HomeMy WebLinkAboutCC - Operating Agreement OPERATING AGREEMENT
OF
SAGARRA PHASE I,LLC
A IDAHO LIMITED LIABILITY COMPANY
THIS OPERATING AGREEMENT is made as of May 2, 2022 by and among those
Persons (the "Members") identified in Exhibit A-1 and Exhibit A-2 (together"Exhibit A").
NOW, THEREFORE, in consideration of the mutual covenants and conditions herein, the
Members agree that, pursuant to the Act, the following shall constitute the Operating Agreement, as
amended from time-to-time., for Sagarra Phase I LLC, a Idaho limited liability company:
ARTICLE I
ORGANIZATION
Section 1.01 Formation and Qualification. The Members have formed a limited liability
company (the "Company' under the Idaho Limited Liability Company Act (the "Act") by filing a
Article of Organization with the Idaho Secretary of State.
Section 1.02 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Idaho including the Act as amended from
time-to-time.,without regard to Idaho's conflicts of laws principles. The rights and liabilities of the
Members shall be determined pursuant to the Act and this Agreement.To the extent that any
provision of this Agreement is inconsistent with any provision of the Act, this Agreement shall
govern to the extent permitted by the Act.
Section 1.03 Name. The name of the Company shall be Sagarra Phase 1,LLC."The
business of the Company may be conducted under that name or, on compliance with applicable
laws, any other name that the Members deem appropriate or advisable. The Members on behalf of
the Company shall file any certificates, articles, fictitious business name statements and the like, and
any amendments and supplements thereto, as the Members consider appropriate or advisable.
Section 1.04 Term. The term of the Company commenced on the filing of the Articles of
Organization and shall be perpetual unless dissolved as provided in this Agreement.
Section 1.05 Office and Agent.The principal office of the Company shall be at such place
or places of business within or without the State of Idaho as the Members may determine. The
Company shall continuously maintain a registered agent in the State of Idaho as required by the Act.
The registered agent shall be as stated in the Articles or as otherwise determined by the Members.
Section 1.06 Purpose of Company. The purpose of the Company shall be for the
development and sale of 64 units of residential real property located in the SW Corner of the
Orchard Park Development,in Meridian,Idaho, as is evidence in Exhibit C attached hereto. The
Company has the right: (A) to exercise all other powers necessary to reasonably be connected with
the Company's business which may legally be exercised by limited liability companies under the Act;
and (B) to engage in all activities necessary, customary, convenient or incident to any of the
foregoing.
ARTICLE II
MEMBERSHIP INTERESTS AND MANAGEMENT
Section 2.01 Initial Members. The initial Members of the Company are the Members who
are identified in Exhibit A.
Operating Agreement of Sagarra Phase 1, LLC I Page 2
Section 2.02 Classification of Membership Interests. The Company shall issue Horizontal
Membership Units ("Horizontal" or"Horizontal Units") and Vertical Membership Units ("Vertical"
or"Vertical Units"). The initial makeup of the company shall be comprised of 44.71% Horizontal
and 55.29%Vertical. The Horizontal Members shall be allocated 44.71% of the profits from the
horizontal development of the property, and the Vertical Members will be allocated 55.29% of the
profits from the horizontal development of the property. The Vertical Members will be allocated
100% of the profits of the vertical development of the property.
(a) The Horizontal Members shall be as listed on Exhibit A attached hereto,
with their respective Membership Unit Percentages reflected thereon. The Horizontal
Members shall be:
(1) Dahle Construction LLC
(2) Lakeside Capital Fund I,LLC
(3) Cosenza Capital,Inc
(b) The Vertical Members shall be as listed on Exhibit A attached hereto, with
their respective Membership Unit Percentages reflected thereon. The Vertical Members
shall be:
(1) Accomplice,LLC
(2) Lynx Investments,LLLP
Unless the context requires otherwise, in this Agreement, the terms "Member" or "Members,"
without the qualifiers "Horizontal" or "Vertical" refer to the Horizontal and Vertical Members
collectively.
Section 2.03 Percentage Ownership and Interests. A Member's Ownership Interest ("Ownership
Interest") is the total of his interests, together with all of the rights, as a Member or Manager of the
Company, that arise from such interests. The Members shall have the initial Ownership, Percentage
Ownership and Percentage Interests in the Company that are identified in Exhibit A, immediately
following the making of the capital contributions set forth therein.
