as provided in Section 12.4.2 below. The closing will be held during
normal business hours at the offices of the Membership's legal counsel or at any other place to
which the parties agree.
12.4.2 Price Determination. As soon as practicable upon the Managers' receipt
of the notice described in Section 12.3.1 above,the Managers shall select and retain a competent
appraiser or valuation professional qualified to value the Company's business and assets to assist
the Company's regularly employed independent certified public accountant in valuing the
Membership Interest proposed to be Transferred, and to thereby determine the purchase price
hereunder (which purchase price will be substantiated in a written appraisal or report by the
accountant). Alternately, the accountant may proceed alone with valuing the Company on any
reasonable basis if his or her firm has sufficient experience in performing valuations. It is the
purpose of this Section 12.4.2 that the purchase price shall be the fair market value of the
Membership Interest determined consistently with the rules applicable for federal estate and gift
tax purposes. Accordingly, the accountant shall use the same methods as would be used for
determining the estate tax value of the Membership Interest if the transferring Member had died
on the date the deemed offer was made, ignoring any alternate valuation date (under Section
2032 of the Code) or special use valuation (under Section 2032A of the Code). The accountant,
with the assistance of the appraiser if required, shall determine the fair market value of the
Membership Interest, and its determination shall fix the price of such Membership Interest for all
14
relevant purposes under this Agreement and shall be final and binding upon all of the parties.
The Company shall pay the fees and other charges of the appraiser and accountant.
12.4.3 Payment Terms. The purchase price as determined under Section 12.4.2
above shall be paid by each purchasing Member,proportionately, (a) 10%in cash at closing, and
(b)the balance by an unsecured promissory note,bearing interest on the unpaid principal balance
at an annual rate equal to the annual prime rate prevailing at the primary depository bank of the
Company as of the date of closing, providing for equal quarterly combined installments of
principal and interest and amortization over a term of 15 years, and prepayment at any time
without penalty or premium.
12.5 Right of Transferee to Become Member. Notwithstanding a proper Transfer of a
Membership Interest pursuant to Section 12.2 above, no person to whom a Membership Interest
is Transferred or assigned shall become or be admitted or substituted as a new Member until (a)
such admission has been consented to by Members together owning a Majority of the
Membership Interests (other than the Membership Interest being Transferred), and (b) such
person has agreed in a writing delivered to the Managers to assume all of the obligations and
undertakings of the transferor under,and to be fully bound by the terms of, this Agreement.
SECTION 13
AMENDMENTS
This Agreement may be amended only with the unanimous consent of the Members if the
amendment would change their required contributions, their rights and interest in Company
profits or losses, their rights on liquidation of the Company, the payment of cash flow, income
tax allocations, or the requisite vote needed to expel a Member. Any other provision of this
Agreement may be amended by the affirmative vote of the Members holding a Majority of the
Membership Interests, except that any amendments needed to correct errors in this Agreement or
to cause this Agreement to comply with current or future provisions of federal tax laws and
regulations may be made by the unilateral act of the Managers. Each Member agrees to execute
any written instrument reflecting any such amendments made by the Managers upon the request
of the Managers.
SECTION 14
EXPULSION AND RESIGNATION OF MEMBERS
14.1 Expulsion. Any Member may be expelled from the Company upon the unanimous
written consent of all other Members who, as a group, at more than a Majority of the Membership
Interests, and the Managers. Upon the expulsion of any Member,the Company will be required to
pay to such Member an amount equal to the fair market value of such expelled Member's Interest.
The fair market value of such expelled Member's Membership Interest shall be determined and paid
in the manner described in Section 12.4.2 hereof.
14.2 Resignation. Any Member may elect to resign from the Company and to sell his or
her entire Membership Interest in the Company to the Company at any time by serving written
notice of such election upon the Company. Such notice shall set forth the date upon which such
resignation shall become effective, which shall not be less than 30 nor more than 60 days from the
15
date of the notice. The purchase price payable by the Company for a resigning Member's entire
Membership Interest shall be One Dollar($1.00).
SECTION 15
DISSOLUTION
15.1 Causes for Dissolution. The Company will be dissolved and its affairs shall be
wound up upon:
(a) the unanimous written consent of the Members;
(b) the entry of a decree of judicial dissolution under Section 13.1-1047 of the
Code of Virginia;or
(c) any event that under the Act or the Articles requires dissolution of the
Company, provided that the death, resignation, expulsion, bankruptcy, or dissolution of a
Member or occurrence of any other event that terminates the continued membership of a
Member shall not cause dissolution of the Company.
15.2 Upon Dissolution.- Upon its dissolution, the Company will terminate and
immediately commence and wind up its affairs. The Members will continue to share in profits
and losses during liquidation in the same manner and proportions as they did before dissolution.
The Company's assets may be sold,if a price deemed reasonable by Members together owning a
Majority of the Membership Interests can be obtained. The proceeds from liquidation of
Company assets will be applied as follows:
15.2.1 First, all of the Company's debts and liabilities will be paid and
discharged in the order of priority as provided by law;and
15.2.2 Second, all remaining assets will be distributed proportionately among the
Members,first,in proportion to their positive Capital Account balances and, second,in the ratios
of their respective Membership Interests.
