Preview
FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023
O'LEARY EXHIBIT 20
FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023
NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023
AMENDED AND RESTATED OPERATING AGREEMENT
OF
DELAWARE OPERATIONS ASSOCIATES LLC
AMENDED AND RESTATED OPERATING AGREEMENT (the "Agreement") of
2nd
Delaware Operations Associates LLC (the "Company") made as of the day of November, 2014,
"Members"
by and between Kenneth Rozenberg and Jeffrey Sicklick (hereinafter collectively the
and individually as a "Member").
WI T N E S S E T H
WHEREAS, the Company has been formed pursuant to the provisions of the New
York Limited Liability Company Act (the "Act"), by having its articles of organization (the
"Articles of Organization") filed with the Secretary of State of the State of New York on August 1,
2013, and the Members intend to amend and restate the Articles of Organization to provide that the
purpose of the Company is to operate a 200-bed skilled nursing facility located at 1014 Delaware
Avenue, Buffalo, NY 14209 (the "Facility"); and
WHEREAS, the Members desire to adopt this Agreement for the operation and
management of the Company.
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein, the Members hereby agree as follows:
1. Formation, Name and Place of Business.
A. This Agreement shall become effective upon the execution hereof.
B. The terms and provisions hereof will be construed and interpreted in
accordance with the terms and provisions of the Act and, if any of the terms and provisions of this
Agreement should be deemed inconsistent with those of the Act, the Act shall be controlling.
C. The business of the Company will be conducted, subject to regulatory
approval, under the assumed name of Buffalo Center for Rehabilitation and Health Care subject to
regulatory approval, if any, any name(s) designated by the Managing Member hereinafter
mentioned.
D. The place of business of the Company will be initially located at 4770 White Plains Road,
Third Floor, Bronx, New York 10470 until the Closing Date (hereafter defined) at which time the
place of business shall be at 1014 Delaware Avenue, Buffalo, NY 14209.
E. The parties hereto shall execute such certificates and documents, and
the Members shall file and record such certificates and documents, as may be necessary or
. .
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appropriate to comply with the requirements for the continuance and operations of a limited liability
company under the Act. The parties hereto shall also execute such certificates and documents, and
the Members shall file, record and publish such certificates and documents, as the Members, upon
advice of counsel, deem necessary or appropriate to comply with requirements of applicable laws
governing the formation and operation of a limited liability company in all other jurisdictions where
the Company desires to conduct business.
2. Term.
The Company commenced doing business on the date on which the Articles
of Organization were filed with the Secretary of State of the State of New York, and will commence
doing business as the operator of the Facility upon the date the Company closes on the acquisition
of certain assets relating to the Facility (the "Closing Date"). The Company shall continue in
existence unless sooner dissolved and wound up pursuant to the Act or any provisions of this
Agreement.
3. Purposes and Powers.
The powers and purposes of the Company are limited to (a) acquiring, owning, managing,
operating and otherwise using the Facility, a 200-bed skilled nursing facility to be known as Buffalo
Center for Rehabilitation and Health Care located at 1014 Delaware Avenue, Buffalo, NY 14209,
and owning or leasing such assets, personalty, and/or fixtures as reasonably may be related to the
ownership or operation of the Facility and such other assets, and (b) exercising all powers
enumerated in the Act necessary or convenient to the conduct, promotion or attainment of the
foregoing business or purposes.
4. Members.
A. The names and addresses of the Members and their initial respective
Percentage Interests in the Company are set forth on Schedule A, attached hereto.
B. No person or entity may own ten percent or more of any membership
interest or voting right unless approved by the Public Health and Planning Council.
5. Management.
The business and affairs of the Company shall be exclusively managed by
Kenneth Rozenberg, the managing member of the Company (the "Managing Member"). The
Managing Member of the Company must be a Member of the Company. The Managing Member
shall have full and complete authority, power, and discretion to manage and carry out the business
of the Company, to make all decisions regarding those matters and to perform any and all other acts
or activities customary to or incident to the day-to-day management of the Company's business.
Neither the management structure, nor this Section 5, may be deleted, modified or amended without
State of New York Department of Health approval.
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6. Capital Contribution; Additional Capital Contributions.
