Frequently Asked Questions
Act
Means the Revised Florida Limited Liability Company Act as amended from time to time.
Additional Member
Means any Person that is admitted to the Company as an additional member pursuant to this Agreement.
Agreement
Means the written Operating Agreement, as further amended from time to time.
Articles
Means the Articles of Organization of the Company as properly adopted and amended from time to time by the Members and filed with the Florida Secretary of State.
Bankruptcy
Means a Member who:
a. makes an assignment for the benefit of creditors.
b. files a voluntary petition in bankruptcy.
c. is adjudged a bankrupt or insolvent or has entered against the Member an order for relief in any bankruptcy or insolvency proceeding; files a petition or answer seeking for herself or himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, if the proceeding has not been dismissed within 120 days after commencement.
d. files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of this nature; or
e. seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the Member or of all or any substantial part of the Member’s properties, if within ninety (90) days after the appointment without the Member’s consent or acquiescence of a trustee, receiver, or liquidator of the Member or of all or any substantial part of the Member’s properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated.
Capital Account
Has the meaning ascribed to the term by the Florida Limited Liability Company Act, Florida Statutes, §608.402(6), as amended from time to time.
Capital Contribution
Means any contribution of funds, property, or services made by or on behalf of a Preferred Member as consideration for a Preferred Membership Interest determined by the number of Units purchased by such Member multiplied by $10,000.
Cash Proceeds
Means the amount of cash received from operations.
Code
Means the Internal Revenue Code of 1986, as amended, and any successor to that Code.
Common Member
Means a voting Member who has made a Contribution to the Company in consideration for receiving one hundred (100%) percent of a) all tax losses, and b) all profits after Preferred Members’ Preferred Monthly Return and Liquidation Preference.
Company Property
Means any investment in real property directly or indirectly owned by the Company, specifically through special purpose affiliated entities used to consolidate Company investments. See “Properties.”
Disposition (Dispose)
Means any sale, assignment, exchange, mortgage, pledge, grant, hypothecation, or other transfer, absolute or as security or encumbrance (including dispositions by operation of law).
Fiscal Year
Means the Company’s fiscal year, which shall be the calendar year.
Gross Assets Under Management
Means the aggregate total leveraged value of all assets under the direct or indirect management or oversight by the Company or its affiliates, without any deduction for debt or leverage. For the avoidance of doubt, an asset that is purchased by a Company Affiliate for ten million dollars ($10,000,000.00) using three million dollars ($3,000,000.00) of invested equity by the Company and seven million dollars ($7,000,000.00) mortgage debt would
47 PRIVATE AND CONFIDENTIAL FOR OFFEREE ONLY represent ten million dollars ($10,000,000.00) of indirect Gross Assets Under Management
and three million dollars ($3,000,000.00) direct Gross Assets Under Management.
Gross Offering Proceeds
Means ten thousand ($10,000) dollars multiplied by the number of Units sold in this Offering. The calculation of Gross Offering Proceeds does not include Units acquired by the Advisor.
Investment Date
Means the date on which a Preferred Member’s membership certificate is issued.
Liquidity Event
Means the sale of all, or substantially all Company Property.
Liquidation Preference
Means an amount necessary to bring the average, annual, cumulative non-compounded
Preferred Member distribution (inclusive of the Preferred Monthly Returns) to fifteen (15.0%)
percent per annum.
Liquidity Reserves
Means the amount of cash flow set aside as a fund to satisfy Early Redemption Requests.
Manager
Means Storage Units Management II Corporation, or any other person(s) that becomes a Manager pursuant to the Agreement.
Member
Means a person who has been admitted as a member of the Company and has a Preferred
Membership Interest in the Company with rights, obligations and preferences and limitations specified in the Agreement and pursuant to the Florida Revised Limited Liability Company
Act. Members include Common Members, Preferred Members, and Manager(s).
Net Distributable Cash Flow
Means the amount determined by the Manager based on its sole and absolute discretion, of cash flow generated after payment of all costs and expenses of operation and allocation of
a reasonable reserve for working capital, depreciation, unpaid liabilities, and Liquidity
Reserves.
Net Offering Proceeds
Means Gross Offering Proceeds, less those fees as are more fully set out in Section 7.
