Form 1-A Dlp Positive Fixed Returns Fund Llc

Offering Statement [Regulation A]

Published: 2019-09-20 11:37:51
Submitted: 2019-09-20
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schemaVersion:

1-A: Filer Information

Issuer CIK
0001731302 
Issuer CCC
XXXXXXXX 
DOS File Number
 
Offering File Number
 
Is this a LIVE or TEST Filing? Radio button checked LIVE Radio button not checked TEST
Would you like a Return Copy? Checkbox not checked
Notify via Filing Website only? Checkbox not checked
Since Last Filing? Checkbox not checked

Submission Contact Information

Name
 
Phone
 
E-Mail Address
 

1-A: Item 1. Issuer Information

Issuer Infomation

Exact name of issuer as specified in the issuer's charter

DLP Positive Fixed Returns Fund LLC 

Jurisdiction of Incorporation / Organization

DELAWARE  

Year of Incorporation

2017 

CIK

0001731302 

Primary Standard Industrial Classification Code

REAL ESTATE 

I.R.S. Employer Identification Number

82-0823067 

Total number of full-time employees

0 

Total number of part-time employees

0 

Contact Infomation

Address of Principal Executive Offices

Address 1

604 MARKET STREET 

Address 2

 

City

ST. AUGUSTINE 

State/Country

FLORIDA  

Mailing Zip/ Postal Code

32095 

Phone

800-350-8061 

Provide the following information for the person the Securities and Exchange Commission's staff should call in connection with any pre-qualification review of the offering statement.

Name

Ira Levine 

Address 1

 

Address 2

 

City

 

State/Country

 

Mailing Zip/ Postal Code

 

Phone

 

Provide up to two e-mail addresses to which the Securities and Exchange Commission's staff may send any comment letters relating to the offering statement. After qualification of the offering statement, such e-mail addresses are not required to remain active.

Financial Statements

Use the financial statements for the most recent period contained in this offering statement to provide the following information about the issuer. The following table does not include all of the line items from the financial statements. Long Term Debt would include notes payable, bonds, mortgages, and similar obligations. To determine "Total Revenues" for all companies selecting "Other" for their industry group, refer to Article 5-03(b)(1) of Regulation S-X. For companies selecting "Insurance", refer to Article 7-04 of Regulation S-X for calculation of "Total Revenues" and paragraphs 5 and 7 of Article 7-04 for "Costs and Expenses Applicable to Revenues".

Industry Group (select one) Radio button not checked Banking Radio button not checked Insurance Radio button checked Other

Balance Sheet Information

Cash and Cash Equivalents

$ 0.00 

Investment Securities
$ 0.00 
Total Investments

$  

Accounts and Notes Receivable

$ 0.00 

Loans

$  

Property, Plant and Equipment (PP&E):

$ 0.00 

Property and Equipment

$  

Total Assets

$ 0.00 

Accounts Payable and Accrued Liabilities

$ 0.00 

Policy Liabilities and Accruals

$  

Deposits

$  

Long Term Debt

$ 0.00 

Total Liabilities

$ 0.00 

Total Stockholders' Equity

$ 0.00 

Total Liabilities and Equity

$ 0.00 

Statement of Comprehensive Income Information

Total Revenues

$ 0.00 

Total Interest Income

$  

Costs and Expenses Applicable to Revenues

$ 0.00 

Total Interest Expenses

$  

Depreciation and Amortization

$ 0.00 

Net Income

$ 0.00 

Earnings Per Share - Basic

$ 0.00 

Earnings Per Share - Diluted

$ 0.00 

Name of Auditor (if any)

 

Outstanding Securities

Common Equity

Name of Class (if any) Common Equity

N/A 

Common Equity Units Outstanding

100 

Common Equity CUSIP (if any):

N/A 

Common Equity Units Name of Trading Center or Quotation Medium (if any)

N/A 

Preferred Equity

Preferred Equity Name of Class (if any)

 

Preferred Equity Units Outstanding

0 

Preferred Equity CUSIP (if any)

 

Preferred Equity Name of Trading Center or Quotation Medium (if any)

 

Debt Securities

Debt Securities Name of Class (if any)

 

Debt Securities Units Outstanding

0 

Debt Securities CUSIP (if any):

 

Debt Securities Name of Trading Center or Quotation Medium (if any)

 

1-A: Item 2. Issuer Eligibility

Issuer Eligibility

Check this box to certify that all of the following statements are true for the issuer(s)

Checkbox checked

  • Organized under the laws of the United States or Canada, or any State, Province, Territory or possession thereof, or the District of Columbia.
  • Principal place of business is in the United States or Canada.
  • Not subject to section 13 or 15(d) of the Securities Exchange Act of 1934.
  • Not a development stage company that either (a) has no specific business plan or purpose, or (b) has indicated that its business plan is to merge with an unidentified company or companies.
  • Not an investment company registered or required to be registered under the Investment Company Act of 1940.
  • Not issuing fractional undivided interests in oil or gas rights, or a similar interest in other mineral rights.
  • Not issuing asset-backed securities as defined in Item 1101 (c) of Regulation AB.
  • Not, and has not been, subject to any order of the Commission entered pursuant to Section 12(j) of the Exchange Act (15 U.S.C. 78l(j)) within five years before the filing of this offering statement.
  • Has filed with the Commission all the reports it was required to file, if any, pursuant to Rule 257 during the two years immediately before the filing of the offering statement (or for such shorter period that the issuer was required to file such reports).

1-A: Item 3. Application of Rule 262

Application Rule 262

Check this box to certify that, as of the time of this filing, each person described in Rule 262 of Regulation A is either not disqualified under that rule or is disqualified but has received a waiver of such disqualification.

Checkbox checked

Check this box if "bad actor" disclosure under Rule 262(d) is provided in Part II of the offering statement.

Checkbox not checked

1-A: Item 4. Summary Information Regarding the Offering and Other Current or Proposed Offerings

Summary Infomation

Check the appropriate box to indicate whether you are conducting a Tier 1 or Tier 2 offering Radio button checked Tier1 Radio button not checked Tier2
Check the appropriate box to indicate whether the financial statements have been audited Radio button checked Unaudited Radio button not checked Audited
Types of Securities Offered in this Offering Statement (select all that apply)
Checkbox checkedDebt 

The information called for by this item below may be omitted if undetermined at the time of filing or submission, except that if a price range has been included in the offering statement, the midpoint of that range must be used to respond. Please refer to Rule 251(a) for the definition of "aggregate offering price" or "aggregate sales" as used in this item. Please leave the field blank if undetermined at this time and include a zero if a particular item is not applicable to the offering.

Price per security
$ 50000.0000 
The portion of the aggregate offering price attributable to securities being offered on behalf of the issuer
$ 50000.00 
The portion of the aggregate offering price attributable to securities being offered on behalf of selling securityholders
$ 0.00 
The portion of the aggregate offering price attributable to all the securities of the issuer sold pursuant to a qualified offering statement within the 12 months before the qualification of this offering statement
$ 0.00 
The estimated portion of aggregate sales attributable to securities that may be sold pursuant to any other qualified offering statement concurrently with securities being sold under this offering statement
$ 0.00 
Total (the sum of the aggregate offering price and aggregate sales in the four preceding paragraphs)
$ 50000.00 

Anticipated fees in connection with this offering and names of service providers

Underwriters - Name of Service Provider
Underwriters - Fees
$ 0.00 
Sales Commissions - Name of Service Provider
Sales Commissions - Fee
$ 0.00 
Finders' Fees - Name of Service Provider
Finders' Fees - Fees
$ 0.00 
Accounting or Audit - Name of Service Provider
Accounting or Audit - Fees
$ 0.00 
Legal - Name of Service Provider
Legal - Fees
$  
Promoters - Name of Service Provider
Promoters - Fees
$ 0.00 
Blue Sky Compliance - Name of Service Provider
Blue Sky Compliance - Fees
$  
CRD Number of any broker or dealer listed:
0 
Estimated net proceeds to the issuer
$ 19500000.00 
Clarification of responses (if necessary)
 

1-A: Item 5. Jurisdictions in Which Securities are to be Offered

Jurisdictions in Which Securities are to be Offered

Using the list below, select the jurisdictions in which the issuer intends to offer the securities

Selected States and Jurisdictions

ALABAMA
ALASKA
ARIZONA
ARKANSAS
CALIFORNIA
COLORADO
CONNECTICUT
DELAWARE
DISTRICT OF COLUMBIA
FLORIDA
GEORGIA
HAWAII
IDAHO
ILLINOIS
INDIANA
IOWA
KANSAS
KENTUCKY
LOUISIANA
MAINE
MARYLAND
MASSACHUSETTS
MICHIGAN
MINNESOTA
MISSISSIPPI
MISSOURI
MONTANA
NEBRASKA
NEVADA
NEW HAMPSHIRE
NEW JERSEY
NEW MEXICO
NEW YORK
NORTH CAROLINA
NORTH DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
PUERTO RICO
RHODE ISLAND
SOUTH CAROLINA
SOUTH DAKOTA
TENNESSEE
TEXAS
UTAH
VERMONT
VIRGINIA
WASHINGTON
WEST VIRGINIA
WISCONSIN
WYOMING

Using the list below, select the jurisdictions in which the securities are to be offered by underwriters, dealers or sales persons or check the appropriate box

None Checkbox checked
Same as the jurisdictions in which the issuer intends to offer the securities Checkbox not checked
Selected States and Jurisdictions

1-A: Item 6. Unregistered Securities Issued or Sold Within One Year

Unregistered Securities Issued or Sold Within One Year

None Checkbox checked

Unregistered Securities Act

(d) Indicate the section of the Securities Act or Commission rule or regulation relied upon for exemption from the registration requirements of such Act and state briefly the facts relied upon for such exemption
 
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Header Data

Submission Type
1-A

Filer Info

Live Test Flag
LIVE

Issuer Credentials

Cik
0001731302
Ccc
XXXXXXXX

Flags

Return Copy Flag
false
Override Internet Flag
false

Form Data

Employees Info

Issuer Name
DLP Positive Fixed Returns Fund LLC
Jurisdiction Organization
DE
Year Incorporation
2017
Cik
0001731302
Sic Code
6500
Irs Num
82-0823067
Full Time Employees
0
Part Time Employees
0

Issuer Info

Street1
604 MARKET STREET
City
ST. AUGUSTINE
State Or Country
FL
Zip Code
32095
Phone Number
800-350-8061
Connection Name
Ira Levine
Industry Group
Other
Cash Equivalents
0.00
Investment Securities
0.00
Accounts Receivable
0.00
Property Plant Equipment
0.00
Total Assets
0.00
Accounts Payable
0.00
Long Term Debt
0.00
Total Liabilities
0.00
Total Stockholder Equity
0.00
Total Liabilities And Equity
0.00
Total Revenues
0.00
Cost And Expenses Appl To Revenues
0.00
Depreciation And Amortization
0.00
Net Income
0.00
Earnings Per Share Basic
0.00
Earnings Per Share Diluted
0.00

Common Equity

Common Equity Class Name
N/A
Outstanding Common Equity
100
Common Cusip Equity
N/A
Publicly Traded Common Equity
N/A
Preferred Equity Outstanding Preferred Equity
0
Debt Securities Outstanding Debt Securities
0
Issuer Eligibility Certify If True
true

Application Rule262

Certify If Not Disqualified
true
Certify If Bad Actor
false

Summary Info

Indicate Tier1 Tier2 Offering
Tier1
Financial Statement Audit Status
Unaudited
Securities Offered Types
Debt
Offer Delayed Continuous Flag
N
Offering Year Flag
Y
Offering After Qualif Flag
N
Offering Best Efforts Flag
Y
Solicitation Proposed Offering Flag
N
Resale Securities Affiliates Flag
N
Securities Offered
100000000
Outstanding Securities
0
Price Per Security
50000.0000
Issuer Aggregate Offering
50000.00
Security Holder Aggegate
0.00
Qualification Offering Aggregate
0.00
Concurrent Offering Aggregate
0.00
Total Aggregate Offering
50000.00
Underwriters Fees
0.00
Sales Commissions Service Provider Fees
0.00
Finder Fees Fee
0.00
Auditor Fees
0.00
Promoters Fees
0.00
Broker Dealer Crd Number
0
Estimated Net Amount
19500000.00

Juridiction Securities Offered

Jurisdictions Of Sec Offered None
true
Jurisdictions Of Sec Offered Same
false

Issue Juridication Securities Offering

0
AL
1
AK
2
AZ
3
AR
4
CA
5
CO
6
CT
7
DE
8
DC
9
FL
10
GA
11
HI
12
ID
13
IL
14
IN
15
IA
16
KS
17
KY
18
LA
19
ME
20
MD
21
MA
22
MI
23
MN
24
MS
25
MO
26
MT
27
NE
28
NV
29
NH
30
NJ
31
NM
32
NY
33
NC
34
ND
35
OH
36
OK
37
OR
38
PA
39
PR
40
RI
41
SC
42
SD
43
TN
44
TX
45
UT
46
VT
47
VA
48
WA
49
WV
50
WI
51
WY
Unregistered Securities If Unregsitered None
true
part-ii_iii.htm PART II AND III



604 Filed Pursuant to Rule
File Number

PART II – OFFERING CIRCULAR
 
PRELIMINARY OFFERING CIRCULAR: An Offering Statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering Statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the Offering Statement in which such Final Offering Circular was filed may be obtained.
 
PRELIMINARY OFFERING CIRCULAR DATED: September __, 2019
 
 DLP POSITIVE FIXED RETURNS FUND LLC

605 Market Street
St. Augustine, FL 32095
(800) 350-8061

Best Efforts Offering of

$100,000,0001

Note Investments (“Notes”)

Minimum Note Holder Amount: $50,000.


This Offering Circular consists of an offer and sale on a best efforts basis of up to an aggregate of $20,000,000 in Notes of
DLP POSITIVE FIXED RETURNS FUND, LLC
(the “Company”) in any 12 month period. The offering will commence as soon as this Offering Circular has been qualified by the Securities and Exchange Commission (the “SEC”) and shall remain open to new and existing investors through subsequent closings until the Company has sold Notes to investors (the “Note Holders”) with an aggregate purchase price of $20,000,000, unless earlier terminated in the Manager’s sole discretion. This Offering is not a mutual fund or other entity registered under the Investment Company Act of 1940 and therefore, Investors will not be afforded those regulatory protections set forth in the Act. See:
Risks Related to Compliance
 
and Regulation
in
Risk Factors
herein. This offering is available to both accredited and non-accredited investors. Since this is a Tier I, Regulation A offering, Rule 251(d)(2)(i)(C) will not apply. For general information on investing, we encourage you to refer to http://www.investor.gov.



1
The Company expects to raise a cumulative sum of approximately $100 million in Note sales prior to the end of the year 2025 with a maximum raise of no more than $20 million in any twelve-month period from the commencement of the offering.
 
The Company is a Delaware limited liability company. The manager of the Company is
DLP PFR MANAGEMENT, LLC
(the “Manager”), a Delaware limited liability company. The Company will endeavor to produce attractive risk adjusted returns by investing in first position loans with both affiliates and non-affiliates primarily secured by single-family and multi-family properties, in addition to other commercial real estate asset classes in which the Manager feels confident and comfortable in its ability to invest, underwrite and mitigate risk effectively in order to achieve the Company’s target returns.
 
The Company is offering to investors, pursuant to this Offering Circular, an opportunity to purchase Notes in the minimum aggregate amount of Fifty Thousand Dollars ($50,000) (the “Minimum Offering Amount”) and up to the maximum aggregate amount of Twenty Million Dollars ($20,000,000) (the “Maximum Offering Amount”) in any twelve-month period (the “Offering”). The Manager, in its sole discretion, may increase or decrease the Minimum Offering Amount.

 
Price to public
Underwriting discounts
and commissions (1)
Proceeds to
Issuer
Proceeds to
Other Persons
Per Membership Interest
$20,000,000
-
$19,950,000
$50,000 (2)
Total Minimum (3)
-
-
-
-
Total Maximum (3)
-
-
-
-
TOTAL
$20,000,000
-
$19,950,000
$50,000 (2)

(1)
The Company does not intend to use commissioned sales agents or underwriters. Please refer to the section entitled “PLAN OF DISTRIBUTION” of this Offering Circular for additional information.
(2)
Proceeds may be used to pay the fees associated with the Company’s accountants, legal counsel and other service providers in connection with preparing and filing this Offering Circular. Such amounts are not contingent on the amount of securities sold.
(3)
There is no minimum or amount for this offering.  The maximum amount is $20,000,000 in any 12 month period.

Investing in the Notes involves a high degree of risk, including risks associated with income tax, use of proceeds and conflicts of interest. Before buying any Notes, you should carefully read the discussion of material risks of investing in the Notes in
Risk Factors
herein. This Offering Circular supersedes any prior offering memorandum with respect to the Notes.
 
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS.  THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

THERE IS AT THIS TIME, NO PUBLIC MARKET FOR THE SECURITIES. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THESE LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY NOR HAS THE COMMISSION OR ANY STATE REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR ANY PERSON TO WHO IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME AN OFFERING CIRCULAR WHICH IS NOT DESIGNATED AS A PRELIMINARY OFFERING CIRCULAR IS DELIVERED AND THE OFFERING STATEMENT FILED WITH THE COMMISSION BECOMES QUALIFIED.

NEITHER THE DELIVERY OF THIS OFFERING CIRCULAR NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF OUR COMPANY SINCE THE DATE HEREOF. INFORMATION CONTAINED IN THE PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT.

NASAA UNIFORM LEGEND:

FOR RESIDENTS OF ALL STATES: THE PRESENCE OF A LEGEND FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN A PARTICULAR STATE. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE HEREBY ADVISED TO CONTACT THE COMPANY. THE SECURITIES DESCRIBED IN THIS OFFERING CIRCULAR HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAWS (COMMONLY CALLED 'BLUE SKY' LAWS).

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY THE FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

NOTICE TO FOREIGN INVESTORS

IF THE PURCHASER LIVES OUTSIDE THE UNITED STATES, IT IS THE PURCHASER'S RESPONSIBILITY TO FULLY OBSERVE THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY PURCHASE OF THE SECURITIES, INCLUDING OBTAINING REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER REQUIRED LEGAL OR OTHER FORMALITIES. THE COMPANY RESERVES THE RIGHT TO DENY THE PURCHASE OF THE SECURITIES BY ANY FOREIGN PURCHASER
.

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IMPORTANT INFORMATION REGARDING THIS OFFERING CIRCULAR
 
This Offering Circular has been prepared solely for the benefit of authorized persons interested in the offering. This Offering Circular does not constitute an offer or solicitation to any person except those particular persons who satisfy the suitability standards described herein.
 
This Offering Circular is part of an offering statement that has been filed with the SEC, using a continuous offering process. Periodically, as the Company makes material investments, or have other material developments, the Company will provide an Offering Circular Supplement that may add, update or change information contained in this Offering Circular. Any statement made in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular Supplement. The offering statement filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the SEC and any Offering Circular Supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that the Company will file periodically with the SEC. See the section entitled
Additional Information
below for more details.
 
There is no public market for the Notes, and none is expected to develop in the future. Sums invested are also subject to restrictions upon withdrawal and transfer, and the investments offered hereby should be purchased only by investors who have no need for liquidity in their investment.
 
Non-U.S. investors have certain restrictions on resale and hedging under Regulation S of the Act. Distributions under this offering might result in a tax liability for the non-U.S. investors. Each prospective investor is urged to consult his, her or its own tax advisor or pension consultant to determine his, her or its tax liability.

No person has been authorized in connection with this offering to give any information or to make any representations other than those contained in this Offering Circular, and any such information or representations should not be relied upon.  Any prospective purchaser of Notes who receives any such information or representations should contact the Manager immediately to determine the accuracy of such information. Neither the delivery of this Offering Circular nor any sale hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company or in the information set forth herein since the date hereof.
 
Prospective investors should not regard the contents of this Offering Circular or any other communication from the Company as a substitute for careful and independent tax and financial planning. Each prospective investor is encouraged to consult with his, her, or its own independent legal counsel, accountant and other professionals with respect to the legal and tax aspects of this investment and with specific reference to his, her, or its own tax situation, prior to investing.
 
The purchase of Notes by an individual retirement account (“IRA”), Keogh plan or other qualified retirement plan involves special tax risks and other considerations that should be carefully considered. Income earned by qualified plans as a result of an investment in the Company may be subject to federal income taxes, even though such plans are otherwise tax exempt.

The Notes are offered subject to prior sale, acceptance of an offer to purchase, and to withdrawal or cancellation of the offering without notice. The Manager reserves the right to reject any investment in whole or in part.

The Manager will make available to any prospective investor and his, her, or its advisors the opportunity to ask questions and receive answers concerning the terms and conditions of the offering, the Company or any other relevant matters, and to obtain any additional information to the extent the Manager possesses such information.
 

The information contained in this Offering Circular has been provided by the Manager. This Offering Circular contains summaries of documents not contained herein, but all such summaries are qualified by references to the actual documents. Copies of documents referred to in this Offering Circular, but not included as an exhibit, will be made available to qualified prospective investors upon request.

SUMMARY OF OFFERING
 
The following information is only a brief summary of, and is qualified in its entirety by, the detailed information appearing elsewhere in this Offering Circular. This Offering Circular, together with the exhibits attached including, but not limited to, the Limited Liability Company Operating Agreement of the Company (the “Operating Agreement”), and Subscription Agreement, should be read in their entirety before any investment decision is made. All capitalized terms used herein but not defined herein shall have the meaning ascribed to them in the Operating Agreement. If there is a conflict between the terms contained in this Offering Circular and the Operating Agreement, then this Offering Circular shall prevail.

The Company

DLP Positive Fixed Returns Fund LLC, (the “Company”) is a Delaware limited liability company which was organized on March 6, 2017, as a Delaware limited liability company, with a principal office located at 605 Market Street, Augustine, FL 32095. The Company will endeavor to produce attractive risk adjusted returns by investing in a range of real estate backed opportunities. The Company was formed to primarily invest in a portfolio of secured real estate loans with both affiliates and non-affiliates and real estate projects with both affiliates and non-affiliates including but not limited to investments into Affiliates’ other funds as well as non-affiliate real estate funds, preferred and/or common equity investments and partnerships, the acquisition and disposition of non-performing notes as well as other real estate backed investment funds.  The Company’s direct investment in real estate assets will include, without limitation, acquiring land for the construction of, or the purchase of, office buildings, multi-family, residential housing projects, senior living, retail projects, industrial projects and other income producing assets and acquiring other real estate assets that the Company believes are fundamentally sound and present attractive income and/or growth opportunities. The loans will include, without limitation, short term loans secured by real estate through mortgages and deeds of trusts.
 
The Manager
 
DLP PFR Management, LLC (the “Manager”) is a Delaware limited liability company located at 605 Market Street, Augustine, FL 32095. The Manager will manage the day to day operations of the Company, shall be responsible for the overall performance of the Company and has discretionary authority over the assets of the Company.  The Manager and its Affiliates will receive significant management and other fees.
 
Investment Objective
 
The objective of the Company is to provide real estate backed loans to investors including Affiliates intended to generate returns in excess of the interest paid to the Note Holders.
 
Offering Size
 
The Company is seeking to raise a maximum aggregate amount of approximately $100 million in Note sales by the end of 2025 with a maximum raise of no more than $20 million in any twelve-month period from the date of Offering.
 
Minimum Offering Amount
 
Investors shall have the opportunity to purchase notes (“Notes”) from the Company in the minimum aggregate amount of Fifty Thousand Dollars ($50,000) (“Minimum Offering Amount”), however; the Manager, in its sole discretion, may increase or decrease the Minimum Offering Amount.
 
Target Interest
 
It is anticipated that the interest rate paid on the Notes (the “Note Rates”) will vary depending on the size of a Note Holder’s investment and the duration of the Note; however, it is anticipated that the Note Rate will be between 6% and 10% per annum. See Note Schedule.
 
Manager’s Capital Commitment
 
The Manager will invest in the Company, directly or indirectly through its Affiliates or members, an amount no less than five percent (5%) of the aggregate amount of Notes issued to Note Holders. The investment will be made as an equity capital contribution as a member of the Company (the “Capital Commitment”) and will be subordinate to the Notes issued to the Note Holders of the Company.
 
Company Term
 
The Company is intended to be an open-ended “evergreen” Company with no set end date. The Manager expects to originate and acquire assets (“Company Assets”) on a frequent and ongoing basis and will continue to do so indefinitely or until the Manager believes market conditions do not justify doing so. The Manager intends generally to utilize the interest payable on the Loans, the payment of principal on the Loans, distributions on Company Assets and the return of capital from the sale or disposition of Company Assets to originate and acquire new Company Assets, however; the Manager expects to manage the Company’s investments and capital structure in such a manner as to attempt to provide a reasonable level of capability for the Company to pay the Notes when due and to accommodate redemption requests given the relatively illiquid nature of real estate based investments in general.
See also Redemption and Early Repayment
. If the Manager deems it appropriate based on evolving market conditions and dynamics, the Manager shall cease to originate and acquire new Company Assets and shall distribute any return of capital from the disposition of Company Assets in accordance with the Waterfall, as defined herein, until all Company Assets have been liquidated. See Company Waterfall-Distributions, The Manager may choose to redeem Notes and liquidate Company Assets at any time during the life of the Company.
 
The Company intends to have multiple tiers of rates based on the amount of money invested from a Note Holder and the duration of the maturity (the “Note Schedule”). These tiers may change from time to time. While the Company intends to offer notes in different series and on different terms, the Company does not intend to offer different terms to newer acquirers of the Notes. All Notes will be available immediately upon qualification.  No Notes will be reserved for later offerings.  Notes will be offered on the same terms, subject to the qualifications set forth in the Note Schedule.  The realized interest rates, as set forth in the Note Schedule are based upon the amount of money invested and the date of the investment, and all Note Holders within the same tier will be treated equally.  The interest rate for each maturity date and dollar amount combination shall be set by the Manager in a Note Schedule to be published periodically.  The Manager, from time to time, in its sole discretion may also offer alternative note offering rates and terms. Notes may be purchased, with the consent of the Manager, at any time at the interest rate and terms defined for that period by the Manager. The Company may prepay the outstanding principal and interest to any Note Holder at any time without penalty.
 
Note Holders will be lenders to the Company on a Pari Passu basis with the other Note Holders and shall have a blanket secured interest in the Company Assets. As security for the performance and payment of Company’s obligations to the Note Holders under the Notes, the Company will grant to the Note Holders a security interest in all Company Assets, whenever acquired, including without limitation, all real property, equipment, fixtures, tenant improvements, deposits, deposit accounts, accounts receivable, shares, units, membership and partnership interests, contract rights, securities, mortgages, notes, trust deeds, beneficial interests, instruments, and any and all assignments of the same, and intellectual property (including, but not limited to, patents, patent applications, copyrights, trademarks, trade names, and goodwill), together with all replacements thereof or substitutions therefore, and all proceeds thereof (the “Security”). This secured interest will generally be in a senior position except in circumstances where individual Company Assets have been or are being pledged by the Company to any senior lender (“Credit Facility or “Facility”).
 
Monthly Interest Payments
 
Note holders shall have the option (prior to any liquidation of the Company) to receive their interest paid either (a) via ACH, or (b) reinvested and compounded.
 
Redemption and Early Repayment
 
The Notes will either have a stated Maturity Date or will be an Open Redemption Option Note.  The Company shall have the option to extend the Maturity Date of the Note for ninety (90) days.  In the event a Note is not paid at the Maturity Date, the Note shall be deemed an Open Redemption Option Note. Such Open Redemption Option Note may be redeemed at any time by the Note Holder providing ninety (90) days’ advance written notice to the Company. In addition, the Note Holder may request an early repayment of the Note by providing written notice to the Company. The granting or not of the early Repayment request shall be subject to the sole discretion of the Manager.
   
Investor Suitability
 
This offering is available to both accredited and non-accredited investors. Since this is a Tier I, Regulation A offering, Rule 251(d)(2)(i)(C) will not apply and most investors will not have limitations in investing in this Offering.  Each purchaser must execute a Subscription Agreement and Investor Questionnaire making certain representations and warranties.  (See “Investor Suitability herein”).
 
Financial Reporting
 
The Company expects to use the accrual basis of accounting and shall prepare its financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”). As a Tier 1, Regulation A offering, we are not required to furnish reports, statements, and tax information to the Note Holders. Subject to Tier 1 issuer reporting requirements, the Company will provide certain information on Form 1-Z within 30 days after the completion or termination of the offering. This information may include the date that the offering commenced, the total amount of securities sold, the price of the securities sold, and net proceeds to the company. Notwithstanding the foregoing, the Company intends to provide to the Note Holders quarterly financial reports, consisting of a balance sheet, statement of net income and statement of cash flows, within sixty (60) days after the end of each quarter and an annual report within one hundred twenty (120) days of the year end.
 
Affiliates of the Manager
 
The Affiliates of the Manager include, but are not limited to DLP Real Estate Capital, Inc., DLP Real Estate LLC, DLP Real Estate Management, DLP Construction Management LLC, DLP Capital Partners, LLC, Direct Lending Partners LLC, Alliance Servicing LLC and Alliance Property Transfer, LLC, as well as other companies or funds including DLP Lending Fund, LLC, DLP Income & Growth Fund I, LLC and DLP Preferred Returns Equity Fund LLC. Affiliates also include any existing or any such future entities and funds in which Don Wenner is either directly or indirectly a controlling principal.
 
Management Fee
 
The Manager will charge an annual Management Fee of one percent (1%) of the total Company Assets Under Management (“AUM”) based upon the then current Stated Value of the Company Assets (the “Management Fee”). The Management Fee shall be calculated, prorated, and paid at the end of each calendar month.
 
Company Administration
 
It is the intention of the Company that the Manager will also manage the administration and investor relations functions, the cost of which shall be a Company Expense.  The Company will pay the Manager a fee of .5% of the Company’s AUM based upon the then Stated Value of the Company’s Assets.  Loan servicing shall be administered internally by the Manager, or an Affiliate of the Manager at usual and customary market rates. The Manager may, in its sole discretion, retain the services of an outside third-party administrator.
 
Leverage/Credit Facilities
 
The Company and/or any special purpose vehicles (SPV’s) of the Company may choose to borrow money from time to time from one or more senior lenders (“Credit Facilities” or “Facilities”) and may pledge one or more Company Assets as collateral for any such borrowing. Any Facility shall be nonrecourse to the Members. The Manager (and/or its principals) and the Company may agree to provide its Guarantees for a given Facility but are not required to do so. Any Facility will likely have covenants that affect the Company, any SPVs, and the Manager. There is no limitation on the amount of senior debt the Company may incur.
 
Company Expenses
 
Company Expenses shall include, but not necessarily be limited to the following: Company organizational costs, legal and accounting related costs for tax return preparation, financial statement preparation and/or audits, legal fees and costs, filing, licensing or other governmental fees, other third party audits, loan servicing fees, insurance costs (including without limitation GL, D&O, E&O and Fidelity), Company administration costs, fees associated with any Credit Facilities; and any other expenses associated with the operation of the Company or management of its Assets. Expenses may include expenses for services provided by Affiliates and costs and expenses may be apportioned and/or reimbursed to or from Affiliates.
 
Key Man Insurance
 
DLP Capital Partners LLC, the sole member of the Manager is a beneficiary of a life insurance policy on the life of Donald Wenner in the minimum amount of $2,000,000. The proceeds of such a policy is intended to provide the Manager with sufficient liquidity to be able to operate without duress while a new Key Man is identified and approved by the Members or to allow the Company to proceed with an orderly liquidation of its Assets.
 
Company Waterfall – Distributions
 
The following outlines the priority (“Waterfall”) for the distribution of cash from the Company:
 

First to interest and principal payments on any Credit Facility;

Second, to Note Holder interest, payable monthly;

Third, to Company Expenses;

Fourth, to Management Fees due Manager, payable monthly, and any other fees due Manager;

Fifth, to repayment of maturing Notes, if any;

Sixth, to distribution of remaining cash to the Manager.
 
The Company does not contribute funds on a regular basis to a separate account, commonly known as a sinking fund, to repay the Notes upon maturity.  Because funds are not set aside for the repayment of the Notes over their term, Noteholder’s must rely on the Company’s cash flow from operations and the Company’s ability to raise funds from the sale of additional securities or through credit facilities to repay the Notes at maturity.
 
Upon dissolution of the Company, except a dissolution caused by the dissolution, bankruptcy, or withdrawal of the Manager where a substitute Manager is retained within 90 days of such dissolution or bankruptcy or one year in the case of withdrawal, the Company will be liquidated, and the proceeds of liquidation will be applied as follows:
 

First, to interest and outstanding principal balance of any Credit Facility;

Second, to Note Holder principal, followed by accrued Note Holder interest, Pari Passu;

Third, to Company Expenses (inclusive of liquidated expenses);

Fourth, to Management Fees due Manager, payable monthly, and any other fees due Manager;

Fifth, to the distribution of remaining assets to the Manager.
 