A. Each Member's initial capital contribution is set forth on
Schedule A annexed hereto. The amounts set forth on Schedule A shall constitute the initial capital
of the Company. The Company shall maintain a capital account for each Member (a "Capital
Account"). The opening balance of each Capital Account shall consist of such Member's initial
capital contribution. Each Capital Account shall be adjusted by the amount of any additional
contibutions of capital by, or distributions to, such Member and any allocation of profits and losses
pursuant to Section 8 hereof.
B. The Members acknowledge that the Company may require additional
capital. If such determination is made by those Members holding a majority in interest of the
Percentage Interests, the Company shall send a notice to each Member stating the aggregate amount
of the additional capital required (the "Capital Call") and the amount required to be contributed by
each Member, determined by multiplying (1) each Member's Percentage Interest by (2) the
aggregate amount of the Capital Call ("Capital Call Share").
C. If a Member shall not contribute an amount equal to his Capital Call Share
(the "Failing Member"), and if the other Member(s) (the "Non-Failing Member(s)") have made
their entire required con1ributions, then the Non-Failing Member(s) may make the additional
contribution that the Failing Member was to make to the Company, pro rata in accordance with each
Non-Failing Member's Percentage Interest(s) (the "Additional Contributions").
In such event the Non-Failing Member(s) shall be entitled to receive the return of their Additional
Contributions before the Failing Member shall receive any distributions. In addition, the Percentage
Interest of each Failing Member shall be decreased to a percentage equal to a number expressed in
fractional terms, the numerator of which is the aggregate capital contributions made by the Failing
Member and the denominator of which is equal to the total sum of (i) all capital contributions made
by all Members prior to this Capital Call plus (ii) a number equal to the aggregate of all Additional
Contributions made pursuant to this Capital Call multiplied by 150%. The Percentage Interest of
the Non-Failing Members shall be increased, pro rata to their relative Additional Contributions, by
an amount equal to the percentage decrease in the Percentage Interest of the Failing Member
pursuant to the preceding sentence.
D. A Member shall not be entitled to withdraw any part of such Member's
Capital Account or to receive any distribution from the Company, except as provided in this
Agreement. Except as set forth in C above, no Member shall have priority over any other Member
either for the retum of Capital Contributions or for distributions of All Cash Available for
Distribution (as hereinafter defined).
7. Distributions.
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Distribution"
A. "All Cash Available for shall mean all cash receipts of the
Company remaining after the payment of (i) all operating expenses, (ii) outstanding Member loans
(if any), including the interest thereon, and (iii) such reasonable reserves the Managing Member
may set aside for working capital requirements.
B. Subject to the provisions of 6 C above, All Cash Available for
Distribution shall be distributed to the Members in accordance with their respective Percentage
Interests at such time and in such amount as the Managing Members shall determine in his sole
discretion.
8. Allocation of Profits and Losses.
A. Except as herein otherwise expressly provided, for purposes of this
"Profits" "Losses"
Agreement the terms and shall mean the net profits and losses of the Company
as determined separately, and not cumulatively, for each fiscal year of the Company by the
Company's accountants in accordance with the accounting methods followed by the Company for
Federal income tax purposes.
B. Except as herein otherwise expressly provided, the Profits and Losses
of the Company (including each item of income, gain, loss, deduction or credit entering into the
computation thereof) shall be allocated for each year by crediting the Capital Account of each
Member with any Profits in accordance with such Member's Percentage Interest, and charging the
Capital Account of each Member with any Losses as follows: first to all Members with positive
Capital Accounts proportionately until such Capital Accounts are reduced to zero, then to each
Member in accordance with such Member's Percentage Interest.
C. Except as herein otherwise expressly provided, allocations of Profits
and Losses upon the liquidation and dissolution of the Company shall be made, to the extent
Members'
possible, so as to create balances in the Capital Accounts equal to zero.
D. Notwithstanding the foregoing, to the extent that Section 704(b) and
(c) of the Internal Revenue Code of 1986, as amended (the "Code"), requires allocations of income
or loss of the Company in a manner different than that set forth above, the Company shall use any
permissible method contained in the Treasury Regulations promulgated under Code Section 704(b)
and (c) that is selected by the Managing Members.
