Escolar Documentos
Profissional Documentos
Cultura Documentos
Stephen M. Quinlivan
David C. Jenson
Stinson Leonard Street LLP
February 2015
11952077v1
NOTE TO USERS
This is a preliminary draft form meant to engender discussion of the application of the Minnesota
Revised Uniform Limited liability Company Act. It is not published for any other purpose. It is
subject to change and changes will not be published. The form is not appropriate in many
circumstances. Users are responsible for ensuring compliance with the Minnesota Revised
Uniform Limited Liability Company Act and other applicable law and circumstances. This form
should only be used with the assistance of qualified legal and tax professionals. No
representation is made that this form is suitable for any purpose.
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I.
The provisions below may generally be implemented so long as they are not manifestly
unreasonable. Section 322C.0110 Subd. 8 provides guidance on when a term is manifestly
unreasonable. The provisions may be more enforceable if you can explain why they are
reasonable in the specific context of the LLC.
A.
Section [] Consideration of Interests. The parties have formed the Company and
entered into this Agreement and become Members without any expectation that a Member would
forgo any other opportunity available to the Member in the future or that a Member would be
required to consider the interests of the Company or any other Member or Person in any matter.
The Members record that their mutual expectation is that, when voting or taking any other
action, any Member is free to consider its own interests exclusively without considering whether
such vote or other action serves the interests or is in the best interest of the other Members, the
Company, or any other Person. Accordingly, when voting on any matter under this Agreement
or when a Member is otherwise permitted or required to make a decision (including a decision
that is in such Members discretion or under a grant of similar authority or latitude), the
Member shall be entitled to consider only such interests and factors as such Member desires,
including its own interests, and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the other Members, the Company, or any other Person. [Whenever
in this Agreement a Member is permitted or required to make a decision in such Members
good faith, the Member shall act under such express standard and shall not be subject to any
other or different standard imposed by this Agreement or any other applicable law.] Each party
was advised by counsel, or had the opportunity to be advised by counsel, in entering into this
Agreement and is fully apprised and aware of all implications and consequences of entering into
this Agreement. The parties agree the foregoing provision is not manifestly unreasonable.
B.
Elimination of Fiduciary Duties for Non-Managing Members [322C.0110 Subd. 6;
322C.0206; 322C.0405]
Section [] Duties of Non-Managing Members. No Person other than the Managing
Member (each a Non-Managing Member) has any fiduciary duty to the other Members in
managing the Company under this Agreement or the Act. Accordingly, each such NonManaging Member is expressly relieved of all such fiduciary duties imposed on the Managing
Member under this Agreement and the Act. In addition to the foregoing, each Non-Managing
Member is hereby expressly relieved of any and all responsibility and liability for (i) maintaining
the accuracy of information in records filed with the Minnesota Secretary of State under the Act
and (ii) determining or consenting to the amount of any distribution pursuant to Section
322C.0405 of the Act.
[NTD: To implement the foregoing, the duties of the Managing Member need to expressly
include the responsibility for maintaining the accuracy of information filed with the Secretary of
State and determining the amount of distributions.]
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C.
Section [] Dealings with the Company; Company Opportunities. The parties have
formed the Company and entered into this Agreement and become Members with the
expectation that one or more Members (i) would deal with the Company without any restrictions
imposed by fiduciary duties or otherwise, (ii) are permitted to, and may presently or in the future,
have investments or other business relationships, ventures, agreements or arrangements with
entities engaged in the business of the Company, other than through the Company and the
subsidiaries of the Company, and (iii) are permitted to, and may presently or in the future, have
or develop strategic relationships with businesses that are or may be competitive with the
Company and the subsidiaries of the Company. As a result, the Members have no expectation
that (i) any Member will be prohibited, by virtue of the Members status as a Member of the
Company, from pursuing and engaging in any activities and (ii) any Member will be obligated to
inform the Company or any Member of any such opportunity, relationship or investment (a
Company Opportunity) or to present to the Company any Company Opportunity. Further,
the Company hereby renounces any interest in any Company Opportunity and any expectancy
that any Company Opportunity will be offered to it. In addition, no Member shall have any
obligation or liability to (i) account to the Company and to hold as trustee for it any property,
profit, or benefit derived by the Member in the conduct or winding up of the Companys
business, from a use by the Member of the Companys property, or from the appropriation of a
limited liability company opportunity or (ii) refrain from dealing with the company in the
conduct or winding up of the Company's business as or on behalf of a party having an interest
adverse to the Company. Each party was advised by counsel, or had the opportunity to be
advised by counsel, in entering into this Agreement and is fully apprised and aware of all
implications and consequences of entering into this Agreement. The parties agree the foregoing
provisions are not manifestly unreasonable.