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
 
This Offering Circular contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “outlook,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward-looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth or anticipated in our forward-looking statements. Factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, funds derived from operations, cash available for dividends, cash flows, liquidity and prospects include, but are not limited to, the factors referenced in this Offering Circular, including those set forth below.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Offering Circular. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Offering Circular. The matters summarized below and elsewhere in this Offering Circular could cause our actual results and performance to differ materially from those set forth or anticipated in forward-looking statements. Accordingly, we cannot guarantee future results or performance. Furthermore, except as required by law, we are under no duty to, and we do not intend to, update any of our forward-looking statements after the date of this Offering Circular, whether as a result of new information, future events or otherwise.
 
ABOUT THIS FORM 1-A AND OFFERING CIRCULAR
 
In making an investment decision, you should rely only on the information contained in this Form 1-A and Offering Circular. The Company has not authorized anyone to provide you with information different from that contained in this Form 1-A and Offering Circular. We are offering to sell, and seeking offers to buy the Notes only in jurisdictions where offers and sales are permitted. You should assume that the information contained in this Form 1-A and Offering Circular is accurate only as of the date of this Form 1-A and Offering Circular, regardless of the time of delivery of this Form 1-A and Offering Circular. Our business, financial condition, results of operations, and prospects may have changed since that date. Statements contained herein as to the content of any agreements or other documents are summaries and, therefore, are necessarily selective and incomplete and are qualified in their entirety by the actual agreements or other documents. The Company will provide the opportunity to ask questions of and receive answers from the Company's management concerning terms and conditions of the Offering, the Company or any other relevant matters and any additional reasonable information to any prospective investor prior to the consummation of the sale of the Notes. This Form 1-A and Offering Circular do not purport to contain all of the information that may be required to evaluate the Offering and any recipient hereof should conduct its own independent analysis. The statements of the Company contained herein are based on information believed to be reliable. No warranty can be made as to the accuracy of such information or that circumstances have not changed since the date of this Form 1-A and Offering Circular. The Company does not expect to update or otherwise revise this Form 1-A, Offering Circular or other materials supplied herewith. The delivery of this Form 1-A and Offering Circular at any time does not imply that the information contained herein is correct as of any time subsequent to the date of this Form 1-A and Offering Circular. This Form 1-A and Offering Circular are submitted in connection with the Offering described herein and may not be reproduced or used for any other purpose.
 
RISK FACTORS
 
There are significant risks associated with investing in the Company’s Notes and such Notes are highly speculative and should not be purchased by anyone who cannot afford a total loss of his, her or its entire investment.  Before you purchase Notes in the Company, please review below a list of risks that the Company specifically wants to bring to your attention.  There are undoubtedly many more risks that could interfere with the business of the Company and the summary below is not intended to be full and complete. You should carefully consider the following risk factors together with all of the other information included in this Offering Circular, including the matters addressed under “Forward-Looking Statements,” in evaluating an investment in the Company’s Notes. If any of the following risks were to occur, the Company’s business, financial condition, results of operations, cash flows and ability to pay interest or principal on the Loans could be materially adversely affected.

Risks Relating to an Investment in the Company – General
 
We are conducting this offering on a “best efforts” basis.

This Offering is being conducted on a “best efforts” basis. No guarantee can be given that all or any of the Notes will be sold, or that sufficient proceeds will be available to conduct successful operations. The sale of a relatively small amount of Notes may reduce the ability of the Company to spread investment risks through diversification of its Company Assets. If we are unable to raise substantial funds, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments that we make. In that case, the likelihood that any single asset’s performance would adversely affect our profitability will increase. Your investment in our Notes will be subject to greater risk to the extent that we lack a diversified portfolio of investments. Further, we will have certain fixed operating expenses, regardless of whether we are able to raise substantial funds in this offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make interest and principal payments.

An investment in our Notes is speculative and there is no guarantee of profitability.

The Manager anticipates that revenues from the investment in Company Assets will be sufficient to create net profits for the Company. However, there can be no assurance that revenues will be sufficient for such purpose. Although the Manager believes in each investment’s economic viability, there can be no guarantee that the investments will be profitable to the extent anticipated. Poor performance by any of the investments could significantly affect the ability of the Company to pay the interest and principal due on the Loans.

There is no guaranteed return of investor’s investment.

The investments offered hereby are speculative and involve a high degree of risk. There can be no guarantee that an Investor will realize a substantial return on investment, or any return at all, or that the Investor will not lose the entire investment. For this reason, each prospective Investor should read this Offering Circular and all documents in the Subscription Booklet carefully and should consult with his/her or its own legal counsel, accountant(s), or business advisor(s) prior to making any investment decision.

There is no assurance that we can obtain suitable financing arrangements.

The Company and/or any SPV(s) of the Company may choose from time to time to borrow money from one or more lenders (a “Credit Facility” or “Facility”) and utilize one or more Company Assets as collateral for any such borrowing. The Company further may issue debt securities in the future. The Operating Agreement grants the Manager significant latitude and discretion in its ability to use Credit Facilities in the operation of the Company. However, the Operating Agreement also places specific limitations on the use of Credit Facilities by the Manager, namely:

The Company will not utilize a Facility in an amount in excess of 80% of the Stated Value of any Company Asset at the time of procurement of that debt.

Any Facility shall be nonrecourse to the Investors. The Manager and/or the Company may agree to provide its Guaranty for a given Facility but is not required to do so. Any Facility will likely have covenants that affect the Company, any SPV(s), and the Manager.

While the use of leverage is designed to provide liquidity options, reduced required member equity and increase returns, it is inherently risky and may increase the risk of loss.

The Company has no Operating History
.

The Company has not commenced operations since its formation.. The Company is relying solely on its future operating performance and its ability to raise money to meet its obligations to the Noteholders.  Given its lack of operating history, there can be no assurance that such sources will generate sufficient cash flow to enable the Company to meet its obligations to the Noteholders.  As a result, you should not invest in the Notes unless you can afford to lose all or a significant part of your investment.

The Notes are Highly Speculative.

The Company’s goals are highly speculative and there is no assurance that the Company will be able to meet any of its goals.  If you buy Notes, you should be aware that you may not earn a substantial return on your investment in the Notes and you may, in fact, lose your entire investment.

The Notes may not be a suitable investment
.

The offered Notes are not a suitable investment for all Investors. In particular, an Investor should not purchase any Notes unless such Investor understands and is able to bear the risks associated with underlying investments of the Issuer. An investment in the Notes involves substantial risks and uncertainties and should be considered only by sophisticated Investors with substantial investment experience who can afford to lose the entirety of their investment in the Issuer.

Loss of capital.

The risks associated with the business objectives could result in the total loss of capital. No guarantee or representation is made that the Manager will be successful in lowering the risks associated with the business objectives. Moreover, investments made by Investors in the Company also risk the total loss of capital, and no guarantee or representation is made that the Manager will be successful in lowering the risk associated with the business objectives.

No Certainty of Payments
.

While the Company intends to make all payments due under the Notes monthly, there can be no assurance with respect to the amount or timing of such payments or that such payments will, in fact, be made.

Reliance on Manager
.

All decisions regarding management of the Company’s investment affairs will be made, in general, by the Manager.  Accordingly, Noteholders should not buy Notes unless they are willing to entrust all aspects of management to the Manager or its successor(s).  Noteholders should carefully evaluate the personal experience and business performance of the Manager and their principals.  See “The Manager” and “Conflicts of Interest.”  The Manager may retain independent contractors to provide various services to the Company.  The independent contractors will have no fiduciary duty to the Noteholders and may not perform as expected.

Key Personnel
.

The ability of the Manager to discharge its duties is dependent on the services of its key personnel.  The loss of the services of key personnel or one or more members of senior management of the Manager  could have a significant adverse effect on the Company and the Company’s Assets.

Receipt of Compensation Regardless of Profitability
.

The Manager is entitled to receive certain significant fees and other compensation, payments and reimbursements regardless of whether the Noteholders are paid back their principal and interest under the Notes.

Accuracy of available information.

The Manager manages the Issuer and conducts the business of the Issuer, in part, on the basis of information and data provided by third parties. Although the Manager evaluates all such information and data and may seek independent corroboration when the Manager considers it is appropriate and reasonably available, the Manager is not in a position to confirm the completeness, genuineness or accuracy of such information and data, and in some cases, complete and accurate information is not available.

We may change our targeted investments and investment guidelines without Note Holder or member consent
.

Our Manager may change our targeted investments and investment guidelines at any time without the consent of our Note Holders or members, which could result in our making investments that are different from, and possibly riskier than, the investments described in our Offering Circular. A change in our targeted investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of the Notes and our ability to make interest and principal payments to our Note Holders.

We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology networks and related systems.

We will face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our information technology, or IT, networks and related systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations, and, in some cases, may be critical to the operations of certain of our tenants. There can be no assurance that our efforts to maintain the security and integrity of these types of IT networks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging. A security breach or other significant disruption involving our IT networks and related systems could adversely impact our financial condition, results of operations, cash flows, and our ability to satisfy our debt service obligations and to pay interest and principal to our Note Holders.

Risks Related to Compliance and Regulation
 
We are subject to significant government regulation, which may affect our ability to operate.

The industry in which the Company will become an active participant may be highly regulated at both state and federal levels, both with respect to its activities as an issuer of securities and its investing activities. Some of these regulations are discussed in greater detail below under “U.S. Securities Laws and Foreign Investors,” “Compliance with Anti-Money Laundering Requirements,” “Usury Risk,” “Risk that the Company May Become Subject to the Provisions of the Investment Company Act of 1940,” “Risk that the Manager May Become Subject to the Provisions of the Investment Advisers Act of 1940,” “The Company’s Reliance on Exclusions from the Investment Company Act May Impact Certain Investment Decisions,” and “Recent and Anticipated Legislative and Regulatory Activity.” The Company or the Company Assets may be subject to governmental regulations in addition to those discussed in this Offering Circular, and new regulations or regulatory agencies may develop that affect the Company’s operations and ability to generate revenue. The Company will attempt to comply with all applicable regulations affecting the markets in which it operates. However, such regulation may become overly burdensome and therefore may have a negative effect on the Company’s ability to perform as illustrated.

We are offering securities pursuant to recent amendments to Regulation A promulgated pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to Tier 1 issuers will make our securities less attractive to investors as compared to a traditional initial public offering.

As a Tier 1 issuer, we will be subject to limited disclosure and reporting requirements as compared to a traditional initial public offering, which may make an investment in our Securities less attractive to investors who are accustomed to enhanced disclosure and more frequent financial reporting. In addition, given the relative lack of regulatory precedence regarding the recent amendments to Regulation A, there is a significant amount of regulatory uncertainty in regard to how the SEC or the individual state securities regulators will regulate both the offer and sale of our securities, as well as any ongoing compliance that we may be subject to. If our scaled disclosure and reporting requirements, or regulatory uncertainty regarding Regulation A, reduces the attractiveness of our Notes, we may be unable to raise the necessary funds necessary to commence operations, or acquire property, which could severely affect the value of our Notes.

We may become subject to the Investment Company Act, which could interfere with our intended operations.
 
The Investment Company Act regulates required obligations of an investment company’s product offerings including provisions regarding filings, service charges, financial disclosures and fiduciary duties. The Company intends to operate so as to not be regulated as an investment company under the Investment Company Act based upon certain exemptions thereunder. Specifically, the Company expects to be exempted from registration under the Investment Company Act because the Company will be primarily engaged in purchasing or acquiring mortgages and other liens on, and interests in, real estate and the purchase and/or sale of loans, assets and distressed assets as determined under exemptions from the Investment Company Act and rules issued thereunder. Accordingly, the Company does not expect to be subject to the restrictive provisions of the Investment Company Act. However, if the Company fails to qualify for exemption from registration as an investment company, its ability to conduct its business as described herein will be compromised. Any such failure to qualify for such exemption would likely have a material adverse effect on the Company.
 
Our reliance on certain exclusions from the Investment Company Act may impact certain investment decisions.
 
The Investment Company Act excludes a real estate program from the definition of an “investment company” if it is “primarily engaged” in, the origination or acquisition of mortgages and other liens on, and/or interests in, real estate. The Manager has not sought a no-action letter from the SEC to confirm that the Company is eligible for this exemption. However, the Manager will rely on guidance issued by the SEC stating that so long as qualifying percentages of the Company’s assets consist of (1) mortgages and other liens on or interests in real estate; and (2) the remaining percentage of the Company’s assets consist primarily of real estate related assets, the Company will remain exempt from the Investment Company Act registration requirements. These formulaic requirements may negatively impact the Company’s investment flexibility and the ability of the Manager to invest in other funds, limited partnerships, limited liability companies, and other similar vehicles.
 
This offering is being made subject to Regulation A, which has recently undergone significant changes.
 
The Company is conducting this offering pursuant to Regulation A, which was amended effective June 19, 2015.  Because of these recent amendments, there is still significant uncertainty with respect to the parameters of an offering pursuant to this regulation.  In addition, these regulations may change as regulators develop practices with respect to such amendments, which changes may be detrimental to the Company or its ability to raise funds.   If the Company were to inadvertently violate the parameters of this type of offering, it may be subject to enforcement action or civil liabilities under both federal and state securities laws.  Such violation may also affect the Company’s ability to raise capital in the future.
 
Compliance with anti-money laundering requirements may require the Company to disclose investor information to regulatory authorities.

The Company may be subject to certain provisions of the Uniting and Strengthening America By Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“the Patriot Act”), including, but not limited to, Title III thereof, the International Money Laundering and Abatement and Anti-Terrorist Financing Act of 2001 (“Title III”), certain regulatory and legal requirements imposed or enforced by the Office of Foreign Assets Control (“OFAC”) and other similar laws of the United States. In response to increased regulatory concerns with respect to the sources of the Company’s capital used in investments and other activities, the Manager may request that Investors provide additional documentation verifying, among other things, such Investor’s identity and source of funds to be used to purchase Notes. The Manager may decline to accept a subscription if this information is not provided or on the basis of the information that is provided. Requests for documentation and additional information may be made at any time during which an investor is a Note Holder. The Manager may be required to report this information or report the failure to comply with such requests for information, to appropriate governmental authorities, in certain circumstances without informing a Note Holder that such information has been reported. The Manager will take such steps as it determines are necessary to comply with applicable law, regulations, orders, directives or special measures, including, but not limited to, those imposed or enforced by OFAC, the Patriot Act and Title III. Governmental authorities are continuing to consider appropriate measures to implement anti-money laundering laws and at this point it is unclear what steps the Manager may be required to take; however, these steps may include prohibiting a Note Holder from making a contribution of capital to the Company, from lending further monies to the Company, depositing interest to which such Note Holder would otherwise be entitled into an escrow account or causing the withdrawal of such Note Holder from the Company.

Risks Related to Conflicts of Interest
 
There are conflicts of interest between us, our Manager and its Affiliates.

The Manager, its Affiliates, and its principals are subject to various conflicts of interest in managing the Company. The Company will pay the Manager and/or Affiliates substantial fees, some of which are not determined by arm’s length negotiations. The Company will pay a monthly Management Fee to the Manager of 1% (annualized) of the total collective assets under management (“AUM”) as determined on the last day of each month. Given that the Management Fee and other fees are calculated off the AUM, a potential incentive exists for the Manager to inflate the AUM in order to increase the Manager’s fees.

The Manager and/or Affiliates may charge reasonable, market-based loan origination, extension, processing, underwriting, administration, loan servicing, legal, accounting and inspection fees in connection with the services provided in connection with the business of the Company. Direct Lending Partner, an Affiliate of the Manager, may receive fees in connection with the origination of mortgage loans. DLP Realty, an Affiliate of the Manager, may receive compensation in the form of commissions paid through the closing of the purchase or sale of a Company borrower, or Company Asset. DLP Construction, an Affiliate of the Manager, may receive compensation from the construction and project management services it provides to Company Borrowers or the Company directly for properties it acquires through foreclosure. Alliance Property Transfer, LLC, an Affiliate of the Manager, may receive compensation for title and escrow related services it provides to borrowers and/or the Company directly. All fees and compensation paid to Affiliates shall be market-based and commercially reasonable at all times. In these regards, the interests of the Manager and its Affiliates are in conflict with the members and the Note Holders.

The Company does not at this time have its own officers, directors, or employees. The Manager supervises and controls the business affairs of the Company, locates investment opportunities for the Company, raises capital for the Company, administers the financial affairs of the Company, and renders certain other services. The Manager, however, shall devote only such time to the Company’s affairs as may be reasonably necessary to conduct its business. The Manager, and/or its Affiliates and principals, may be a manager of other companies (some of which may directly compete with the business of the Company) and have other business interests of significance. These conflicts are described in greater detail under “Conflicts of Interest” below.

The Company will make Mortgage Loans and Equity Investments to Affiliates of the Manager.

The Company may make loans secured by real estate and preferred and/or common equity investments to one or more of the Manager’s Affiliates, and allocating the Manager’s management time, services, and functions between such Affiliate and the Company presents an inherent conflict of interest. The Manager, however, believes that it will have sufficient staff, consultants, independent contractors, and business managers to perform all necessary responsibilities to the Company, while servicing the needs of any Affiliate who is a borrower from the Company.

Additionally, while the Company and the Manager expects to take the same approach to all borrowers, it is uncertain that the Company and Manager would exercise the same level of assertiveness and the same collection practices with Affiliated borrowers than with non-Affiliated borrowers.
 
The fees we pay in connection with the Offering and in connection with the acquisition and management of our investments were not determined on an arm’s length basis; therefore, we do not have the benefit of arm’s length negotiations of the type normally conducted between unrelated parties.
 
The fees to be paid to the Manager and other Affiliates for services they provide for us were not determined on an arm’s length basis. As a result, the fees have been determined without the benefit of arm’s length negotiations of the type normally conducted between unrelated parties and may be in excess of amounts that we would otherwise pay to third parties for such services.
 
The Manager’s key real estate, finance and securities professionals will face conflicts of interest caused by our compensation arrangements with the Manager and its Affiliates, which could result in actions that are not in the long-term best interests of our Company.
 
The Manager and other affiliated entities will receive substantial fees from us. These fees could influence the advice given to us by the key personnel of the Manager and its Affiliates.
 
The payment of certain fees may influence the Manager to recommend transactions that may not be in our best interest at the time. In evaluating investments and other management strategies, the opportunity to earn fees may lead the Manager to place undue emphasis on criteria relating to its compensation at the expense of other criteria, such as the preservation of capital, to achieve higher short-term compensation. Considerations relating to our Affiliates’ compensation from us and other Affiliates could result in decisions that are not in the best interests of our Note Holders, which could hurt our ability to pay interest and principal to Note Holders or result in a decline in the value of their investment.
 
The Manager’s real estate, finance and securities professionals acting on behalf of the Manager will face competing demands relating to their time and this may cause our operations and a Note Holder’s investment to suffer.
 
Our Manager and other affiliated entities rely on many of the same real estate, finance and securities professionals as the Manager, including Don Wenner, for the day-to-day operation of our business. Mr. Wenner is also an executive of other affiliated entities. As a result of his interests in other affiliated entities and the fact that he engages in and will continue to engage in other business activities on behalf of himself and others, Mr. Wenner will face conflicts of interest in allocating his time among us, our Manager and other affiliated entities and other business activities in which he is involved. These conflicts of interest could result in declines in the returns on our investments and the value of a Note Holder’s investment.
 
The Manager may have conflicting fiduciary obligations if we enter into joint ventures or engage in other transactions with its Affiliates. As a result, in any such transaction we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.
 
We anticipate make co-investments with Affiliates of the Manager through joint ventures, partnerships or other forms of investments. In these circumstances, the Manager will have a conflict of interest when fulfilling its fiduciary obligation to us.. In any such transaction, we would not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.
 
The Manager’s key real estate, finance and securities professionals face conflicts of interest related to their positions and interests in our Affiliates which could hinder our ability to implement our business strategy and to generate returns to the Note Holders.
 
The Manager’s key real estate, finance and securities professionals are also executives, managers, and key professionals of other affiliated entities. As a result, they owe duties to each of these entities, their members and limited partners and these investors, which duties may from time to time conflict with the fiduciary duties that they owe to us and our members and Note Holders. In addition, our Manager may grant equity interests in the Manager to certain management personnel performing services for the Manager. The loyalties of these individuals to other entities and investors could result in action or inaction that is detrimental to our business, which could harm the implementation of our business strategy and our investment opportunities. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to members, payment of interest and principal to Note Holders and to maintain or increase the value of our assets.
 
The Company has no independent management.
 
The Company will not be independently managed, and must rely on the Manager and its management team in operating its affairs. The Manager is accountable to the Company as a fiduciary and, consequently, must exercise good faith and integrity in handling the business of the Company. Nevertheless, in the conduct of such business, conflicts may arise between the interests of the Manager and the entire management team and those of the Company, and potential Note Holders should be aware of these conflicts of interest before investing.
 
Lack of separate representation.
 
None of the agreements, contracts and arrangements between the Company, on the one hand, and the Manager or affiliates thereof, on the other hand, were or will be the result of arm’s-length negotiations. The attorneys, accountants and others who have performed services for the Company in connection with this Offering, and who will perform services for the Company in the future, have been and will be selected by the Manager. No independent counsel has been retained to represent the interests of potential Investors, and the Notes and Operating Agreement has not been reviewed by any attorney on their behalf. You are therefore urged to consult your own counsel as to the terms and provisions of the Notes, the Operating Agreement and all other related documents.
 
An increase in the number of Notes issued may reduce the amount the Company has available to pay to investors.

Subject to the limitations contained in Regulation A for Tier 1 offering limiting the amount of Notes to $20,000,000 in any twelve month period, the Company is open-ended, which means it does not have restrictions on the amount of Notes the Company will issue. If demand is high enough, the Company may continue to issue Notes no matter how many Note Holders there are. Additional Notes may be sold from time to time to the Manager, its Affiliates, new Investors, or current Investors that choose to exercise their Reinvestment Option. As additional Notes are issued, the increase in Notes may reduce the amount the Company has available to pay interest and/or principal to any one Investor, as payments will need to be distributed amongst more Notes. The Company intends to only accept additional capital to the extent it will result in additional yields sufficient to provide for the associated payments, but the Company cannot assure Investors that this will happen. In addition, subsequent sales may be on terms that are more or less favorable to the Note Holders than under the current Note Schedule.
 
Any adverse changes in the Manager’s financial health or our relationship with the Manager or its affiliates could hinder our operating performance and the return on investment.
 
We have engaged the Manager to manage our operations and any investments we may acquire. Our ability to achieve our investment objectives and to pay interest and principal to our Note Holders is dependent upon the performance of the Manager and its affiliates as well as the Manager’s real estate, finance and securities professionals in the identification and acquisition of investments, the determination of any financing arrangements, the management of our assets and operation of our day-to-day activities. Any adverse changes in the Manager’s financial condition or our relationship with the Manager could hinder the Manager’s ability to successfully manage our operations and our portfolio of investments.
 
Risks Related to Mortgage Loans and Real Estate Asset Based Model
 
Real estate investing is inherently risky.

The Company will be subject to the risks that generally relate to investing in real estate. Real estate historically has experienced significant fluctuations and cycles in performance that may result in reductions in the value of the Company’s real estate related investments. The performance and value of its investments once originated or acquired depends upon many factors beyond the Company’s control. The ultimate performance and value of the Company’s investments are subject to varying degrees of risk generally incident to the ownership and operation of the properties in which the Company invests and which collateralize or support its investments.

The ultimate performance and value of the Company’s investments will depend upon, in large part, the Borrower’s or the Company’s ability to operate any given property so that it produces sufficient cash flows necessary to pay the interest and principal due to the Company on its Mortgage Loans and investments and/or to recover the Company’s equity investment in the case of Real Estate Owned (“REO”). Revenues and cash flows may be adversely affected by: changes in national or local economic conditions; changes in local real estate market conditions due to changes in national or local economic conditions or changes in local property market characteristics, including, but not limited to, changes in the supply of and demand for competing properties within a particular local property market; competition from other properties offering the same or similar services; changes in interest rates and the credit markets which may affect the ability to finance, and the value of, investments; the ongoing need for capital improvements, particularly in older building structures; changes in real estate tax rates and other operating expenses; changes in governmental rules and fiscal policies, civil unrest, acts of God, including earthquakes, hurricanes, and other natural disasters, acts of war, or terrorism, which may decrease the availability of or increase the cost of insurance or result in uninsured losses; changes in governmental rules and fiscal policies which may result in adverse tax consequences, unforeseen increases in operating expenses generally or increases in the cost of borrowing; decreases in consumer confidence; government taking investments by eminent domain; various uninsured or uninsurable risks; the bankruptcy or liquidation of major tenants; adverse changes in zoning laws; the impact of present or future environmental legislation and compliance with environmental laws; the impact of lawsuits which could cause the Company to incur significant legal expenses and divert management’s following:

Other owner(s) of a Participation in such an Asset may have different ideas, motivations, or desired outcomes than the Company which may give rise to disputes in how to manage such Asset. There may be additional legal costs for Participations in event of default due to having multiple participants in the ownership of the Asset.

The Company’s real estate related investments will be subject to varying degrees of risk and significant fluctuations in their value. The value of the Company’s investments depends upon the real property owner’s ability to repair or rehabilitate the property as projected, operate the real property in a manner sufficient to meet its commitments, including debt service, and/or maintain or increase revenues in excess of operating expenses or, in the case of real property leased to a single lessee, the ability of the lessee to make rental payments. Revenues may be adversely affected by changes in national or international economic conditions; changes in local market conditions due to changes in general or local economic conditions and neighborhood characteristics; the financial condition of tenants, buyers, and sellers of properties; competition from other properties offering the same or similar services; changes in interest rates and in the availability, cost, and terms of mortgages; the impact of present or future environmental legislation and compliance with environmental laws; the ongoing need for capital improvements (particularly in older structures); changes in real estate tax rates and other operating expenses; adverse changes in governmental rules and fiscal policies; civil unrest; acts of God, including earthquakes, hurricanes, and other natural disasters; acts of war; acts of terrorism (any of which may result in uninsured losses); adverse changes in zoning laws; and other factors that are beyond the control of the real property owners and the Company. In the event that any of the properties underlying the Company’s investments experience any of the foregoing events or occurrences, the ability of the real property owner to pay the interest and principal on any debt securities would be negatively impacted.

The Company may invest in subordinated (Unsecured or Second Lien Position) Loans which are inherently risky.

Some of the Company’s investments may consist of subordinated Mortgage Loans. Such investments will be subordinated to the senior obligations of the property or issuer, either contractually, inherently due to the nature of equity securities, or both. In the event of default on the senior debt, the Company as a holder of a subordinated loan may be at the risk of realizing a loss of up to all of its investment before the senior debt will suffer any loss. Consequently, greater credit risks are usually attached to these subordinated investments than to a Borrower’s first mortgage or other senior obligations. In addition, these securities may not be protected by financial or other covenants and may have limited liquidity. Adverse changes in the Borrower’s financial condition and/or in general economic conditions may impair the ability of the Borrower to make payments on the subordinated securities and cause them to default more quickly with respect to such securities than with respect to the Borrower’s senior obligations. In most cases, the Company’s management of its investments and its remedies with respect thereto, including the ability to foreclose on any Collateral securing investments, will be subject to the rights of the more senior lenders and contractual intercreditor provisions.

The Company’s investments are illiquid in nature.

Although some of the Company’s investments may generate current income, the illiquidity commonly associated with real estate investments may limit the Company’s ability to vary its portfolio of investments in response to changes in economic and other conditions. Illiquidity may result from the absence of an established market for investments as well as the legal or contractual restrictions on their resale. In addition, illiquidity may result from the decline in value of a property comprising one of the Company’s investments. There can be no assurances that the fair market value of any property held by the Company will not decrease in the future, leaving the Company’s investment relatively illiquid.

Furthermore, although the Manager expects that the Company’s investments will be disposed of prior to dissolution, the Company may have to sell, distribute, or otherwise dispose of its investments at a disadvantageous time as a result of dissolution.

The Company may become subject to penalties for usury.

State and federal usury laws limit the interest that lenders are entitled to receive on loans.  Statutes differ in their provision relating to usury and as to the consequences of a usurious loan. One group of statutes requires the lender to forfeit the interest above the applicable limit or imposes a specified penalty. Under this statutory scheme, the Borrower may have the recorded mortgage or deed of trust canceled upon paying its debt with lawful interest, or the lender may foreclose, but only for the debt plus lawful interest. Under a second, more severe type of statute, a violation of the usury law results in the invalidation of the transaction,  permitting the Borrower to have the recorded mortgage or deed of trust canceled without any payment and prohibiting the lender from foreclosing.

Transactions originated or acquired by the Company may be subject to state usury laws imposing maximum interest charges and possible penalties for violation, including restitution of excess interest and unenforceability of debt. The Company intends to originate or acquire transactions which charge various rates of interest, and uncertainties in determining the legality of interest rates and other borrowing charges under some state statutes may result in inadvertent violations. Some state laws make it illegal to charge or collect interest at a rate exceeding a certain percentage rate per annum, unless the lender belongs to a class of regulated lenders such as banks, mortgage companies, or real estate brokers. It is expected that all loans made and acquired by the Company will attempt to comply with state usury restrictions, if any, and will utilize usury savings clauses; however, usury laws in the states where the Company’s investments are located may limit the ability of the Company to charge interest and may create a risk to the Company and the Company’s principal.

The Company relies on digital operations.

The Company is nearly paperless, with all documents secured and managed digitally. The Company utilizes industry proven software that allows it to track and manage its investments with confidence and accuracy. However, there are risks associated with technology. Defects in software products and errors or delays in processing of electronic transactions could result in:


transaction or processing errors;

diversion of technical and other resources from other efforts;

loss of credibility with current or potential customers;

harm to reputation; or

exposure to liability claims.

In addition, the Company relies on technologies supplied by third parties that may also contain undetected errors, viruses, or defects that could have a material adverse effect on the Company’s financial condition and results of operations.

Changes in market interest rates may result in a reduction of profits

A change in market interest rates may result in a reduction in profits and impair our ability to make interest and principal payments to our Note Holders.  Rapid changes, either upward or downward, in interest rates may adversely affect our profits. Any future rise in interest rates may:

Reduce real estate lending;
Increase our cost of funds;
Reduce our profits; and
Limit our access to borrowings in the capital markets.

A future decline in interest rates may:

Make it difficult for us to purchase and sell properties.
Result in significant prepayments, thereby reducing the yield to our funding sources;
Intensify competition.

Real estate values may decline.

A decline in real estate values could result in a reduction in acquisition opportunities which could reduce our revenues and impair our ability to pay interest and principal to our Note Holders and meet our investment objectives. Our business may be adversely affected by declining real estate values. Any significant decline in real estate values reduces the ability to purchase and sell real estate. This reduction in real estate values may reduce the number of real properties we may be able to acquire or sell, which will reduce our revenues and limit our ability to pay principal and interest and meet investment objectives.

We May Not Receive Appraisals

We may not obtain appraisals of properties we acquire, relying instead on the opinion of management with respect to the value of such properties.  If the values of such properties are inadequate, our ability to pay interest and principal to our Note Holders and meet our investment objectives will be affected.

Changes in General Economic Conditions

Our operating results are subject to significant fluctuation depending upon the effect changes in general economic conditions may have on the real estate markets.  Real estate markets are particularly sensitive to changes in general economic conditions. Real estate development and commercial activity generally slow down during recessions. On the other hand, if the economy grows too fast, interest rates may rise sharply and the cost of borrowing may cause our interest rates we pay to increase. In either scenario, our ability to acquire and sell real estate may suffer, thereby reducing our revenues and our ability to pay interest and principal to our Note Holders and meet our investment objectives will be affected.

Other General Risks of an Investment in the Company
 
The Company may be unable to find a sufficient number of attractive investment opportunities to meet its investment objectives.

The Company has not identified the particular investments it will make. Accordingly, an Investor must rely upon the ability of the Manager in making investments consistent with the Company’s investment objectives and policies. Although the principals have been successful in locating investments in the past, there is no assurance the principals will be successful in the future, and the Company may be unable to find a sufficient number of attractive opportunities to invest its committed capital or meet its investment objectives.

Furthermore, there may be a period of time before the Manager fully invests the proceeds of this Offering and begins to make payments to Note Holders and/or distributions to members. The Company’s Manager will attempt to invest the proceeds as quickly as prudence and circumstances permit; however, no assurance can be given as to how quickly the proceeds will be invested. Consequently, the payments you receive on your Notes may be reduced pending the investment of the Offering proceeds in real estate loans or direct real estate acquisition.