E. All allocations of Profits and Losses shall be made as of the last day
of each fiscal year of the Company; provided, however, that if during any fiscal year of the
Company or any portion thereof there is for any reason a change in any Member's interest in the
Company, then Profits and Losses for such year shall be allocated among the Members based upon
the number of days during such period that such Member was registered as the owner of such
interest or in such other manner as theManaging Members deem appropriate in accordance with
requirements of the Code and of regulations issued pursuant thereto.
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9. Transfer of Percentage Interests; Sale of Facility.
A. Notwithstanding anything to the contrary in the Articles of Organization or the
Operating Agreement, all transfers, assignments or other dispositions of membership interests or
voting rights, including any such transfers, assignments or dispositions under this Section or Section
6(D) hereof, shall be effectuated, to the extent applicable, in accordance with Public Health Law §
2801-a(4)(b) or any successor statute thereto.
B. Except as provided in this Agreement, a Member may not gift, sell,
assign, pledge, encumber, hypothecate, exchange, transfer or otherwise dispose some or all of his
Percentage Interest in the Company. Subject to the provisions of G below, a Member may gift,
transfer and assign some or all of his Percentage Interest in the Company, in the case of a natural
Member, to such Member's Immediate Family Members and in the case of an entity Member, to
such entity Member's affiliates or employees. Except as set forth hereinabove but subject to the
provisions of G below, a Member desiring to assign, transfer, sell or otherwise dispose of some or
all of his Percentage Interest (the "Selling Member") shall first obtain a bona fide written offer from
a prospective purchaser of such Percentage Interest stating the terms and conditions upon which the
proposed purchase is to be made. The Selling Member shall then give the other Members (the
"Remaining Members") written notice (the "Offer Notice") of his intention to so sell to such
proposed purchaser along with a copy of such bona fide written offer. Each Remaining Member,
other than the Selling Member, on a basis pro rata to the Percentage Interests of each Remaining
Member exercising his right of first refusal, shall have the right to exercise a right of first refusal to
purchase all (but not less than all) of the Percentage Interests proposed to be sold by the Selling
Member upon the same terms and conditions as stated in the bona fide written offer by giving
written notification to the Selling Member of his intention to do so within sixty (60) days after
receiving the written notice from the Selling Member. The failure of any Remaining Member to so
notify the Selling Member of a desire to exercise such right of first refusal within such sixty (60)
day period shall result in the termination of such Remaining Member's right of first refusal and the
Selling Member shall be entitled to consummate the sale of his Percentage Interests with respect to
which such first right of refusal has not been exercised to the proposed purchaser offering to do so
pursuant to the bona fide written offer to purchase and upon no other terms or conditions. Any
changes in any of the terms or conditions of the written bona fide offer shall require the Selling
Member to re-offer the Percentage Interests to the Remaining Members who shall again have the
right of first refusal pursuant to the provisions of this Section. If the Selling Member does not sell
his Percentage Interests in accordance with the written bona fide offer within thirty (30) days after
receiving the right to do so, his right to do so terminates and the terms and conditions of this Section
shall again be in effect with respect to his Percentage Interests. If a Remaining Member gives
written notice to the Selling Member of his desire to exercise his right of first refusal and to
purchase the Selling Member's offered Percentage Interest upon the same terms and conditions as
are stated in the bona fide written offer, such Remaining Member shall have the right to designate
the time, date and place of closing for the closing to occur within ninety (90) days after receipt of
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NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023
written notification from the Selling Member of the bona fide offer.
C. Except for transfers to Immediate Family Members or in the case of an entity Member,
to such entity Member's affiliates or employees, no person acquiring a Percentage Interest, other
than a Member, shall become a Member unless such person is approved by the vote or consent of at
least sixty (60%) percent of all the Percentage Interests (excluding the Percentage Interests acquired
by such person). If no such approval is obtained, such person's Percentage Interests shall only
entitle such person to receive the distributions and allocations of profits and losses to which the
Member from whom such person received such Percentage Interests would be entitled. Any such
approval may be subject to any terms and conditions imposed by the Members. It shall be an
additional condition of any transfer that the transferee (if not already a party to this Agreement)
become a party to this Agreement by delivering to each of the Members a counterpart of this
Agreement signed by such transferee.