Section 2.04 Liability of Members. All 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.
Section 2.05 New Members. The Members may issue additional Horizontal or Vertical Members
and thereby admit a new Member or Members, as the case may be, to the Company, only if such
new Member: (i) is approved unanimously by the Members; (ii) delivers to the Company the
required capital contribution; (iii) agrees in writing to be bound by the terms of this Agreement by
becoming a party hereto; and (iv) delivers such additional documentation as the Members shall
reasonably require to so admit such new Member to the Company. Upon the admission of a new
Member or Members, as the case may be, to the Company, the capital accounts of Members, and
the calculations that are based on the capital accounts, shall be adjusted appropriately and as
Operating Agreement of Sagarra Phase 1, LLC I Page 3
provided herein as between Horizonal and Vertical Membership.
Section 2.06 Transfer and Assignment of Interests. A Member may not sell, assign, transfer or
otherwise dispose of all or part of his Ownership Interest without first making a written offer to sell
such Ownership Interests to the other Members or the Company at a mutually agreed upon price. If
the Company or such other Members decline the purchase of the Ownership Interest within thirty
(30) days, and the sale or assignment is made and the Members fail to approve this sale or
assignment unanimously then, the purchaser or assignee shall have no right to vote nor participate in
the management of the business or other affairs of the Company. The purchaser or assignee shall
only be entitled to receive the share of the profits or other compensation by way of income and the
return of contributions to which that Member would otherwise be entitled. In the event of a
Member's bankruptcy or other involuntary transfer of interest, such as a creditor obtaining a lien or
a charging order against a Member's interest, this act shall constitute a material breach of this
Agreement by such Member. The creditor or claimant shall only be considered an Assignee and shall
have no right to become a Member or have rights to participate in the affairs of the Company nor
have the right to participate as a Member or Manager in any regard. Said creditor or claimant shall
only be entitled to receive the share of profit and losses, or the return of capital, to which the
Member would otherwise have been entitled. In the event of a charging order, bankruptcy, lien or
other involuntary transfer, the Members may unanimously elect that the Company purchase all or
any part of the Ownership Interests that are in question. The price shall be equal to one-half('/z) of
the fair market value of such Ownership Interests. Written notice of such purchase shall be provided
to the creditor or claimant within sixty (60) days.
ARTICLE III
CAPITAL ACCOUNTS
Section 3.01 Initial Capital Contributions. Each original Member to this Agreement shall make an
initial Capital Contribution to the Company in accordance with Exhibit A at the time of each
Member's execution of this Agreement. Dahle Construction LLC's capital contribution consists of
work on the project with an estimated value of$960,000. If the actual value of the work is greater
than the estimated value, then the amount over the $960,000 shall be considered a debt to the
Company,which debt shall be satisfied in the ordinary course of business, and prior to distributions
pursuant to Article IV. If the actual value of the work is less than $960,000, then Dahle
Construction LLC shall pay the Company the difference which amount shall be credited to the
Development Budget.
Section 3.02 Capital Accounts. A separate capital account shall be maintained for each Member's
ownership interest in the Horizontal Members (the "Horizontal Capital Account") and Vertical
Capital (the "Vertical Capital Account"). The capital account of each Member shall be increased by:
(i) the amount of any cash and the fair market value of any property contributed to the Company by
such Member (net of any liability secured by such contributed property that the Company is
considered to assume or take subject to), (ii) the amount of income or profits allocated to such
Member. The capital account or accounts of each Member shall be reduced by: (i) the amount of any
cash and the fair market value of any property distributed to the Member by the Company (net of
liabilities secured by such distributed property that the Member is considered to assume or take
subject to on account of his ownership interest), (ii) the amount of expenses or loss allocated to the
Member. If any property other than cash is distributed to a Member, the Capital Accounts of the
Members shall be adjusted as if the property had instead been sold by the Company for a price equal
Operating Agreement of Sagarra Phase I, LLC I Page 4
to its fair market value and the proceeds distributed. Guaranteed Payments ("Guaranteed
Payments") for salary, wages, fees, payments on loans, rents, etc., may be made to the Members.
Guaranteed Payments shall not be deemed to be distributions to the Members on account of their
Ownership Interests, and shall not be charged to the Members' capital accounts. No Member shall
be obligated to restore any negative balance in his Capital Account. No Member shall be
compensated for any positive balance in his Capital Account except as otherwise expressly provided
herein. The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with the provisions of Regulations Section
1.704-1(b)(2) and shall be interpreted and applied in a manner consistent with such Regulations. The
Members agree that the initial Capital Accounts of the Members on the date hereof are as set forth
in Exhibit A.