The Company’s Due Diligence May Not Reveal All Factors Affecting an Investment and May Not Reveal Weaknesses in Such Investments.

There can be no assurance that the Manager’s due diligence processes will uncover all relevant facts that would be material to an investment decision. Before making an investment, the Manager will assess the strength of the underlying properties and any other factors that they believe are material to the performance of the investment. In making the assessment and otherwise conducting customary due diligence, the Manager will rely on the resources available to them and, in some cases, investigations by third parties.

The Company will be relying on the Manager’s discretion and acquisition expertise.

The Manager will make all Company management decisions, including Company Asset selection. The Company will be relying in large part on the Manager’s acquisition expertise. The Manager may resign at any time with one-year notice to the Members without liability to the Company or Manager.

Don Wenner is considered a Key Man. If Mr. Wenner were to leave the Manager, die, or become permanently disabled, the Manager’s ability to continue the management of the Company could be materially and adversely affected. Upon the death or permanent disability of Mr. Wenner, the Members shall have the right to approve a replacement Key Man by majority vote for a period of up to one year. If no replacement Key Man is appointed by the Members within the maximum one-year period, the Company shall permanently cease to make new investments and shall proceed with an orderly liquidation of its Assets.

The Manager is the beneficiary of a life insurance policy on the life of Don Wenner in a minimum amount of $2,000,000. The proceeds of such a policy is intended to provide the Manager with sufficient liquidity to be able to operate without duress while a new Key Man is identified and approved by the Members or to allow the Company to proceed with an orderly liquidation of its Assets.

If the Manager withdraws or is terminated the Members may not be able to locate a suitable replacement.

The Company presently only has one Manager. If the Manager, subject to its one-year notice requirement, withdraws from the Company, is terminated by the Members, for cause or otherwise, or is terminated as Manager by dissolution or bankruptcy, it may be difficult or impossible for the Members of the Company to locate a suitable replacement for the Manager. If it is unable to replace the Manager, the Company would proceed with liquidating the Company’s Assets, which may or may not be able to be successfully executed.

The Company’s activities may subject it to the risks of becoming involved in litigation.

The Company’s investment activities may include activities that will subject it to the risks of becoming involved in litigation by third parties. The expense of defending claims against the Company by third parties and paying any amounts pursuant to settlements or judgments would be borne by the Company and would reduce net assets and could require the Partners to return distributed capital and earnings to the Company. The management team of the Manager and their Affiliates will be indemnified by the Company in connection with such litigation, subject to certain conditions.

Because of the nature of certain of our investments, the Company may be subject to allegations of lender liability.

In recent years, a number of judicial decisions in the U.S. have upheld the right of Borrowers to sue lending institutions on the basis of various evolving legal theories (collectively termed “lender liability”). Generally, lender liability is founded upon the premise that an institutional lender has violated a duty (whether implied or contractual) of good faith and fair dealing owed to the Borrower or has assumed a degree of control over the Borrower resulting in creation of a fiduciary duty owed to the borrower or its other creditors or shareholders. Because of the nature of certain of the Company’s investments, the Company could be subject to allegations of lender liability.

In addition, under common law principles that, in some cases, form the basis for lender liability claims, if a lending institution (a) intentionally takes an action that results in the undercapitalization of a Borrower to the detriment of other creditors of such Borrower, (b) engages in other inequitable conduct to the detriment of such other creditors, (c) engages in fraud with respect to, or makes misrepresentations to, such other creditors or (d) uses its influence as an equity holder to dominate or control a Borrower to the detriment of the other creditors of such Borrower, a court applying bankruptcy laws may elect to subordinate the claim of the offending lending institution to the claims of the disadvantaged creditor or creditors, a remedy called “equitable subordination.” The Company could be subject to claims from creditors of an obligor that the Company’s investments in debt obligations of such obligor should be equitably subordinated. Alternatively, in bankruptcy a court may re-characterize the Company’s claims or restructure the debt using “cram down” provisions of the bankruptcy laws.

Disruptions in the financial markets or deteriorating economic conditions could adversely impact the Company’s ability to access capital.

As a result of the credit crisis and the occurrence of several high profile bankruptcies, recent government bailouts, bank failures, other negative corporate events, and certain other recent events, the financial markets have been disrupted in general and the availability and cost of capital for the Company and that of the Company’s competitors have been adversely affected. The achievement of the Company’s targeted rate of return is dependent, at least in part, upon the Company’s ability to access capital at rates and on terms the Manager determines to be acceptable. If the Company’s ability to access capital becomes significantly constrained, the Company’s financial condition and future investments may be significantly adversely affected.

Uninsured losses including those relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on our shareholders’ investment.

The Company will require that all Assets are insured against hazard. However, some events may be uninsurable or insurance coverage for such events may not be economically practicable. Losses from earthquakes, floods, or other weather phenomena, for example, as well as losses due to theft or fraudulent acts that could occur may be uninsured and cause losses to the Company. In addition, insurance may lapse without proper notice to the Manager and/or Assets may become temporarily uninsured and sustain damage during this period.

There may not be sufficient quality opportunities to immediately invest the proceeds received when Assets are paid off or disposed.

There is a risk that when the Assets are paid off or disposed of, there may not be sufficient quality opportunities to immediately redeploy the proceeds received from these payoffs or sales proceeds into new Assets. If the Company is unable to locate new Assets in a timely manner, the excess cash may decrease the overall yield to the Company or the Manager may choose to repay Note Holders a portion or all of their principal and any accrued interest earlier than expected.

The real estate and financial sectors are highly competitive industries and competitive conditions could adversely affect our business or financial results.

The business and arena in which the Company is engaged is highly competitive, and the Company and Manager compete with numerous established entities, some of which have more financial resources and experience in the business than the Company or Manager. The Company and Manager expect to encounter significant competition from other market participants including private lenders, private equity fund managers, real estate developers, pension funds, real estate investment trusts, other private parties, potential investors or homeowners, and other people and/or entities with objectives similar in whole or in part to those of the Company. Any general increase in the availability of capital for such purposes may increase competition for Company Assets and could reduce the yields they produce, including those of the Company.

Investment of cash in Money Market Accounts involves a risk of loss.

The Company intends to place all its cash which is not otherwise invested in Money Market Accounts. Each Money Market Account will consist of investments that are immediately liquid, and that, in the Manager’s judgment, are sufficiently safe while producing a yield on the Company’s cash.

We may become subject to the Investment Company Act, which could interfere with our intended operations.

The Company intends to operate so as to not be regulated as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”) based upon certain exemptions thereunder. Companies that are subject to the Investment Company Act must register with the SEC and become subject to various registration, governance, and reporting requirements. Compliance with such restrictions would limit the Company’s flexibility and create additional financial and administrative burdens on the Company. The Company believes it can avoid these restrictions based on one or more exemptions provided for companies like the Company. Specifically, the Company expects to be exempted from registration under the Investment Company Act because the Company will not make a public offering of the Notes and the Company will be primarily engaged in purchasing or acquiring mortgages and other liens on, and interests in, real estate as determined under exemptions from the Investment Company Act and rules issued thereunder. Accordingly, the Company does not expect to be subject to the restrictive provisions of the Investment Company Act. However, the SEC has recently indicated that it may seek to narrow the exemption from registration for entities engaged in purchasing or acquiring mortgages and other liens on real estate. If the Company fails to qualify for exemption from registration as an investment company, its ability to conduct its business as described herein will be compromised. Any such failure to qualify for such exemption would likely have a material adverse effect on the Company.

Though the Manager does not intend to register under the Investment Advisers Act, it may be required to register under one or more state investment adviser acts (“State Advisers Acts”). State Advisers Acts are similar to the Investment Advisers Act but generally apply to investment advisers that are not subject to the Investment Advisers Act because of the amount of AUM or other exemptions from registration. The Manager intends to seek exemptions from such registration where possible. If the Manager does have to register under one or more State Advisers Acts, such registration may create administrative and financial burdens on the Manager.

Our Manager may become subject to the Investment Company Act, which would subject it to various regulatory requirements.

The Manager has not registered as an investment adviser under the Investment Advisers Act of 1940 (the “Investment Advisers Act”) and intends to operate so as to not be required to register as an investment adviser with the SEC for as long as possible (based upon certain exemptions thereunder). Specifically, investment advisers are not required to register under the Investment Advisers Act so long as they have less than $110 million in AUM, and the Manager expects to be further exempted from registration so long as the Manager has less than $150 million in AUM based on the fact that it is a manager to a real estate company that is a qualifying private company exempt from registration under the Investment Company Act. If or when the Manager exceeds that threshold, unless it is eligible for another exemption, it will be required to register under the Investment Advisers Act and will be subject to various restrictive provisions provided for therein. The Manager cannot determine at this time, what, if any, impact such registration and restrictions will have on its business or the business of the Company.

The Company’s Reliance on Exclusions from the Investment Company Act May Impact Certain Investment Decisions

The Investment Company Act excludes a real estate program from the definition of an “investment company” if it is “primarily engaged” in, the origination or acquisition of mortgages and other liens on, and/or interests in, real estate. The Manager has not sought a no-action letter from the SEC to confirm that the Company is eligible for this exemption. However, the Manager will rely on guidance issued by the SEC stating that so long as qualifying percentages of the Company’s assets consist of (1) mortgages and other liens on or interests in real estate; and (2) the remaining percentage of the Company’s assets consist primarily of real estate related assets, the Company will remain exempt from the Investment Company Act registration requirements. Because the Company is relying on an exemption that is dependent on the nature of the Company’s investment holdings, the Manager may need to consider such restrictions when assessing a potential investment for the Company, and may decide not to pursue an asset because such asset would jeopardize the Company’s use of the exemption, as opposed to whether or not the asset would otherwise be a sound investment for the Company.

Recent legislative and regulatory initiatives have imposed restrictions and requirements could have an adverse effect on our business.

The U.S. Congress, the SEC, and other regulators have taken, or represented that they may take, action to increase or otherwise modify the laws, rules, and regulations applicable to techniques and instruments in which the Company may invest. New (or modified) laws, rules, and regulations may prevent, or significantly limit the ability of, the Manager from using certain such instruments or from engaging in such transactions. This may impair the ability of the Manager to carry out the Company’s investment strategy and may otherwise have an adverse impact on the Company’s returns. Compliance with such new or modified laws, rules, and regulations may also increase the Company’s expenses and therefore, may adversely affect the Company’s performance. It is not possible at this time to predict with certainty what, if any, impact the new or modified regulations will have on the Manager or the Company, and it is possible that such impact could be adverse and material.

We may become liable for indemnification obligations to our Manager or its affiliates.

The Company will be required to indemnify the Manager and certain affiliated persons and entities of the Manager for liabilities incurred in connection with the affairs of the Company. Such liabilities may be material and have an adverse effect on the returns to the Members. The indemnification obligation of the Company will be payable from the assets of the Company, and Investors may be required to return certain amounts distributed to them to satisfy the indemnity obligations of the Company.

Risks Specific to Note Holders
 
Risk of Failure to Notify Manager of Desire to Cash-Out at Maturity
 
The Note Holder shall have responsibility for notifying the Manager of its desire to cash-out its Note. No later than 90 days prior to the Maturity Date, a Note Holder shall notify the Manager of Note Holder’s desire to cash-out and receive payment of outstanding principal and interest upon the Maturity Date. If the Note Holder does not provide the 90 day Cash-Out Notice, the Note upon the Maturity Date will automatically extend at the Note rate less 1% until either (i) the Note Holder notifies the Company that it wishes for the outstanding balance of the Note to be rolled over into a new Note, based on the then current Note Schedule, and such new Note is executed, or (ii) 90 days after the Note Holder provides a Cash-Out Notice.
 
Risk of 90-Day Continuance at Election of the Company
 
The Company may not be able to repay the principal balance of a Note at its Maturity Date. The Company shall have the right, upon receipt of 90 days Cash-Out Notice, to continue to make interest payments on a monthly basis to the Note Holder at the existing Note Rate plus 1% for up to 90 days beyond the Maturity Date without such continuation constituting an Event of Default.
 
Notes are not Liquid
 
An investment in the Notes is intended as an illiquid investment, and Notes are only repurchased or repayable early upon the written consent of the Manager, which may be withheld in its sole discretion.
 
Restrictions on Transfer
 
You will be required to represent that you are acquiring the Notes for your own account for investment purposes only and have no present intention, agreement or arrangement for the distribution, transfer, assignment, resale or subdivision of the Notes.  Note Holders will not be free to sell or transfer Notes without written consent from the Manager which may be withheld in its sole discretion. There is no market for the Notes, public or private, and there is no likelihood that one will ever develop. Note Holders must be prepared to hold their Notes to the Maturity Date, or beyond, and as a long-term investment. To comply with applicable tax and securities laws, the Manager, in its sole discretion, may refuse to consent to a transfer or assignment of Notes.
 
Pari Passu Intercreditor Interests; Note Holder Representative
 
The respective interests of each Note Holder in and to any payments made by the Company in respect of the Notes, any Security, and any collections in connection with the foreclosure of such Security shall be Pari Passu and no Note Holder shall have any priority over the other; provided further, that any such payments, Security, and/or collections received by any Note Holder, other than such payments, Security, and collections that are received by all Note Holders on a pro rata basis, shall be paid by such Note Holder to the Representative, to be held in trust for the benefit of all Note Holders.
 
The Representative shall initially be the Manager, and the Manager shall retain the right to select and appoint successor Representatives. The Representative shall have the authority to sign all documents and take any action necessary to protect each Note Holder’s Pari Passu rights in the Security. This means the Representative will be the only party with the authority to take any enforcement action with respect to the Notes, foreclose or take any other action to realize upon the Notes or the Security, institute any action or proceeding to collect or enforce the Notes, commence or cause to be commenced any bankruptcy or similar proceeding against the Company, or commence or exercise any other right to remedy against the Company. The Note Holder shall execute the Intercreditor Agreement as part of the documents, prior to acceptance by the Manager. By doing so, all Note Holders shall be treated equally with respect to their rights of payment.
 
Note Holders Have No Right to Vote or to be Involved in Management
 
Note Holders cannot exercise any control over the Company’s affairs and will not have any vote or influence over the Company, its investment policies, or any of its operations. The Manager will exercise complete control over the Company. The Manager has broad investment authority and may change its investment and underwriting policies (within the confines of its overall investment strategy) in its sole discretion, consistent with the duties it owes to all of the Note Holders. The Operating Agreement also provides that in its sole discretion, the Manager may withdraw from the Company at any time with one-year notice, which may result in the Company’s dissolution if a replacement is not named within such period.
 
Power of Attorney
 
Pursuant to the Intercreditor Agreement and the Subscription Agreement, the Note Holder irrevocably constitutes and appoints the Manager with full power of substitution as his/her true and lawful attorney-in-fact and agent, to execute, acknowledge, verify, swear to, deliver, record, and file, in the Purchaser’s name or his/her assignee’s name, place, and stead, all instruments, documents, and certificates that may from time to time be required by the laws of the United States of America, the State of Delaware, and any other state in which the LLC conducts or plans to conduct business, or any political subdivision or agency of the government, to effectuate, implement, and continue the valid existence of the LLC, including, without limitation, the power of attorney and authority to execute, verify, swear to, acknowledge, deliver, record and file the following:
 

The Operating Agreement, the Articles of Organization, and all other instruments (including amendments) that the Manager deems appropriate to form, qualify or continue the LLC as a limited liability company in the State of Delaware and all other jurisdictions in which the LLC conducts or plans to conduct business;

All instruments that the Manager deems appropriate to reflect any
amendments
to the Operating Agreement, or modification of the LLC, made in accordance with the terms of the Operating Agreement;

A fictitious business name certificate and such other certificates and instruments as may be necessary under the fictitious or assumed name statute from time to time in effect in the State of Delaware and all other jurisdiction in which the LLC conducts or plans to conduct business;

All instruments relating to the admission of any additional or substituted Member; and
 
All conveyances and other instruments that the Manager deems appropriate to reflect the dissolution and termination of the Company pursuant to the terms of the Operating Agreement. The Note Holder will further authorize the Representative to take any further action which the Representative shall consider necessary or advisable in connection with any of the foregoing, giving the Representative full power and authority to do and perform each and every act or thing whatsoever requisite to be done in and about the foregoing as fully as such Note Holder might or could do if personally present. The Note Holder shall be bound by any representations made by the Representative acting in good faith pursuant to such power of attorney, and the Note Holder will waive any and all defenses which may be available to contest, negate or disaffirm the action of the Representative taken in good faith pursuant to such power of attorney.
 
The Company has limited Assets and in the event of a default you will likely lose your investment.
 
In the event of a default, it is likely that you would lose most, if not all, of your investment in the Notes.
 
The Notes are issued directly by the Company and there is no trustee.
 
The Notes will be issued directly to the Noteholders and there will not be a trustee for the Notes.  Thus, each Investor in the Notes will be a separate lender.  If, in the event of the Company’s bankruptcy or other default on the Notes, it is possible that certain Noteholders may be able to recover on their Notes before other Noteholders, despite the Notes being Pari Passu and subject to an Intercreditor Agreement, which may adversely affect the ability of the remaining Noteholders to recover on their Notes.
 
Bankruptcy
.
 
If the Company becomes bankrupt or otherwise defaults on the payment of principal and interest pursuant to the Notes, enforcement of the Noteholders’ rights under the Note may be delayed. Such delay may result in loss to the Noteholders. Bankruptcy proceedings may result in a modification of the terms of the Note. Each Investor in the Notes will be a separate lender. If, in the event of the Company’s bankruptcy or other default on the Notes, certain Noteholders are able to recover on their Notes before other Noteholders, it may adversely affect the ability of the remaining Noteholders to recover on their Notes.
 
Limitations on Interest
.
 
The Notes provide that if the rate of interest payable under the Notes is deemed to exceed the maximum rate of interest permitted by applicable law, then the interest rate charged would be reduced to the maximum rate of interest permissible under applicable law.  The Notes may be subject to limitations imposed by usury law.  If this interest rate limitation were deemed to be applicable to the Notes, there is a risk that the interest rate charged with respect to the Notes may be found to be usurious, and the Company or Noteholders would be subject to substantial penalties and, among other things, forfeitures of interest.
 
Limited Recourse
.
 
The Notes have limited recourse in that the only source of payment on the Notes are assets of the Company and neither the Manager or any of its affiliates will be liable for payment of the Notes.  The Notes will not be secured any assets of the Company. The Notes will not be guaranteed by any affiliate of the Company and no person or entity other than the Company is obligated on the Notes. If the Company defaults on our obligations to you, you will not have recourse to any pledged collateral. Since the Notes are unsecured and the Company does not set aside funds to repay the Notes, there is a significant risk that you could lose all or part of your investment if we are unable to meet our obligations on the Notes.
 
Federal Income Tax Consequences.
 
The Company will not receive a ruling that the Notes will be treated as indebtedness and not equity for federal income tax purposes.
 
The Notes are not insured.
 
Because the Notes are corporate obligations they are not insured against loss by the FDIC or any governmental agency, insurance company, any affiliated companies or any other person or entity, you could lose all or part of your investment. Neither the FDIC nor any other governmental or private agency insures the Notes.  The Company is the sole party obligated to pay principal and interest on the Notes.  If its sources of liquidity, such as its cash flow and ability to raise additional funds prove inadequate, you could lose all or a part of your investment.
 
No Sinking Fund will be established for repayment of the Notes.
 
The Company does not contribute funds on a regular basis to a separate account, commonly known as a sinking fund, to repay the Notes upon maturity.  Because funds are not set aside for the repayment of the Notes over their term, holders of the Notes must rely on the Company’s cash flow from operations and the Company’s ability to raise funds from the sale of additional securities or through credit facilities.  To the extent that the Company’s financial resources are not sufficient to repay the Notes, holders may lose all or a part of their investment.
 
The Notes may be subordinated to Senior Debt we may incur, if any.
 
The Notes may be subordinated, or junior in right of repayment, to senior debt incurred by the Company, if any. In the event of the Company’s insolvency, Noteholders would be repaid only if funds remain after the repayment of the Company’s senior debt.  There is no limitation on the amount of senior debt the Company may incur. Senior debt may include all forms of indebtedness incurred in connection with the Company’s borrowings from any source. These borrowings do not have to be specifically designated as “senior debt.” If the Company were to become insolvent, its senior debt, if any, would have to be paid in full prior to payment of the Notes. As a result, there may not be adequate funds remaining to pay the principal and interest on the Notes and you may lose all or a portion of your investment.
 
The Company is not subject to banking regulations.
 
Because the Company’s business operations are generally not subject to regulation and examination by federal or state banking regulators, these protections are not available to protect purchasers of the Notes. The Company’s operations are not regulated or subject to examination in the same manner as commercial banks, savings banks and thrift institutions.  The Company’s operations are not subject to the stringent regulatory requirements imposed upon the operations of those entities and are not subject to periodic compliance examinations by federal or state banking regulators designed to protect investors.
 
The Notes are not rated and have not been reviewed by any rating agency
.
 
The Notes have not been rated, nor have they been reviewed by any rating agency. As a result, you will not have the benefit of any third party’s assessment as to the level of risk involved with an investment in the Notes.
 
Economic Uncertainties
.
 
Repayment of the Notes will depend upon certain factors which are beyond the control of the Company and cannot be predicted accurately at this time.  Such factors include general and local real-estate and economic conditions, changes in spending patterns, and limitations imposed by government regulation.

Tax Risks
 
General tax considerations.
 
As with any investment that generates income and/or loss and distributes cash, an investment has federal income tax risks. The significant tax risks are discussed in greater detail later in this Offering Circular. All Investors are encouraged to review the tax risk section with competent tax counsel.

Investors should understand the role of the Company and the United States Internal Revenue Service (“IRS”) concerning the tax issues involved in any investment in the Company. The IRS may do any of the following:


Review the federal income taxation rules involving the Company and any investment in it, and issue revised interpretations of established concepts.

Scrutinize the proper application of tax laws to the Company, including a comprehensive audit of the Company at any time. The Company does not expect to fall under the reporting requirements for tax shelters, as the Company does not have the avoidance or evasion of Federal income tax as a significant purpose. If the Company borrows significant sums and incurs significant losses, however, the Company may be required to notify the IRS of its status as a tax shelter. The effect of such action is generally unknown but could result in increased IRS scrutiny of the Company’s taxes.

The Company will:


Retain an accounting firm to annually prepare a financial statement on the Company’s behalf. At the discretion of the Manager, the Manager may at any time change accounting firms; and

Not apply to the IRS for any ruling concerning the establishment or operation of the Company.

Investors may be subject to state and local taxes and filings.

Even if you would not otherwise be subject to tax in certain states, you may be required to file tax returns in states where we invest. Certain jurisdictions may collect taxes through withholding at the company level or at the investment level and any amounts so withheld that are allocable to your investment may be treated as a distribution to you. It is expected that income and gain we earn will subject you to tax and filing requirements in an unknown number of jurisdictions. We urge you to consult your tax advisor regarding the applicability of state and local taxes, and additional filing requirements associated with, an investment in the Company.

USE OF PROCEEDS
 
The net proceeds to the Company from the sale of the Notes will be equal to the aggregate principal amount of the Notes sold, less offering expenses. If the Company issues Notes in the maximum amount of $20,000,000 during any twelve-month period, the net proceeds will be approximately $19,950,000.00, after deducting estimated expenses for the preparation, filing, printing, legal, accounting and other fees and expenses related to the same. The Company intends to use the net proceeds from this offering to invest in Company Assets and originate and make non-consumer loans on real estate in target markets throughout the United States. The Company intends to invest in a range of real estate backed opportunities. The Company was formed to primarily invest in a portfolio of secured real estate loans with both affiliates and non-affiliates and real estate projects with both affiliates and non-affiliates including but not limited to investments into Affiliates’ other funds as well as non-affiliate real estate funds, preferred and/or common equity investments and partnerships, the acquisition and disposition of non-performing notes as well as other real estate backed investment funds.  The Company’s direct investment in real estate assets will include, without limitation, acquiring land for the construction of, or the purchase of, office buildings, multi-family, residential housing projects, senior living, retail projects, industrial projects and other income producing assets and acquiring other real estate assets that the Company believes are fundamentally sound and present attractive income and/or growth opportunities. The loans will include, without limitation, short term loans secured by real estate through mortgages and deeds of trusts, the provision of first and second lien mortgage loans for the acquisition of land and/or construction of build to suit (“BTS”) development projects primarily on NNN leased retail.  If and to the extent required by applicable law, the Company will use a licensed mortgage broker for the transaction of all loans secured by real estate. We may not be able to promptly invest the net proceeds of this offering.  In the interim, we may invest in short-term, highly liquid or other authorized investments. Such short-term investments are not anticipated to earn as high of a return as we expect to earn on our real estate investments. We have identified certain investment opportunities, all of which are with affiliates, however, to date we have no assets and there can be no assurance that any of the identified investment opportunities will be completed, and if completed, there can be no assurance that they will be on the same terms and conditions as have been identified.  The Company may also take any action incidental and conducive to the furtherance of the aforementioned purposes.  The Company has not identified the particular investments it will make. Accordingly, an investor must rely upon the ability of the Manager in making investments consistent with the Company’s investment objectives and policies. Although the Manager has been successful in locating investments in the past, there can be no guarantee of future success, and the Company may be unable to find a sufficient number of attractive opportunities to invest its committed capital or meet its investment objectives. The Company does not intend to use net proceeds for the purpose of repurchasing equity interests in the Company, but because of the nature of the Company’s cash flows, some proceeds from time to time may be used for such purposes. The proceeds will be used to compensate the Manager only to the extent that such proceeds may contribute to the fees of the Manager as discussed below under “Management” in this Offering Circular.
 
DESCRIPTION OF BUSINESS
 
Overview
 
DLP Positive Fixed Returns Fund LLC was organized as a Delaware limited liability company on March 6, 2017 pursuant to filing the Certificate of Formation with the Secretary of State of Delaware. To date, the Company has not commenced business activities.
 
Investment Objectives and Strategy
 
The Company’s objectives with respect to acquiring Assets are to effectively deploy the proceeds of this Offering in Assets which are expected to:


Preserve and protect each Note Holders’ principal; and

Provide the Note Holders with annualized returns that will vary from time to time, initially ranging from 5% to 10%, depending on investment size and duration of Note maturity (see the current Note Schedule);

The Company cannot assure Note Holders that the Company will attain these objectives or that the value of the Company’s Assets will not decrease. Furthermore, within the investment objectives and policies, the Manager has substantial discretion with respect to the selection of specific investments and the purchase and sale of the Company’s assets, both from Affiliates and non-affiliates. The Manager will review investment policies periodically to determine whether the investment policies continue to be in the best interests of members.

Strategy to Achieve Company Investment Objectives
 
The Company will endeavor to produce attractive risk adjusted returns by investing in a range of real estate backed opportunities. The Company was formed to primarily invest in a portfolio of secured real estate loans with both affiliates and non-affiliates and real estate projects with both affiliates and non-affiliates including but not limited to investments into Affiliates’ other funds as well as non-affiliate real estate funds, preferred and/or common equity investments and partnerships, the acquisition and disposition of non-performing notes as well as other real estate backed investment funds.  The Company’s direct investment in real estate assets will include, without limitation, acquiring land for the construction of, or the purchase of, office buildings, multi-family, residential housing projects, senior living, retail projects, industrial projects and other income producing assets and acquiring other real estate assets that the Company believes are fundamentally sound and present attractive income and/or growth opportunities. The loans will include, without limitation, short term loans secured by real estate through mortgages and deeds of trusts, the provision of first and second lien mortgage loans for the acquisition of land and/or construction of build to suit (“BTS”) development projects primarily on NNN leased retail.  If and to the extent required by applicable law, the Company will use a licensed mortgage broker for the transaction of all loans secured by real estate. We may not be able to promptly invest the net proceeds of this offering.  In the interim, we may invest in short-term, highly liquid or other authorized investments. Such short-term investments are not anticipated to earn as high of a return as we expect to earn on our real estate investments. We have identified certain investment opportunities, all of which are with affiliates, however, to date we have no assets and there can be no assurance that any of the identified investment opportunities will be completed, and if completed, there can be no assurance that they will be on the same terms and conditions as have been identified.  The Company may also take any action incidental and conducive to the furtherance of the aforementioned purposes.

Plan of Operation
 
Our Manager has the authority to make decisions regarding our investments subject to the limitations in our Operating Agreement.
 
THERE IS NO GUARANTEE THAT THE COMPANY WILL INVEST IN ANY PARTICULAR PROJECT OR OPPORTUNITY. FOR ANY NUMBER OF REASONS, THE COMPANY MAY OPT AGAINST PURSUING ANY PARTICULAR OPPORTUNITY.

The Company, either directly or through special purpose vehicles, which will be subsidiary funds owned by the Company, (each a “SPV”) will provide capital to real estate investors including Affiliates of the Manager. The Company and/or any SPV(s) of the Company may choose to borrow money from time to time from one or more senior lenders (“Credit Facilities” or “Facilities”) and may pledge one or more Company Assets as collateral for any such borrowing.
 
Any Facility shall be nonrecourse to the Members. The Manager (and/or its principals) and the Company may agree to provide its Guarantees for a given Facility but are not required to do so. Any Facility will likely have covenants that affect the Company, any SPVs, and the Manager.
 
Investments shall be made in markets in which the Manager feels confident and comfortable in its ability to invest and underwrite effectively.
 
The Company will typically originate and acquire Mortgage Loans that meet the following general criteria, subject to modification in the Manager’s discretion:
 

Mortgage Loans made to real estate investors, including Affiliates, often for the acquisition and rehabilitation, or refinance of non-owner occupied 1-4 unit residential, multifamily, and commercial properties.

The Mortgage Loans originated or acquired will generally be secured in first lien position.

The Mortgage Loans are expected to be relatively short term in nature, with terms typically ranging from 6 to 18 months.

The maximized Company level LTV will be 60%; and maximum LTC of 70%.

The maximized asset level LTV will be 70%; and a maximum LTC of 80%.

A minimum of 90% of the loans made will be backed by single family or multi-family real estate; with a maximum of 10% backed by other commercial real estate asset classes.

Loans made to Affiliates will be underwritten to the same standards as a Mortgage Loan made to a non-affiliated borrower.

Generally, the Manager will cause an independent, third party appraisal to be performed to determine property value. However, the Manager may choose to determine property value through other means, such as broker price opinions, prior experience with similar properties.

Renovations will be monitored, and construction reserve funds will be released as the project progresses based upon an approved scope of work and draw schedule.

Borrowers will typically be required to demonstrate and document their experience in completing similar projects, as well as financial strength and creditworthiness.

Personal guarantees from the Borrower’s principals are typically be required.

The Company will sell and/or participate in loans with Affiliates of the Manager and with third parties with whom the Manager, or Affiliate of the Manager has a business relationship.

The Company may provide leverage to Affiliates or other real estate backed companies or funds.

The Company may purchase existing notes from other funds, lenders and Affiliates, which meet the criteria mentioned above.

The Company will further make investments into Affiliates’ other funds, preferred and common equity investments and partnerships, the acquisition and disposition of non-performing notes, the acquisition and disposition of real estate and other real estate backed investment funds.

DESCRIPTION OF SECURITIES OFFERED
 
The following descriptions of our securities, certain provisions of Delaware law and certain provisions of our certificate of formation and operating agreement, which will be in effect upon consummation of this offering, are summaries and are qualified by reference to Delaware law, our certificate of formation and our operating agreement, copies of which are filed as exhibits to the offering statement of which this Offering Circular is a part. See “Where You Can Find More Information.”

General
 
The Company is a Delaware limited liability company organized on March 6, 2017. The Company will sell Notes to its investors. (“Notes”). The Company Operating Agreement provides that it may issue an unlimited number of Notes as well as subsequent offerings subject to the approval of the Manager and subject to the limitations contained in Regulation A with regard to Tier 1 offerings which limit the sale of securities to $20,000,000 in any 12 month period.

All of the Notes offered by this offering circular will be duly authorized and validly issued. Upon payment in full of the consideration payable with respect to the Notes, Note Holders will not be liable to the Company to make any additional investments with respect to such Notes. Holders of the Notes have no conversion, exchange, sinking fund or appraisal rights, no pre-emptive rights to subscribe for any securities of the Company and no preferential rights to distributions.

The Company intends to have a December 31 fiscal year end.

Interest Payments
 
The Company expects to pay interest to Note Holders as set forth in the Note Schedule.

Although the Company reserves the right to do so, there is no current intention to list the Notes on a stock exchange or other trading market, nor is it expected that a public market for the Notes will develop. Further, the Company does not anticipate that it will distribute other assets in kind (other than in the context of a roll up transaction).