D. Notwithstanding anything in this Agreement to the contrary, but subject to
the provisions of 6 C hereof, no additional Percentage Interests shall be issued and no Member's
Percentage Interests shall be reduced without the consent of at least sixty (60%) percent of all the
Percentage Interests.
Members"
E. For purposes of this Agreement, the term "Immediate Family
shall mean a spouse, sibling, parent or child.
F. Notwithstanding anything in this Agreement to the contrary, no sale of all
or substantially all of the assets of the Company may occur without the consent of at least sixty
(60%) percent of all the Percentage Interests.
G. Notwithstanding anything to the contrary, it is agreed that: (i) anyone who
hereafter becomes a Member of the Company and who is employed by the Company or its affiliates
Member"
(each an "Employee and collectively the "Employee Members") not howsoever gift,
may
sell, assign, pledge, encumber, hypothecate, exchange, transfer or otherwise dispose of all or any
portion of their respective Percentage Interests in the Company without the consent of the
Managing Member, which consent may be withheld for any or no reason, and that the foregoing
restriction shall also apply to gifts, transfers or any other form of alienation of all or any portion of
the Percentage Interests to the Immediate Family Members of any Employee Member; (ii)
immediately, automatically and without any further action by or notice to an Employee Member,
upon any termination of such Employee Member's employment with the
Company or with any of
its affiliates, such Employee Member's Percentage Interest in the Company shall by virtue of this
provision be assigned to and shall revert to the Company without any additional consideration
payable to such Employee Member and without any additional documents of conveyance or
assignment, it being agreed that this provision shall act as and for an irrevocable, assignment,
authorization and consent by each Employee Member to the foregoing assignment and reversion to
the Company and as a power of attorney (coupled with an interest) hereby granted to the Managing
Member on behalf of each Employee Member to effectuate any such assignment and reversion as
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set for hereinabove and to execute any documents and instruments on behalf of each Employee
Member as the Managing Member may deem necessary or desirable to effectuate the intent and
purpose of this provision; (iii) unless and until all the other Members of the Company receive the
full return of all capital sums they invested and/or advanced/loaned to the Company, the Employee
Members shall not be entitled to receive any distributions from the Company.
10. Dissolution and Winding Up.
A. The Company shall be dissolved upon the earliest to occur of (i) the
expiration
Preview
FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 O'LEARY EXHIBIT 20 FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 AMENDED AND RESTATED OPERATING AGREEMENT OF DELAWARE OPERATIONS ASSOCIATES LLC AMENDED AND RESTATED OPERATING AGREEMENT (the "Agreement") of 2nd Delaware Operations Associates LLC (the "Company") made as of the day of November, 2014, "Members" by and between Kenneth Rozenberg and Jeffrey Sicklick (hereinafter collectively the and individually as a "Member"). WI T N E S S E T H WHEREAS, the Company has been formed pursuant to the provisions of the New York Limited Liability Company Act (the "Act"), by having its articles of organization (the "Articles of Organization") filed with the Secretary of State of the State of New York on August 1, 2013, and the Members intend to amend and restate the Articles of Organization to provide that the purpose of the Company is to operate a 200-bed skilled nursing facility located at 1014 Delaware Avenue, Buffalo, NY 14209 (the "Facility"); and WHEREAS, the Members desire to adopt this Agreement for the operation and management of the Company. NOW, THEREFORE, in consideration of the agreements and obligations set forth herein, the Members hereby agree as follows: 1. Formation, Name and Place of Business. A. This Agreement shall become effective upon the execution hereof. B. The terms and provisions hereof will be construed and interpreted in accordance with the terms and provisions of the Act and, if any of the terms and provisions of this Agreement should be deemed inconsistent with those of the Act, the Act shall be controlling. C. The business of the Company will be conducted, subject to regulatory approval, under the assumed name of Buffalo Center for Rehabilitation and Health Care subject to regulatory approval, if any, any name(s) designated by the Managing Member hereinafter mentioned. D. The place of business of the Company will be initially located at 4770 White Plains Road, Third Floor, Bronx, New York 10470 until the Closing Date (hereafter defined) at which time the place of business shall be at 1014 Delaware Avenue, Buffalo, NY 14209. E. The parties hereto shall execute such certificates and documents, and the Members shall file and record such certificates and documents, as may be necessary or . . 