15.3 Gain or Loss. Any gain or loss on the disposition of Company properties in the
process of Iiquidation will be credited or charged to the Members in proportion to their
Membership Interests; provided, however, that gain or loss with respect to property contributed
to the Company by a Member will be shared among the Members so as to take account of any
variation between the basis of the property so contributed and its fair market value at the time of
contribution, in accordance with any applicable U.S. Treasury Regulations. Any property
distributed in kind in the liquidation will be valued and treated as though it were sold and the
cash proceeds distributed. The difference between the value of property distributed in kind and
its book value will be treated as a gain or loss on the sale of property, and will be credited or
charged to the Members accordingly.
15.4 Company Assets Sole Source. The Members will look solely to the Company's
assets for the payment of any debts or liabilities owed by the Company to the Members and for
the return of their Capital Contributions and liquidation amounts. If the Company property
remaining after the payment or discharge of all of its debts and liabilities to persons other than
16
•
Members is insufficient to return the Members' Capital Contributions,they will have no recourse
therefor against the Company or any other Members, except to the extent that such other
Members may have outstanding debts or obligations owing to the Company.
15.5 Winding Up. The winding up of Company affairs and the liquidation and
distribution of its assets will be conducted by the Managers,who are hereby authorized to do any
and all acts and things authorized by law in order to effect such Iiquidation and distribution of
the company's assets.
SECTION 16
POWER OF ATTORNEY
16.1 General. To facilitate the convenient and efficient operation of the Company's
business,each Member names each Manager while they are serving and each successor Manager
while he or she is serving as his or her attorney-in-fact, and gives each Manager full power and
authority,in place of such Member and acting alone or together with any other Manager, to file
and record (a) any amendment to the Articles of Organization, (b) any documents of any kind
required by any state in which the Company is doing business, (c) any other documents deemed
advisable by the Manager, (d) any documents required to continue the Company, admit
additional or substituted Members or Manager (and upon any change in the ownership of
Membership Interests hereunder by virtue of Transfers permitted under this Agreement, each
Manager shall be authorized to execute a revised Schedule A to be attached to this Agreement
and to discard the Schedule A being replaced thereby),dissolve or terminate the Company or any
interest in it (provided that any such dissolution or termination shall have been consented to by
all Members in accordance with Section 15.1(a)), (e) any documents required to obtain or settle
any loan,and (f)any documents that may be required to Transfer any Company assets.
16.2 Power With an Interest. The power of attorney granted under the preceding
subsection (a) is a power coupled with an Interest, (b) is irrevocable and survives the Member's
incompetency and shall not terminate upon the disability of the Member, (c)may be exercised by
any Manager by a facsimile signature or by listing all of the Members executing the instrument
with a signature of such Manager as the attorney-in-fact for all of them, (d) survives the
assignment of any Member's Membership Interest, and(e)empowers each Manager to act to the
same extent for such successor Member.
SECTION 17
MISCELLANEOUS
17.1 Notices. Any notice or payment required or permitted under this Agreement will
be given and served either by personal delivery to the party to whom it is directed, or by
registered or certified mail,postage and charges prepaid,and if it is sent to a Member, addressed
with his or her address as it appears on Schedule A hereto. Any notice is deemed given on the
date on which it is personally delivered, or, if mailed, the date it is deposited in a regularly
maintained receptacle for the deposit of United States mail,addressed and sent as required in this
Section. Any Member may change his or her address for all purposes of this Agreement by
giving notice in writing stating his or her new address to a Manager. Such a change of address
will be effective fifteen(15) days after the notice is received by such Manager.
17
i I
17.2 Non-Waiver. Any party's failure to seek redress for violation of or to insist upon
the strict performance of any provision of this Agreement will not prevent a subsequent act,
which would have originally constituted a violation, from having the effect of an original
violation.
17.3 Severability. Every provision of this Agreement is intended to be severable. If
any term or provision hereof is invalid for any reason whatsoever, its invalidity will not affect
the validity of the remainder of this Agreement.
17.4 Arbitration. All disputes and controversies between the parties hereto arising out of
or in connection with this Agreement shall be submitted to arbitration pursuant to the following
procedure. Either party may, by written notice to the other within thirty (30) days after the
controversy has arisen, hereunder, appoint an arbitrator who shall be either an attorney or
accountant. The other party shall, by written notice, within fifteen (15) days after receipt of such
notice by the first party, appoint a second arbitrator who shall also be an attorney or accountant, and
in default of such second appointment the first party shall apply to the Circuit Court for the City of
Charlottesville,Virginia,to appoint the second arbitrator pursuant to the provisions of Section 8.01-
581.03 of the Virginia Code. When two arbitrators have been appointed as hereinabove provided,
they shall agree on a third arbitrator and shall appoint him or her by written notice signed by both of
them and a copy mailed to each party hereto within fifteen (15) days after such appointment. On
appointment of three arbitrators as hereinabove provided, such arbitrators shall hold an arbitration
hearing within thirty (30) days after such appointment. At the hearing the three arbitrators shall
allow each party to present his or her case, evidence and witnesses, if any, in the presence of the
other party,and shall render their award,including a provision for payment of costs and expenses of
arbitration to be paid by one or both of the parties hereto, as the arbitrators deem just. The decision
of the majority of the arbitrators shall be binding on the parties hereto (although each party shall
retain his or her right to appeal any questions of law arising at the hearing),and judgment may be
entered thereon in any court having jurisdiction.