Section 3.03 Additional Contributions. If, at any time or times hereafter, the Members shall
determine that additional capital is required by the Company, the Members shall determine the
amount of such additional capital and the anticipated time such additional capital will be required;
whether such additional capital shall be provided by the Members by way of additional Capital
Contributions or by way of loans from Members. No Member shall be obligated, at any time, to
guarantee or otherwise assume or become liable for any obligations of the Company or to make any
additional Capital Contributions advances or loans to the Company, unless such obligations are
specifically accepted and agreed to by such Member.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
Section 4.01 Allocations of Profits and Losses. Profits and Losses, shall be allocated among the
Members as provided hereinabove. Any special allocations necessary to comply with the
requirements set forth in I.R.C. § 704 and the corresponding Regulations, including, without
limitation, the qualified income offset and minimum gain chargeback provisions contained therein,
shall be made if the Members deem these actions to be appropriate.
Section 4.02 Distributions. Subject to applicable law and any limitations elsewhere in this
Agreement, the Manager shall determine the amount and timing of all distributions of cash, or other
assets, by the Company. All distributions shall be made first to Horizontal Members until the HDP
(described below) is depleted, and then to Vertical Members in proportion to their Horizontal or
Vertical Percentage Ownership Interests as identified on Exhibit A. Once the Company has
generated revenue, the Manager shall make distributions, at its discretion, but said distributions shall
be no less frequently than quarterly, and shall be for all funds available to be distributed. All such
distributions shall be made only to the Members who, according to the books and records of the
Company, are the holders of record on the actual date of distribution. The Manager may base a
determination that a distribution of cash may be made on a balance sheet, profit and loss statement,
cash flow statement of the Company or other relevant information, however distributions by the
Company are contingent upon the payment and satisfaction of (i) construction loans; (ii) mechanic's
liens; (iii) other debt secured by the real property; or (iv) liabilities of the Company. Neither the
Company, the Manager, nor the Members shall incur any liability for making distributions.
Section 4.03 Horizontal Member and Vertical Member Distribution Rights. Distributions shall
first occur to the Horizontal Members as described in Section 4.03(a) until the HDP is depleted and
then to the Vertical Members, as described in Section 4.03(c).
Operating Agreement of Sagarra Phase 1, LLC I Page 5
(a) Upon formation of the Company, a Horizontal Distribution Pool (the "HDP") shall
be established in the amount of$3,798,939. Upon the recordation of the final plat for the project,
the HDP will increase in value by 0.583% per month, of the then current value of the HDP, until
such time as the HDP is depleted to $0.00. The HDP shall decrease in value by an amount equal to
distributions to the Horizontal Members. Dahle Construction, LLC, a Horizontal Member, may
direct the Company to create a separate Purchase Pool account which shall be utilized solely by
Dahle Construction, LLC. At Dahle Construction, LLC's direction, any distribution to it from the
HDP may be directed to the Purchase Pool, to be held for Dahle Construction, LLC's benefit. The
HDP will decrease in value by an amount equal to 44.71% of any additional expenses beyond the
budget set forth on Exhibit B attached hereto; however the HDP will also increase in value by an
amount equal to 44.71% of any net savings from the Total Development Costs set forth on the
Development Budget attached hereto as Exhibit B. (As an example, the Development Budget lists
the "Total Development Costs" as $2,623,000. If the Actual Development Costs is $3,000,000, the
HDP would decrease by $168,556.70 which is calculated as ($2,623,000-3,000,000) x .0.4471.
Alternatively, if the Actual Development Costs were $2,300,000, the HDP would increase by
$144,413.30, which is calculated as ($2,623,000-2,300,000) x 0.4471. Upon depletion of the HDP,
the Horizontal Members' interests will be redeemed by the Company, with the exception of Dahle
Construction,LLC.
(b) Dahle Construction LLC may utilize the Purchase Pool to direct the Company to
retain properties of Dahle's choosing. The retained properties shall cause the value of the Purchase
Pool to be reduced by an amount that is mutually agreeable to Dahle Construction, LLC and the
Manager, which amount shall not be less than the fair market value that a third-party would pay at
an arms-length transaction. However, Dahle Construction LLC may not direct any properties to be
retained until the HDP has been depleted. In the event the properties directed to be retained by
Dahle Construction LLC do not deplete the Purchase Pool, the remaining funds shall be distributed
to Dahle Construction LLC.