Voting Rights
 
Note Holders cannot exercise any control over the Company’s affairs and will not have any vote or influence over the Company, its investment policies, or any of its operations. The Manager will exercise complete control over the Company. The Manager has broad investment authority and may change its investment and underwriting policies (within the confines of its overall investment strategy) in its sole discretion, consistent with the duties it owes to all of the Note Holders.

Transfer Agent and Registrar
 
As of the date of this offering circular, the Company has not engaged a transfer agent, and does not intend to engage a transfer agent until such time as it is required to do so, or deems it to be in the best interest of the Company in order to satisfy the conditional exemption contained in Rule 12g5-1(a)(7) of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
 
PLAN OF DISTRIBUTION
 
The Company is offering up to $100,000,000.00 in Notes, with a maximum capital raise of $20,000,000 in any twelve-month period pursuant to this Offering Circular. The investments will be primarily offered by associated persons of the Company’s Affiliate DLP Capital Partners LLC and through online platforms. In conducting this offering, such persons and online platforms intend to rely on the exemption from registration contained in Exchange Act Rule 3a4-1.

In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those only states if they have been registered or qualified for sale; an exemption from such registration or qualification requirement is available and with which the company will be in compliance.

DLP Capital Partners LLC, and platforms as may be chosen by the Manager shall not be subject to the registration requirements of Section 304 of the JOBS Act because they will not offer and sell securities pursuant to Section 4(a)(6) of the Securities Act, and, therefore, will not meet the definition of a “funding portal.” This Offering Circular and supplements hereto will be furnished to prospective investors upon their request via electronic PDF format and will be available for viewing and download 24 hours per day, 7 days per week on the dlpcapitalpartners.com website, as well as on the SEC’s website at sec.report.

Advertising, Sales and other Promotional Materials
 
In addition to this Offering Circular, subject to limitations imposed by applicable securities laws, we expect to use additional advertising, sales and other promotional materials in connection with this Offering. These materials may include information relating to this offering, the past performance of our sponsor and its affiliates, property brochures, articles and publications concerning real estate, or public advertisements and audio-visual materials, in each case only as authorized by us. In addition, the sales material may contain certain quotes from various publications without obtaining the consent of the author or the publication for use of the quoted material in the sales material. Although these materials will not contain information in conflict with the information provided by this Offering Circular and will be prepared with a view to presenting a balanced discussion of risk and reward with respect to the investments offered, these materials will not give a complete understanding of this offering, us or the investments offered and are not to be considered part of this Offering Circular. This offering is made only by means of this Offering Circular and prospective investors must read and rely on the information provided in this Offering Circular in connection with their decision to invest.
 
Other than in the United States, no action has been taken by the Company that would permit a public offering of the securities offered by this offering circular in any jurisdiction where action for that purpose is required. The securities offered by this offering circular may not be offered or sold, directly or indirectly, nor may this offering circular or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this offering circular comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this offering circular. This offering circular does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this offering circular in any jurisdiction in which
such offer
 
or solicitation
is unlawful.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The DLP Family of Companies
 
DLP Capital Partners is a private investment group designed to produce consistent, returns while providing liquidity and security to its investors. We leverage the experience and resources of the DLP family of companies which have an extensive background in the distressed and value-add residential and multi-family real estate space. In the past, which is no guaranty of future success, the DLP family of companies has offered attractive investment options, not only in the real estate industry, but in the broader alternative investment spectrum as well. The DLP family of companies focus on income-producing real estate-backed debt and equity investments.
 
DLP’s purpose statement is:
Dream. Live. Prosper. Passionately Creating Prosperity through Real Estate.
DLP Capital Partners attempts to put this purpose into action by focusing on connecting capital with real estate opportunities.

DLP’s Affiliates which constitute the DLP family of companies include, but are not limited to DLP Real Estate Capital, Inc., DLP Real Estate LLC, DLP Property Management, DLP Construction Management LLC, DLP Capital Partners, LLC, Direct Lending Partners LLC and Alliance Property Transfer, LLC, and other funds which include, but are not limited to DLP Lending Fund, LLC, DLP Income & Growth Fund I, LLC and DLP Preferred Returns Equity Fund LLC.

As of the middle of 2019, the DLP family of companies had:


Over 10,000 real estate transactions closed totaling more than 1.2 billion;

Over 600 current investors

Over 300 loans in portfolio

Over 9,000 multi-family & single-family units owned and managed

Over $600 million in assets under management, and

Over $100 million combined annual revenue

In addition, DLP Realty has consistently ranked as one of the top real estate teams (including #1 in PA and NJ) by Real Trends as published in the Wall Street Journal for the past 5 years and has been ranked as one of the Inc 5000 fastest growing companies for the past 7 years.

The DLP family of companies focuses on its purpose, its core values, the hiring and development of top talent and a passion for excellence.

The Company and its Affiliates believes it offers its investors a number of items which it believes gives it a competitive advantage which include:


A seasoned and experienced management team with developed relationships;

Extensive real estate acquisition and management experience;

Competitive lending terms and programs;

Established deal sourcing and underwriting processes;

Ability to adapt and manage operations as needed;

Innovative approach to internal and external products & offerings

The Company has not yet commenced operations as of the date of this Offering Circular and therefore, does not have financial statements.

PRIOR PERFORMANCE SUMMARY
 
PRIOR PERFORMANCE SUMMARY
 
The information presented in this section represents the historical experience of DLP Lending Fund, LLC, DLP Fixed Fund, LLC, DLP Income and Growth Fund, LLC, DLP Equity Fund I, LP and DLP Equity Fund II, LLC. Each of these are real estate funds managed by our Manager which is an affiliate of our sponsor, which have similar investment objectives to the company.
 
The returns to our members and our ability to pay on the Notes will depend in part on the mix of investments in real estate, real estate secured loans and other assets in which we invest. Because our portfolio is unlikely to mirror the portfolio of DLP Lending Fund, LLC, DLP Fixed Fund, LLC, DLP Income and Growth Fund, LLC, DLP Equity Fund I, LP and DLP Equity Fund II, LLC, the returns to our members and our ability to pay on the Notes will vary from those generated by DLP Lending Fund, LLC, DLP Fixed Fund, LLC, DLP Income and Growth Fund, LLC, DLP Equity Fund I, LP and DLP Equity Fund II, LLC. You should not assume the past performance of DLP Lending Fund, LLC, DLP Fixed Fund, LLC, DLP Income and Growth Fund, LLC, DLP Equity Fund I, LP and DLP Equity Fund II, LLC will be indicative of our future performance.
 
Overview of DLP Lending Fund, LLC
 
DLP Lending Fund, LLC was organized on September 11, 2014 as a Delaware limited liability company for the primary purpose of originating and making non-consumer loans on real estate in target markets throughout the United States. Typically, DLP Lending Fund, LLC invests in first mortgages. DLP Lending Fund, LLC commenced a private placement pursuant to Rule 506(c) of Regulation D. The offering is a $150,000,000 offering consisting of both the sale of notes and the sale of membership units.  The offering commenced on October 22, 2014. DLP Lending Fund, LLC has raised $81,329,797 consisting of $6,246,090 in the sale of notes and $75,082,707 in the sale of membership units.
 
The Manager of DLP Lending Fund, LLC is DLP Management Group, LLC an affiliate of our sponsor and manager.  The prior performance of DLP Lending Fund, LLC is set forth in the tables below.
 
Overview of DLP Fixed Fund I, LLC
 
DLP Fixed Fund I, LLC was organized on February 18, 2014 as a Pennsylvania limited liability company for the primary purpose of providing non-consumer loans and preferred equity investments in target markets throughout the United States.  DLP Fixed Fund, LLC commenced a private placement pursuant to Rule 506(c) of Regulation D. The offering was a $100,000,000. offering consisting of both the sale of notes and the sale of membership units. The offering commenced on July 1, 2015. DLP Fixed Fund, LLC has raised $11,598,114 consisting of $4,409,459 in the sale of notes and $7,188,655 in the sale of membership units. DLP Fixed Fund I, LLC has been closed.
 
The Manager of DLP Fixed Fund, LLC was DLP Capital Partners LLC, an affiliate of our sponsor and manager.  The prior performance of DLP Fixed Fund I, LLC is set forth in the tables below.
 
Overview of Income and Growth Fund I, LLC
 
DLP Income and Growth Fund I, LLC was organized on December 16, 2015 as a Pennsylvania limited liability company for the primary purpose of making non-consumer loans to real estate investors, loans to Affiliates, investments into Affiliates’ other funds, the acquisition and disposition of non-performing notes as well as other real estate backed investment funds. DLP commenced a private placement pursuant to Rule 506(c) of Regulation D. The offering is a $150,000,000 offering consisting of both the sale of notes and the sale of membership units.  The offering commenced on January 1, 2016. DLP Income and Growth Fund I, LLC has raised $55,060,380 consisting of $12,601,717 in the sale of notes and $42,458,663 in the sale of membership units.
 
The Manager of DLP Lending Fund, LLC is DLP Capital Partners, LLC an affiliate of our sponsor and manager.  The prior performance of DLP Income and Growth Fund I, LLC is set forth in the tables below.
 
Overview of DLP Equity Fund I, LP
 
DLP Equity Fund I, LP was organized on April 30, 2018 as a Pennsylvania limited partnership for the primary purpose of providing preferred equity investments in real estate.  DLP Equity Fund I, LP commenced a private placement pursuant to Rule 506(c) of Regulation D. The offering is a $40,000,000 offering consisting of the sale of membership units. The offering commenced on March 10, 2014. DLP Equity Fund I, LP, has raised $8,116,025 and has been closed.
 
The General Partner of DLP Equity Fund I, LP is DLP Capital Partners LLC an affiliate of our sponsor and manager.  The prior performance of DLP Equity Fund I, LP is set forth in the tables below.
 
Overview of DLP Equity Fund II, LLC
 
DLP Equity Fund II, LP was organized on January 10, 2017 as a Delaware limited liability company for the primary purpose of providing preferred equity investments in real estate.  DLP Equity Fund II, LP commenced a private placement pursuant to Rule 506(c) of Regulation D. The offering is a $40,000,000 offering consisting of the sale of membership units.  The offering commenced on March 7, 2017. DLP Equity Fund II, LP has raised $12,493,659 and has been closed.
 
The General Partner of DLP Equity Fund II, LP is DLP Capital Partners LLC an affiliate of our sponsor and manager.  The prior performance of DLP Equity Fund II, LP is set forth in the tables below.
 
TABLE I – Experience in Raising and Investing Funds (on a percentage basis)
– Includes information for the past 3 years.

 
Program A
Program B
Program C
Program D
Program E
Dollar amount offered
DLP Lending Fund, LLC
 DLP Fixed Fund, LLC
DLP Income and Growth Fund, LLC
DLP Equity Fund I, LP
DLP Equity Fund II, LLC
Dollar amount raised
$43,883,616
$10,182,464
$39,065,859
$8,116,025
$12,200,000
Less offering expenses

-          Selling commissions and discounts retained by affiliates

-          Organizational expenses

-          Other (explain)
 0
0
0
0
0
Reserves

-          Percent available for investment
100%
100%
0%
0%
0%
Acquisition costs:

-          Prepaid items and fees related to purchase of property

-          Cash down payment

-          Acquisition fees

-          Other (explain)
0
0
0
0
0
Total acquisition cost
0
0
0
0
0
Percent leverage (mortgage financing divided by total acquisition cost)
0%
0%
0%
0%
0%
Date offering began
10/22/2014
7/1/2015
1/1/2016
3/10/2014
3/7/2017
Length of offering (in months)
Evergreen
Evergreen
Evergreen
14
13
Months to Invest 90% of amount available for investment (measured from beginning of offering)
1
1
1
1
2

TABLE II – Compensation to Sponsor
– Includes information for the past 3 years.

Type of Compensation
Program A
Program B
Program C
Program D
Program E
Date offering commenced
N/A
N/A
N/A
4/30/2015
3/31/2018
Dollar amount raised
$43,883,616
$10,182,464
$39,065,859
$8,116,025 
$12,200,000
Amount paid to sponsor from proceeds of offering

-          Underwriting Fees

-          Acquisition Fees

∙         Real estate commissions

∙         Advisory fees

∙         Other (identify and quantify)

-          Other
0
0
0
0
0
Dollar amount of cash generated from operations before deducting payments to sponsor
$12,596,268
$3,185,207
$5,678,494
$4,578,318
$5,698,846
Amount paid to sponsor from operations

-          Property management fees

-          Partnership management fees

-          Reimbursements

-          Leasing commissions

-          Other (identify and quantify)
$794,228
$242,817
$469,028
$794,143
$208,636
Dollar amount of property sales and refinancing before deducting payments to sponsor

-          Cash

-          Notes
0
0
0
0
0
Amount paid to sponsor from property sales and refinancing

-          Real estate commissions

-          Incentive fees

-          Other (identify and quantify)
0
0
0
0
0

TABLE III – Compensation to Sponsor
– Includes information for the past 3 years.

Type of Compensation
Program A
Program B
YEAR
2016
2017
2018
2016
2017
2018
Gross Revenues
$1,470,767
$4,237,917
$6,887,584
$1,093,765
$966,697
$1,124,745
Profit on sale of properties
0
0
0
0
0
0
Less:

-          Operating Expenses

-          Interest expense

-          Depreciation
$404,483
$1,281,488
$2,350,882
$653,592
$501,851
$510,321
Net Income – GAAP Basis
$1,066,284
$2,873,228
$4,536,702
$440,173
$464,846
$614,424
Taxable Income

-          From operations

-          From gain on sale
$1,182,004
$2,956,429
$4,536,702
$440,173
$464,846
$614,424
Cash generated from operations
$876,450
$2,725,264
$4,087,583
$399,051
$458,661
$511,960

Type of Compensation
Program C
Program D
YEAR
2016
2017
2018
2016
2017
2018
Gross Revenues
$377,052
$1,575,837
$3,725,605
$1,857,341
$1,603,691
$867,129
Profit on sale of properties
0
0
0
$279,432
$345,759
$27,162
Less:

-       Operating Expenses

-       Interest expense

-       Depreciation
$111,041
$347,059
$1,318,480
$1,977,314
$1,797,959
$1,516,699
Net Income – GAAP Basis
$266,012
$1,228,778
$2,407,125
$159,459
$151,491
$(622,408)
Taxable Income

-          From operations

-          From gain on sale
$272,684
$1,261,548
$2,407,125
$88,343
$99,352
$(639,215)
Cash generated from operations
$265,250
$1,229,540
$1,920,525
$200,002
$169,880
$297,934

Type of Compensation
Program E
YEAR
2016
2017
2018
Gross Revenues
0
$51,445
$127,275
Profit on sale of properties
0
0
$356,980
Less:

-          Operating Expenses

-          Interest expense

-          Depreciation
0
$180,731
$344,416
Net Income – GAAP Basis
0
($129,286)
$139,839
Taxable Income

-          From operations

-          From gain on sale
0
($200,017)
($1,656,517)
Cash generated from operations
0
($74,145)
($111,189)

MANAGEMENT
 
The Manager of the Company is DLP PFR Management LLC, a Delaware limited liability company. The principals of the Manager are Donald Wenner, Robert Peterson and Barry W. DeGroot. The Company does not have any employees at this time and it is not anticipated they will have employees in the future.

Name
Position
Age
Term of Office
       
Donald Wenner
CEO
34
N/A
       
Robert Peterson
CFO
60
N/A
       
Richard Delgado
Managing Director
50
N/A
       
Barry W. DeGroot
Chief Legal Counsel
54
N/A

Donald Wenner
is the CEO & Founder of DLP Real Estate Capital, a family of companies that includes: DLP Capital Partners, Direct Lending Partners, DLP Realty, DLP Real Estate Management, DLP Interactive Media, and Alliance Property Transfer. Mr. Wenner is experienced in all facets of housing as well as his ability to scale companies through utilization of the DLP Elite Acceleration  System, for which DLP Real Estate Capital has been ranked in the Inc. 5000 fastest growing companies in the US for 7 consecutive years.  Since DLP Real Estate Capital’s founding in 2007, MR. Wenner and DLP Real Estate Capital and its Affiliates have closed more than 10,000 real estate transactions totaling more than $1.2 billion. Mr. Wenner is ranked by The Wall Street Journal as one of the Top 15 Real Estate professionals in the country, including #1 in all of PA and NJ for the past 5 years in a row. With over $600 million in assets under management, DLP Real Estate Capital and its Affiliates’ portfolio includes more than 9,000 apartments and homes located primarily throughout the southeast and northeast areas of the country, as well as a portfolio of real estate loans originated to active real estate investors. Mr. Wenner studied Finance and Marketing at Drexel University.

Robert Peterson
is the Chief Financial Officer (CFO)
 
of DLP Real Estate Capital and an equity holder  in the company. Mr. Peterson
has 40 years’ experience in the commercial, retail and multi-family residential real estate industry as an accounting and finance professional with extensive asset management experience. Mr. Peterson joined the DLP family of companies in 2015. Previously, from 1978 to 1987 Mr. Peterson served as the Vice President of Finance and Information Technologies at the Buckeye Companies, the largest full-service commercial office building owner, contractor, property management, brokerage and automobile parking group of companies in Beverly Hills, California. He was the Treasurer and Chief Financial Officer for Malibu Bay Company from 1989 to 1999, the largest commercial landowner and retail developer in Malibu at the time, where he also served as the Director of Leasing. Mr. Peterson also spent 28 years as the General Manager and Chief Financial Officer of Konheim Enterprises and CitiNational-Buckeye Building Company from 1987 to 2015. Mr. Peterson studied Accounting and Computer Sciences at UCLA and has a Bachelor of Science degree in Accounting from Western Governors University.
 
Richard Delgado
is DLP's first ever Managing Director. Richard is a highly accomplished leader with a record of achievement in the mortgage industry over the past 25 years. He served for 5 years as Senior Vice President, Portfolio Investments and Structured Finance with Nationstar Mortgage (dba Mr. Cooper), the 3rd largest mortgage servicer with more than $600 billion in servicing under management, where he was accountable for the financing and securitization of assets and raising and managing the firm’s corporate debt, and transactional work, as well as for the acquisition and sale of assets and corporate development. Earlier, Richard added significant value for nearly 19 years at the Ocwen Financial Corporation family of companies. With two other executives, Richard launched Home Loan Servicing Solutions, Ltd.  (HLLS), an Ocwen affiliate that operated as a separate publicly-traded company. Together, they raised $1.2B of equity in the IPO and follow-on offerings, and purchased the mortgage servicing rights from Ocwen that resulted in Ocwen becoming a capital-light operator while HLSS managed the capital-intensive assets. Richard’s work was instrumental in growing the firm’s market cap to $1.6B. Richard completed his Bachelor of Business Administration in Accounting from Iona College.
 
Barry W. DeGroot
serves as Chief Legal Counsel for the DLP family of companies. Mr. DeGroot has over 32 years’ experience in multiple areas of real estate including acquisitions, development, finance, sales and brokerage. Mr. DeGroot joined the DLP family of companies in 2014. Prior to joining DLP, Mr. DeGroot was engaged in the private practice of law with a focus on real estate and corporate matters and served as corporate counsel for a large real estate brokerage franchise with offices in Pennsylvania and New Jersey
. Mr. DeGroot’s focus within the DLP companies includes, but is not limited to corporate matters, licensing, regulation and compliance; legal due diligence and financial transactions.
Mr. DeGroot
received his B.A. degree from Pennsylvania State University and his J.D. Degree from The Dickinson School of Law of the Pennsylvania State University.
 
Messrs. Wenner, Peterson, Delgado and DeGroot certify that none of them individually, or as a principal of a business entity have filed for bankruptcy, none have been charged or convicted of a felony or misdemeanor, other than a minor traffic violation, in any criminal proceeding and the Company is unaware of any disqualifying events as set forth in Section 230.262 that would limit the principals or the Company from utilizing Regulation A.
 
Employees
 
The key principal of DLP PFR Management LLC is Donald Wenner.
The Manager has no direct employees.

Company Expenses
 
The Company will be responsible for all of its operating expenses including, without limitation, (i) all costs and expenses incurred in connection with identifying, evaluating, structuring, negotiating, developing, closing and servicing investments consummated by the Company (including, without limitation, any due diligence, travel, legal and accounting expenses, deposits, commitment fees, other related fees and out-of-pocket costs related thereto); (ii) taxes of the Company; (iii) all costs and expenses associated with obtaining and maintaining insurance for the Company and its assets, if any; (iv) all costs related to litigation (including threatened litigation) involving the Company, and indemnification expenses; (v) expenses and fees associated with third party auditors, accountants, attorneys and tax advisors and other professionals with respect to the Company and its activities; (vi) fees incurred in connection with the maintenance of bank or custodian accounts; (vii) brokerage points and commissions, referral fees, finder fees, and other investment costs incurred by or on behalf of the Company and paid to Affiliates and third parties; (viii) all expenses incurred in connection with the registration of the Company’s securities under applicable securities laws or regulations; (ix) all expenses associated with the borrowing of funds and procurement of lines of credit; (x) all expenses of liquidating the Company or its investments; and (xi) other general ordinary Company administration and overhead expenses. All such expenses may be direct, indirect and/or allocated.
 
The Manager will be responsible for costs of its own personnel (including compensation and benefits), office space and general overhead expenses incurred in performing duties to the Company.

Management Fees
 
The Company does not have any employees, officers, or directors. The Manager is responsible for managing the Company. The Manager will receive compensation for its services to the Company, in the form of a base management fee and a management incentive fee, described below.
 
The Manager will charge an annual Management Fee of one percent (1%) of the total Assets Under Management (“AUM”) based upon the then Stated Value of the Assets. The Management Fee shall be calculated, prorated, and paid at the end of each calendar month.
 
It is the intention of the Company that the Manager will also manage the administration and investor relations functions, the cost of which shall be a Company Expense.  The Company will pay the Manager a fee of .5% of the Company’s AUM based upon the then Stated Value of the Company’s Assets. Loan servicing shall be administered internally by the Manager, or an Affiliate of the Manager at usual and customary market rates. The Manager may, in its sole discretion, retain the services of an outside third-party administrator.
 
Donald Wenner, Robert Peterson and Barry W. DeGroot may also receive distributions from the Company in their capacities as equity owners DLP Capital Partners LLC, sole member of the Manager.
 
Investment by the Principals
 
DLP PFR Management, LLC is wholly owned by DLP Capital Partners LLC, a Delaware limited liability company in which Donald Wenner, Robert Peterson and Barry W. DeGroot are the Managing Member and Members respectively. The Manager will invest in the Company, directly or indirectly through its Affiliates or members, an amount no less than five percent (5%) of the aggregate amount of Notes issued to Note Holders. The investment will be made as an equity capital contribution as a member of the Company (the “Capital Commitment”) and will be subordinate to the Notes issued to the Note Holders of the Company.
 
Fiduciary Duties of the Manager
 
Duties owed the Company by the Manager are prescribed by law and the Operating Agreement (“Operating Agreement”). The Act provides that Delaware limited liability companies may, in their Operating Agreements, limit or eliminate any and all liabilities for breach of duties (including fiduciary duties) of a member, manager or other person to a limited liability company or to another member or manager or to another person that is a party to or is otherwise bound by a limited liability company agreement.
 
The Operating Agreement provides that the Manager will not be liable to the Company for losses resulting from errors in judgment or other acts or omissions unless the Manager acted fraudulently or in bad faith. Notwithstanding the foregoing, the Operating Agreement provides that neither the Manager nor any owner, director, officer, employee, or agent of the Manager shall be indemnified for any loss or damage incurred by them in connection with any judgment entered in or settlement of any lawsuit involving allegations that federal or state securities laws were violated by the Manager or by any such person in connection with the offer or sale of Notes unless: (a) where the lawsuit is not settled, the person seeking indemnification successfully defends that lawsuit; and (b) indemnification is specifically approved by a court of law.
 
It is the position of the U.S. Securities and Exchange Commission that indemnification for liabilities arising from, or out of, a violation of federal securities law is void as contrary to public policy.  However, indemnification will be available for settlements and related expenses of lawsuits alleging securities law violations if a court approves the settlement and indemnification, and also for expenses incurred in successfully defending such lawsuits if a court approves such indemnification.
 
The Operating Agreement provides that the Manager is not required to manage the Company as its sole and exclusive function. The Manager does have other business interests and will engage in activities other than those relating to the Company. The pursuit of such ventures by the Manager and/or Affiliates, even if competitive with the business of the Company, shall not be deemed wrongful or improper or a violation of any fiduciary duties by the Manager.
 
By subscribing to and holding Notes, each Note Holder will automatically agree to be bound by the provisions in our Operating Agreement, as may be amended from time to time. The failure of a member to sign our Operating Agreement does not render our Operating Agreement unenforceable against that person.
 
Indemnification and Exculpation
 
Subject to certain limitations, our operating agreement limits the liability of our Manager, its officers and directors, our sponsor and our sponsor’s shareholders and affiliates, for monetary damages and provides that we will indemnify and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to our Manager, its officers and directors, our sponsor and our sponsor’s shareholder and affiliates.
 
Our operating agreement provides that to the fullest extent permitted by applicable law our Manager, its owners, directors, officers, employees and agents, will not be liable to the Company. In addition, pursuant to our operating agreement, we have agreed to indemnify our Manager, its owners, directors, officers, employees and agents, to the fullest extent permitted by law, against all expenses and liabilities (including judgments, fines, penalties, interest, amounts paid in settlement with the approval of our Company and attorney’s fees and disbursements) arising from the performance of any of their obligations or duties in connection with their service to us or the operating agreement, including in connection with any civil, criminal, administrative, investigative or other action, suit or proceeding to which any such person may hereafter be made a party by reason of being or having been the Manager or one of our Manager’s directors or officers.
 
Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling us for liability arising under the Securities Act, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
 
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
 
The following table presents information regarding the ownership of the Company’s equity interests as of effective December 31, 2018 by:
 

our Manager;

each of our Manager’s Principals;

each equity owner known by us to beneficially hold 10% or more of the Company’s equity interests; and all of our Manager’s Principals as a group.

Beneficial ownership is generally determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise noted, the address for each beneficial owner listed below is 605 Market Street, Augustine, FL 32095.
 
Name
Number of Units
Beneficially Owned
Percent of
Class1
Manager:
   
DLP PFR Management LLC
2
2%
DLP Capital Partners LLC
98
98%
     
Managing Directors of Manager:2
   
Donald Wenner
-
-
Robert Peterson - -
Barry W. DeGroot
-
-
TOTAL
100
100%
     
Other holders of 10% or more of the Company’s equity interests:
   
 
0
0%
 
0
0%





2
Percentages are based on 100 Units outstanding.
3
The Membership Interests of DLP Capital Partners LLC is Donald Wenner (85%),
Robert Peterson (10%) and Barry W. DeGroot (5%).

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
 
Other than the Manager’s relationship to the Company as Manager, the Company has not engaged in, nor currently proposes to engage in, any transaction in which any of the Manager, any affiliates of the Manager, any other person holding more than a 10% interest in the Company, or any immediate family member of such persons, had or is to have a direct or indirect material interest.
 
CONFLICTS OF INTEREST
 
The Company is subject to various conflicts of interest arising out of its relationship with the Manager. None of the agreements and arrangements between the Company and the Manager, including those relating to compensation, resulted from arm’s length negotiations. In addition, no assurances can be made that other conflicts of interest will not arise in the future. These conflicts of interest include, but are not limited to, the Receipt of Management Fee, Company Administration Fee and Loan Servicing Fees by the Manager. See Risk Factors-Conflict of Interest.

The Manager will be paid the Management Fee, as a percentage of AUM, which is based on the Stated Value of the Company Assets (as determined by the Manager). Such Management Fee is intended to compensate the Manager for its services and was not negotiated on an arm’s length basis. Since absent the existence of a Management Fee, Members might receive a higher rate of return, the interests of the Manager and the Investors are adverse in this respect. See Risk Factors-Conflict of Interest.

Receipt of Other Asset Level Fees by the Manager and its Affiliates
 
The Manager and/or Affiliates may charge reasonable, market-based loan origination, extension, processing, underwriting, loan servicing, fund administration, accounting, legal, appraisal and inspection fees in connection with services provided in connection with the business of the Company. Direct Lending Partners LLC may receive fees in connection with the origination of mortgage loans. DLP Real Estate LLC may receive compensation in the form of commissions, acquisitions and disposition fees paid through the closing of the purchase or sale of a Company Asset. DLP Construction Management LLC may receive compensation from the construction and project management services it provides to the Company’s borrowers or the Company directly for properties it acquires. Alliance Servicing LLC may receive fees for servicing loans and assets, Alliance Property Transfer, LLC may receive compensation for title and escrow related services it provides to the Company’ and/or the Company directly. All fees and compensation paid to Affiliates shall be market-based and commercially reasonable at all times.

Competition by the Company with Other Affiliated Companies
 
The Manager and its members may engage for their own accounts or for the accounts of others in other business ventures, including other public or private limited partnerships or limited liability companies. Neither the Company nor any holder of a Unit issued by the Company is entitled to an interest therein. The Manager’s members invest in real estate or other activities similar to those of the Company for their own accounts and expect to continue to do so. The Company’s investment objectives and underwriting criteria may differ substantially from those of additional real estate investment programs sponsored by the Manager.

The Manager and its members may be members or managers of other entities which have investment objectives that have some similarities to the Company, which may cause the Manager’s members to pursue investments that are competitive with those of the Company. However, the decision as to the suitability of the investment by the Company will be determined by the Manager in its sole discretion and will be based upon a review of the Company’s investment portfolio and upon factors including but not limited to such as property location, investment size, net income, the effect of the investment on diversification of the Company’s portfolio, and the amount of Company capital then available for investment.
 
Sale or Participation of Loans
 
The Company will purchase, sell and/or participate loans to Affiliates of the Manager and to third parties with whom the Manager, or Affiliates of the Manager have a business relationship.

Equity Investments

The Company will, either directly or indirectly, make equity investments, preferred and/or common, in assets, companies and funds which will include Affiliates.

Other Investments
 
Personnel of the Manager and its respective Affiliates involved in managing and executing responsibilities of the Manager may have investments in other companies, funds or accounts and real estate interests sponsored by or affiliated with the Manager as well as investments in non-affiliates. The performance of and financial returns on such other investments may be at odds with those of the Company.

Lack of Independent Legal Representation
 
The Manager and Company are not represented by separate counsel. The attorneys and other experts who have prepared the documents for this Offering also perform other services for the Manager. This representation will continue.

Manager as Member
 
The Manager is a Member of the Company and from time to time may invest additional amounts in the Company. Any further investment by the Manager will be made according to the then prevailing Unit Price and otherwise be in such form and in such amount as determined by the Manager in its sole discretion, without notice or approval of the other Members. The Manager may also determine to have the Company accept its investment while rejecting the investments of others (though it does not intend to do so). As additional Units are issued, the increase in Units may reduce the amounts the Company has available to make distributions to other Investors, as distributions will need to be distributed amongst more Units. In addition, the Manager will be eligible to have the same rights to request the Company to redeem its Units as any other Member. Any such Redemption may reduce the amount of funds available for the redemption or repayment of other Investors’ interests.

Furthermore, the interests of the Manager in its capacity as a Member may be adverse to the interests of other Members.

Indemnification
 
Pursuant to the Operating Agreement, the Company will indemnify its Manager and any of its Affiliates, agents, or attorneys from any action, claim, or liability arising from any act or omission made in good faith and in the performance of its duties under the Operating Agreement. If the Company becomes obligated to make such payments, such indemnification costs would be paid from funds that would otherwise be available to distribute to Investors or invest in further Company Assets. To the extent these indemnification provisions protect the Manager and its Affiliates, agents, or attorneys at the cost of the Investors in the Company, a conflict of interest may exist.
 
Other Services or Potential Compensation
 
The Company may engage Affiliates of the Manager to perform services for and on behalf of the Company and the Company may, in connection with such services, pay to such Affiliates brokerage commissions and fees, property management fees, and other compensation as described in this Offering. Affiliates of the Company may receive commissions or fees from unrelated third parties with whom the Company is purchasing or selling a real property asset or engaging in another transaction and, that in such event, such Affiliate may have a potentially conflicting division of loyalties and responsibilities regarding the Company and the other parties to the transaction.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
 
The tax considerations relating to the purchase, ownership and disposition of the Notes are significant and complex. It is impossible for any memorandum such as this to address all of the tax considerations that may be relevant to holders in light of their particular circumstances or to holders subject to special rules under US Federal income tax laws.
 
Therefore, all prospective investors are urged to consult their individual tax advisors with respect to the tax ramifications of any investment in, or holding of, any security of the company.
 