1 FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 appropriate to comply with the requirements for the continuance and operations of a limited liability company under the Act. The parties hereto shall also execute such certificates and documents, and the Members shall file, record and publish such certificates and documents, as the Members, upon advice of counsel, deem necessary or appropriate to comply with requirements of applicable laws governing the formation and operation of a limited liability company in all other jurisdictions where the Company desires to conduct business. 2. Term. The Company commenced doing business on the date on which the Articles of Organization were filed with the Secretary of State of the State of New York, and will commence doing business as the operator of the Facility upon the date the Company closes on the acquisition of certain assets relating to the Facility (the "Closing Date"). The Company shall continue in existence unless sooner dissolved and wound up pursuant to the Act or any provisions of this Agreement. 3. Purposes and Powers. The powers and purposes of the Company are limited to (a) acquiring, owning, managing, operating and otherwise using the Facility, a 200-bed skilled nursing facility to be known as Buffalo Center for Rehabilitation and Health Care located at 1014 Delaware Avenue, Buffalo, NY 14209, and owning or leasing such assets, personalty, and/or fixtures as reasonably may be related to the ownership or operation of the Facility and such other assets, and (b) exercising all powers enumerated in the Act necessary or convenient to the conduct, promotion or attainment of the foregoing business or purposes. 4. Members. A. The names and addresses of the Members and their initial respective Percentage Interests in the Company are set forth on Schedule A, attached hereto. B. No person or entity may own ten percent or more of any membership interest or voting right unless approved by the Public Health and Planning Council. 5. Management. The business and affairs of the Company shall be exclusively managed by Kenneth Rozenberg, the managing member of the Company (the "Managing Member"). The Managing Member of the Company must be a Member of the Company. The Managing Member shall have full and complete authority, power, and discretion to manage and carry out the business of the Company, to make all decisions regarding those matters and to perform any and all other acts or activities customary to or incident to the day-to-day management of the Company's business. Neither the management structure, nor this Section 5, may be deleted, modified or amended without State of New York Department of Health approval. 2 FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 6. Capital Contribution; Additional Capital Contributions. A. Each Member's initial capital contribution is set forth on Schedule A annexed hereto. The amounts set forth on Schedule A shall constitute the initial capital of the Company. The Company shall maintain a capital account for each Member (a "Capital Account"). The opening balance of each Capital Account shall consist of such Member's initial capital contribution. Each Capital Account shall be adjusted by the amount of any additional contibutions of capital by, or distributions to, such Member and any allocation of profits and losses pursuant to Section 8 hereof. B. The Members acknowledge that the Company may require additional capital. If such determination is made by those Members holding a majority in interest of the Percentage Interests, the Company shall send a notice to each Member stating the aggregate amount of the additional capital required (the "Capital Call") and the amount required to be contributed by each Member, determined by multiplying (1) each Member's Percentage Interest by (2) the aggregate amount of the Capital Call ("Capital Call Share"). C. If a Member shall not contribute an amount equal to his Capital Call Share (the "Failing Member"), and if the other Member(s) (the "Non-Failing Member(s)") have made their entire required con1ributions, then the Non-Failing Member(s) may make the additional contribution that the Failing Member was to make to the Company, pro rata in accordance with each Non-Failing Member's Percentage Interest(s) (the "Additional Contributions"). In such event the Non-Failing Member(s) shall be entitled to receive the return of their Additional Contributions before the Failing Member shall receive any distributions. In addition, the Percentage Interest of each Failing Member shall be decreased to a percentage equal to a number expressed in fractional terms, the numerator of which is the aggregate capital contributions made by the Failing Member and the denominator of which is equal to the total sum of (i) all capital contributions made by all Members prior to this Capital Call plus (ii) a number equal to the aggregate of all Additional Contributions made pursuant to this Capital Call multiplied by 150%. The Percentage Interest of the Non-Failing Members shall be increased, pro rata to their relative Additional Contributions, by an amount equal to the percentage decrease in the Percentage Interest of the Failing Member pursuant to the preceding sentence. D. A Member shall not be entitled to withdraw any part of such Member's Capital Account or to receive any distribution from the Company, except as provided in this Agreement. Except as set forth in C above, no Member shall have priority over any other Member either for the retum of Capital Contributions or for distributions of All Cash Available for Distribution (as hereinafter defined). 