(c) Upon depletion of the HDP, all distributions will be made to Lynx Investments
LLLP until it has received$1,600,000 representing a repayment of land value.
(d) Upon depletion of the HDP, and payment to Lynx pursuant to Section 4.03(c), all
distributions will be made to the Vertical Members in proportion to their Percentage Ownership
Interests. Once all the properties have been sold or retained by the Company pursuant to Section
4.03(b), all Vertical Members'interests will be redeemed by the Company.
Section 4.04 Form of Distribution. No Member has the right to demand and receive any
distribution from the Company in any form other than money, except as provided herein or by any
Exhibit hereto, or any unanimously approved written modification hereto or thereto. No Member
may be compelled to accept from the Company a distribution of any asset in kind in lieu of a
proportionate distribution of money being made to other Members except on the dissolution and
winding up of the Company.
Operating Agreement of Sagarra Phase 1, LLC I Page 6
ARTICLE V
MEETINGS AND VOTING
Section 5.01 Notice of Meetings. If any action on the part of the Members is to be proposed at
the meeting, then written notice of the meeting must be provided to each Member not less than ten
(10) days or more than sixty (60) days prior to the meeting. Notice may be given in person, by fax,
by first class mail, or by any other written communication, charges prepaid, at the Members' address
listed in Exhibit A attached. The notice shall contain the date, time and place of the meeting and a
statement of the general nature of this business to be transacted there.
Section 5.02 Meetings. The Company shall have no predetermined annual or regular meetings of
the Members. However, any Member or Members with a collective ownership percentage of 20% or
more may call a meeting of the Members at any time. No action may be taken at a meeting that was
not proposed in the notice of the meeting, unless all Members consent unanimously. Any meeting
may be adjourned upon the vote, and subsequent approval, of the majority of the Membership
Interests represented at the meeting.
Section 5.03 Quorum. Members holding at least seventy-five percent (75%) of the Membership
Interests in the Company represented in person,by telephone or by proxy, shall constitute a quorum
at any meeting of Members. In the absence of a quorum at any such meeting, the Members may
adjourn the meeting for a period not to exceed sixty days.
Section 5.04 Voting. Voting of the Members is expressly limited as set forth herein. The
Members shall have the right to vote on the Manager. The Manager may only be removed upon
unanimous vote by the Members. The Manager, if a member, shall not be entitled to vote upon the
removal of the Manager. All Members are entitled to vote on the appointment of the replacement
manager, which vote shall be unanimous. Except as otherwise provided or permitted by this
Agreement, Members shall in all cases, in their capacity as Members of the Company, act
collectively, and, unless otherwise specified or permitted by this Agreement, only unanimously.
Except as otherwise provided or permitted by this Agreement, no Member acting individually,in his
capacity as a Member of the Company, shall have any power or authority to sign for, bind or act on
behalf of the Company in any way, to pledge the Company's credit, or to render the Company liable
for any purpose. The Members, pursuant to Idaho Code § 30-25-407, are required to unanimously
vote to: (1) undertake an act outside the ordinary course of the Company's activities and affairs; or
(2) to Amend this Operating Agreement.
ARTICLE VI
MANAGEMENT AND DUTIES
Section 6.01 Management by Manager; Election and Appointment. The Company shall be
managed by one or more Managers elected and appointed by the Members. Managers, who may be
individuals or entities, may be chosen from among the Members or may be other individuals or
entities who are not Members. The initial Manager is Accomplice, LLC, whose address is listed on
Exhibit A hereto. The Members may only replace, or elect additional Managers, as is unanimously
voted upon, however the Manager shall not have the right to vote to replace the Manager. If there
are two or more Managers one of the Managers shall be elected to take the position of Chief
Operating Manager by a majority vote of the Members. The Chief Operating Manager shall be held
responsible for managing the operations of the Company and shall carry out the decisions of the
Operating Agreement of Sagarra Phase I, LLC I Page 7
Members and the Managers. Managers shall serve until they resign or their successors are duly
elected and appointed by the Members.