Under current law, the Company, which intends to be treated as a partnership for U.S. tax purposes, will be required to file a tax return with the IRS. If the tax returns of the Company are audited by the IRS, the tax treatment of the Company’s income and deductions generally is determined at the Company level and U.S. tax deficiencies arising from the audit, if any, are paid by the Members that were partners for U.S. tax purposes in the year subject to the audit.
 
The Bipartisan Budget Act of 2015 (“BBA”), changed many of the rules relating to the Tax Matters Member or Partnership Representative and their representation of the entity (in this case the Company) with respect to all tax matters.  Specifically, under the general rule imposed under new legislation, an audit adjustment of the Company’s tax return filed or required to be filed for any tax year beginning during or after 2018 (a “Filing Year”) could result in a tax liability (including interest and penalties) imposed on the Company for the year during which the adjustment is determined (the “Adjustment Year”).  The tax liability generally is determined by using the highest tax rates under the Code applicable to U.S. taxpayers, in which case any Adjustment Year partners of the Company would bear the audit tax liability at significantly higher rates (including interest and penalties) arising from audit adjustments and in amounts that are unrelated to their Filing Year economic interests in the Company partnership items that were adjusted.
 
To mitigate the potential adverse consequences of the general rule, the Company may be able to elect to pass through such audit adjustments for any year to the Members who were partners in the Company for the Filing Year (instead of those who are partners/members in the Adjustment Year), in which case those partners generally would be responsible for the payment of any tax deficiency, determined after including their shares of the adjustments on their tax returns for the Adjustment Year. The ramifications of the BBA changes to the audit procedures and rules could be significant, and prospective investors are strongly encouraged to consult with competent and experienced tax advisors and counsel with respect to the BBA changes, before making an investment in the Company.
 
AS REQUIRED BY U.S. TREASURY REGULATIONS GOVERNING TAX PRACTICE, YOU ARE HEREBY ADVISED THAT ANY WRITTEN TAX ADVICE CONTAINED HEREIN WAS NOT WRITTEN OR INTENDED TO BE USED (AND CANNOT BE USED) BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE INTERNAL REVENUE CODE OF THE UNITED STATES; THE ADVICE WAS PREPARED TO SUPPORT THE PROMOTION OR MARKETING OF TRANSACTIONS OR MATTERS ADDRESSED BY THE WRITTEN ADVICE; AND PROSPECTIVE INVESTORS REVIEWING THIS DISCUSSION SHOULD CONSULT THEIR OWN TAX ADVISERS CONCERNING THE U.S. FEDERAL, STATE, AND LOCAL INCOME TAX CONSEQUENCES IN THEIR PARTICULAR SITUATIONS OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF INTERESTS, AS WELL AS ANY CONSEQUENCES UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
 
DISQUALIFYING EVENTS DISCLOSURE
 
Recent changes to Regulation A promulgated under the Securities Act prohibit an issuer from claiming an exemption from registration of its securities under such rule if the issuer, any of its predecessors, any affiliated issuer, any director, executive officer, other officer participating in the offering of the interests, general partner or managing member of the issuer, any beneficial owner of 20% or more of the voting power of the issuer's outstanding voting equity securities, any promoter connected with the issuer in any capacity as of the date hereof, any investment manager of the issuer, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of the issuer's interests, any general partner or managing member of any such investment manager or solicitor, or any director, executive officer or other officer participating in the offering of any such investment manager or solicitor or general partner or managing member of such investment manager or solicitor has been subject to certain "Disqualifying Events" described in Rule 506(d)(1) of Regulation D subsequent to September 23, 2013, subject to certain limited exceptions. The Company is required to exercise reasonable care in conducting an inquiry to determine whether any such persons have been subject to such Disqualifying Events and is required to disclose any Disqualifying Events that occurred prior to September 23, 2013 to investors in the Company. The Company believes that it has exercised reasonable care in conducting an inquiry into Disqualifying Events by the foregoing persons and is aware of the no such Disqualifying Events.

It is possible that (a) Disqualifying Events may exist of which the Company is not aware and (b) the SEC, a court or other finder of fact may determine that the steps that the Company has taken to conduct its inquiry were inadequate and did not constitute reasonable care. If such a finding were made, the Company may lose its ability to rely upon exemptions under Regulation A, and, depending on the circumstances, may be required to register the Offering of the Company's Common Stock with the SEC and under applicable state securities laws or to conduct a rescission offer with respect to the securities sold in the Offering.

ERISA CONSIDERATIONS
 
In considering the acquisition of Units to be held as a portion of the assets of an “employee benefit plan” within the meaning of Section 3(3) of ERISA (“a Benefit Plan” or “Plan”), a Plan fiduciary, taking into account the facts and circumstances of such trust, should consider, among other things: (a) the effect of the “Plan Asset Regulations” (Labor Regulation Section 2510.3-101) including potential “prohibited transactions” under the Code and ERISA; (b) whether the investment satisfies the “exclusive purpose,” “prudence,” and “diversification” requirements of Sections 404(a)(l)(A),(B) and (C) of ERISA; (c) whether the investment is a permissible investment under the documents and instruments governing the plan as provided in Section 404 (a)(l)(D) of ERISA; (d) the Plan may not be able to distribute Units to participants or beneficiaries in pay status because the Manager may withhold its consent; and (e) the fact that no market will exist in which the fiduciary can sell or otherwise dispose of the Units and the Company has no history of operations. The prudence of a particular investment must be determined by the responsible fiduciary with respect to each employee benefit plan, taking into account the facts and circumstances of the investment.

Any Investor that invests funds belonging to a qualified retirement plan or IRA should carefully review the tax risks provisions of this Offering Circular as well as consult with their own tax advisors. The contents hereof are not to be construed as tax, legal, or investment advice. 
PROSPECTIVE BENEFIT PLAN INVESTORS ARE URGED TO CONSULT THEIR ERISA ADVISORS WITH RESPECT TO ERISA AND RELATED TAX MATTERS, AS WELL AS OTHER MATTERS AFFECTING THE BENEFIT PLAN’S INVESTMENT IN THE COMPANY. MOREOVER, MANY OF THE TAX ASPECTS OF THE OFFERING DISCUSSED HEREIN ARE APPLICABLE TO BENEFIT PLAN INVESTORS WHICH SHOULD ALSO BE DISCUSSED WITH QUALIFIED TAX COUNSEL BEFORE INVESTING IN THE COMPANY.
 
HOW TO SUBSCRIBE
 
How to Become and Investor
 
In order to invest, a prospective investor must electronically complete, sign and deliver to us an executed subscription agreement in the form attached to this Offering Circular as Appendix A, and wire funds for its subscription amount in accordance with the instructions provided therein. Settlement may occur up to 45 days after a prospective investor submits a subscription agreement, depending on the volume of subscriptions received. An investor will become a Note Holder of our Company, including for tax purposes, and the Notes will be issued, as provided in the subscription agreement.  We reserve the right to reject any investor’s subscription in whole or in part for any reason. If the offering terminates or if any prospective investor’s subscription is rejected, all funds received from such investors will be returned without interest or deduction.


ADDITIONAL INFORMATION
 
We have filed with the SEC an offering statement under the Securities Act on Form 1-A regarding this offering. This Offering Circular, which is part of the offering statement, does not contain all the information set forth in the offering statement and the exhibits related thereto filed with the SEC, reference to which is hereby made. You may read and copy the offering statement, the related exhibits and the reports and other information we file with the SEC at the SEC’s public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549.

You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC- 0330 for further information regarding the operation of the public reference rooms. The SEC also maintains a website at
sec.report
that contains reports, information statements and other information regarding issuers that file with the SEC.

You may also request a copy of these filings at no cost, by writing, or telephoning us at:

DLP Positive Fixed Returns Fund, LLC
605 Palencia Club Drive
St. Augustine, FL 32095
(800) 488-2375

INDEX TO FINANCIAL STATEMENTS
 
DLP POSITIVE FIXED RETURNS FUND, LLC

Balance Sheets
F-1
   
Statements of Operations
F-2
   
Statements of Members’ Equity
F-3
   
Statements of Cash Flow
F-4
   
Notes to Financial Statements
F-5

DLP POSITIVE FIXED RETURNS FUND, LLC
 
FINANCIAL REPORTING PACKAGE
 
CONTENTS
 
FINANCIAL STATEMENTS
 
Balance sheet
F-1
   
Statement of income
F-2
   
Statement of changes in members' equity
F-3
   
Statement of cash flows
F-4
   
Notes to financial statements
F-5–F-7

BALANCE SHEET
 
   
June 30, 2019
   
December 31, 2018
   
December 31, 2017
 
ASSETS
                 
Total assets
 
$
--
     
--
     
--
 
LIABILITIES AND MEMBERS' EQUITY
                       
LIABILITIES
                       
Total liabilities
   
--
     
--
     
--
 
MEMBERS' EQUITY
                       
Total members' equity
   
--
     
--
     
--
 
Total liabilities and members' equity
   
--
     
--
     
--
 

See Notes to Financial Statements.
 
DLP POSITIVE FIXED RETURNS FUND, LLC
 
STATEMENT OF INCOME AND MEMBERS' EQUITY
 
   
June 30, 2019
   
December 31, 2018
   
December 31, 2017
 
                   
Revenues:
 
$
--
     
--
     
--
 
Total revenues
   
--
     
--
     
--
 
                         
Expenses:
                       
Total expenses
   
--
     
--
     
--
 
                         
Net income
 
$
--
     
--
     
--
 
 
See Notes to Financial Statements.

DLP POSITIVE FIXED RETURNS FUND, LLC
 
STATEMENT OF CHANGES IN MEMBERS' EQUITY
 
   
June 30, 2019
   
December 31, 2018
   
December 31, 2017
 
                   
Members' Equity
 
$
--
     
--
     
--
 
                         
Net income for the year
   
--
     
--
     
--
 
                         
Capital contributed
   
--
     
--
     
--
 
                         
Capital withdrawn
   
--
     
--
     
--
 
                         
Members' Equity December 31, 2017
 
$
--
     
--
     
--
 
 
See Notes to Financial Statements.

DLP POSITIVE FIXED RETURNS FUND, LLC
 
STATEMENT OF CASH FLOWS
 
   
June 30, 2019
   
December 31, 2018
   
December 31, 2017
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
No activity
 
$
--
     
--
     
--
 
Adjustments to reconcile net income to net
                       
Net cash used in operating activities
   
--
     
--
     
--
 
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Net cash provided by financing activities
   
--
     
--
     
--
 
                         
Net increase in cash
   
--
     
--
     
--
 
                         
Cash:
                       
Beginning
   
--
     
--
     
--
 
                         
Ending
 
$
--
     
--
     
--
 
                         
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
                       
Cash payments for:
                       
Interest
 
$
--
     
--
     
--
 

See Notes to Financial Statements.

DLP POSITIVE FIXED RETURN FUND, LLC
 
NOTES TO FINANCIAL STATEMENTS
 
Note 1.
Nature of Business
 
The Company is a credit fund which will endeavor to produce attractive risk adjusted returns by making real estate backed loans. These loans will be loans made directly to real estate investors as well as provide senior participation and provide leverage facilities against loans made by other Affiliates that make loans directly to real estate investors. Loans will be made against real estate located throughout the United States; with an expected focus on the East Coast.
 
Note 2.
Summary of Significant Accounting Policies
 
Use of estimates:
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.
 
Cash:
 
The Fund classifies an investment with original maturities of three months or less as cash and cash equivalents.
 
Loans receivable:
 
Loans receivable will be reported at amounts management expects to collect on balances outstanding at year end, net of unfunded draws and the allowance for loan losses. Interest income will be accrued on the unpaid principal balances. Management's periodic review of the adequacy of the allowance for loan losses will be based on its evaluation of the borrower's ability to repay, the estimated value of any underlying collateral, and the other relevant factors. The Fund has established an allowance to provide for reserve for loan losses. Management's policy is to periodically review specific individual accounts to determine collectability and to charge any amounts deemed unrecoverable to the reserve, at which time the accrual of interest is generally discontinued or fully provided for in the allowance for uncollectible accounts. Subsequent resumption of the accrual of interest would begin only after the borrower demonstrates its ability to make principal and interest payments when due. These evaluations are inherently subjective as they require estimates that are susceptible to significant revision as more information becomes available.
 
Income taxes:
 
The Fund has elected to be taxed as a partnership, in which all elements of income and deductions are included in the tax returns of the members of the fund. Accordingly, the accompanying financial statements will not contain a provision for income taxes.
 
As of this report, no tax returns have been required or filed.
 
The Fund will continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law, and new authoritative rulings in determining any uncertain tax positions.
 
Date of management's review:
 
The Fund has evaluated subsequent events through June 30, 2019, the date on which the financial statements were available to be issued.
 
Note 3.
Loans Receivable
 
Loans receivable will be collected over 6-12 months, at interest rates that are agreed upon at the time of the loan agreement, usually between 13% to 15%.
 
Note 4.
Notes Payable, Noteholders
 
The Company intends to have multiple tiers of rates based on the amount of money invested from a Note Holder and the duration of the maturity. These tiers may change from time to time.
 
Note 5.
Related Party Transactions
 
The Fund will pay management fees at 1% of assets under management to a related company, DLP PFR Management, LLC.
 
The Fund will have loan receivables to related parties, entities fully or partially owned by an officer of the Fund.
 
Further related party transactions will be disclosed as they are entered into.

GLOSSARY OF DEFINED TERMS
 
The following terms shall have the meaning ascribed to them below when used elsewhere in this Offering Circular with the initial letter capitalized. Other capitalized terms found throughout this Offering Circular and not defined below or in the body of the Offering Circular shall have the meaning ascribed to them in the Operating Agreement:

“Affiliates” include but is not limited to DLP Real Estate Capital, Inc., DLP Real Estate LLC, DLP Real Estate Management, DLP Construction Management LLC, DLP Capital Partners, LLC, Direct Lending Partners LLC, Alliance Servicing LLC and Alliance Property Transfer, LLC, as well as other companies or funds including DLP Lending Fund, LLC, DLP Income & Growth Fund I, LLC and DLP Preferred Returns Equity Fund LLC. Affiliates also include any existing or any such future entities and funds in which Don Wenner is either directly or indirectly a controlling principal.

“AUM” means total Company Assets under management. AUM shall be determined by the Manager based on consistently applied methodology which may be updated, modified. or improved in its sole discretion.

“Capital” shall mean the all capital invested by Members.
 
“Cash-Out Notice” shall mean that 60-day notice required to be given to the Manager from any Note Holder prior to (or after) a Note’s Maturity Date of the Note Holder’s desire to be cashed out of such Note.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” shall mean the property and interests securing a Mortgage Loan, primarily real property.

“Credit Facility” or “Facility” means any secured line of credit, including obligations to Note Holders, warehouse lines, and/or individual loans from any lender, secured in first position by one or more of the Company Assets.
 
“Early Repayment Fee” means a fee up to 5% as determined by the Manager, in its sole discretion, of the original principal balance of the Note, plus an amount equal to the interest rate differential between the original interest stated on the Note and the interest allocable to the shortened holding period, per the original executed Note Schedule, will be charged for any Notes repurchased early. The Manager may or may not approve a request for Redemption, prior to the Maturity Date, in its sole discretion.
 
“Company Assets” or “Assets” means any and all assets of the Company including Mortgage Loans, real property, contracts or notes receivable, cash, or any other asset or receivable of the Company.
 
“Company Expenses” means Company organizational costs, CPA and accounting related costs for tax return preparation, financial statement preparation and/or audits, legal fees and costs, filing, licensing or other governmental fees, other third party audits, loan servicing fees, insurance costs (including without limitation general liability insurance, directors and officers insurance, errors and omissions insurance and Fidelity bond), Company administration costs, fees associated with any Credit Facilities; and any other expenses associated with the operation of the Company or management of its Assets. Expenses may include expenses for services provided by Affiliates and costs and expenses may be apportioned and/or reimbursed to or from Affiliates.
 
“Intercreditor Agreement” means the Intercreditor Security Agreement signed by each Note Holder, the Manager on behalf of the Company, and the Manager as Note Holder Representative.
 
“Investor” means the purchaser of Notes pursuant to this Offering (“Note Holder”).
 
“IRS” means the United States Internal Revenue Service.
 
“Leverage” means any note obligations of the Company on credit facilities; participations agreements; or Company note offerings.
 
“LTC” means the ratio of the loan amount (or unpaid principal balance) of any Mortgage Loan to the total acquisition costs at the time of acquisition of the property that secured the Mortgage Loan, including, without limitation, closing costs, title, recording and conveyancing fees, transfer taxes or documentary stamp taxes, pro-rata adjustments, lenders fees and origination charges.
 
“LTV” means the ratio of the loan amount (or unpaid principal balance) of any Mortgage Loan to the real property Collateral that secures that Mortgage Loan.
 
“Management Fee” means that 1% of AUM as an annual fee (payable as 0.0833% of AUM monthly) based on the then Stated Value to be paid by the Company to the Manager. The Management Fee will be deemed earned daily and paid to the Manager on the last day of each calendar month, based upon the AUM as of the payment date as calculated by the Manager in its sole discretion. The Management Fee shall be paid by the Company prior to making any interest payments to Note Holders.
 
“Manager” means DLP PFR Management LLC, a Delaware limited liability company.
 
“Maturity Date” means the date upon which a Note is due and payable in full as stated in the Note.
 
“Money Market Account” means one or more accounts in which the Company’s available cash will be placed. Each Money Market Account will consist of investments that are immediately liquid, and that, in the Manager’s judgment, are sufficiently safe while producing a yield, if any, on the Company’s cash.
 
“Mortgage Loans” means the loans originated or acquired by the Company (either in whole or in participation interests) from or through the Manager and which are secured by real estate.
 
“Note” or “Notes” mean a Note, or the Notes issued from the Company to a Note Holder, to be executed by the Manager.
 
“Note Holder” means any purchaser of Note(s) pursuant to this Offering.
 
“Note Rate” means the total interest rate payable under a Note.
 
“Note Schedule” means the matrix summary of Note rates and terms offered to Investors as modified periodically by the Manager.
 
“Offering” shall mean the issuance of Notes in the Company pursuant to the terms of the Offering Circular, the Operating Agreement, the Intercreditor Agreement, the Subscription Booklets, and other related documents.
 
“Open Redemption Option” shall mean an option for a Note Holder to demand repayment of its Note at any time following the initial ninety (90) period from the date of investment by providing the Manager with ninety (90) days advance written notice.
 
“Operating Agreement” means the Operating Agreement of the Company, to be executed by the Manager as well as each Member of the Company.
 
“Pari Passu” means proportionally, at an equal pace with, and without preference over other Investors of the same status.
 
“Participation” shall mean an investment by the Company in which it owns some undivided percentage interest in a Mortgage Loan.
 
“Repayment” means the Company’s paying of cash to a Note Holder to satisfy the Note Holder’s outstanding Note. The Manager shall have the right, at all time to repay a note prior to its Maturity Date.
 
“Reinvest,” “Reinvestment,” or “Reinvestment Option” each refer to a Note Holder’s election to add to its Note balance in lieu of receiving its interest payment in cash.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Security” means the collateral securing the Notes.
 
“Stated Value” shall mean the figure used by the Company as the value for each Asset it owns to assist in determining the AUM. The Stated Value of each individual Company Asset shall be determined on the last day of each calendar quarter by the Manager in its sole discretion. The Manager, however, shall establish and follow a methodology for determining the Stated Value and may modify, alter, or improve the methodology from time to time in its sole discretion.
 
“Subscription Booklets” shall mean that package of documents provided to Investors for the purposes of evaluating the Offering and purchasing Notes in the Company. The Note Holder Subscription Booklet shall include this Offering Circular, the Operating Agreement, the Intercreditor Agreement, a sample Note, the Note Subscription Agreement, and the Investor Suitability Statement.
 
PART III - EXHIBITS
 
Exhibit No.
Description
Certificate of Formation of DLP Positive Fixed Returns Fund LLC
Operating Agreement of DLP Positive Fixed Returns Fund LLC
Form of Subscription Package (included in the Offering Circular)
Intercreditor Agreement
Form of Note
11.1
Consent of
Levine Garfinkel & Eckersley
(included in Exhibit 12.1) *
12.1
Form of Opinion of Counsel as to the legality of the securities being registered*




*To be filed by amendment.
 
SIGNATURES
 
Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, duly authorized, in St. Johns County, State of Florida, on the 19th day of September, 2019.
 
 
DLP POSITIVE FIXED RETURNS FUND LLC
   
 
By: DLP PFR MANAGEMENT, LLC
 
Its: Manager
   
 
By: DLP Capital Partners, LLC
 
Its: Sole Member

 
By:
/s/ Donald Wenner
 
Name: Donald Wenner
 
Title: Managing Member

This offering statement has been signed by the following persons in the capacities and on the dates indicated.
 
 
DLP PFR MANAGEMENT, LLC
   
 
By: DLP Capital Partners, LLC
 
Its: Sole Member

 
By:
/s/ Donald Wenner
 
Name: Donald Wenner
 
Title: Managing Member

NOTE SCHEDULE
*
 
Effective:
 
 
 
Open Redemption
3 Year
5 Year
$50,000- $249,900
6.0%
6.5%
7.0%
$250,000-$499,900
6.5%
7.0%
7.5%
$500,000-$999,900
7.0%
7.5%
8%
$1,000,000-$4,999,000
7.5%
8.0%
8.5%
$5,000,000+
8.0%
9%
10.0%

* Subject to periodic change.


63

cert_of_amd.htm CERTIFICATE OF AMENDMENT


State of Delaware
Secretary of State
Division of Corporations
Delivered 01:53 PM 12/13/2017
FILED 01:53 PM 12113/2017
SR 20177550705 - FileNumber 6337094

STATE OF DELAWARE CERTIFICATE OF AMENDMENT OF

DLP Fixed Fund II, LLC

1. Name of Limited Liability Company: DLP Fixed Fund II, LLC
2. The Certificate of Formation of the limited liability company is hereby amended as follows:  Article 1: The name of the Limited Liability Company is  DLP Positive Fixed Returns Fund LLC

IN WITNESS WHEREOF, the undersigned have executed this Certificate on
the 11th day of December, A.D. 2017

By:  Donald Wenner
Authorized Person(s)

Name:	Donald Wenner
Print or Type
ex2_1.htm EXHIBIT 2.1 - CERTIFICATE OF FORMATION



Exhibit 2.1

STATE OF DELAWARE
CERTIFICATE OF FORMATION
OF LIMITED LIABILITY COMPANY

The undersigned authorized person, desiring to form a limited liability company pursuant to the Limited Liability Company Act of the State of Delaware, hereby certifies as follows:

1. The name of the limited liability company is DLP Fixed Fund II, LLC.
2. The Registered Office of the limited liability company in the State of Delaware is located at 919 North Market Street Suite 425 (stree), in the City of Wilmington, Zip Code 19801. The name of the Registered Agent at such address upon whom process against this limited liability company may be served is InCorp Services, Inc.

By: Nadine Long
Authorized Person

Name: Nadine Long
Print or Type

State of Delaware
Secretary of State
Division of Corporations
Delivered 08:50 AM 03/06/2017
FILED 08:50 AM 03/06/2017
SR 20171597731 - File Number 6337094
 
 
ex2_2.htm EXHIBIT 2.2 - OPERATING AGREEMENT



Exhibit 2.2


LIMITED LIABILITY COMPANY OPERATING AGREEMENT
 
DLP POSITIVE FIXED RETURNS FUND LLC

This OPERATING AGREEMENT (the “Agreement”) of DLP POSITIVE FIXED RETURNS FUND LLC (the “Company”) is entered into and effective as of September 12, 2019 (the “Effective Date”) by and between the undersigned as members of the Company (the “Members”, and each individually, a “Member”) and each other person who after the date hereof becomes a Member of the Company and becomes a party to this Agreement by executing a joinder agreement.
 
RECITALS
 
WHEREAS, the Members hereby agree to form and hereby form, having filed a Certificate of Formation (the “Certificate”) with the Secretary of State of the State of Delaware, a limited liability company, pursuant to the provisions of the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq.) (the “Delaware Act”) and
 
WHEREAS, upon the execution and delivery of counterparts of this Agreement, the undersigned shall be admitted as Members and the Agreement shall become the “operating agreement” of the Company under the Act;
 
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the parties hereto as follows:
 
Article 1
General Provisions
 
Section 1.01.
Company Name.
 
The name of the Company is DLP Positive Fixed Returns Fund LLC. The Managing Member is authorized to make any variations in the name of the Company and may otherwise conduct the business of the Company under any other name, upon compliance with all applicable laws, which in either case the Managing Member may deem necessary or advisable.
 
Section 1.02.
Office; Registered Agent.
 
(a)The address of the registered office of the Company in the State of Delaware is 3411 Silverside Road, Tatnall Building 104, Wilmington, DE 19810. The name and address of the Company’s registered agent in Delaware is, c/o Corporate Creations Network, Inc. 3411 Silverside Road, Tatnall Building 104, Wilmington, DE 19810. Such office and such agent may be changed from time to time by the Managing Member in its discretion through appropriate filings with the Secretary of State of the State of Delaware.
 
(b)The business address of the Company shall be 605 Palencia Club Drive St. Augustine, FL 32095, or such other place as the Managing Member shall designate in writing to the Non-Managing Members.
 
Section 1.03.
Purposes of the Company.
 
The purpose of the Company shall be to conduct any lawful business, purpose or activity for which limited liability companies may be formed under the Delaware Act. The Company shall have the power to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of such purposes and for the protection and benefit of its business, including, without limitation, issuing debt, investing in real estate, and investing or trading in securities and other financial instruments. of every kind and nature, including. Without limiting the foregoing, the Company may enter into any partnership, joint venture, limited partnership, limited liability company, corporation or other investment entity for the purpose of conducting any of the foregoing business activities. The Company shall have the power to do any and all acts necessary, appropriate, desirable, incidental or convenient to or for the furtherance of the purposes described in this Section 1.03., including, without limitation, any and all of the powers that may be exercised on behalf of the Company by the Managing Member pursuant to this Agreement.
 

Section 1.04.
Liability of the Members Generally.
 
Except as otherwise expressly provided in the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member. Except as otherwise expressly provided in the Delaware Act, the liability of each Member shall be limited to the amount of capital contributions required to be made by such Member in accordance with the provisions of this Agreement, but only when and to the extent the same shall become due pursuant to the provisions of this Agreement.
 
Section 1.05.
Admission of New Non-Managing Members.
 
(a)At any time during the term of the Company, the Managing Member may, in its discretion, cause the Company to admit additional Non-Managing Members on (i) the first business day of any calendar month or (ii) such other times or days in addition thereto or in substitution therefor as may from time to time be determined by the Managing Member in its discretion either in any particular case or generally (each, a “Closing Date”). A person shall become such an additional Non-Managing Member (and shall be shown as such on the books and records of the Company) after execution and delivery by (or, pursuant to a power of attorney, on behalf of) such person and the Managing Member of counterparts of this Agreement.
 
(b)Notwithstanding any other provision contained herein, the Company (and the Managing Member, on its own behalf or on behalf of the Company) shall enter into and carry out the terms of the subscription agreements (and any agreements to induce any person to purchase an interest in the Company), without any further act, approval or vote of any Member.
 
Article 2
Management
 
Section 2.01.
Management Generally.
 
Except as otherwise expressly provided herein or by law, the management and control of the Company shall be vested exclusively in the Managing Member. The Non-Managing Members shall have no part in the management or control of the Company and shall have no authority or right to act on behalf of the Company in connection with any matter.
 
Section 2.02.
Authority of the Managing Member.
 
The Managing Member shall have the power on behalf and in the name of the Company to carry out any and all of the objects and purposes of the Company and to perform all acts which it may, in its discretion, deem necessary, desirable or incidental thereto, including, without limitation, the power to:
 
(a) identify investments and potential Investments and establish and review policies and investment guidelines;
 
(b) acquire, hold, manage, own, sell, transfer, convey, assign, exchange, pledge or otherwise dispose of any Investment made or held by the Company;
 

(c) enter into, make and perform all contracts and other undertakings, and engage in all activities and transactions, as may be necessary or advisable to the carrying out of the foregoing objects and purposes, including without limitation the power to:
 
(i) purchase, transfer, mortgage, pledge and otherwise acquire and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to Investments;
 
(ii) acquire Company assets with respect to Investments and to make purchases or sales increasing, decreasing or liquidating such positions without any limitation as to the frequency of the fluctuation in such positions;
 
(iii) borrow or raise money without limitation as to amount but subject to any applicable regulations concerning such transactions and to secure the payment of any obligations of the Company by mortgage upon, or hypothecation or pledge of, all or part of the property or assets of the Company;
 
(d) open accounts with banks or other financial institutions, deposit, maintain and withdraw funds in the name of the Company, draw checks or other orders for the payment of moneys, and pay the customary fees and charges applicable to transactions in all such accounts;
 
(e) borrow money and to make, issue, accept, endorse and execute promissory notes, drafts, bills of exchange and other instruments and evidences of indebtedness, all without limit as to amount and to secure the payment thereof by mortgage, pledge or assignment of or granting a security interest in all or any part of the securities and other property then owned or thereafter acquired by the Company;
 
(f) enter into, and take any action under, any contract, agreement or other instrument as the Managing Member shall determine, in its discretion, to be necessary or desirable to further the purposes of the Company (including subscription agreements with any Non-Managing Member or prospective Non-Managing Member), including granting or refraining from granting any waivers, consents and approvals with respect to any of the foregoing and any matters incident thereto;
 
(g) bring and defend actions and proceedings at law or in equity and before any governmental, administrative or other regulatory agency, body or commission;
 
(h) employ, on behalf of the Company, any and all financial advisers, underwriters, attorneys, accountants, consultants, appraisers, custodians of the assets of the Company, or other agents, on such terms and for such compensation as the Managing Member may determine, whether or not such person may be an affiliate of the Managing Member or may also be otherwise employed by any such affiliate, and terminate such employment;
 
(i) make all elections, investigations, evaluations and decisions, including the voting of securities held by the Company, binding the Company thereby, that may in the judgment of the Managing Member be necessary or desirable for the acquisition, management or disposition of Investments by the Company;
 
(j) incur expenses and other obligations on behalf of the Company in accordance with this Agreement, and, to the extent that funds of the Company are available for such purpose, pay all such expenses and obligations;
 
(k) establish reserves in accordance with this Agreement for contingencies and for any other Company purpose;
 
(l) make distributions in accordance with this Agreement to the Members in cash or otherwise;
 
(m) prepare and cause to be prepared reports, statements and other information for distribution to the Members;
 
(n) cause to be prepared and filed all necessary U.S. and, if appropriate, non-U.S. tax returns and statements, pay all taxes, assessments and other impositions applicable to the assets of the Company, and withhold amounts with respect thereto from funds otherwise distributable to the Managing Member or any Non-Managing Member;
 

(o) maintain records and accounts of all operations and expenditures of the Company;
 
(p) determine the accounting methods and conventions to be used in the preparation of any accounting or financial records of the Company;
 
(q) convene meetings of the Non-Managing Members for any purpose;
 
(r) effect a dissolution of the Company as provided herein; and
 
(s) act for and on behalf of the Company in all matters incidental to the foregoing.
 
Section 2.03.
Regulatory Compliance.
 
The Managing Member agrees to use its best efforts to operate the Company in such a way that: (i) the Company would not be an “investment company” within the meaning of the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”) (except for purposes of Sections 12(d)(1)(A)(i) and (B)(i) thereunder), (ii) none of the Company’s assets would be deemed to be “plan assets” for purposes of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (iii) the Managing Member would be in compliance with the U.S. Investment Advisers Act of 1940, as amended (the “Advisers Act”), (iv) the Managing Member would be required to be registered with the Commodity Futures Trading Commission as a “commodity pool operator” and become a member of National Futures Association (if the Managing Member is not then so registered and/or such a member) or would otherwise not be in compliance with the Commodity Exchange Act, and (v) each of the Company, the Managing Member and any affiliate of the Managing Member would be in compliance with any other material law, regulation or guideline applicable to the Company, the Managing Member or such affiliate. The Managing Member is hereby authorized to take any action it has determined in good faith to be necessary or desirable in order for (i) the Company not to be in violation of the Investment Company Act, (ii) the Company’s assets not to be deemed to be “plan assets” for purposes of ERISA, (iii) the Managing Member not to be in violation of the Advisers Act, (iv) the Managing Member not to be in violation of the Commodity Exchange Act, or (v) each of the Company, the Managing Member or any affiliate of the Managing Member not to be in violation of any other material law, regulation or guideline applicable to the Company, the Managing Member or such affiliate, including (A) making structural, operating or other changes in the Company by amending this Agreement or otherwise (provided that any such amendment to cure any violation of law, regulation or guideline may only be made if, in the reasonable determination of the Managing Member, the making of such amendment is necessary or advisable to cure such violation), (B) requiring the sale in whole or in part of any Investment or other asset, (C) requiring the sale in whole or in part of any Non-Managing Member’s interest in the Company or otherwise causing a withdrawal in whole or in part of any Non-Managing Member from the Company, or (D) dissolving the Company. Any action taken by the Managing Member pursuant to this Section 2.03. shall not require the approval of any Non-Managing Member.
 