D.
Section [] Competing with the Company. The parties have formed the Company and
entered into this Agreement and become Members with the expectation that one or more
Members (i) would deal with the Company without any restrictions imposed on the ability to
compete with the Company, notwithstanding any access a Member may have to confidential
information of the Company or any position a Member may have with respect to trust and
confidence in relation to the Company and its Members, (ii) are permitted to, and may presently
or in the future, have investments or other business relationships, ventures, agreements or
arrangements with entities engaged in the business of the Company, other than through the
Company and the subsidiaries of the Company, and (iii) are permitted to, and may presently or in
the future, have or develop strategic relationships with businesses that are or may be competitive
with the Company and the subsidiaries of the Company. Accordingly, no Member is required to
refrain from competing with the Company in the conduct of the Company's business before the
dissolution of the Company. Without limiting the generality of the foregoing, any Member may
directly or indirectly:
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(a)
(i) render services or give advice to, or affiliate with (as employee,
partner, consultant or otherwise), or (ii) directly or through one or more of any of such Members
Affiliates, own, manage, operate, control or participate in the ownership, management, operation
or control of, any competitor of the Company or any division or business segment of any
competitor of the Company;
(b)
directly or through one or more of any of such Members Affiliates, solicit
or entice, or attempt to solicit or entice, any clients, customers or suppliers of the Company or
any subsidiary of the Company for purposes of diverting their business or services from the
Company; and
(c)
directly or through one or more of any of such Members Affiliates, hire
or solicit, or encourage any other Person to hire or solicit, any individual who is or has been
employed by the Company or any Company Subsidiary.
Each party was advised by counsel, or had the opportunity to be advised by counsel, in entering
into this Agreement and is fully apprised and aware of all implications and consequences of
entering into this Agreement. The parties agree the foregoing provisions are not manifestly
unreasonable.
E.
Ratification of Acts that Otherwise Violate the Duty of Loyalty [322C.0110, Subd. 5]
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Governor or Governors are present at the meeting of the Members or the Board or a committee at
which the contract or transaction is authorized, approved, or ratified, if:
(a)
the contract or transaction was, and the person asserting the validity of the
contract or transaction sustains the burden of establishing that the contract or transaction was,
fair and reasonable as to the Company at the time it was authorized, approved, or ratified;
(b)
the material facts as to the contract or transaction and as to the Governors
or Governors interest are fully disclosed or known to the Members, whether or not entitled to
vote, and the contract or transaction is approved in good faith by (i) the owners of a [Majority in
Interest] [Super-Majority in Interest] that are owned by persons other than the interested
Governor or Governors, or (ii) the unanimous affirmative vote of all Members, whether or not
entitled to vote; or
(c)
the material facts as to the contract or transaction and as to the Governors
or Governors interest are fully disclosed or known to the Board or a committee, and the Board
or committee authorizes, approves, or ratifies the contract or transaction in good faith by a
majority of the Governors or committee members currently holding office, but the interested
Governor or Governors shall not be counted in determining the presence of a quorum and shall
not vote.
F.
Section [] Duty of Care. The parties have formed the Company and entered into this
Agreement and become Members with the expectation that each Member would have the
opportunity to protect its own interests and monitor the management of the Company.