Section 6.02 Delegation of Powers. The Manager(s) are authorized on the Company's behalf to
bind the Company to contracts and obligations, and to do or cause all acts to be done deemed
necessary or appropriate to carry out or further the business of the Company. In the event there are
more than one manager, all decisions and actions of the Managers shall be made by the Chief
Operating Manager. Except as otherwise provided in the Act or in this Agreement, the Managers
have in their power to authorize or decide the following: (i) employment of persons or institutions
for the operation and management of the Company affairs; (ii) execution of all checks, drafts and
money orders for the payment of Company funds; (iii) delivery and execution of promissory notes,
loans or security agreements; (iv) purchase or acquisition of Company assets; (v) sale, lease or other
disposition of Company assets; (vi) granting security interests in the Company assets in exchange for
capital; (vii) pre-payment or refinancing of any loan secured by the Company assets; and (viii)
execution and delivery of all contracts, franchise agreements, licensing agreements, assignments,
leases,and subleases which affect the Company assets.
Section 6.03 Compensation. Any Manager whom renders services to the Company shall not be
entitled to compensation., The Company shall reimburse all direct out-of-pocket expenses incurred
by the Manager(s) while managing the Company.
Section 6.04 Indemnification. Unless otherwise provided by law or expressly assumed, a person
who is a Member or Manager, or both, shall not be liable for the acts, debts, or liabilities of the
Company, except to the extent any related loss results from fraud, gross negligence or willful or
wanton misconduct on the part of such Member or the material breach of any obligation under this
Agreement or of the fiduciary duties owed to the Company or the other Members by such Member.
In addition, the Company shall, to the fullest extent allowed by law, indemnify, save and hold
harmless and pay all judgments and claims against the Members, and each of such Member's agents,
legal representatives, heirs, affiliates, successors, and/or assigns from, against, an in respect of any
and all liability, loss, damage, and expense incurred or sustained by the indemnified party in
connection with the activities of the Company or in dealing with third parties on behalf of the
Company, including all costs and attorney's fees, as incurred, and any amounts expended in the
settlement of any claims of liability,loss, or damage to the fullest extent allowed by law.
ARTICLE VII
ACCOUNTING, RECORDS,AND REPORTING
Section 7.01 Books and Records. The Company shall maintain complete and accurate accounts in
proper books of all transactions of or on behalf of the Company and shall enter or cause to be
entered therein a full and accurate account of all transactions on behalf of the Company. The
Company's books and accounting records shall be kept in accordance with such accounting
principles (which shall be consistently applied throughout each accounting period) as the Members
may determine to be convenient and advisable. The Company shall maintain at its principal office all
of the following: (i) a current list of the full name and last known business or residence address of
each Member in the Company set forth in alphabetical order, together with, for each Member, the
Capital account, including entries to these accounts for contributions and distributions; (ii) the
Ownership Interest, Percentage Ownership and Interests; (hi) a copy of the Certificate of
Formation and any and all amendments thereto together with executed copies of any powers of
Operating Agreement of Sagarra Phase I, LLC I Page 8
attorney pursuant to which the Certificate or any amendments thereto have been executed; (iv)
copies of the Company's federal, state and local income tax or information returns and reports, if
any, for the six most recent taxable years; (v) a copy of this Agreement and any and all amendments
hereto together with executed copies of any powers of attorney pursuant to which this Agreement
or any amendments thereto have been executed; (vi) copies of the financial statements of the
Company, if any, for the six most recent fiscal years and the Company's books and records as they
relate to the internal affairs of the Company for at least the current and past four fiscal years; (vii)
true and full information regarding the status of the business and financial condition of the
Company; and true and full information regarding the amount of cash and a description and
statement of the agreed value of any other property or services contributed by each Member and
which each Member has agreed to contribute in the future, and the date on which each became a
Member.
Section 7.02 Inspection of Books and Records. Each Member has the right, on reasonable request
for purposes reasonably related to the interest of the person as a Member or a Manager, to: (a)
inspect and copy during normal business hours any of the Company's records described in Section
7.1; and (b) obtain from the Company promptly after their becoming available a copy of the
Company's federal, state,and local income tax or information returns for each fiscal year.