Net Liquidation Proceeds
Means, with respect to the sale of all, or substantially all assets of the Company, the net
proceeds, if any, remaining with respect to a Liquidity Event generated by the saleafter deduction for (i) all direct and indirect expenses and fees accrued or paid by the Company not previously reimbursed by Net Liquidation Proceeds from prior Liquidity Events, (ii) any costs and expenses, including the repayment of indebtedness, incurred in connection with such sale after setting aside appropriate reserves, all as determined in good faith by the Manager, and (iii) all accrued or outstanding debts and obligations of the Company, its subsidiaries or Affiliates pertaining to the operation of the Company or the asset(s) or portion(s) thereof for which the Liquidity Event occurred.
Net Operating Cash Flow
Means, for any period, all cash revenues, interest and other funds received by the Company
(including distributions from a Propco and any amounts attributable to the reduction of reserves) during such period (other than Net Liquidation Proceeds and Capital Contributions),
less all expenses with respect to the Company during such period and after setting aside
appropriate reserves, as determined by the Manager in its sole and absolute discretion and any other nondeductible cash items, including principal payments on indebtedness and expenditures for capital outlay items to be paid from net operating cash flow as determined in good faith by the manager of the Company.
Preferred Member
Means a non-voting Member who has made a preferred Capital Contribution to the Company in consideration of receiving a Preferred Monthly Return and Liquidation Preference.
Preferred Membership Interest or Interest
Means a Member’s entire interest in the Company including such Member’s rights in or to the Company’s profits, losses and Distributions pursuant to this Agreement and the Act and such other rights and privileges that the Member may enjoy by being a Member.
Preferred Monthly Return
Means the amount paid in arrears on the 10th day of each month to Preferred Members
calculated at six (6.0%) percent per annum on the Preferred Members’ Capital Contribution.
The Preferred Monthly Return shall begin to accrue thirty (30) days after the Investment Date
(“Accrual Date”). The first payment shall occur on the tenth (10th) day of the month following
the Accrual Date. By way of example a One Hundred Thousand ($100,000.00) Dollar Preferred
Member’s Capital Contribution made on December 21st would begin to earn a Preferred
49 PRIVATE AND CONFIDENTIAL FOR OFFEREE ONLY Monthly Return of Five Hundred Dollars and Zero Cents ($500.00), or Twenty-One Dollars and
Ninety-Two Cents ($16.44) per day beginning January 20th. The first payment of One Hundred Eighty Dollars and Eighty Four Cents ($180.84) would occur February 10th for the period commencing on January 20th through January 31st, representing 11 days Preferred Monthly Return. Thereafter, monthly payments of Five Hundred Dollars and Zero Cents
($500.00) would be made on the 10th day of each subsequent month. Thereafter, monthly
payments of Five Hundred Dollars and Zero Cents ($500.00) would be made on the 10th day of each subsequent month.
Proceeding
Means any judicial or administrative trial, hearing, or other activity, civil, criminal, or investigative, the result of which may be that a court, arbitrator, or governmental agency may
enter a judgment, order, decree, or other determination which, if not appealed and reversed, would be binding upon the Company, a Member in the capacity of a Member, or other Person subject to the jurisdiction of such court, arbitrator, or governmental agency.
Proceeds
Means the amount of cash received from all sources.
Propco
Means an affiliated limited liability company which directly or indirectly owns fee simple title to one or more Self-Storage Facilities, through which the Company expects to indirectly acquire an indirect interest in each Company Property.
Early Redemption Request
Means a request by a Preferred Member for a redemption of the Preferred Member’s Preferred Membership Interest.
Self-Storage Facility” or “Facility
Means an individual self-storage facility.
Special Member
Means a Member who has made a contribution to the Company in the form of providing advisory services or investor introductions in consideration for receiving the Special Member Allocation Percentage of tax losses and Net Liquidation Proceeds.
Special Member Allocation Percentage
Means, for purposes of profit and loss allocations and distribution of Net Liquidation Proceeds, an amount equal to a percentage of the amounts otherwise attributable (prior to any Special Member Allocation Percentage) to Common Members after deduction for (i) any Preferred Monthly Return, and (ii) Liquidation Preference.
Storage Units
Means Storage Units, LLC, an affiliate of Rapid Building Solutions, LLC.
Substitute Member
Means any Person that is admitted to the Company as an additional member pursuant to Article 10 of this Agreement.
Total Project Costs
Means the total cost for the design, development, and/or acquisition of a Company Property or self-storage facility, including without limitation all hard construction and development costs, land and site improvements, soft costs, financing costs, fees to third parties and affiliates, startup costs, working capital, contingencies, capitalized interest, reserves, capital
sourcing and advisory fees, and underwriter and issuance fees.
Unit
Means the Preferred Member’s interest in the Company.
Unit Value
Means the value for purposes of redemption.