Accordingly, no Member shall have any duty of care to the Company, except to refrain from
authorizing intentional misconduct or knowing violation of law. Each party was advised by
counsel, or had the opportunity to be advised by counsel, in entering into this Agreement and is
fully apprised and aware of all implications and consequences of entering into this Agreement.
The parties agree the foregoing provisions are not manifestly unreasonable.
G.
Prescribing Standards of Good Faith and Fair Dealing [322C.0110, Subd. 4(5)]
Section [] Standard of Conduct. Members shall exercise their rights and discharge
their duties under this Agreement and the Act in a manner consistent with the contractual
obligation of good faith and fair dealing. Any right exercised or duty discharged by a Member
pursuant to the written advice of the Company's attorneys, accountants, investment bankers,
appraisers or other professional advisors shall be deemed to satisfy such contractual obligation.
Each party was advised by counsel, or had the opportunity to be advised by counsel, in entering
into this Agreement and is fully apprised and aware of all implications and consequences of
entering into this Agreement. The parties agree the foregoing provisions are not manifestly
unreasonable.
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II.
Sections 322C.0408, Subd. 4 and 322C.0110, Subd. 7 outline the conditions when the operating
agreement may prohibit indemnification or provide appropriate conditions. In addition, Section
322C.0110, Subd. 7 states the operating agreement may alter or eliminate the right to
indemnification for a member, manager or governor.
A.
Alternative 1
Section [] Limit on Indemnification. No employee of the Company other than an
Officer is entitled to indemnification or advancement of expenses pursuant to Section 322C.0408
of the Act.
Alternative 2
Section [] Limit on Indemnification. No employee of the Company is entitled to
indemnification or advancement of expenses pursuant to Section 322C.0408 of the Act in
connection with an action commenced by the Company against the employee.
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III.
A.
Limit the Obligation of the Company to Provide Information to Members Without
Request [322C.0410, Subd. 1(2)]
Section [] Company Information. The information that the Company is required to
furnish, without demand, to the Members pursuant to Section 322C.0410, Subd. 1(2) of the Act
is limited to the following:
[insert list of information]
Each Member acknowledges and agrees that the foregoing information is all of the information
that is reasonably necessary, without demand, for the proper exercise its rights and duties under
this Agreement and the Act for the purposes of Section 322C.0410, Subd. 1(2)(i) and Subd. 1(3),
whether such information is held by the Company or another Member. The parties agree that the
foregoing limitations are reasonable.
B.
Confidentiality
Section [] Confidential Information.
(a)
In addition to any restrictions the Company might impose pursuant to
Section 322C.0410, Subd. 7, each Member acknowledges that during the term of this Agreement,
such Member will have access to and become acquainted with trade secrets, proprietary
information and confidential information belonging to the Company, subsidiaries of the
Company and their Affiliates that are not generally known to the public, including, but not
limited to, information concerning business plans, financial statements and other information
provided pursuant to this Agreement, operating practices and methods, expansion plans, strategic
plans, marketing plans, contracts, customer lists or other business documents, whether the
foregoing are oral, written, electronic, or contained in any other form or medium, which the
Company treats as confidential, (collectively, Confidential Information). In addition, each
Member acknowledges that: (i) the Company has invested, and continues to invest, substantial
time, expense and specialized knowledge in developing its Confidential Information; (ii) the
Confidential Information provides the Company with a competitive advantage over others in the
marketplace; and (iii) the Company would be irreparably harmed if the Confidential Information
were disclosed to competitors or made available to the public. Without limiting the applicability
of any other agreement to which any Member is subject, no Member shall, directly or indirectly,
disclose or use (other than solely for the purposes of such Member monitoring and analyzing
such Members investment in the Company or performing such Members duties as a manager,
officer, employee, consultant or other service provider of the Company) at any time, including,
without limitation, use for personal, commercial or proprietary advantage or profit, either during
such Members association (as an owner or transferee of an Interest) or employment with the
Company or thereafter, any Confidential Information of which such Member is or becomes
aware. Each Member in possession of Confidential Information shall take all appropriate steps to
safeguard such information and to protect it against disclosure, misuse, espionage, loss and theft.