Section 7.03 Accountings. As soon as is reasonably practicable after the close of each fiscal year,
the Members shall make or cause to be made a full and accurate accounting of the affairs of the
Company as of the close of that fiscal year and shall prepare or cause to be prepared a balance sheet
as of the end of such fiscal year, a profit and loss statement for that fiscal year and a statement of
Members' equity showing the respective Capital Accounts of the Members as of the close of such
fiscal year and the distributions,if any, to Members during such fiscal year, and any other statements
and information necessary for a complete and fair presentation of the financial condition of the
Company, all of which the Managers shall furnish to each Member. In addition, the Company shall
furnish to each Member information regarding the Company necessary for such Member to
complete such Member's federal and state income tax returns. The Company shall also furnish a
copy of the Company's tax returns to any Member requesting the same. On such accounting being
made, profits and losses during such fiscal year shall be ascertained and credited or debited, as the
case may be, in the books of account of the Company to the respective Members as herein
provided.
Section 7.04 Filings. The Members, at Company expense, shall cause the income tax returns for
the Company to be prepared and timely filed with the appropriate authorities. The Members, at
Company expense, shall also cause to be prepared and timely filed with appropriate federal and state
regulatory and administrative bodies amendments to, or restatements of, the Certificate and all
reports required to be filed by the Company with those entities under the Act or other then current
applicable laws, rules, and regulations. If the Company is required by the Act to execute or file any
document and fails, after demand, to do so within a reasonable period of time or refuses to do so,
any Member may prepare, execute and file that document with the Idaho Secretary of State.
Section 7.05 Bank Accounts. The Company shall maintain its funds in one or more separate bank
accounts in the name of the Company, and shall not permit the funds of the Company to be co-
mingled in any fashion with the funds of any other Person.
Section 7.06 Partnership Representative. The Members may,in their exclusive discretion, appoint,
Operating Agreement of Sagarra Phase 1, LLC I Page 9
remove and replace a Partnership Representative at any time or times. The Members shall from
time-to-time. cause the Company to make such tax elections as they deem to be in the interests of
the Company and the Members generally. The Partnership Representative, as described in I.R.C. 5
6223(a), shall represent the Company (at the Company's expense) in connection with all
examinations of the Company's affairs by tax authorities, including resulting judicial and
administrative proceedings, and shall expend the Company funds for professional services and costs
associated therewith.
ARTICLE VIII
DISSOLUTION AND WINDING UP
Section 8.01 Dissolution. The Company shall be dissolved, its assets shall be disposed of, and its
affairs wound up on the first to occur of. the entry of a decree of judicial dissolution pursuant to the
Act; or the unanimous approval of the Members.
Section 8.02 Winding Up. On the occurrence of an event specified in Section 8.01, the Company
shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its
assets and satisfying the claims of its creditors. The Members shall be responsible for overseeing the
winding up and liquidation of Company, shall take full account of the assets and liabilities of
Company, shall cause such assets to be sold or distributed, and shall cause the proceeds therefrom,
to the extent sufficient therefor, to be applied and distributed as provided in Section 8.04. The
Members shall give written notice of the commencement of winding up by mail to all known
creditors and claimants whose addresses appear on the records of the Company. The Members shall
be entitled to reasonable compensation for such services.
Section 8.03 Distributions in Kind. Any noncash assets distributed to the Members shall first be
valued at their fair market value to determine the profit or loss that would have resulted if such
assets were sold for such value. Such profit or loss shall then be allocated pursuant to this
Agreement, and the Members' Capital Accounts shall be adjusted to reflect such allocations. The
amount distributed and charged against the Capital Account of each Member receiving an interest in
a distributed asset shall be the fair market value of such interest (net of any liability secured by such
asset that such Member assumes or takes subject to). The fair market value of such asset shall be
determined by the Members, or if any Member objects, by an independent appraiser (and any such
appraiser must be recognized as an expert in valuing the type of asset involved) selected by a
Majority of the Members.
Section 8.04 Order of Payment of Liabilities on Dissolution. After a determination that all known
debts and liabilities of the Company in the process of winding up, including, without limitation,
debts and liabilities to Members who are creditors of the Company, have been paid or adequately
provided for, the remaining assets shall be distributed to the Members in proportion to their positive
Capital Account balances, after taking into account profit and loss allocations for the Company's
taxable year during which liquidation occurs.
Section 8.05 Adequacy of Payment. The payment of a debt or liability, whether the whereabouts
of the creditor is known or unknown, shall have been adequately provided for if payment thereof
shall have been assumed or guaranteed in good faith by one or more financially responsible Persons
or by the United States government or any agency thereof, and the provision, including the financial
responsibility of the Person,was determined in good faith and with reasonable care by the Members
Operating Agreement of Sagarra Phase I,LLC I Page 10
to be adequate at the time of any distribution of the assets pursuant to this Section. This Section
shall not prescribe the exclusive means of making adequate provision for debts and liabilities.