7. Distributions. -3- FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 Distribution" A. "All Cash Available for shall mean all cash receipts of the Company remaining after the payment of (i) all operating expenses, (ii) outstanding Member loans (if any), including the interest thereon, and (iii) such reasonable reserves the Managing Member may set aside for working capital requirements. B. Subject to the provisions of 6 C above, All Cash Available for Distribution shall be distributed to the Members in accordance with their respective Percentage Interests at such time and in such amount as the Managing Members shall determine in his sole discretion. 8. Allocation of Profits and Losses. A. Except as herein otherwise expressly provided, for purposes of this "Profits" "Losses" Agreement the terms and shall mean the net profits and losses of the Company as determined separately, and not cumulatively, for each fiscal year of the Company by the Company's accountants in accordance with the accounting methods followed by the Company for Federal income tax purposes. B. Except as herein otherwise expressly provided, the Profits and Losses of the Company (including each item of income, gain, loss, deduction or credit entering into the computation thereof) shall be allocated for each year by crediting the Capital Account of each Member with any Profits in accordance with such Member's Percentage Interest, and charging the Capital Account of each Member with any Losses as follows: first to all Members with positive Capital Accounts proportionately until such Capital Accounts are reduced to zero, then to each Member in accordance with such Member's Percentage Interest. C. Except as herein otherwise expressly provided, allocations of Profits and Losses upon the liquidation and dissolution of the Company shall be made, to the extent Members' possible, so as to create balances in the Capital Accounts equal to zero. D. Notwithstanding the foregoing, to the extent that Section 704(b) and (c) of the Internal Revenue Code of 1986, as amended (the "Code"), requires allocations of income or loss of the Company in a manner different than that set forth above, the Company shall use any permissible method contained in the Treasury Regulations promulgated under Code Section 704(b) and (c) that is selected by the Managing Members. E. All allocations of Profits and Losses shall be made as of the last day of each fiscal year of the Company; provided, however, that if during any fiscal year of the Company or any portion thereof there is for any reason a change in any Member's interest in the Company, then Profits and Losses for such year shall be allocated among the Members based upon the number of days during such period that such Member was registered as the owner of such interest or in such other manner as theManaging Members deem appropriate in accordance with requirements of the Code and of regulations issued pursuant thereto. -4- FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 9. Transfer of Percentage Interests; Sale of Facility. A. Notwithstanding anything to the contrary in the Articles of Organization or the Operating Agreement, all transfers, assignments or other dispositions of membership interests or voting rights, including any such transfers, assignments or dispositions under this Section or Section 6(D) hereof, shall be effectuated, to the extent applicable, in accordance with Public Health Law § 2801-a(4)(b) or any successor statute thereto. B. Except as provided in this Agreement, a Member may not gift, sell, assign, pledge, encumber, hypothecate, exchange, transfer or otherwise dispose some or all of his Percentage Interest in the Company. Subject to the provisions of G below, a Member may gift, transfer and assign some or all of his Percentage Interest in the Company, in the case of a natural Member, to such Member's Immediate Family Members and in the case of an entity Member, to such entity Member's affiliates or employees. Except as set forth hereinabove but subject to the provisions of G below, a Member desiring to assign, transfer, sell or otherwise dispose of some or all of his Percentage Interest (the "Selling Member") shall first obtain a bona fide written offer from a prospective purchaser of such Percentage Interest stating the terms and conditions upon which the proposed purchase is to be made. The Selling Member shall then give the other Members (the "Remaining Members") written notice (the "Offer Notice") of his intention to so sell to such proposed purchaser along with a copy of such bona fide written offer. Each Remaining Member, other than the Selling Member, on a basis pro rata to the Percentage Interests of each Remaining Member exercising his right of first refusal, shall have the right to exercise a right of first refusal to purchase all (but not less than all) of the Percentage Interests proposed to be sold by the Selling Member upon the same terms and conditions as stated in the bona fide written offer by giving written notification to the Selling Member of his intention to do so within sixty (60) days after receiving the written notice from the Selling Member. The failure of any Remaining Member to so notify the Selling Member of a desire to exercise such right of first refusal within such sixty (60) day period shall result in the