Section 2.04.
Management Fee.
 
(a) In consideration of the investment management and administrative services rendered pursuant to this Agreement, the Company shall pay to the Managing Member a management fee (the “Management Fee”), payable monthly in advance equal to 0.833% (1% on an annualized basis) of the aggregate amount of the Capital Contributions made on such Interim Calculation Date and (ii) a fraction, the numerator of which shall be equal to the number of days remaining in such calendar month (inclusive of the date of such Capital Contribution) and the denominator of which shall be the total number of days in such calendar month. The Company shall pay any such additional Management Fee for any calendar month to the Managing Member as soon as practicable after the applicable Interim Calculation Date.
 

Section 2.05.
Expenses.
 
(a) The Company shall pay the costs and expenses of (i) all transactions carried out by it or on its behalf and (ii) the administration of the Company, including but not limited to: (A) the charges and expenses of legal advisers, accountants and auditors, (B) brokers’ commissions (if any), (C) all entity-level taxes and corporate fees payable to governments or agencies, (D) interest on borrowings, (F) communication expenses with respect to investor services and all expenses of meetings of Non-Managing Members and of preparing, printing and distributing financial and other reports, prospectuses and similar documents, (G) the cost of insurance (if any) for the benefit of the Managing Member, (H) litigation and indemnification expenses and extraordinary expenses not incurred in the ordinary course of business, and (I) all other operating expenses of the Company (together, “Operating Expenses”).
 
(b) In addition to the Managing Member’s receipt of the Management Fee, the Company shall be solely responsible for and shall pay the following fees and expenses incurred by the Managing Member in connection with the provision of its investment management services to the Company, including, for the avoidance of doubt and without limitation: (a) the costs of research and market analysis, (b) the costs of travel and entertainment in connection with due diligence visits to the issuers of securities in which the Company has invested or is considering an investment, and (c) all salaries, bonuses and employee benefit expenses of employees of the Managing Member and a pro rata share of office overhead (including rent, utilities and other similar items) resulting from the activities of such employees in connection with middle and back office operations conducted by the Managing Member on behalf of the Company.
 
(c) The Company shall pay the costs and expenses (including legal fees and expenses) of organizing the Company and all expenses (including legal fees and expenses and travel and entertainment) incurred by the Managing Member or the Company in connection with (i) the private placement of interests of the Company, and (ii) the registration, qualification or exemption of the Company under any applicable federal or state laws (together, “Offering and Organizational Expenses”). For the avoidance of doubt, Offering and Organizational Expenses shall not include any placement fees payable to the Company’s placement agents (if any).
 
Section 2.06.
Non-Exclusivity; Conflicts of Interest.
 
The Non-Managing Members recognize that the Managing Member and its officers, directors, principals, members, employees, advisors, consultants and affiliates may invest in other investment funds and engage in investment management and investment advisory activities for others. Except to the extent necessary to perform their obligations hereunder, nothing herein shall be deemed to limit or restrict the right of the Managing Member or its officers, directors, principals, members, employees, advisors, consultants and affiliates to engage in, or to devote time and attention to the management of any other business, whether of a similar or dissimilar nature, or to render services of any kind to any other person. The portfolio strategies employed by the Managing Member or its affiliates for Other Accounts may conflict with the transactions and strategies employed in managing the Company’s portfolio. Conversely, participation in specific investment opportunities may be appropriate, at times, for both the Company and Other Accounts. In such case, the Managing Member and its affiliates may allocate such opportunities on an equitable basis, taking into account such factors as the relative amounts of capital available for new investments, relative exposure to short-term market trends, and the respective investment programs and portfolio positions of the Company and the Other Accounts. No Non-Managing Member shall, by reason of being a Member in the Company, have any right to participate in any manner in any profits or income earned, derived by or accruing to the Managing Member or any affiliate from the conduct of any business other than the business of the Company (to the extent provided herein) or from any transaction in Investments effected by the Managing Member or any affiliate for any account other than that of the Company.
 

Section 2.07.
Books and Records; Accounting Method; Fiscal Year.
 
(a) The Managing Member shall keep or cause to be kept at the address of the Managing Member (or, in accordance with applicable law, at such other place as the Managing Member shall determine in its discretion) full and accurate books and records of the Company. Subject to Section 2.09.(b), such books and records shall be available, upon ten (10) business days’ notice to the Managing Member, for inspection at the offices of the Managing Member (or such other location designated by the Managing Member, in its discretion) at reasonable times during business hours on any business day by each Non-Managing Member or its duly authorized agents or representatives for a purpose reasonably related to such Non-Managing Member’s interest in the Company. Each Non-Managing Member agrees that (i) such books and records contain confidential information relating to the Company and its affairs, and (ii) the Managing Member shall have the right pursuant to Section 17-305 of the Delaware Act to prohibit or otherwise limit, in its reasonable discretion, the making of any copies of such books and records.
 
(b) Except as otherwise provided in this Agreement, the Company’s books of account shall be kept in accordance with U.S. generally accepted accounting principles.
 
(c) Unless otherwise required by law, the fiscal year of the Company for financial statement and U.S. federal income tax purposes shall end on December 31st.
 
Section 2.08.
Company Elections and Tax Returns.
 
(a) The Managing Member shall cause to be prepared and timely filed all tax returns required to be filed for the Company. The Managing Member may, in its discretion, make, or refrain from making, any income or other tax elections for the Company that it deems necessary or advisable, including an election pursuant to Section 754 of the Code; provided that neither the Managing Member nor any other person shall make an election or take any other action that would cause the Company to be treated, for U.S. federal income tax purposes, as a corporation, an association taxable as a corporation or an “electing large partnership” as defined in Section 775 of the Code.
 
(b) The Managing Member is hereby designated as the Company’s “partnership representative” (the “Company Representative”) under Section 6223(a) of the Internal Revenue Code of 1986, as amended (the “Code”). If any state or local tax law provides for a partnership representative or person having similar rights, powers, authority or obligations (including as a “tax matters partner”), the Company Representative shall also serve in such capacity. The Managing Member is specifically directed and authorized to take all steps the Managing Member, in its discretion, deems necessary or desirable to perfect such designation, including filing any forms or documents with the U.S. Internal Revenue Service and taking such other action as may from time to time be required under U.S. Treasury Regulations.
 

Section 2.09.
Confidentiality.
 
(a) Each Non-Managing Member agrees to keep confidential, and not to make any use of (other than for purposes reasonably related to its interest in the Company or for purposes of filing such Non-Managing Member’s tax returns or for other routine matters required by law) nor to disclose to any person, any information or matter relating to the Company and its affairs, including the identities of the other Non-Managing Members, all offering materials used in connection with the private placement of interests in the Company (including, without limitation, the private placement memorandum, this Agreement and the related subscription booklet) and any information or matter related to any Investment (other than disclosure to such Non-Managing Member’s employees, agents, advisors (including financial and legal advisors), or representatives responsible for matters relating to the Company (each such person being hereinafter referred to as an “Authorized Representative”)); provided that such Non-Managing Member and its Authorized Representatives may make such disclosure to the extent that (i) the information being disclosed is publicly known at the time of proposed disclosure by such Non-Managing Member or Authorized Representative, (ii) the information subsequently becomes publicly known through no act or omission of such Non-Managing Member or Authorized Representative, (iii) the information otherwise is or becomes legally known to such Non-Managing Member other than through disclosure by the Company, the Managing Member or by a source the Non-Managing Member knew or should have known, was bound by a confidentiality obligation, (iv) such disclosure, in the written opinion of legal counsel reasonably acceptable to the Managing Member, is required by law or regulation, (v) such disclosure, in the written opinion of legal counsel reasonably acceptable to the Managing Member, is required by any regulatory authority or self-regulatory organization having jurisdiction over such Non-Managing Member, or (vi) such disclosure is approved in advance and in writing by the Managing Member. Prior to making any disclosure required by law, regulation, regulatory authority or self-regulatory organization, each Non-Managing Member shall notify the Managing Member in writing of such disclosure and deliver to the Managing Member a copy of the opinion referred to above. Prior to any disclosure to any Authorized Representative, each Non-Managing Member shall advise such Authorized Representative of the obligations set forth in this Section 2.09.(a) and obtain the agreement of such person to be bound by the terms of such obligations.
 
(b) The Managing Member may, to the maximum extent permitted by applicable law, keep confidential from any Non-Managing Member any information (including information requested pursuant to Section 2.07.(a), but excluding information required to be furnished pursuant to Section 5.. the disclosure of which (i) the Company, the Managing Member or any of their affiliates is required by law, agreement or course of business to keep confidential, or (ii) the Managing Member reasonably believes may have a material adverse effect on: (A) the ability to entertain, negotiate or consummate any proposed Investment or any transaction directly or indirectly related to, or giving rise to, such Investment, (B) the Company’s portfolio of Investments, or (C) the ability of the Managing Member to protect the technology, know-how, processes, intellectual property, patents, copyrights, trade secrets, or proprietary information belonging to the Managing Member or any of its affiliates.
 
(c) Notwithstanding anything in this Agreement to the contrary, each Member (and each employee, representative or other agent of such Member) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Company and any transaction covered by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Member relating to such tax treatment and tax structure.
 
Section 2.10.
Reliance by Third Parties.
 
Persons dealing with the Company are entitled to rely conclusively upon the power and authority of the Managing Member as set forth herein. The Company, and the Managing Member on behalf of the Company, may enter into and perform subscription agreements with each person subscribing for an Interest in the Company without any further act, vote or approval of any person, including any Member, notwithstanding any other provision of this Agreement. The Managing Member is hereby authorized to enter into the agreements described in the preceding sentence on behalf of the Company, but such authorization shall not be deemed a restriction on the power of the Managing Member to enter into other agreements on behalf of the Company.
 

Section 2.11. 
Advisory Committee.
 
(a)The Managing Member may appoint a committee of representatives of the Non-Managing Members (the “Advisory Committee”). The Managing Member may, in its discretion, select on an annual basis Non-Managing Members who are entitled to appoint (and remove or replace at any time for any reason or for no reason) their representatives to serve as members of the Advisory Committee. Upon being constituted, the Advisory Committee shall have no less than three (3) and no more than nine (9) members at any time. At no time shall any member of the Advisory Committee be a representative of the Managing Member or any of its affiliates. Meetings of the Advisory Committee may be held in person or by telephone, in the discretion of the Managing Member.
 
(c)Any member of the Advisory Committee (i) may resign by giving the Company at least thirty (30) days’ prior written notice and (ii) shall be deemed removed if the Non-Managing Member such member represents has withdrawn its entire Capital Account balance. Any Non-Managing Member that has appointed a representative to the Advisory Committee shall be entitled to remove or replace such representative at any time and for any reason.
 
(d)The Company shall reimburse each representative of a Non-Managing Member on the Advisory Committee for reasonable out-of-pocket expenses incurred by such member in connection with attendance by such member at meetings of the Advisory Committee. The members of the Advisory Committee shall not, to the fullest extent permitted by applicable law, owe any duties to the Company, to any Non-Managing Member, or to any other person by virtue of serving on the Advisory Committee. Each Non-Managing Member with a representative serving on the Advisory Committee and such representative shall each be an Indemnified Person for purposes of Article 6.
 
Article 3
Capital Contributions; Capital Accounts; Allocations
 
3.01.
Capital Contributions.
 
(a) Upon admission to the Company as a Non-Managing Member, each Non-Managing Member shall make a capital contribution (a “Capital Contribution”) to the Company in an amount agreed by the Managing Member and such Non-Managing Member, which shall be reflected in the Company’s books and records. The Managing Member may, in its discretion, allow Non-Managing Members to make additional Capital Contributions to the Company as of the opening of business on each Closing Date. No Non-Managing Member shall be required to make additional Capital Contributions to the Company pursuant to this Section 3.01.(a).
 
(b) Each Capital Contribution by a Non-Managing Member shall be due on or before 5:00 PM (New York City time) on the relevant Closing Date.
 
(c) Capital Contributions may be made in cash or in kind in the sole discretion of the Managing Member. Capital Contributions made in kind shall be valued by the Managing Member in the manner provided in Section 3.06.
 
(d) The Managing Member may make Capital Contributions to the Company from time to time in amounts determined by the Managing Member in its discretion.
 
(e) Except as expressly provided in Section 6.01., the provisions of this Agreement (including this Section 3.01. are intended solely to benefit the Members and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and no Member shall have any duty or obligation to any creditor of the Company to make any contributions or payments to the Company.
 
3.02.
Capital Accounts.
 
There shall be established for each Member on the books and records of the Company a capital account (a “Capital Account”), the balance of which shall initially be zero. It is intended that each Member’s Capital Account shall be maintained at all times in a manner consistent with Section 704 of the Code and applicable Treasury regulations thereunder, and that the provisions hereof relating to the Capital Accounts shall be interpreted in a manner consistent therewith. For each fiscal year (or other accounting period), the Capital Account of each Member shall be
 

(a) credited with the amount of any Capital Contributions made by such Member during such period;
 
(b) credited with any allocations of income and gains made to such Member for such period;
 
(c) debited by any allocation of losses or deductions made to such Member for such period;
 
(d) debited by the amount of cash paid to such Member as an amount withdrawn or distributed to such Member during such period, or, in the case of any payment of a withdrawal or distribution in kind, the fair value of the property paid or distributed during such period (net of any liabilities assumed by such Member), as determined in accordance with Section 3.06..
 
3.03.
Allocations.
 
Each item of income, gain, loss or deduction for the relevant fiscal year or other applicable period shall be allocated in accordance with the provisions of this Article 3 as follows:
 
(a) Each item of income, gain, loss or deduction attributable to New Issues Investments (as defined below) shall be allocated to the Capital Accounts of the Members participating in such New Issues Investments in proportion to their respective New Issues Percentages (as defined below) as such New Issues Percentages are calculated as of the opening of business on the first day of such period; and
 
(b) all other items of income, gain, loss or deduction shall be allocated to the Capital Accounts of the Members in proportion to their respective Company Percentages as such Company Percentages are calculated as of the opening of business on the first day of such period.
 
The “Company Percentage” for any Member, at any time, means the percentage derived by dividing (i) such Member’s Capital Account balance by (ii) the aggregate Capital Account balances of all Members.
 
3.04.
Valuation of Net Assets.
 
(a) The value of the Company’s assets net of liabilities (the “Net Asset Value”) shall be determined by the Managing Member as of the close of business on the last business day of each calendar quarter and at such other times as determined by the Managing Member in its discretion (each, a “Valuation Date”). The Managing Member shall establish and follow a methodology for determining the Net Asset Value and may modify, alter, or improve the methodology from time to time.
 
(b) The Managing Member’s determination of the value of the Company's assets and liabilities shall be final and conclusive as to all of the Members. Liabilities shall be determined using GAAP as a guideline and as the Managing Member will otherwise determine, in its sole and absolute discretion. The Managing Member, in its sole and absolute discretion, may provide reserves or holdbacks for estimated accrued expenses, liabilities or contingencies, even if these reserves or holdbacks are not in accordance with GAAP. The Managing Member may rely, without further verification, upon valuations and pricing information provided by third parties considered by the Managing Member to be competent to provide such valuations and information. The Managing Member shall not be liable for any error in the determination of the Net Asset Value arising from any inaccuracy or error in the valuations and pricing information so provided or from any error in any calculation upon which the Managing Member has relied in good faith.
 
3.05.
Tax Allocations.
 
(a)For U.S. federal income tax purposes, each item of income, gain, loss, deduction and credit of the Company shall be allocated among the Members as nearly as possible in the same manner as the corresponding item of income, expense, gain or loss is allocated pursuant to the other provisions of this Article 3. Allocations under this Section 3.07. shall be made pursuant to the principles of Sections 704(b) and 704(c) of the Code, and United States Treasury Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), 1.704-1(b)(4)(i) and 1.704-3(e) promulgated thereunder, as applicable, or the successor provisions to such Section and Treasury Regulations. The Managing Member shall be authorized in its discretion to make appropriate adjustments to the allocation of items pursuant to this Section 3.07. to comply with Section 704 of the Code and applicable Treasury Regulations thereunder.
 

(b)Notwithstanding anything else contained in this Article 3, if any Member has a deficit Capital Account for any fiscal year (or other accounting period) as a result of any adjustment of the type described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4) through (6), then the Company’s income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate such deficit as quickly as possible. Any special allocation of items of income or gain pursuant to this Section 3.07.(b) shall be taken into account in computing subsequent allocations pursuant to this Article 3 so that the cumulative net amount of all items allocated to each Member shall, to the extent possible, be equal to the amount that would have been allocated to such Member if there had never been any allocation pursuant to this Section 3.07.(b).
 
Article 4
Withdrawals and Distributions
 
4.01.
Withdrawals and Distributions in General.
 
No Non-Managing Member shall be entitled (i) to receive distributions from the Company, or (ii) to withdraw any amount from such Non-Managing Member’s Capital Account, except as provided in this Article 4, or with the consent of and upon such terms as may be specified by, the Managing Member in its sole and absolute discretion.
 
4.02.
Voluntary Withdrawals.
 
A Non-Managing Member has the right to withdraw, upon at least thirty (30) days’ prior written notice to the Managing Member, all or a portion of its Capital Account balance as of the last calendar day of each month. Withdrawal requests are irrevocable unless the Managing Member determines otherwise in its sole and absolute discretion, or unless made during a period when the calculation of the Net Asset Value of the Company is suspended. The Managing Member may waive notice requirements or permit withdrawals at such other times, under such other circumstances and on such conditions as it deems appropriate. Each date on which a withdrawal is permitted or required is referred to as a “Withdrawal Date.”
 
4.03.
Involuntary Withdrawals.
 
(a)The Managing Member shall have the right, but shall not be obligated, to terminate the participation of a Non-Managing Member in the Company in whole or in part at any time without notice (i) if the Managing Member reasonably believes that such Non-Managing Member acquired an interest in the Company as a result of a misrepresentation, or (ii) if such Non-Managing Member’s continued participation in the Company may, in the reasonable judgment of the Managing Member, put the Company or its other Non-Managing Members at a material tax, legal, regulatory, or pecuniary disadvantage including, by way of example and without limitation: (A) causing non-compliance with any matter set forth in Section 2.03., (B) causing a violation under any law or any contractual provision to which the Company or its property or the Managing Member is subject; or (C) causing the Company to be in violation of (in the reasonable judgment of the Managing Member), to potentially violate or otherwise cause concerns under, the anti-money laundering program and related responsibilities of the Company or the Managing Member. In addition to the foregoing, the Managing Member shall have the right, but shall not be obligated, to terminate the participation of a Non-Managing Member in the Company in whole or in part at any time upon ninety (90) days’ prior written notice if such Non-Managing Member’s continued participation in the Company would, in the reasonable judgment of the Managing Member, put the Company or its other Non-Managing Members at a material administrative disadvantage. No such involuntary withdrawal shall give rise to any claim or cause of action by any Non-Managing Member. The Member receiving such notice shall be treated for all purposes and in all respects as a Member who has requested withdrawal of all of its Capital Accounts under Section 4.03.
 

(b)Where the value of a Non-Managing Member’s capital account is less than $500,000.00 and the Managing Member decides to exercise its right to require the withdrawal of such Non-Managing Member, the Managing Member shall notify the Non-Managing Member in writing and allow such Non-Managing Member thirty (30) days to make an additional Capital Contribution to meet the minimum requirement. Partial withdrawals may be refused, in the sole and absolute discretion of the Managing Member, if, as a result of such withdrawal, the balance of a Non-Managing Member’s Capital Account will be less than $500,000.00.
 
4.04.
Payment of Withdrawal Proceeds.
 
(a) Withdrawals will be deemed effective as of the close of business on the applicable Withdrawal Date for a voluntary withdrawal, and as of the close of business on a date determined by the Managing Member for an involuntary withdrawal. Payment of withdrawal proceeds generally will be made as soon as practicable, but in any event not later than ten (10) business days after the Withdrawal Date; provided that the Managing Member may retain up to 10% of the estimated withdrawal proceeds and such proceeds shall be paid to the withdrawing Non-Managing Member, together with interest thereon (which will begin to accrue on the relevant Withdrawal Date) at a rate equal to the target overnight Federal Funds rate. The Company shall pay the balance as soon as practicable following the determination of the final month-end Net Asset Value as of the month in which the Withdrawal Date falls
 
(b) The Managing Member, by written notice to a withdrawing Non-Managing Member, may suspend the payment of withdrawal proceeds to such Non-Managing Member if the Managing Member, in its sole and absolute discretion, deems it necessary to do so to comply with anti-money laundering laws and regulations applicable to the Company, the Managing Member, or any of the Company’s service providers.
 
4.05.
Suspension Events.
 
(a) The Company may suspend the determination of its Net Asset Value, the acceptance of Capital Contributions and the processing of requests for withdrawals (each, a “Suspension Event”):
 
(i) during any period in which any market on which a material part of the Investments of the Company are quoted is closed or has materially limited or suspended dealings;
 
(ii) during the existence of any state of affairs (including the restriction of trading in one or more markets) which, in the opinion of the Managing Member, makes the determination of the price or value, or the disposition of the Company’s Investments, impractical or prejudicial to the Non-Managing Members;
 
(iii) during any breakdown in any of the means normally employed by the Company in ascertaining the value of its Investments and other assets or for any other reason the Managing Member is of the opinion that it cannot reasonably ascertain the value of the Company’s Investments and other assets on the Valuation Date concerned;
 
(iv) during any period where the conversion and remittance of funds which would or might be involved in the realization or acquisition of Investments (whether actual or hypothetical for valuation purposes) could not in the opinion of the Managing Member be carried out at normal rates of exchange and without undue delay;
 
(v) during any period in which distributions or withdrawals would, in the opinion of the Managing Member, result in a violation of applicable law; or
 
(vi) in the event of the dissolution and wind-up of the Company.
 

(b) Any such Suspension Event shall take effect at such time as the Managing Member shall declare but not later than the close of business on the business day next following the declaration, and thereafter there shall be no determination of the Net Asset Value of the Company until the Managing Member shall declare the Suspension Event at an end; provided that such Suspension Event shall terminate in any event on the first business day on which (i) the condition giving rise to the Suspension Event shall have ceased to exist and (ii) no other condition under which the declaration of a Suspension Event is authorized under this Agreement shall then exist. The determination of the Managing Member shall be final and conclusive.
 
(c) All Non-Managing Members shall be notified of any Suspension Event, and the termination of any Suspension Event, by means of a promptly delivered written notice. If monthly withdrawals are suspended as a result of a Suspension Event, withdrawal requests shall be honored as of the last business day of the calendar month next following the termination of such Suspension Event.
 
4.06.
Distributions.
 
The Managing Member may, in its discretion, cause the Company to make distributions to the Members at any time. Any such distribution shall be made to the Members in proportion to their respective Company Percentages on the date of any such distribution and shall be debited from the Members’ Capital Accounts.
 
4.07.
Withdrawals by the Managing Member.
 
The Managing Member may, effective as of the last day of any calendar month, withdraw all or any portion of its Capital Account balance.
 
4.08.
Withdrawals and Distributions in Kind.
 
(a) Notwithstanding Section 17-605 of the Delaware Act, any distributions to a Member or the payment of any amounts withdrawn by a Member may be made either in cash or in kind, or partly in cash and partly in kind, as may be determined by the Managing Member in its discretion. The Managing Member may, in its discretion, (i) distribute or pay property in kind to certain (but not all) Members and distribute or pay cash to the remaining Members or distribute or pay property of different types to different Members, and/or (ii) if cash and property in kind (or property in kind of different types) are to be distributed or paid simultaneously in respect of any Investment, distribute or pay to Members cash and property in kind (or property in kind of different types) in different proportions. Notwithstanding the foregoing, no in-kind distribution may be made to a Non-Managing Member, unless the Non-Managing Member has provided its prior written consent to such in-kind distribution, which may be withheld for any reason in the Non-Managing Member’s sole discretion.
 
(b)If a distribution to a Member or a payment of an amount withdrawn by a Member is made in kind, the Managing Member shall determine, immediately prior to such distribution or payment and in accordance with Section 3.06., the fair value of the property to be distributed or paid in kind.
 
4.09.
Withholding of Certain Amounts; Limitations.
 
(a) Notwithstanding anything else contained in this Agreement, the Managing Member may, in its discretion, withhold from any distribution or payments of cash or property in kind to any Member pursuant to this Agreement, the following amounts:
 
(i) any amounts due from such Member to the Company or to the Managing Member pursuant to this Agreement to the extent not otherwise paid; and
 
(ii) any amounts required to pay, or to reimburse (on a net after-tax basis) any Indemnified Person (as defined below) for the payment of, any taxes and related expenses that the Managing Member in good faith determines to be properly attributable to such Member (including, without limitation, withholding taxes and interest, penalties, additions to tax and expenses incurred in respect thereof).
 

(b) Notwithstanding any other provision of this Agreement, the Company and the Managing Member on behalf of the Company shall not be required to make a distribution to, or payment of any amount withdrawn by, any Non-Managing Member on account of its Non-Managing Member interest in the Company, if such distribution or payment would violate the Delaware Act or other applicable law.
 
Article 5
Reports to Non-Managing Members
 
5.
Reports.
 
(a)Within thirty (30) days of the end of each calendar month, the Managing Member will deliver to each Non-Managing Member an estimate of the Company’s Net Asset Value and the Non-Managing Member’s Capital Account balance as of such calendar month. These estimates will be computed net of the Management Fee and will reflect the accrued Incentive Allocation.
 
(b)The books of account and records of the Company shall be audited as of the end of each fiscal year by the Company’s independent accountants, which shall be an independent accounting firm selected from time to time by the Managing Member. The independent accounting firm shall deem the Managing Member to have management authority and to represent all Members in the Company’s affairs. All audited annual reports provided to the Non-Managing Members pursuant to this Section 5. shall be prepared in accordance with U.S. generally accepted accounting principles.
 
(c)Within one hundred and twenty (120) days after the end of each fiscal year, the Managing Member shall prepare and deliver to each Non-Managing Member, together with the report thereon of the Company’s independent public accountants, a financial report setting forth: (i) a balance sheet or statement of financial condition for the Company as of the end of such fiscal year; (ii) a statement showing the net income or loss for the Company for such fiscal year; (iii) a statement of the Net Asset Value of the Company as of the end of such fiscal year, and the changes in the Net Asset Value of the Company for such fiscal year; and (iv) related footnote disclosure and any other matters required to comply with GAAP.
 
(d)The Managing Member shall use its best efforts to prepare and to transmit a U.S. federal income tax form K-1 for each Member not later than one hundred and twenty (120) days after the end of such Fiscal Year; provided that there can be no assurance that Schedules K-1 will be distributed to Members prior to April 15th in each year.
 
Article 6
Exculpation and Indemnification
 
6.01.
Exculpation and Indemnification.
 
(a) Neither the Managing Member, any of its officers, directors, members, managers, employees, agents or affiliates, nor any officers, directors, members, managers, employees or agents of affiliates of the Managing Member (each, an “Indemnified Person”) shall be liable to the Company or to the Non-Managing Members for any losses, claims, damages, liabilities or expenses arising from any act or omission performed or omitted by it in connection with this Agreement or the Company’s business or affairs except for any such losses, claims, damages, liabilities or expenses determined by final judgment of a court of competent jurisdiction to have been primarily attributable to such Indemnified Person’s gross negligence, willful misconduct or fraud. The Managing Member and its affiliates may also consult with legal counsel and accountants in respect of the Company’s affairs and shall be fully protected and justified in any action or inaction that is taken in accordance with the advice or opinion of such counsel or accountants, provided that such counsel or accountants were engaged, selected, monitored and retained with reasonable care. Notwithstanding the foregoing provisions of this Section 6.01.(a), no provision of this Agreement shall constitute a waiver or limitation of any Non-Managing Member’s rights under the U.S. federal or state securities laws
 

(b) The Company shall, to the fullest extent permitted by applicable law, indemnify and hold harmless each Indemnified Person against any losses, claims, damages, liabilities or expenses to which such Indemnified Person may become subject in connection with any matter arising out of or in connection with this Agreement or the Company’s business or affairs, except for any such loss, claim, damage, liability or expense that is determined by final judgment of a court of competent jurisdiction to have been primarily attributable to such Indemnified Person’s gross negligence, willful misconduct or fraud. If any Indemnified Person becomes involved in any capacity in any action, proceeding or investigation in connection with any matter arising out of or in connection with this Agreement or the Company’s business or affairs, the Company shall periodically reimburse the Indemnified Person for its legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith; provided that such Indemnified Person shall agree promptly to repay to the Company the amount of any such reimbursed expenses paid to it to the extent that it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the Company in connection with such action, proceeding or investigation as provided in the exception contained in the immediately preceding sentence. If for any reason (other than the gross negligence, willful misconduct or fraud of such Indemnified Person) the foregoing indemnification is unavailable to such Indemnified Person, or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Indemnified Person on the other hand or, if such allocation is not permitted by applicable law, to reflect not only the relative benefits referred to above but also any other relevant equitable considerations. The Company shall not indemnify an Indemnified Person to the extent the claim or action for which indemnification is sought is a derivative action or any other action brought by a majority of the Non-Managing Members, or an action between or among the Managing Member, the principals or affiliates thereof, or other Indemnified Persons.
 
(c) The Managing Member may cause the Company to purchase and maintain insurance coverage reasonably satisfactory to the Managing Member that provides the Company with coverage with respect to losses, claims, damages, liabilities and expenses that would otherwise be obligations associated with indemnification hereunder. The fees and expenses incurred in connection with obtaining and maintaining any such insurance policy or policies, including any commissions and premiums, shall be treated as Operating Expenses.
 
6.02.
Forum Selection.
 
(a)To the fullest extent permitted by applicable law, the Managing Member and each Non-Managing Member hereby agree that
all disputes arising out of or relating to this Agreement, its subject matter, the performance by the parties of their obligations with respect to this Agreement or the claimed breach thereof, whether in tort, contract or otherwise, shall be finally resolved by binding arbitration under then-existing rules of commercial arbitration of the American Arbitration Association. Any such arbitration shall be conducted before a single arbitrator in the County of St. Johns, Florida. The award of the arbitrator, including the allocation of each party’s costs of arbitration, shall be final and conclusive, and judgment on such award may be entered and enforced by any court of competent jurisdiction.
The Managing Member and each Non-Managing Member acknowledge that, in the event of any breach of this provision, the Indemnified Persons have no adequate remedy at law and shall be entitled to injunctive relief to enforce the terms of this Section 6.02.
 
(b)EACH MEMBER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 

Article 7
Duration and Dissolution of the Company
 
7.01.
Duration.
 
The term of the Company shall continue from year-to-year until the Company is dissolved as provided in this Agreement. Neither the admission, withdrawal, retirement, bankruptcy or death of a Non-Managing Member shall, in and of itself, dissolve the Company.
 
7.02.
Dissolution.
 
Subject to the Delaware Act, the Company shall be dissolved, and its affairs shall be wound up, as soon as practicable following the earliest of:
 
(a) a decision made by the Managing Member, in its discretion, to dissolve the Company upon thirty (30) days’ prior written notice to the Non-Managing Members;
 
(b) the determination by the Managing Member, in its discretion, to dissolve the Company because it has determined in good faith that (i) changes in any applicable law or regulation, or any interpretation thereof, would have a material adverse effect on the continuation of the Company, or (ii) such action is necessary or desirable as provided in Section 2.03..;
 
(c) the withdrawal of the Managing Member unless (i) at the time there is at least one remaining managing member of the Company and all remaining non-managing members shall agree to continue the business of the Company without dissolution, or (ii) within ninety (90) days after the occurrence of such event, a majority in interest of the Non-Managing Members agree in writing or vote to continue the business of the Company and to the appointment, effective as of the date of such event, if required, of one or more additional Managing Members of the Company;
 
(d) at any time that there are no members of the Company, unless the business of the Company is continued in accordance with the Delaware Act; and
 
(e) the entry of a decree of judicial dissolution under the Delaware Act.
 
7.03.
Liquidation of the Company.
 
(a) Upon the earliest to occur of an event specified in Section 7.02., the Company shall be in liquidation and the Company’s business and affairs shall be wound up in an orderly manner. The Managing Member shall be the liquidator to wind up the affairs of the Company pursuant to this Agreement.
 
(b)Subject to the Delaware Act, in performing its duties, the Managing Member is authorized to sell, distribute, exchange or otherwise dispose of the assets of the Company in any reasonable manner that the Managing Member shall determine. The Managing Member shall determine in its discretion which assets of the Company shall be sold and which assets of the Company shall be retained for distribution in kind to the Members. Assets to be distributed in kind to the Members shall be distributed in accordance with Section 4.08.
 