17.5 Good Faith. The doing of any act or the failure to do any act by a Member or the
Company, the effect of which causes any loss or damage to the Company, will not subject such
Member or the Company to any liability, if done pursuant to the advice of the Company's legal
counsel or in good faith to promote the Company's best interests.
17.6 Governing Law. This Agreement is to be construed according to the laws of the
Commonwealth of Virginia without reference to its choice of law provisions.
17.7 Cumulative Rights. The rights and remedies provided in this Agreement are
cumulative and the use of any right or remedy does not limit a party's right to use any or all other
remedies. All rights and remedies in this Agreement are in addition to any other legal rights the
parties may have, including those enforcement rights contained in Section 13.1-1023(C) of the
Code of Virginia.
17.8 Other Activities. Every Member may also engage in whatever activities he or she
chooses without having or incurring any obligation to offer any interest in such activities to any
party hereof. •
18
17.9 Confidentiality. No Member may, without a Manager's express written consent;
divulge to others any information not already known to the public pertinent to the assets,
investments, business, affairs, or operations of the Company, whether before or after the
Company's dissolution.
17.10 Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if all parties hereto had all signed the same document. All counterparts
will be construed together and will constitute one agreement.
17.11 Binding Effect. The terms of this Agreement are binding upon and inure to the
benefit of the parties and, to the extent permitted by this Agreement, their heirs, executors,
administrators,legal representatives,successors,and assigns.
17.12 Personal Property. The Membership Interest of each Member in the Company is
personal property.
17.13 Gender and Number. Unless the context requires otherwise, the use of a
masculine pronoun includes the feminine and the neuter, and vices versa, and the use of the
singular includes the plural,and vices versa.
SECTION 18
LEGAL COUNSEL •
This Agreement was prepared by Julie A. King PLC, counsel to the Company
("Counsel"), with the consent of each Member. Each Member acknowledges that he or she was
advised by Counsel that a potential conflict exists among the individual interests of the Members
with respect to this Agreement and that each Member should seek the advice of independent
counsel. Each Member further acknowledges that Counsel has provided no advice or
representations to them regarding the tax consequences of this Agreement to any individual
Member.
IN WITNESS WHEREOF,the undersigned have executed this Agreement,under seal,on
the date written above.
•
19
i 1
61A14' as4 A'/
E. GRANT COSNER,Manager and Member
BARBARA H. COSNER,Member
1
C-
KIMBERLY . ILLEY,Member
6:14Z CSDR11-9-11-- r\ -
KIMBERL OSNER LILLEY,Trustee
COSNER FAMILY 2012 IRREVOCABLE TRUST,
Member
41•il4 /
GREG Y J. 0 LEY,Trustee
COSNER FAMILY 2012 IRREVOCABLE TRUST,
Member
20
}
SECOND AMENDED AND RESTATED OPERATING AGREEMENT
OF
KIMCO,L.C.
SCHEDULE A
Member Name Membership %Interest
E. GRANT COSNER 35.4052%
BARBARA.H.COSNER 2.6745%
KIMBERLY C.LILLEY 13.9203 %
COSNER FAMILY 2012 IRREVOCABLE TRUST 48%
21
1
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if?,
R 0 k
STATE CORPORATION COMMISSION
•
M/$U2/ c November 16, 1992
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KIMCO, L.C. ID: S-00823
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I hereby certify that Kimco, L.C. is in good standing with the State
Corporation Commission as of this date and - � L. Grant C► ner e the
Managing Partner, ','��' '
_ „ '
• ., .- P- a ag an /
Oate: May 12, 1994
(' ` 7,1
ARTICLES OF ORGANIZATION
OF
KIMCO, L.C.
Pursuant to Chapter 12 of Title 13 . 1 of the Code of Virginia
the undersigned states as follows:
1. The name of the Limited Liability Company is KIMCO, L.C.
2 . The address of the initial registered office in Virginia
is 1538 East•High Street, Charlottesville, Virginia 22901, located
in the City of Charlottesville.
3 . A. The registered agent is E. Grant Cosner whose
business address is identical with the registered office.
B. The registered agent is an individual who is a
resident of Virginia and the manager of the Limited Liability
Company. - •
4 . The post office address for the principal office where the
records will be maintained pursuant to Virginia Code Section 13.1-
1028 is 1538 East High Street, Charlottesville, Virginia 22901.
5. The period of duration of the Limited Liability Company
is thirty (30) years.
IN WITNESS WHEREOF the undersigned has hereunto set his name
and seal this day of , 1992 .
p� �.ai ' '•. nv�-u ---� (SEAL)
Greg ry M. Jo son, Organizer