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(b)
Nothing contained in Section [] shall prevent any Member from
disclosing Confidential Information: (i) upon the order of any court or administrative agency; (ii)
upon the request or demand of any regulatory agency or authority having jurisdiction over such
Member; (iii) to the extent compelled by legal process or required or requested pursuant to
subpoena, interrogatories or other discovery requests; (iv) to the extent necessary in connection
with the exercise of any remedy hereunder; (v) to other Members; (vi) to such Members
representatives who, in the reasonable judgment of such Member, need to know such
Confidential Information and agree to be bound by the provisions of this Section [] as if a
Member; or (vii) to any potential [Permitted Transferee] in connection with a proposed [Transfer
of Units] from such Member, as long as such Transferee agrees to be bound by the provisions of
this Section [] as if a Member; provided, that in the case of clause (i), (ii) or (iii), such Member
shall notify the Company and other Members of the proposed disclosure as far in advance of
such disclosure as practicable (but in no event make any such disclosure before notifying the
Company and other Members) and use reasonable efforts to ensure that any Confidential
Information so disclosed is accorded confidential treatment satisfactory to the Company, when
and if available.
(c)
The restrictions of Section [] shall not apply to Confidential Information
that: (i) is or becomes generally available to the public other than as a result of a disclosure by a
Member in violation of this Agreement; (ii) is or becomes available to a Member or any of its
Representatives on a non-confidential basis prior to its disclosure to the receiving Member and
any of its Representatives in compliance with this Agreement; (iii) is or has been independently
developed or conceived by such Member without use of Confidential Information; or (iv)
becomes available to the receiving Member or any of its representatives on a non-confidential
basis from a source other than the Company, any other Member or any of their respective
representatives; provided, that such source is not known by the recipient of the Confidential
Information to be bound by a confidentiality agreement with the disclosing Member or any of its
representatives.
IV.
A.
Section [] Events Causing Dissolution. The Company will be dissolved upon the first
to occur of the following events:
(a)
(b)
upon the entry of a decree of judicial dissolution permitted under Section
322C.0701 of the Act.
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Notwithstanding Section 322.0701 of the Act, the forgoing events which cause dissolution of the
Company are the exclusive events which cause the dissolution of the Company.
B.
Modify Events of Dissolution in Statute Add and subtract from the following
statutory events [322C.0701, Subd. 2; 322C.0110, Subd. 3(7)].
Section [] Events Causing Dissolution. The Company shall be dissolved, and its
activities must be wound up, upon the occurrence of any of the following:
(a)
(b)
(c)
following the admission of the initial Member or Members, the passage of
90 consecutive days during which the Company has no Members;
(d)
on application by a Member, the entry by an appropriate court of an order
dissolving the Company on the grounds that:
(i)
unlawful; or
(ii)
it is not reasonably practicable to carry on the Companys activities
in conformity with the articles of organization and this Agreement;
(e)
on application by a Member, the entry by an appropriate court of an order
dissolving the Company on the grounds that the managers, governors, or those Members in
control of the Company:
(i)
fraudulent; or
(ii)
have acted or are acting in a manner that is oppressive and was, is,
or will be directly harmful to the applicant; or
(f)
on application by the attorney general in an action commenced pursuant to
Section 322C.0708 of the Act, the entry by an appropriate court of an order dissolving the
Company on grounds specified in Section 322C.0708 of the Act.
Notwithstanding Section 322.0701 of the Act, the forgoing events which cause dissolution of the
Company are the exclusive events which cause the dissolution of the Company.
C.
The Only Remedy for Illegal, Fraudulent or Oppressive Conduct is Dissolution
[322C.0701, Subd. 2; 322C.0110, Subd. 3(7)]
Section [] Remedies for Certain Conduct. Notwithstanding Section 322C.0701,
Subd. 2 of the Act, in a proceeding brought under Section 322C.0701, Subd. 1(5) of the Act, no
court shall order any remedy other than dissolution.
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D.