7.04.
Distribution upon Liquidation of the Company.
 
(a) Subject to the Delaware Act, after all liabilities of the Company have been satisfied or duly provided for, the remaining assets of the Company shall be distributed to the Members in accordance with their respective positive Capital Account balances. The Company shall terminate when all of the assets of the Company shall have been distributed to the Members in accordance with this Section 7.04. and the Certificate of Limited Company of the Company shall have been cancelled in the manner required by the Delaware Act.
 

(b)In the discretion of the liquidator, and subject to the Delaware Act, a portion of the distributions that would otherwise be made to the Members pursuant to this Section 7.04. may be:
 
(i)distributed to a trust established for the benefit of the Members for purposes of liquidating Company assets, collecting amounts owed to the Company and paying any liabilities or obligations of the Company or of the Managing Member arising out of, or in connection with, this Agreement or the Company’s affairs; or
 
(ii)withheld, with respect to any Member, to provide a reserve for the payment of such Member’s share of future Operating Expenses; provided that such withheld amounts shall be distributed to the Members as soon as the liquidator determines, in its discretion, that it is no longer necessary to retain such amounts.
 
The assets of any trust established in connection with clause ((b)(i)) above shall be distributed to the Members from time to time, in the discretion of the liquidator, in the same proportions as the amount distributed to such trust by the Company would otherwise have been distributed to the Members pursuant to this Agreement.
 
7.05.
Death or Incapacity of a Non-Managing Member.
 
Upon the death or incompetency of an individual Non-Managing Member, such Non-Managing Member shall not be entitled to receive the fair value of his or her interest in the Company in accordance with Section 17-604 of the Delaware Act. Such Non-Managing Member’s executor, administrator, guardian, conservator or other legal representative may, however, exercise all of such Non-Managing Member’s rights for the purpose of settling such Non-Managing Member’s estate or administering such Non-Managing Member’s property, including exercising any applicable withdrawal rights under Article 4. Except as expressly provided in this Agreement, no other event affecting a Non-Managing Member (including bankruptcy or insolvency) shall in and of itself affect its obligations under this Agreement or affect the Company.
 
Article 8
Transfers of Non-Managing Member Interests
 
8.01.
Restrictions on Transfers by a Non-Managing Member.
 
(a)No Non-Managing Member may directly or indirectly, sell, exchange, transfer, assign, pledge, hypothecate or otherwise dispose of all or any portion of its interest in the Company without the prior written consent of the Managing Member (which may, in the Managing Member’s sole discretion, be withheld or granted on such terms as the Managing Member determines). In no event may a Non-Managing Member engage in any aforementioned transfer of any portion of its interest in the Company nor may a substituted Non-Managing Member be admitted to the Company if such transfer or such admission would, in the judgment of the Managing Member, cause non-compliance with any matter set forth in Section 2.03..
 
(b)Notwithstanding anything to the contrary herein, the Company shall not participate in the establishment of a secondary market for interests in the Company or the substantial equivalent thereof as defined in Treasury Regulation Section 1.7704-1(c) or the inclusion of interests in the Company on such a market or on an established securities market as defined in Treasury Regulation Section 1.7704-1(b), nor shall it recognize any aforementioned transfer of interests in the Company made on any of the foregoing markets by admitting the purported transferee to the Company or otherwise recognizing the rights of such transferee.
 

8.02.
Transfer of the Managing Member’s Interest.
 
(a)Except as otherwise provided herein, the Managing Member may not, directly or indirectly, sell, exchange, transfer, assign, pledge, hypothecate or otherwise dispose of to any third party (other than to a successor-in-interest (by merger or otherwise) or assignee that is a limited partnership, limited liability company or other entity controlled, directly or indirectly, by the members of the Managing Member or is otherwise an affiliate of the Managing Member, which such aforementioned transfer may be made without the approval of any other Member) without the prior approval of the Non-Managing Members representing at least a majority of the aggregate Capital Account balances of all Non-Managing Members at such time. For purposes of this Section 8.02., only Non-Managing Members that are not affiliated with the Managing Member may vote, approve or consent to an assignment or transfer of the Managing Member’s interest in the Company. If the Managing Member so determines in its discretion, and any such prior approval of the Non-Managing Members (if required) so provides, the Managing Member may admit any person to whom the Managing Member proposes to make such an aforementioned transfer as an additional managing member of the Company, and such transferee shall be deemed admitted to the Company as a managing member of the Company immediately prior to such aforementioned transfer and shall continue the business of the Company without dissolution. Any person who succeeds to the Managing Member’s interest in the Company and becomes the managing member of the Company shall be bound by calculations relating to amounts previously allocated, withdrawn and distributed pursuant to Articles 3, Article 4 and Article 7 herein and shall otherwise be treated with respect to such amounts and calculations as if such person were the managing member of the Company from the inception of the Company. Except as otherwise provided in this Section 8.02., the Managing Member may not withdraw from the Company (within the meaning of the Delaware Act) or be removed as the managing member of the Company.
 
(b)Notwithstanding the foregoing provisions of this Section 8.02., the Managing Member shall not assign any of its rights or duties hereunder except with such approval of the Non-Managing Members as may be required under the Advisers Act.
 
Article 9
Miscellaneous
 
9.01.
Amendments; Waivers.
 
(a) Except as otherwise provided in this Section 9.01., any provision of this Agreement may be amended or waived by the Managing Member at any time and from time to time with the approval of the Managing Member and the Non-Managing Members representing at least a majority of the aggregate Capital Account balances of all Non-Managing Members at such time; provided that no amendment or waiver of this Agreement shall:
 
(i) without the written approval of all the Non-Managing Members, amend Article 6 (Exculpation and Indemnification) or this Section 9.01.; or
 
(ii) without the written approval of the affected Non-Managing Member, adversely modify or affect (A) the limited liability of such Non-Managing Member, or (B) such Non-Managing Member’s Company Percentage or Capital Account balance in a manner inconsistent with the method of allocations (including tax allocations) under Article 3, or the rights of such Non-Managing Member to make withdrawals under Article 4 in a manner adverse to such affected Non-Managing Member.
 
(b) Notwithstanding anything to the contrary in Section 9.01.(a), the Managing Member may, without the approval of any Non-Managing Member, amend or waive any provision of this Agreement (including any amendment that the Managing Member determines in its discretion is necessary or desirable to cure any ambiguity, to correct or supplement any provision of this Agreement, or to make any other provision with respect to matters or questions arising under this Agreement that are not inconsistent with the provisions of this Agreement) that:
 
(i) is not materially adverse to any Non-Managing Member;
 
(ii) is necessary or desirable in order for the Company, the Managing Member, or any affiliate of the Managing Member not to be in violation of any material law, regulation or guideline applicable to the Company, the Managing Member or such affiliate of the Managing Member, including amending or waiving any provision of Section 3.05. and Article 3 to reflect any amendment, change or modification of the provisions of the New Issues Rule that may be made by the Financial Industry Regulatory Authority, Inc.; or
 

(iii) will, in the opinion of the Managing Member in its sole and absolute discretion, likely adversely affect the Non-Managing Members in a material respect (including, without limitation, amendments to the Company’s trading program, to the Management Fee and Incentive Allocation imposed on the Company by the Managing Member, and to the withdrawal terms with respect to interests under Article 4); provided that such amendment does not become effective until after the affected Non-Managing Members have been given prior notice of such change and have had the opportunity following receipt of such notice to request a withdrawal from the Capital Accounts of the interests so affected, and any such withdrawal requests have in fact been effected.
 
The Managing Member shall give prompt notice to each Non-Managing Member of any amendment of this Agreement pursuant to this Section 9.01.(b).
 
9.02.
Successors; Counterparts; Beneficiaries.
 
This Agreement (i) shall be binding as to the executors, administrators, estates, heirs and legal successors of the Members and (ii) may be executed in several counterparts with the same effect as if the parties executing the several counterparts had all executed one counterpart. The signature page attached to the subscription agreement for the Company shall constitute a counterpart of this Agreement. Except as otherwise set forth in Section 6.01., no provision of this Agreement is intended to confer upon any person other than the parties hereto any rights or remedies hereunder.
 
9.03.
Governing Law, Severability.
 
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. In particular, it shall be construed to the maximum extent possible to comply with all of the terms and conditions of the Delaware Act. If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Agreement shall be invalid or unenforceable under the Delaware Act or other applicable law, such invalidity or unenforceability shall not invalidate the entire Agreement. In that case, this Agreement shall be construed so as to limit any term or provision so as to make it enforceable or valid within the requirements of applicable law, and, in the event such term or provision cannot be so limited, this Agreement shall be construed to omit such invalid or unenforceable provision.
 
9.04.
Power of Attorney.
 
Each Non-Managing Member does hereby constitute and appoint the Managing Member and its officers as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign and file a Certificate of Limited Company of the Company, any amendment thereof required because of an amendment to this Agreement or in order to effectuate any change in the membership of the Company, any amendments to this Agreement pursuant to Section 9.01., all instruments that effect a change or modification of the Company in accordance with this Agreement, all instruments, agreements, contracts or other documents that the Managing Member determines are necessary or appropriate in connection with the operation of the business of the Company, and all such other instruments, documents and certificates which may from time to time be required by the laws of the United States of America, the State of Delaware or any other State, or any political subdivision or agency thereof, or any non-U.S. country, or any political subdivision or agency thereof, or otherwise, to effectuate, implement and continue the valid and subsisting existence of the Company or to dissolve the Company. Such representative and attorney -in -fact shall not have any right, power or authority that is inconsistent with Section 9.01. to amend or modify this Agreement when acting in such capacity. The power of attorney granted hereby is coupled with an interest and shall (i) survive and not be affected by the subsequent dissolution, termination, bankruptcy, death or incapacity of the Non-Managing Member granting the same or the transfer of all or any portion of such Non-Managing Member’s Interest in the Company, and (ii) extend to such Non-Managing Member’s successors, assigns and legal representatives. The power of attorney granted herein shall terminate upon the bankruptcy, insolvency or conviction of a crime of the Managing Member.
 

9.05.
No Bill for Company Accounting; Waiver of Partition.
 
Subject to any mandatory provisions of law applicable to a Non-Managing Member and circumstances involving a breach of this Agreement, each of the Members covenants that it shall not (except with the consent of the Managing Member) file a bill for company accounting, or otherwise proceed adversely in any way whatsoever against the other Members or the Company. Each Member hereby irrevocably waives during the term of the Company any right that such Member may have to maintain any action for partition with respect to any Company property.
 
9.06.
Notices.
 
(a)All notices, requests and other communications to any party hereunder shall be in writing (including facsimile, electronic mail or similar writing) and shall be given to such party at its address, electronic mail address, or facsimile number set forth in the books and records of the Company or such other address, electronic mail address, or facsimile number as such party may hereafter specify for the purpose by notice to the Managing Member (if such party is a Non-Managing Member) or to all the Non-Managing Members (if such party is the Managing Member). Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified above, (ii) if given by mail, seventy-two (72) hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid, or (iii) if given by electronic mail, when actually received at the electronic mail address specified above.
 
(b)Each Non-Managing Member hereby authorizes the Managing Member to transmit periodic statements, reports, notices, requests and other communications to it electronically, by facsimile, or by electronic mail and/or Internet web site maintained by the Managing Member, and each Non-Managing Member hereby consents to such methods of electronic delivery. There shall not be any additional cost or fee for electronic delivery and accessing of documents (other than costs normally associated with receiving documents by facsimile or electronic mail, such as for telephone, office supplies and equipment or software). If a Non-Managing Member requests a hard copy of any of these documents, there shall be no charge. This consent to electronic delivery shall be effective until revoked by a Non-Managing Member in a writing delivered to the Managing Member. It shall be a Non-Managing Member’s responsibility to check the Internet web site maintained by the Managing Member, electronic mail and telecopies on a regular basis to receive communications from the Managing Member. A Non-Managing Member shall promptly notify the Managing Member of any difficulty in accessing, opening or otherwise viewing an electronically transmitted document. Upon a Non-Managing Member’s request, the Managing Member may use an alternative method of delivering a communication, at the Non-Managing Member’s sole expense. Such alternative means of delivery shall not affect the date the communication is deemed received by the Non-Managing Member.
 
9.07.
Headings; Table of Contents.
 
The Article and Section headings contained herein are provided for ease of reference only and do not constitute or form a part of this Agreement.
 
9.08.
Legends.
 
If certificates for any interests in the Company are issued evidencing a Non-Managing Member’s interest in the Company, each such certificate shall bear such legends as may be required by applicable U.S. federal or state laws, or as may be deemed necessary or appropriate by the Managing Member to reflect restrictions upon transfer contemplated herein.
 

9.09.
Goodwill.
 
No value shall be placed on the name or goodwill of the Company.
 
9.10.
Further Assurance.
 
Each Non-Managing Member, upon the request of the Managing Member, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may reasonably be necessary to carry out the provisions of this Agreement.
 
9.11.
Member Tax Basis.
 
Upon request of the Managing Member, each Member agrees to provide to the Managing Member information regarding its adjusted tax basis in its interest in the Company along with documentation substantiating such amount.


IN WITNESS WHEREOF, the undersigned has hereunto set its hand as of the day and year first above written.
 
DLP PFR Management LLC
 
as the Managing Member and as attorney-in-fact for each Non-Managing Member
 
By:
 
 
   
Name: Donald Wenner
 
   
Title: Authorized Signatory
 



ex4_1.htm EXHIBIT 4.1 - SUBSCRIPTION AGREEMENT



Exhibit 4.1
 
NOTE HOLDER SUBSCRIPTION AGREEMENT
 
DLP POSITIVE FIXED RETURNS FUND LLC

THE LIMITED LIABILITY COMPANY MEMBERSHIP INTERESTS SUBJECT TO THIS SUBSCRIPTION AGREEMENT ARE SECURITIES WHICH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). SUCH INTERESTS MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED TO ANY PERSON AT ANY TIME; IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SHARES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MANAGER OF THE LLC (THE  “MANAGER”) TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED; OR IN A MANNER INCONSISTENT WITH THE TERMS OF THE LIMITED LIABILITY COMPANY OPERATING AGREEMENT GOVERNING SUCH LIMITED LIABILITY COMPANY, WHICH IS INCORPORATED HEREIN BY THIS REFERENCE.

This Subscription Agreement (the “Agreement” or the “Subscription Agreement”) is between DLP Positive Fixed Returns Fund LLC, a Delaware limited liability company (the “Fund”), and the undersigned (referred to herein as “you,” except that in the case of a subscription for the account of one or more trusts or other entities, “you” will refer to the trustee, fiduciary or representative making the investment decision and executing this Agreement, of the trust or other entity, or both, as appropriate). The Fund and you hereby agree as follows:

1.
Definitions.  All capitalized terms in this Subscription Agreement have the meanings given to them in the Offering Circular (together with any amendments and supplements thereto, the “Offering Circular”), the Note and the Intercreditor Security Agreement. This Subscription Agreement and the Documents, each and all, form the necessary documents for a purchase of the Note. The Note Holder shall execute all Documents required by the Manager to effect a purchase of the Note.

2.
Purchase and Consideration.  The Note Holder hereby contracts to purchase a Note or Notes in the Principal amount set forth on Note Holder’s signature page attached hereto. By signing this Subscription Agreement, the Note Holder agrees to be bound by the terms and conditions of the Note as set forth therein. Each Subscription Agreement between the Fund and each respective Note Holder is a separate agreement, and the sale of each Note to each Note Holder is a separate sale.

3.
Closing Procedures.


(a)
Tender; Acceptance.  Note Holder shall tender Note Holder’s signed Documents to the Fund for acceptance by the Manager of the Fund, in the Manager’s sole discretion. The Fund will hold the tendered documents and consideration pending the Fund’s review of such documents and acceptance of Note Holder as a Note Holder in the Offering. If the Fund does not accept the tender, then the Fund will so inform the Note Holder, and return Note Holder’s funds.


(b)
Closing of Note Purchases. Closing of purchases of the Notes shall occur upon acceptance of this Subscription Agreement by the Manager of the Fund, in its sole discretion, with the close of each such sale being referred to as a Closing.


(c)
Conditions to Closing. Proceeds will be considered delivered to the Fund only upon your delivery of any other Documents requested or required by the Manager and the Fund’s (i) acceptance of this Agreement by its countersignature on the signature page, and (ii) having deposited in the U.S. Mail, or overnight delivery service, the following items for delivery to Note Holder:



(a)
A signed original Note executed by the Fund, as applicable;

(b)
A copy of this Subscription Agreement fully executed by the Fund as to the Note Holder; and

(c)
A signed copy of the Intercreditor Security Agreement.

The Fund will deliver copies of the Note Holder’s fully executed Documents to each Note Holder promptly upon the Closing of such Note Holder’s purchase of a Note.

4.
Termination of Offering.  The Offering shall terminate on the date selected by the Manager in its sole discretion.

5.
Minimum Investment. Each Note Holder must purchase a Note with a minimum principal amount of $50,000.00 unless a waiver, signed by the Manager, in its sole discretion, is provided.

6.
Representations of the Fund. The Fund represents and warrants to each Note Holder as set forth below in this Section 6. All such representations and warranties to each Note Holder are as of the date of the applicable Closing as to such Note Holder, except as otherwise indicated:


(a)
Corporate Existence and Power. The Fund is a limited liability company duly organized and validly existing under the laws of the State of Delaware; and the Fund has full corporate power and authority to transact the business in which it is engaged, and full power, authority, and legal right to enter into this Agreement and to incur and perform its obligations hereunder.


(b)
Authority, No Contravention, Valid Issuance. The making and performance by the Fund of this Agreement, and the issuance of the Notes (i) have been duly authorized, (ii) and to the Fund’s and the Manager’s actual, current knowledge do not and will not violate any provision of any applicable law, rule, regulation, or order of any court, regulatory commission, board or other administrative agency, or any provision of the Fund’s Certificate of Formation, as may be amended and/or restated, or Operating Agreement, as may be amended or restated, and, (iii) except for the terms and provisions of any senior Credit Facility, do not and will not result in the breach of, or constitute a default or require any consent under (except to the extent such consent has been received), or result in the creation of any lien upon any properties or assets of the Fund pursuant to any other indenture, bank, or other credit agreement, mortgage or other agreement or instrument to which the Fund is a party, or by which it or any of its properties may be bound or affected.


(c)
Binding Obligations. This Agreement has been duly executed and delivered by the Fund and constitutes the legal, valid, and binding obligation of the Fund, enforceable in accordance with its terms (subject to limitations as to enforceability which might result from bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors’ rights generally).


(d)
Approvals. To the Fund’s actual and current knowledge, no authorization, consent, license, or approval of, or filing (except for filings with the appropriate office of states as may be required by securities laws of the Note Holder’s state of residence, or with the SEC if and as required by federal securities laws) or registration with, or notification to, any governmental body or regulatory or supervisory authority is required for the execution, delivery, or performance by the Fund of this Agreement.

7.
Event of Default; Remedies.  Events of Default under the Note and the remedies therefore are described in the Note.


8.
Representations of Note Holders. Each Note Holder for him, her, or itself represents and warrants as follows:


(a)
Power, Authority, Valid Agreement, Good Standing. (i) Note Holder has all requisite power and authority to execute, deliver, and perform his, her or its obligations under this Subscription Agreement, the Note and the Intercreditor Security Agreement and to subscribe for and purchase or otherwise acquire the Note; (ii) if Note Holder is an entity, its execution of this Subscription Agreement, the Note and the Intercreditor Security Agreement has been authorized by all necessary corporate or other action on Note Holder’s behalf; (iii) this Subscription Agreement, the Note and the Intercreditor Security Agreement  are each valid, binding, and enforceable against Note Holder in accordance with their respective terms and (vi) if Note Holder is an entity, it is validly existing and in good standing under the laws of the state of Note Holder formation or incorporation.


(b)
Purchase Entirely for Own Account. Note Holder is purchasing the Notes solely for Note Holder’s own account for investment and not with a view to or for sale or distribution and not with any present intention of selling, offering to sell, or otherwise disposing of or distributing the Notes, as the case may be, in any transaction other than a transaction complying with the registration requirements of the Securities Act or pursuant to an exemption therefrom. Note Holder also represents that the entire legal and beneficial interest of the Notes, as the case may be, is being purchased by Note Holder for Note Holder’s account and is purchased neither in whole nor in part for any other person or entity.


(c)
Access to Information. Note Holder has had the opportunity to fully investigated the investment Note Holder is making in the Notes, including, without implied limitation (i) the opportunity to discuss the Fund’s business and financial condition, properties, operations, and prospects with the Fund’s management and (ii) ask questions of principals of the Manager of the Fund, which questions, if any, were answered to Note Holder’s satisfaction. Note Holder represents that he, she, or it has reviewed the Documents prepared by the Fund and has asked such questions as Note Holder may have concerning the Documents and received satisfactory answers to all such questions, if any, and has not relied on any matters outside those described in the Documents in making Note Holder’s decision to purchase a Note or Notes. Note Holder also confirms his, her, or its understanding that (i) all projections of future performance by the Fund and representations or forward-looking statements concerning future performance by the Fund contained in the Documents generally, and in the Offering Circular specifically, are based on the Manager’s good faith projections or belief, and do not represent commitments or warranties of any particular performance by the Fund, (ii) that no particular performance by the Fund can be assured, and (iii) that all such forward-looking statements must be regarded as highly speculative and uncertain.


(d)
Investment Experience; Ability to Sustain Loss. Note Holder has carefully reviewed this Subscription Agreement, the Offering Circular, and the other Documents, is experienced in investments comparable to those of the Fund, is able to fend for her, him, or itself, and has such knowledge and experience in financial or business matters that he, she, or it is capable of evaluating the merits and risks of the investment in the Notes. Note Holder understands the risks associated with purchasing the Notes in particular. Note Holder is able to sustain the loss of Note Holder’s entire investment of Principal in the Notes. If Note Holder is a legal entity, then Note Holder has not been organized for the purpose of purchasing or otherwise acquiring the Notes.


(e)
Understanding of Risks. Note Holder confirms his, her, or its understanding that the Fund and its proposed transactions are subject to all the risks inherent in transactions involving the Fund’s business, investment objectives, multiple parties, and lenders. Note Holder has read and reviewed the Documents, including the Offering Circular, with such of Note Holder’s attorneys, advisors, and agents as Note Holder has deemed necessary to make an informed decision about the purchase of the Notes.



(f)
Authorization. The execution, delivery, and performance of this Subscription Agreement by Note Holder (i) does not require the consent, approval, or authorization of any governmental or regulatory authority, and (ii) will not violate any applicable law, judgment, order, injunction, decree, rule, regulation, or ruling of any governmental authority applicable to Note Holder.


(g)
Restricted Securities. Note Holder understands that the Notes have not been registered under the Securities Act, in reliance upon an exemption from registration. Such exemption depends upon, among other things, the good faith nature of Note Holder’s investment intent stated in this Subscription Agreement and Note Holder’s qualified status as an Accredited Investor or “Non-Resident Alien” as described in Section 8.3 above. Note Holder understands that the Notes must be held by the Note Holder and not transferred, unless the Fund consents in writing, or unless the Notes are subsequently registered under the Securities Act, or unless an exemption from registration is otherwise available. Note Holder understands that the Fund is not obligated to register the Notes. Note Holder also understands that the Notes may not be offered, sold, transferred, pledged, or otherwise disposed of in the absence of an effective registration statement under the Securities Act and applicable state securities laws or an opinion of counsel acceptable to the Fund that such registration is not required, or the written consent of the Fund is given, which consent may be withheld for any reason by the Fund.


(h)
Anti-Money Laundering. Note Holder is not a person, government, country or entity:  (i) that is listed in the Annex to, or is otherwise subject to the provisions of, United States Executive Order 13224, as issued on September 24, 2001 (“EO 13224”) which list is published at http://www.treasury.gov/terrorism.html); (ii) whose name appears on the most current U.S. Office of Foreign Assets Control (“OFAC”) list of “Specifically Designated Nationals and Blocked Persons” (which list is published on the OFAC website, http://www.treas.gov/ofac); (iii) who commits, threatens to commit or supports “terrorism,” as that term is defined in EO 13224; or (iv) who is otherwise affiliated with any person, government, country or entity listed above. Any funds used by the Note Holder to invest in the Fund were not, directly or indirectly, derived from activities that may contravene U.S. federal and/or state laws and regulations, including anti-money laundering laws or that may contravene the anti-money laundering laws of any other jurisdiction.

9.
Covenants. The following covenants last for so long as each Note Holder holds any Notes:


(a)
Compliance with Laws. The Fund will comply with the requirements of all applicable laws, rules, regulations, and orders of any governmental authority, except where contested in good faith and by proper proceedings.


(b)
Taxes.

(i)     The Fund. The Fund will pay and discharge all taxes, assessments, and governmental charges or levies imposed upon the Fund or upon its income or profits or upon any property belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a lien upon its property, provided that it shall not be required to pay any such tax assessment, charge, levy, or claim the payment of which is being contested in good faith and by proper proceedings and in respect of which it is maintaining adequate reserves. The Fund may, in its discretion deduct or withhold Note Holder taxes as may be required by any governing taxing authority and remit the same on Note Holder’s behalf. Note Holder shall be liable to reimburse the Fund for any such taxes remitted on behalf of Note Holder, which liability will survive redemption of the Note.


(ii)   Note Holder. Note Holder has read the Documents, understands the tax aspects and risks associated with the purchase of the Notes, and agrees that the Note Holder shall be solely and entirely responsible for any and all tax payments, tax obligations, fees, and assessments, along with all reporting of Note Holder’s tax consequences, as a result of the purchase of, and any income from, the Notes. The Fund shall have no obligation, responsibility or liability to the Note Holder in connection with the payment or remittance of any taxes or tax filings required to be made by the Note Holder.

10.
Restrictions on Transfer of Notes.


(a)
Restrictions. In addition to any other restrictions on transfer imposed by applicable federal or state securities laws, no Note Holder may transfer any interest in any of the Notes except as provided in this Section 10. Note Holder understands that the Notes may not be offered, sold, transferred, pledged, or otherwise disposed of unless: (i) the Fund files an effective registration statement for the Notes under the Securities Act and applicable state securities laws, or (ii) the written consent of the Fund is given, which consent may be withheld for any reason by the Fund, and the Fund receives an opinion of counsel acceptable to the Fund that registration is not required for such Transfer.


(b)
Obligations Binding Upon Transferees. Any permitted transferee of Notes or any interest therein will receive and hold such Notes or interests subject to the provisions of this Section 10. Any such transferee shall agree in writing that the transferee shall hold the Notes subject to the provisions of this Section 10 and that no further transfers shall be made except as provided in this Section 10.


(c)
Purported Transfers in Violation. Any purported transfer of Notes in violation the provisions of this Section 10 are null and void and shall be of no effect. The purported transferee shall have no interest in any of the Notes purported to be transferred. Each Note Holder agrees that in the event of a purported transfer of Notes in violation of the provisions of this Section 10, the Fund may enforce the provisions of this Section 10 by specific performance or other injunctive relief, in addition to any of the remedies available at law or in equity.

11.
Other Matters.


(a)
Amendments. This Subscription Agreement may be amended or modified only in writing signed by the Note Holder and the Manager of the Fund on behalf of the Fund.


(b)
Assignment. This Subscription Agreement shall not be assigned by the Note Holder without the prior written consent of the Fund. Any purported assignment of this Subscription Agreement in violation of this Agreement is null and void and shall be of no effect.


(c)
Counterparts; Electronic Mail, Facsimile. This Subscription Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute but one document. Delivery of an executed signature page to this Subscription Agreement and any of the other agreements, Documents and instruments contemplated hereby, by electronic mail or facsimile transmission shall be as effective as delivery of a manually signed counterpart or thereof.



(d)
Expenses and Attorneys’ Fees. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery, and performance of this Subscription Agreement. Each party in any suit, action, or appeal filed or held concerning this Subscription Agreement shall be responsible for its own attorneys’ fees and shall not be responsible for the attorneys’ fees of any other party.


(e)
Additional Information. Each of the parties shall promptly execute and deliver such additional documents and shall do such acts that are reasonably necessary in connection with the performance of their respective obligations hereunder to carry out the intent of this Subscription Agreement.


(f)
Governing Law.
This Subscription Agreement shall be governed by the laws of the State of Delaware without regard to conflicts of law principles. All disputes arising out of or relating to this Subscription Agreement, its subject matter, the performance by the parties of their obligations with respect to this Subscription Agreement or the claimed breach thereof, whether in tort, contract or otherwise, shall be finally resolved by binding arbitration under then-existing rules of commercial arbitration of the American Arbitration Association. Any such arbitration shall be conducted before a single arbitrator in the County of St. Johns, Florida. The award of the arbitrator, including the allocation of each party’s costs of arbitration, shall be final and conclusive, and judgment on such award may be entered and enforced by any court of competent jurisdiction.


(g)
Confidentiality. The Note Holder acknowledges that the information provided to it regarding the Fund is confidential and non-public. The Note Holder agrees that all of the information will be kept in confidence and will be neither used to its personal benefit (other than in connection with its subscription for the Notes) nor disclosed to any third party. This obligation does not apply to any such information which (a) is part of public knowledge or is readily accessible as literature at the date of this Subscription Agreement, (b) becomes part of public knowledge or literature and, thus, becomes readily accessible by publication (except as a result of a breach of this provision), or (c) is received from third parties (except third parties who disclose it in violation of any confidentiality agreement they may have with the Fund).


(h)
Notices. All notices or other communications required or permitted by this Subscription Agreement must be in writing; must be delivered to the Fund and the Manager at the addresses set forth below, or any other address that a party may designate by notice to the other parties; and are considered delivered upon (i) actual receipt if delivered personally, (ii) one day after deposit with a nationally recognized overnight delivery service, (iii) at the end of the third business day after the date of deposit in the United States mail, postage pre-paid, certified, return receipt requested or (iv) if sent by facsimile or email, at the time received by the email service or facsimile machine of the receiving party if received before 5:00 p.m. (Eastern Time) on the business day received, or if received after 5:00 p.m. (Eastern Time), or if emailed or faxed on a day other than a business day (i.e., a Saturday, Sunday, or legal holiday), such notice shall be deemed delivered on the next following business day.


To Fund:
DLP Lending Fund LLC
 
605 Palencia Club Drive
 
St. Augustine, FL 32095
   
To Manager:
DLP Capital Partners LLC
 
605 Palencia Club Drive
 
St. Augustine, FL 32095
 

(i)
Non-Waiver. A waiver of one or more breaches of any clause of this Subscription Agreement shall not act to waive any other breach, whether of the same or different causes.


(j)
Severability. Each clause of this Subscription Agreement is severable. If any clause is ruled void or unenforceable, then the balance of this Subscription Agreement shall nonetheless remain in effect.


(k)
Term. Unless otherwise agreed to in writing by the parties, this Subscription Agreement shall remain in full force and effect and shall not terminate.


[Signature Page to Subscription Agreement]

FOR GOOD AND VALID CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the Purchaser, intending to be legally bound, has executed this Subscription Agreement:

Note Amount:
 
$
 
___________________________.
       
Term:
 
$
 
 ___________________________.
       
Note Rate:
 
$
 
___________________________.
 
Reinvest Interest:

Yes

No

ACCEPTANCE OF NOTE HOLDER: The undersigned hereby accepts the foregoing Subscription Agreement for DLP Positive Fixed Returns Fund LLC and subject to delivery of payment and other documents to be delivered by the Note Holder, agrees that the Note Holder shall become a holder of the Note(s) effective as of the date signed by the Manager below.
 
Date

 
 
Name of Entity or Trust (if applicable)
 
   

 


 
 
Purchaser Signature
 
Co-Purchaser Signature (if applicable)
 
 

 
 
Name and title (if applicable) of person signing
 
Name and title (if applicable) of person signing
 

ACCEPTANCE:

DLP POSITIVE FIXED RETURNS FUND LLC

 
 
By: DLP PFR MAMAGEMENT LLC, Manager
 
Date
 
By: DLP Capital Partners LLC, Sole Member
     
By: DLP Real Estate Capital, Inc., Manager
     
By: Donald Wenner, President
     



ex4_2.htm EXHIBIT 4.2 - SECURITY AGREEMENT



Exhibit 4.2

INTERCREDITOR SECURITY AGREEMENT
 
DLP POSITIVE FIXED RETURNS FUND LLC

This Intercreditor Security Agreement, dated as of ______________ _____, 20___ (this “Agreement”), is by and among DLP Positive Fixed Returns Fund LLC, a Delaware limited liability company (“Fund”), and DLP PFR Management LLC (the “Manager”) as Representative or its successor thereto, and the undersigned (“Note Holder”).