termination of such Remaining Member's right of first refusal and the Selling Member shall be entitled to consummate the sale of his Percentage Interests with respect to which such first right of refusal has not been exercised to the proposed purchaser offering to do so pursuant to the bona fide written offer to purchase and upon no other terms or conditions. Any changes in any of the terms or conditions of the written bona fide offer shall require the Selling Member to re-offer the Percentage Interests to the Remaining Members who shall again have the right of first refusal pursuant to the provisions of this Section. If the Selling Member does not sell his Percentage Interests in accordance with the written bona fide offer within thirty (30) days after receiving the right to do so, his right to do so terminates and the terms and conditions of this Section shall again be in effect with respect to his Percentage Interests. If a Remaining Member gives written notice to the Selling Member of his desire to exercise his right of first refusal and to purchase the Selling Member's offered Percentage Interest upon the same terms and conditions as are stated in the bona fide written offer, such Remaining Member shall have the right to designate the time, date and place of closing for the closing to occur within ninety (90) days after receipt of -5- FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 written notification from the Selling Member of the bona fide offer. C. Except for transfers to Immediate Family Members or in the case of an entity Member, to such entity Member's affiliates or employees, no person acquiring a Percentage Interest, other than a Member, shall become a Member unless such person is approved by the vote or consent of at least sixty (60%) percent of all the Percentage Interests (excluding the Percentage Interests acquired by such person). If no such approval is obtained, such person's Percentage Interests shall only entitle such person to receive the distributions and allocations of profits and losses to which the Member from whom such person received such Percentage Interests would be entitled. Any such approval may be subject to any terms and conditions imposed by the Members. It shall be an additional condition of any transfer that the transferee (if not already a party to this Agreement) become a party to this Agreement by delivering to each of the Members a counterpart of this Agreement signed by such transferee. D. Notwithstanding anything in this Agreement to the contrary, but subject to the provisions of 6 C hereof, no additional Percentage Interests shall be issued and no Member's Percentage Interests shall be reduced without the consent of at least sixty (60%) percent of all the Percentage Interests. Members" E. For purposes of this Agreement, the term "Immediate Family shall mean a spouse, sibling, parent or child. F. Notwithstanding anything in this Agreement to the contrary, no sale of all or substantially all of the assets of the Company may occur without the consent of at least sixty (60%) percent of all the Percentage Interests. G. Notwithstanding anything to the contrary, it is agreed that: (i) anyone who hereafter becomes a Member of the Company and who is employed by the Company or its affiliates Member" (each an "Employee and collectively the "Employee Members") not howsoever gift, may sell, assign, pledge, encumber, hypothecate, exchange, transfer or otherwise dispose of all or any portion of their respective Percentage Interests in the Company without the consent of the Managing Member, which consent may be withheld for any or no reason, and that the foregoing restriction shall also apply to gifts, transfers or any other form of alienation of all or any portion of the Percentage Interests to the Immediate Family Members of any Employee Member; (ii) immediately, automatically and without any further action by or notice to an Employee Member, upon any termination of such Employee Member's employment with the Company or with any of its affiliates, such Employee Member's Percentage Interest in the Company shall by virtue of this provision be assigned to and shall revert to the Company without any additional consideration payable to such Employee Member and without any additional documents of conveyance or assignment, it being agreed that this provision shall act as and for an irrevocable, assignment, authorization and consent by each Employee Member to the foregoing assignment and reversion to the Company and as a power of attorney (coupled with an interest) hereby granted to the Managing Member on behalf of each Employee Member to effectuate any such assignment and reversion as -6- FILED: NEW YORK COUNTY CLERK 06/28/2023 03:21 PM INDEX NO. 451549/2023 NYSCEF DOC. NO. 236 RECEIVED NYSCEF: 06/28/2023 set for hereinabove and to execute any documents and instruments on behalf of each Employee Member as the Managing Member may deem necessary or desirable to effectuate the intent and purpose of this provision; (iii) unless and until all the other Members of the Company receive the full return of all capital sums they invested and/or advanced/loaned to the Company, the Employee Members shall not be entitled to receive any distributions from the Company. 10. Dissolution and Winding Up. A. The Company shall be dissolved upon the earliest to occur of (i) the expiration