OPERATION
OF ITS BUSINESS IN ACCORDANCE WITH THIS AGREEMENT.
(B)
ACCOUNTING METHODS.
(I)
THE COMPANY SHALL USE THE ACCRUAL METHOD
OF ACCOUNTING IN PREPARATION OF ITS ANNUAL REPORTS AND FOR TAX PURPOSES AND
SHALL KEEP ITS BOOKS AND RECORDS ACCORDINGLY.
(II)
ALL AMOUNTS PAYABLE UNDER ANY AGREEMENT
BETWEEN THE COMPANY ON THE ONE HAND AND THE MEMBERS OR THEIR AFFILIATES ON THE
OTHER HAND SHALL BE TREATED AS OCCURRING BETWEEN THE COMPANY AND A PERSON WHO IS
NOT A MEMBER WITHIN THE MEANING OF CODE SECTION 707(A)(1) AND SUCH AMOUNTS
PAYABLE BY THE COMPANY TO ANY MEMBER OR ITS AFFILIATES SHALL BE CONSIDERED AN
EXPENSE OR CAPITAL COST, AS THE CASE MAY BE, OF THE COMPANY FOR INCOME TAX AND
FINANCIAL REPORTING PURPOSES, AND SHALL NOT BE CONSIDERED A DISTRIBUTION TO SUCH
MEMBER INCLUDING, WITHOUT LIMITATION, IN MAINTAINING SUCH MEMBER'S CAPITAL
ACCOUNT, AND ANY SUCH AMOUNTS PAYABLE BY ANY MEMBER OR ITS AFFILIATES TO THE
COMPANY SHALL NOT BE CONSIDERED A CONTRIBUTION TO THE COMPANY, INCLUDING,
WITHOUT LIMITATION, IN MAINTAINING SUCH MEMBER'S CAPITAL ACCOUNT.
(III)
ACCESS TO BOOKS, RECORDS, ETC.
SUBJECT TO
SECTION 8.04 HEREOF, ANY MEMBER OR ANY AGENTS OR REPRESENTATIVES OF SUCH MEMBER,
AT THE MEMBER'S OWN EXPENSE AND UPON REASONABLE NOTICE AND WITH REASONABLE
FREQUENCY, MAY EXAMINE ANY INFORMATION IT MAY REASONABLY REQUEST AND MAKE COPIES
OF AND ABSTRACTS FROM THE FINANCIAL AND OPERATING RECORDS AND BOOKS OF ACCOUNT
OF THE COMPANY, AND DISCUSS THE AFFAIRS, FINANCES AND ACCOUNTS OF THE COMPANY
WITH THE MANAGING MEMBER AND ITS RESPONSIBLE OFFICERS, DIRECTORS, OFFICERS AND
INDEPENDENT ACCOUNTANTS OF THE COMPANY, ALL AT SUCH REASONABLE TIMES AND AS
OFTEN AS SUCH MEMBER OR ANY AGENTS OR REPRESENTATIVES OF SUCH MEMBER MAY
REASONABLY REQUEST.
THE RIGHTS GRANTED TO A MEMBER PURSUANT TO THIS SECTION
8.01 ARE EXPRESSLY SUBJECT TO COMPLIANCE BY SUCH MEMBER WITH THE CONFIDENTIALITY
PROCEDURES AND GUIDELINES OF THE COMPANY, AS SUCH PROCEDURES AND GUIDELINES MAY
BE ESTABLISHED FROM TIME TO TIME.
SECTION 8.02.
REPORTS.
(A)
IN GENERAL.
THE MANAGING MEMBER SHALL BE
RESPONSIBLE FOR THE PREPARATION OF FINANCIAL REPORTS OF THE COMPANY AND THE
COORDINATION OF FINANCIAL MATTERS OF THE COMPANY WITH THE COMPANY'S
ACCOUNTANTS.
EACH REPORT DELIVERED BY THE COMPANY TO THE MEMBERS PURSUANT TO
THIS ARTICLE VIII SHALL BE ACCOMPANIED BY A REPRESENTATION OF A RESPONSIBLE
OFFICER OF THE MANAGING MEMBER FAMILIAR WITH THE AFFAIRS OF THE COMPANY THAT
(X) SUCH REPORT HAS BEEN
47
PREPARED AND FAIRLY STATED IN ALL MATERIAL RESPECTS IN ACCORDANCE WITH GAAP, OR
TO THE EXTENT INCONSISTENT THEREWITH, IN ACCORDANCE WITH THIS AGREEMENT, AND
(Y) NO LIQUIDATING EVENT OR NOTICE EVENT, OR EVENT WHICH WITH NOTICE OR LAPSE OF
TIME OR BOTH WOULD CONSTITUTE A LIQUIDATING EVENT OR NOTICE EVENT (OTHER THAN
THE NOTICE EVENT DESCRIBED IN SECTION 14.01(A) HEREOF) HAS OCCURRED AND IS
CONTINUING OR IF ANY SUCH EVENT HAS OCCURRED AND IS CONTINUING, THE ACTION THAT
THE MANAGING MEMBER HAS TAKEN OR PROPOSES TO TAKE WITH RESPECT THERETO.
(B)
ANNUAL REPORTS.
(I)
WITHIN 120 DAYS AFTER THE END