RECITALS

A.           Pursuant to the terms and conditions of the Offering of the Fund, Notes will be issued to Investors in exchange for cash investments. The Notes are secured by the Fund’s Assets.

B.         Pursuant to the terms and conditions provided for in the Subscription Agreement, each Note Holder, along with each other Note Holder, shall designate a Representative, which shall initially be the Manager and subsequently any of Manager’s successors thereto, as its sole representative, and each Note Holder furthermore agrees and acknowledges that the Representative shall enter into an agreement with the Fund providing for the orderly prosecution of any enforcement or foreclosure action with respect to the Notes.

C.           The parties wish to describe the relative rights of Representative with respect to the Notes.

D.        All capitalized terms in this Agreement not defined herein have the meanings given to them in the Fund’s Operating Agreement dated January 1, 2019, as amended from time to time (“Operating Agreement”), the Note, or the Subscription Agreement (collectively, the “Documents”). This Agreement and the Documents, each and all, form the necessary documents for a purchase of the Notes. The Note Holder shall execute each and every Document required by the Manager to effect a purchase of the Notes.

AGREEMENT

Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, the undersigned hereby agree as follows:

1.           Pari Passu Interests. The Fund, the Representative, and the Note Holder acknowledge and agree that the respective interests of each Note Holder in and to any payments made by the Fund in respect of the Notes, the Security, and any collections in connection with the foreclosure of such Security shall be Pari Passu and no Note Holder shall have any priority over the other; provided further, that any such payments, Security and/or collections received by any Note Holder, other than such payments, Security and collections that are received by all Note Holders on a Pari Passu basis, shall be paid by such Note Holder to the Representative, to be held in trust for the benefit of all Note Holders.

2.           Designation of Representative as Sole Representative. The Fund and the Representative acknowledge that the Note Holders have designated the Representative as the sole representative of all Note Holders and furthermore that the Note Holders have granted to the Representative a Power of Attorney, and the authority to control the orderly prosecution of any enforcement action with respect to any Notes or foreclosure of the Security for which each of the Note Holders receives a Pari Passu interest. As described below, the Note Holder hereby appoints Representative as its agent, representative and attorney-in-fact, with the exclusive right to manage, perform and enforce the terms of the Notes and to exercise and enforce all privileges and rights exercisable and enforceable thereunder, for the joint benefit of the Note Holders. Neither the Representative nor any of its directors, officers or employees shall be liable for any action taken or omitted to be taken by it under or in connection with the Notes, except for its own willful misconduct.  The Note Holder will indemnify the Representative and its directors, officers and employees to the same extent, and under the same terms, as provided to the Manager in the Fund’s Operating Agreement. The Representative may resign as sole representative of all the Note Holders at any time by delivering 90 days’ written notice to the Note Holders. In the event that the Representative ceases to serve as representative for all the Note Holders, the Manager may designate a new Representative.


3.           Power of Attorney. Note Holder hereby makes, constitutes, and appoints the Representative, and any successor Representative, as determined by the Manager, as its true and lawful representative and attorney-in-fact in such Note Holder’s name, place, and stead to make, execute, sign, acknowledge, file, and record with respect to the Note:

 
(a)
all instruments which the Representative deems appropriate to reflect any amendment, change, or modification of the Note or the Security in accordance with the terms of this Agreement;
 
(b)
such agreements, instruments, or documents as may be necessary or advisable to reflect the exercise by the Representative of any of the powers granted to it under this Agreement, including without limitation, any subordination agreement required to be executed for the benefit of any Credit Facility;
 
(c)
all such other instruments, documents, and certificates which may from time to time be required by the laws of the State of Pennsylvania, the United States of America, or any other jurisdiction in which the Fund shall determine to do business, or any political subdivision or agency thereof, to effectuate, implement, continue, and defend the valid and subsisting existence of the Note and the Security; and
 
(d)
all applications, certificates, certifications, reports, or similar instruments or documents required to be submitted by or on behalf of the Fund to any governmental or administrative agency or body, or to any securities or commodities exchange, board of trade, clearing corporation or association or similar institution or to any other self-regulatory organization or trade association.

The Note Holder authorizes the Representative to take any further action which the Representative shall consider necessary or advisable in connection with any of the foregoing, hereby giving the Representative full power and authority to do and perform each and every act or thing whatsoever requisite to be done in and about the foregoing as fully as such Note Holder might or could do if personally present, and hereby ratifying and confirming all that the Representative shall lawfully do or cause to be done by virtue hereof; provided, however, that the Representative shall not have any right, power, or authority to amend or modify this Agreement when acting in such capacity except as set forth herein. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive the death of a Note Holder and extend to the Note Holder’s heirs, legal representatives, successors, and assigns. The Note Holder hereby agrees to be bound by any representation made by the Representative acting in good faith pursuant to such power of attorney, and the Note Holder hereby waives any and all defenses which may be available to contest, negate, or disaffirm the action of the Representative taken in good faith pursuant to such power of attorney.

4.           Specific Enforcement. As sole Representative of all Note Holders, the Manager or its successor shall be the only party to take any enforcement or set-off action with respect to the Notes, foreclose or take any other action to realize upon the Note or the Security, institute any action or proceeding to collect or enforce the Note, commence or cause to be commenced any bankruptcy or similar proceeding against the Fund or commence or exercise any other right or remedy against the Fund or under any document related to the Notes or under applicable law. Pursuant to the terms and conditions of the Offering, each Note Holder defers to the Representative to make all decisions regarding any action concerning the Notes.


5.           Note Holder Security. 

(a)          Grant and Definition. As Security for the due and timely performance and payment of Fund’s obligations to the Note Holders under the Notes, the Fund hereby grants to the Note Holders a security interest in all Fund Assets, whether presently owned or hereafter acquired, including without implied limitation, all real property, equipment, fixtures, tenant improvements, deposits, deposit accounts, accounts receivable, shares, units, membership and partnership interests, contract rights, securities, mortgages, notes, trust deeds, beneficial interests, instruments, and any and all assignments of the same, and intellectual property (including, but not limited to, patents, patent applications, copyrights, trademarks, trade names, and goodwill), together with all replacements thereof or substitutions therefore, and all proceeds thereof (the “Security”). The term Security specifically excludes any money or funds on account, or assets in trust held by the Fund or by the Manager, in connection with loans originated or acquired by the Fund as Fund Assets.  The Representative may exclude any assets, collateral or Security, or perfection or priority of any Security, to the extent required to obtain financing from a senior lender under a Credit Facility. 
 
(b)          Note Security.
 
Note Holder acknowledges that the Note is part of a group of Notes offered by the Fund. The Note will be secured against the Assets of the Fund Pari Passu with the other Notes offered by the Fund as part of the Offering, but subject to any Credit Facilities, as described herein.
 
(c)          Representative. The Note Holder further acknowledges that all Security and filings granted and made under the Note shall be held, pursuant to this Agreement, in the name of the Representative, who shall initially be the Manager. The Manager shall have the sole discretion to appoint a successor Representative or Representatives. Such Representative or Representatives shall receive and keep record of quarterly updates and reports from the Fund, and such reports shall be available to the Note Holder from the Representative.
 
(d)           Perfection. The Note Holder hereby authorizes the Fund, at the Fund’s discretion and through the designated Representative, to file any UCC financing statements, and any amendment or modifications thereto or continuations thereof, and to file any other instrument or document, and take any other action the Representative may elect to perfect or protect the Security created under this Agreement.  The Fund anticipates that, if anything, this will include only the filing of a UCC financing statement (this Note will not be secured by the filing of mortgages, deeds of trust, deposit or investment account control agreements or similar methods of perfection).
 
(e)           No Assignment. The Assets of the Fund shall not be assigned to any Note Holder or to any Representative but shall remain in the name of the Fund. The Fund shall retain full rights in its Assets and may, without notice to or consent of Note Holder or any Representative, agree to the modification, waiver, or release of any provisions of any agreement, lien, deed of trust, mortgage, or any other Asset, consent to any action or failure to act by any obligor on any Asset, and exercise or refrain from exercising any power or right which the Fund may have under or with respect to any Asset. The Fund may manage, operate, or sell any Asset, all as exercised in the Manager’s sole discretion. Without limiting the foregoing, the Fund shall have the right, without notice to or consent from the Note Holder or any Representative, to grant any extension of time or forbearance for the performance of any obligation or condition under any Asset, which if not performed, would otherwise constitute a default or event of default under the loan or transaction documents pertaining to the Asset.
 
(f)           Subordination; Acknowledgement of Credit Facility. The Note Holder acknowledges and agrees that the Note and all related Documents are subject to and subordinate to any Credit Facilities. The Note Holder’s Security will be senior to all other creditors except for liens granted for any Credit Facility. Representative will execute subordination agreements in a form reasonably acceptable to the Manager prepared by the sources of such Credit Facilities, if requested or required to do so by such source of Credit Facility.
 

(g)           Cash Flow Distribution (“Waterfall”). As Fund income is received, the Fund plans to make payments in the following order of priority, which each Note Holder acknowledges and agrees:
 

First to interest and principal payments on any Credit Facility;

Second, to Note Holder interest, payable monthly;

Third, to Company Expenses;

Fourth, to Management Fees due Manager, payable monthly, and any other fees due Manager;

Fifth, to repayment of maturing Notes, if any;

Sixth, to distribution of remaining cash to the Manager.
 
6.          All Note Holders Treated Equally. Notwithstanding the order of filing of any financing statement, or the perfection or non-perfection of any Security, respective interests of each Note Holder in and to the Security and any collections in connection with the foreclosure of such Security shall be Pari Passu and no Note Holder shall have any priority over the other.

7.           No Obligation to Take Action. Except for action expressly required to be taken by Representative hereunder and under the terms and conditions of the Subscription Agreement, Representative shall be entitled to refrain from taking any action hereunder unless Representative shall be indemnified by all Note Holders to Representative’s satisfaction from any and all liability and expense it may incur by reason of taking such action. If Representative declines to take action hereunder, the Note Holders may designate a new sole representative by a vote of the Note Holders holding at least a majority of the outstanding principal of the Notes and such new sole representative shall have the same authority to act on behalf of the Note Holders as granted to Representative hereunder.
 
8.           Third Party Beneficiaries. The Fund and Representative acknowledge and agree that each Note Holder is a third-party beneficiary under this Agreement, and that each Note Holder may enforce any and all rights of the Note Holder arising under this Agreement. Each Note Holder has agreed to be bound by the terms and conditions to this Agreement pursuant to execution of the Subscription Agreement.
 
9.           Reimbursement. Representative shall be reimbursed by the Note Holders for all reasonable expenses incurred on behalf of the Note Holders in connection with any enforcement action.

10.         Other Matters.

(a)           Amendments. This Agreement and any Notes subject to hereto may be substantively amended or modified only in writing signed by the Manager of the Fund on behalf of the Fund and the Representative on behalf of the Note Holders, provided Note Holders holding at least a majority of the outstanding principal of the Notes have consented to the amendment or modification. Amendments which are non-substantive in nature or do not adversely affect Note Holders shall not require consent of the Note Holders.

(b)           Assignment. This Agreement shall not be assignable by the Note Holder without the prior written consent of the Fund which may be withheld in the Fund’s discretion. Any purported assignment of this Subscription Agreement in violation of this section is null and void and shall be of no effect.


(c)           Counterparts; Electronic Transmission. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute but one document. Delivery of an executed signature page to this Agreement and any of the other agreements, documents and instruments contemplated hereby, by electronic transmission shall be as effective as delivery of a manually signed counterpart or thereof.

(d)           Expenses and Attorneys’ Fees. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery, and performance of this Agreement. Each party in any suit, action, or appeal filed or held concerning this Agreement shall be responsible for its own attorneys’ fees and shall not be responsible for the attorneys’ fees of any other party.

(e)           Additional Documents and Acts. Each of the parties shall promptly execute and deliver such additional documents and shall do such acts that are reasonably necessary in connection with the performance of their respective obligations hereunder to carry out the intent of this Agreement.

(f)           Governing Law. This Agreement shall be governed and construed according to the substantive laws of the State of Delaware
without regard to conflicts of law principles
.
All disputes arising out of or relating to this Agreement, its subject matter, the performance by the parties of their obligations with respect to this Agreement or the claimed breach thereof, whether in tort, contract or otherwise, shall be finally resolved by binding arbitration under then-existing rules of commercial arbitration of the American Arbitration Association. Any such arbitration shall be conducted before a single arbitrator in the County of St. Johns, Florida. The award of the arbitrator, including the allocation of each party’s costs of arbitration, shall be final and conclusive, and judgment on such award may be entered and enforced by any court of competent jurisdiction.

(g)           Notices. All notices or other communications required or permitted by this Agreement must be in writing; must be delivered to the Fund and the Manager at the addresses set forth below, or any other address that a party may designate by notice to the other parties; and are considered delivered upon (i) actual receipt if delivered personally, (ii) one day after deposit with a nationally recognized overnight delivery service, (iii) at the end of the third business day after the date of deposit in the United States mail, postage pre-paid, certified, return receipt requested, or (iv) if sent by facsimile or email, at the time received by the email service or facsimile machine of the receiving party if received before 5:00 p.m. (Pacific Time) on the business day received, or if received after 5:00 p.m. (Pacific Time), or if emailed or faxed on a day other than a business day (i.e., a Saturday, Sunday, or legal holiday), such notice shall be deemed delivered on the next following business day.
 
To Fund:
DLP Positive Fixed Returns Fund LLC
 
605 Palencia Club Drive
 
St. Augustine FL 32095
   
To Manager:
DLP Positive Fixed Returns Fund LLC
 
605 Palencia Club Drive
 
St. Augustine FL 32095
   
To Note Holder:
At the address set forth on the Subscription Agreement signature page executed by Note Holder.

(h)           Non-Waiver. A waiver of one or more breaches of any clause of this Agreement shall not act to waive any other breach, whether of the same or different causes.


(i)            Severability. Each clause of this Agreement is severable. If any clause is ruled void or unenforceable, then the balance of this Subscription Agreement shall nonetheless remain in effect.

(j)            Term. Unless otherwise agreed to in writing by the parties, this Agreement shall remain in full force and effect and shall not terminate.

IN WITNESS WHEREOF,
the parties have executed this Intercreditor Security Agreement as of the date first above written.

Fund:

DLP Positive Fixed Returns Fund LLC


 
 
By: DLP PFR Management LLC, Manager
 
Date
 
By: DLP Capital Partners LLC, Sole Member
     
By: DLP Real Estate Capital, Inc., Manager
     
By: Donald Wenner, President
     

Representative:

DLP PFR Management LLC


 
 
By: DLP Capital Partners LLC, Sole Member
 
Date
 
By: DLP Real Estate Capital, Inc., Manager
     
By: Donald Wenner, President 
     
 
Note Holder:


     

By:



 

   
Date
 



ex4_3.htm EXHIBIT 4.3 - PROMISSORY NOTE



Exhibit 4.3

SPECIMEN PROMISSORY NOTE
 
OPEN REDEMPTION NOTE
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE HAS BEEN ACQUIRED WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE NOTE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE FUND) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER.
 
PROMISSORY NOTE
 
DLP POSITIVE FIXED RETURNS FUND LLC
 
Note Rate:

 
     
Term:

 

FOR VALUE RECEIVED
, as of __________________, which is the Issue Date, in accordance with the terms and conditions contained in this Promissory Note (this “Note”) and that certain Subscription Agreement entered into by DLP Positive Fixed Returns Fund LLC (the “Fund”) and __________________________ (the “Note Holder”) of even date herewith, the Fund promises to pay to Note Holder in the manner described below, the outstanding Principal balance and interest thereon specified in this Note. The Manager of the Fund shall execute this Note and the Documents on behalf of the Fund.
 
All capitalized terms used but not defined in this Note have the meanings given to them in the Intercreditor Security Agreement, dated  _______, 20___, among the Fund, the Manager of the Fund and Note Holder, as amended from time to time (the “Intercreditor Agreement”), the company Operating Agreement dated January 1, 2019, as amended from time to time (“Operating Agreement”), or the Subscription Agreement (together with the Note and all other documents that the Manager determines to be necessary or desirable to be executed in connection with Note Holder’s investment, the “Documents”). This Note and the Documents, each and all, form the necessary documents for a purchase of a Note. The Note Holder shall execute each and every Document required by the Manager to effect a purchase of a Note.
 
For purposes of this Note, “Fund Assets” or “Assets” means any and all assets of the Fund including Mortgage Loans, real property, contracts or notes receivable, cash, or any other asset or receivable of the Fund, excluding any and all assets held by the Fund’s subsidiaries.
 
1.            Amount and Repayment.
 
1.1          Principal. The initial Principal of this Note is US $__________ (____________Dollars) (“Principal”). The Principal shall be adjusted by any payments in excess of accrued interest pursuant to Section 1.3(c).
 

1.2          Interest. The interest payable on this Note is ____% per annum on the outstanding Principal balance of this Note. Note interest is payable on a monthly basis.
 
1.3          Redemption; Prepayment.
 
(a)          Redemption. Note Holder may redeem this Note at any time by delivering ninety (90) days’ advance written notice to the Manager.
 
(b)          Prepayment. Prepayment of all or any portion of this Note is permitted at any time by the Fund without premium or penalty.
 
(c)          Rollover of Interest, or Reinvestment Option. Note Holder may elect to apply interest payable on this Note to increase the Principal of Note Holder’s Note.
 
1.4          Security; Credit Facilities.
 
(a)         The Fund may choose from time to time to borrow money from one or more lenders (a “Credit Facility” or “Facility”) and utilize one or more Fund Assets as collateral for any such borrowing, which Credit Facilities will be senior in priority to this Note. The Operating Agreement grants the Manager significant latitude and discretion in its ability to use Credit Facilities in the operation of the Fund.
 
(b)          Note Security. Pursuant to and as set forth in the Intercreditor Agreement, the Security for this Note is a pro-rated interest with all other Note Holders in the Fund’s Assets, except specific Assets pledged to a senior lender in connection with a Credit Facility. The Note Holder acknowledges and agrees that the Note and all related Documents are subject to and subordinate to any Credit Facilities. All Security and filings granted and made under this Note shall be held in the name of the Representative, who shall initially be the Manager. The Manager shall also have the sole discretion to appoint all successor Representatives. Such Representative or Representatives shall receive and keep record of quarterly updates and reports from the Fund, and such reports shall be available to the Note Holder from the Representative or Representatives.
 
(c)          No Assignment. The Assets of the Fund shall NOT be assigned to any Note Holder or to any Representative but shall remain in the name of the Fund. The Fund shall retain full rights in its Assets and may, without notice to or consent of Note Holder or any Representative, agree to the modification, waiver, or release of any provisions of any agreement, lien, deed of trust, mortgage, or any other Asset, consent to any action or failure to act by any obligor on any Asset, and exercise or refrain from exercising any power or right which the Fund may have under or with respect to any Asset. The Fund may manage, operate, or sell any Asset, all as exercised in the Manager’s sole discretion. Without limiting the foregoing, the Fund shall have the right, without notice to or consent from the Note Holder or any Representative, to grant any extension of time or forbearance for the performance of any obligation or condition under any Asset, which if not performed, would otherwise constitute a default or event of default under the loan or transaction documents pertaining to the Asset.
 
(e)          Document Execution. In order for this Note to be effective, the Note Holder shall execute the Documents as required by the Manager.
 
2.            Other Matters.
 
2.1          Event of Default; Remedies.
 

(a)          Event of Default. For the purposes of this Note, “Event of Default” shall mean the Fund’s failure to pay the Note Rate interest when due (including any applicable grace or cure period), or to perform or be in compliance with any of its obligations under this Note, and such Event of Default continues for more than ninety (90) days following written notice to the Manager of the default.
 
(b)          Note Holder’s Rights and Remedies Upon Event of Default.
 
(i)          General Remedies. Upon the occurrence of an Event of Default that remains uncured after ninety (90) days’ notice of default, the Note Holder may declare all obligations secured hereby immediately due and payable without notice, protest, presentment, or demand, all of which are hereby expressly waived by Fund, and may proceed to enforce payment of same and exercise any and all of the rights and remedies provided by the Uniform Commercial Code (“UCC”) as well as all other rights and remedies at law or in equity possessed by the Note Holder.
 
(ii)         No Election of Remedies. The election by the Note Holder of any right or remedy will not prevent the Note Holder from exercising any other right or remedy against Fund.
 
(iii)        Sale of Security. Any item of Security may be sold for cash or other value at public or private sale in accordance with the UCC, and the proceeds thereof collected. The Fund agrees to promptly execute and deliver, or cause to be executed and delivered, such instruments, documents, assignments, waivers, certificates, and affidavits, and to promptly supply, or cause to be supplied, such further information and to take such further action as required in connection with any such sale.
 
2.2          Assignment. This Note shall not be assigned by the Note Holder without the prior written consent of the Fund. Any purported assignment of this Note in violation of this section is null and void and shall be of no effect.
 
2.3         Expenses and Attorneys’ Fees. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery, and performance of this Note. Each party in any suit, action, or appeal filed or held concerning this Note shall be responsible for its own attorneys’ fees and shall not be responsible for the attorneys’ fees of any other party.
 
2.4          Extension. The term of this Note may be extended by the written consent of the Note Holder and the Fund, on the same terms and at the same Note Rate.
 
2.5          Amendment. This Note may be amended by the written consent of the Representative, on behalf of the Note Holder in accordance with the terms of the Intercreditor Agreement, and the Fund.
 
2.6         Governing Law. Governing Law.
This Note shall be governed by the laws of the State of Delaware without regard to conflicts of law principles. All disputes arising out of or relating to this Note, its subject matter, the performance by the parties of their obligations with respect to this Note or the claimed breach thereof, whether in tort, contract or otherwise, shall be finally resolved by binding arbitration under then-existing rules of commercial arbitration of the American Arbitration Association. Any such arbitration shall be conducted before a single arbitrator in the County of St. Johns, Florida. The award of the arbitrator, including the allocation of each party’s costs of arbitration, shall be final and conclusive, and judgment on such award may be entered and enforced by any court of competent jurisdiction.
 

2.7         Notice. All notices or other communications required or permitted by this Note must be in writing; must be delivered to the Fund and the Manager at the addresses set forth below, or any other address that a party may designate by notice to the other parties; and are considered delivered upon (i) actual receipt if delivered personally, (ii) one day after deposit with a nationally recognized overnight delivery service, (iii) at the end of the third business day after the date of deposit in the United States mail, postage pre-paid, certified, return receipt requested or (iv) if sent by facsimile or email, at the time received by the email service or facsimile machine of the receiving party if received before 5:00 p.m. (Eastern Time) on the business day received, or if received after 5:00 p.m. (Eastern Time), or if emailed or faxed on a day other than a business day (i.e., a Saturday, Sunday, or legal holiday), such notice shall be deemed delivered on the next following business day.
 
To Fund:
DLP Positive Fixed Returns Fund LLC
 
605 Palencia Club Drive
 
St. Augustine, FL 32095
   
To Manager:
DLP PFR Management LLC
 
605 Palencia Club Drive
 
St. Augustine, FL 32095

IN WITNESS WHEREOF
, the undersigned has executed this Promissory Note.

DLP Positive Fixed Returns Fund LLC


 
 
By: DLP PFR Management LLC, Manager
 
Date
 
By: DLP Capital Partners LLC, Sole Member
     
By: DLP Real Estate Capital, Inc., Manager
     
By: Donald Wenner, President
     


SPECIMEN PROMISSORY NOTE
 
FIXED MATURITY DATE
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE HAS BEEN ACQUIRED WITHOUT A VIEW TO DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS NOTE UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL FOR THE NOTE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR THE FUND) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER.
 
PROMISSORY NOTE
 
DLP POSITIVE FIXED RETURNS FUND LLC
 
Note Rate:

 
     
Term:

 
     
Maturity Date:

 
 
FOR VALUE RECEIVED
, as of __________________, which is the Issue Date, in accordance with the terms and conditions contained in this Promissory Note (this “Note”) and that certain Subscription Agreement entered into by DLP Positive Fixed Returns Fund LLC (the “Fund”) and __________________________ (the “Note Holder”) of even date herewith, the Fund promises to pay to Note Holder in the manner described below, the outstanding Principal balance and interest thereon specified in this Note. The Manager of the Fund shall execute this Note and the Documents on behalf of the Fund.
 
All capitalized terms used but not defined in this Note have the meanings given to them in the Intercreditor Security Agreement, dated  _______, 20___, among the Fund, the Manager of the Fund and Note Holder, as amended from time to time (the “Intercreditor Agreement”), the company Operating Agreement dated January 1, 2019, as amended from time to time (“Operating Agreement”), or the Subscription Agreement (together with the Note and all other documents that the Manager determines to be necessary or desirable to be executed in connection with Note Holder’s investment, the “Documents”). This Note and the Documents, each and all, form the necessary documents for a purchase of a Note. The Note Holder shall execute each and every Document required by the Manager to effect a purchase of a Note.
 
For purposes of this Note, “Fund Assets” or “Assets” means any and all assets of the Fund including Mortgage Loans, real property, contracts or notes receivable, cash, or any other asset or receivable of the Fund, excluding any and all assets held by the Fund’s subsidiaries.
 

1.            Amount and Repayment.

1.1          Principal. The initial Principal of this Note is US $__________ (____________Dollars) (“Principal”). The Principal shall be adjusted by any payments in excess of accrued interest pursuant to Section 1.3(c).
 
1.2          Interest. The interest payable on this Note is ____% per annum on the outstanding Principal balance of this Note. Note interest is payable on a monthly basis.
 
1.3          Payment; Prepayment.
 
(a)          Payments. All Principal and interest shall be paid in full on demand of the Note Holder after the Maturity Date, by delivering notice to the Fund as set forth below.
 
(b)         Cash-Out Notice. A Note Holder shall be required to provide sixty (60) days’ written notice to the Manager of Note Holder’s desire to cash-out and receive payment of outstanding principal and interest upon the Maturity Date (the “Cash-Out Notice”). If the Note Holder does not provide the Cash-Out Notice at least sixty (60) days prior to the Maturity Date, the Note upon the Maturity Date will automatically until either (i) the Note Holder notifies the Fund that it wishes for the outstanding balance of the Note to be rolled over into a new Note, based on the then current Note Schedule, and such new Note is executed, or (ii) 60 days after the Note Holder provides a Cash-Out Notice.
 
(c)          Prepayment. Prepayment of all or any portion of this Note is permitted at any time by the Fund without premium or penalty.
 
(d)          Rollover of Interest, or Reinvestment Option. Note Holder may elect to apply interest payable on this Note to increase the Principal of Note Holder’s Note.
 
1.4          Security; Credit Facilities.
 
(a)          The Fund may choose from time to time to borrow money from one or more lenders (a “Credit Facility” or “Facility”) and utilize one or more Fund Assets as collateral for any such borrowing, which Credit Facilities will be senior in priority to this Note. The Operating Agreement grants the Manager significant latitude and discretion in its ability to use Credit Facilities in the operation of the Fund.
 
(b)          Note Security. Pursuant to and as set forth in the Intercreditor Agreement, the Security for this Note is a pro-rated interest with all other Note Holders in the Fund’s Assets, except specific Assets pledged to a senior lender in connection with a Credit Facility. The Note Holder acknowledges and agrees that the Note and all related Documents are subject to and subordinate to any Credit Facilities. All Security and filings granted and made under this Note shall be held in the name of the Representative, who shall initially be the Manager. The Manager shall also have the sole discretion to appoint all successor Representatives. Such Representative or Representatives shall receive and keep record of quarterly updates and reports from the Fund, and such reports shall be available to the Note Holder from the Representative or Representatives.
 
(c)          No Assignment. The Assets of the Fund shall NOT be assigned to any Note Holder or to any Representative but shall remain in the name of the Fund. The Fund shall retain full rights in its Assets and may, without notice to or consent of Note Holder or any Representative, agree to the modification, waiver, or release of any provisions of any agreement, lien, deed of trust, mortgage, or any other Asset, consent to any action or failure to act by any obligor on any Asset, and exercise or refrain from exercising any power or right which the Fund may have under or with respect to any Asset. The Fund may manage, operate, or sell any Asset, all as exercised in the Manager’s sole discretion. Without limiting the foregoing, the Fund shall have the right, without notice to or consent from the Note Holder or any Representative, to grant any extension of time or forbearance for the performance of any obligation or condition under any Asset, which if not performed, would otherwise constitute a default or event of default under the loan or transaction documents pertaining to the Asset.
 

(e)          Document Execution. In order for this Note to be effective, the Note Holder shall execute the Documents as required by the Manager.
 
2.            Other Matters.
 
2.1          Event of Default; Remedies.
 
(a)          Event of Default. For the purposes of this Note, “Event of Default” shall mean the Fund’s failure to pay the Note Rate interest when due (including any applicable grace or cure period), or to perform or be in compliance with any of its obligations under this Note, and such Event of Default continues for more than ninety (90) days following written notice to the Manager of the default.
 
(b)          Note Holder’s Rights and Remedies Upon Event of Default.
 
(i)          General Remedies. Upon the occurrence of an Event of Default that remains uncured after ninety (90) days’ notice of default, the Note Holder may declare all obligations secured hereby immediately due and payable without notice, protest, presentment, or demand, all of which are hereby expressly waived by Fund, and may proceed to enforce payment of same and exercise any and all of the rights and remedies provided by the Uniform Commercial Code (“UCC”) as well as all other rights and remedies at law or in equity possessed by the Note Holder.
 
(ii)         No Election of Remedies. The election by the Note Holder of any right or remedy will not prevent the Note Holder from exercising any other right or remedy against Fund.
 
(iii)        Sale of Security. Any item of Security may be sold for cash or other value at public or private sale in accordance with the UCC, and the proceeds thereof collected. The Fund agrees to promptly execute and deliver, or cause to be executed and delivered, such instruments, documents, assignments, waivers, certificates, and affidavits, and to promptly supply, or cause to be supplied, such further information and to take such further action as required in connection with any such sale.
 
2.2          Assignment. This Note shall not be assigned by the Note Holder without the prior written consent of the Fund. Any purported assignment of this Note in violation of this section is null and void and shall be of no effect.
 
2.3          Expenses and Attorneys’ Fees. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery, and performance of this Note. Each party in any suit, action, or appeal filed or held concerning this Note shall be responsible for its own attorneys’ fees and shall not be responsible for the attorneys’ fees of any other party.
 
2.4          Extension. The term of this Note may be extended by the written consent of the Note Holder and the Fund, on the same terms and at the same Note Rate.
 

2.5          Amendment. This Note may be amended by the written consent of the Representative, on behalf of the Note Holder in accordance with the terms of the Intercreditor Agreement, and the Fund.
 
2.6         Governing Law.
This Note shall be governed by the laws of the State of Delaware without regard to conflicts of law principles. All disputes arising out of or relating to this Note, its subject matter, the performance by the parties of their obligations with respect to this Note or the claimed breach thereof, whether in tort, contract or otherwise, shall be finally resolved by binding arbitration under then-existing rules of commercial arbitration of the American Arbitration Association. Any such arbitration shall be conducted before a single arbitrator in the County of St. Johns, Florida. The award of the arbitrator, including the allocation of each party’s costs of arbitration, shall be final and conclusive, and judgment on such award may be entered and enforced by any court of competent jurisdiction.
 
2.7         Notice. All notices or other communications required or permitted by this Note must be in writing; must be delivered to the Fund and the Manager at the addresses set forth below, or any other address that a party may designate by notice to the other parties; and are considered delivered upon (i) actual receipt if delivered personally, (ii) one day after deposit with a nationally recognized overnight delivery service, (iii) at the end of the third business day after the date of deposit in the United States mail, postage pre-paid, certified, return receipt requested or (iv) if sent by facsimile or email, at the time received by the email service or facsimile machine of the receiving party if received before 5:00 p.m. (Eastern Time) on the business day received, or if received after 5:00 p.m. (Eastern Time), or if emailed or faxed on a day other than a business day (i.e., a Saturday, Sunday, or legal holiday), such notice shall be deemed delivered on the next following business day.
 
To Fund:
DLP Positive Fixed Returns Fund LLC
 
605 Palencia Club Drive
 
St. Augustine, FL 32095
   
To Manager:
DLP PFR Management LLC
 
605 Palencia Club Drive
 
St. Augustine, FL 32095

IN WITNESS WHEREOF
, the undersigned has executed this Promissory Note.

DLP Positive Fixed Returns Fund LLC


 

 
By: DLP PFR Management LLC, Manager
 
Date
 
By: DLP Capital Partners LLC, Sole Member
     
By: DLP Real Estate Capital, Inc., Manager
     
By: Donald Wenner, President
     



Additional Files
FileSequenceDescriptionTypeSize
0001140361-19-017021.txt   Complete submission text file   817637
$THESE

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