Remedies for Illegal, Fraudulent or Oppressive Conduct do not Include Buy-Out
[322C.0701, Subd. 2; 322C.0110, Subd. 3(7)]
Section [] Remedies for Certain Conduct. Notwithstanding Section 322C.0701,
Subd. 2 of the Act, in a proceeding brought under Section 322C.0701, Subd. 1(5) of the Act, no
court shall order the sale of Interests a Member owns in the Company to the Company or one or
more of the other Members.
V.
A.
Nullify Statutory Events of Dissociation in Operating Agreement This is the
Approach Used in the Standard Form [322C.602].
Section [] No Dissociation. A Member shall not cease to be a Member as a result of
the Bankruptcy of such Member or as a result of any other events specified in Section 322C.0602
of the Act except for the events set forth in clauses (11) (merger), (12) (conversion) and (13)
(domestication) of Section 322C.0602 of the Act. So long as a Member continues to hold any
Interest, such Member shall not have the ability to withdraw or resign as a Member and any such
withdrawal or resignation or attempted withdrawal or resignation by a Member prior to the
dissolution or winding up of the Company shall be null and void. As soon as any Person who is a
Member ceases to hold any Interest (other than (i) a transfer for security purposes; or (ii) a
charging order in effect under Section 322C.0503 of the Act which has not been foreclosed) such
Person shall no longer be a Member and shall be dissociated; provided, however, that this
Agreement shall continue to apply with respect to any Interests that have been called in
accordance with Section [] [company call right] until full payment is made therefor in
accordance with the terms of this Agreement. None of the events of dissociation set forth in
Section 322.0602 of the Act (including those with respect to the expulsion of Members) shall
apply to the Company, except for the events set forth in clauses (11) (merger), (12) (conversion)
and (13) (domestication) of Section 322C.0602 of the Act.
B.
Modify Events of Statutory Events of Dissociation in Statute Add and subtract
from the following statutory events.
Section [] Events of Dissociation. A Person is dissociated as a Member from the
Company when (each an Event of Dissociation):
(a)
The Company has notice of the Persons express will to withdraw as a
Member, but, if the Person specified a withdrawal date later than the date the Company had
notice, on that later date;
(b)
(c)
occurs;
(d)
other Members if:
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(i)
as a Member;
(ii)
there has been a transfer of all of the Persons Transferable Interest
in the Company, other than:
(A)
(B)
a charging order in effect under section 322C.0503 which
has not been foreclosed;
(iii) the Person is a corporation and, within 90 days after the Company
notifies the Person that it will be expelled as a Member because the person has filed a
certificate of dissolution or the equivalent, its charter has been revoked, or its right to
conduct business has been suspended by the jurisdiction of its incorporation, the
certificate of dissolution has not been revoked or its charter or right to conduct business
has not been reinstated; or
(iv)
the Person is a limited liability company or partnership that has
been dissolved and whose business is being wound up;
(e)
On application by the Company, the Person is expelled as a Member by
judicial order because the Person:
(i)
has engaged, or is engaging, in wrongful conduct that has
adversely and materially affected, or will adversely and materially affect, the Companys
activities;
(ii)
has willfully or persistently committed, or is willfully and
persistently committing, a material breach of this Agreement or the Persons duties or
obligations under Section 322C.0409 of the Act; or
(iii) has engaged, or is engaging, in conduct relating to the Companys
activities which makes it not reasonably practicable to carry on the activities with the
Person as a Member;
(f)
(ii)
(iii) there is a judicial order that the Person has otherwise become
incapable of performing the Persons duties as a Member under the Act or this
Agreement;*
(g)
(h)
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(i)
The Person seeks, consents to, or acquiesces in the appointment of a
trustee, receiver, or liquidator of the Person or of all or substantially all of the Persons
property;*
(j)
In the case of a Person that is a trust or is acting as a Member by virtue of
being a trustee of a trust, the trusts entire Transferable Interest in the Company is distributed;
(k)
In the case of a Person that is an estate or is acting as a Member by virtue
of being a personal representative of an estate, the estates entire Transferable Interest in the
Company is distributed
[NTD: * indicates provision is applicable only in a member-managed LLC]
C.
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