Section 8.06 Compliance with Regulations. All payments to the Members on the winding up and
dissolution of Company shall be strictly in accordance with the positive capital account balance
limitation and other requirements of Regulations Section 1.704-1(b)(2)(ii)(d), as the Members deem
appropriate.
Section 8.07 Limitations on Payments Made in Dissolution. Except as otherwise specifically
provided in this Agreement, each Member shall only be entitled to look solely to the assets of the
Company for the return of such Member's positive Capital Account balance and shall have no
recourse for such Member's Capital Contribution or share of profits (on dissolution or otherwise)
against any other Member.
Section 8.08 Certificate of Cancellation. The Members conducting the winding up of the affairs of
the Company shall cause to be filed in the office of, and on a form prescribed by the Idaho Secretary
of State, a certificate of cancellation of the Certificate on the completion of the winding up of the
affairs of the Company.
ARTICLE IX
EXCULPATION AND INDEMNIFICATION
Section 9.01 Exculpation of Members. No Member shall be liable to the Company or to the other
Members for damages or otherwise with respect to any actions taken or not taken in good faith and
reasonably believed by such Member to be in or not opposed to the best interests of the Company,
except to the extent any related loss results from fraud, gross negligence or willful or wanton
misconduct on the part of such Member or the material breach of any obligation under this
Agreement or of the fiduciary duties owed to the Company or the other Members by such Member.
Section 9.02 Indemnification by Company. The Company shall indemnify, hold harmless and
defend the Members,in their capacity as Members,Managers, or Officers, from and against any loss,
expense, damage or injury suffered or sustained by them by reason of any acts or omissions arising
out of their activities on behalf of the Company or in furtherance of the interests of the Company,
including but not limited to any judgment, award, settlement, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any actual or threatened action,
proceeding or claim, if the acts or omissions were not performed or omitted fraudulently or as a
result of gross negligence or willful misconduct by the indemnified party. Reasonable expenses
incurred by the indemnified party in connection with any such proceeding relating to the foregoing
matters may be paid or reimbursed by the Company in advance of the final disposition of such
proceeding upon receipt by the Company of. (i) written affirmation by the Person requesting
indemnification of its good-faith belief that it has met the standard of conduct necessary for
indemnification by the Company; and (ii) a written undertaking by or on behalf of such Person to
repay such amount if it shall ultimately be determined by a court of competent jurisdiction that such
Person has not met such standard of conduct, which undertaking shall be an unlimited general
obligation of the indemnified party but need not be secured.
Section 9.03 Insurance. The Company shall have the power to purchase and maintain insurance
on behalf of any Person who is or was a Member or an agent of the Company against any liability
Operating Agreement of Sagarra Phase 1, LLC I Page 11
asserted against such Person and incurred by such Person in any such capacity, or arising out of such
Person's status as a Member or an agent of the Company,whether or not the Company would have
the power to indemnify such Person against such liability under Section 10.1 or under applicable
law.
ARTICLE X
MISCELLANEOUS
Section 10.01 Authority. This Agreement constitutes a legal, valid, and binding agreement of the
Member, enforceable against the Member in accordance with its terms. The Member is empowered
and duly authorized to enter into this Agreement (including the power of attorney herein) under
every applicable governing document, partnership agreement, trust instrument, pension plan,
charter, certificate of incorporation, bylaw provision, or the like. The Person, if any, signing this
Agreement on behalf of the Member is empowered and duly authorized to do so by the governing
document or trust instrument, pension plan, charter, certificate of incorporation, bylaw provision,
board of directors or stockholder resolution or the like.
Section 10.02 Indemnification by the Members. Each Member hereby agrees to indemnify and
defend the Company, the other Members and each of their respective employees, agents, partners,
members, shareholders, officers and directors and hold them harmless from and against any and all
claims, liabilities, damages, costs, and expenses (including, without limitation, court costs and
attorney's fees and expenses) suffered or incurred on account of or arising out of any breach of this
Agreement by that Member.
Section 10.03 Disputes among Members. The Members agree that in the event of any dispute or
disagreement solely between or among any of them arising out of, relating to or in connection with
this Agreement or the Company or its organization, formation, business or management ("Member
Dispute"), the Members shall use their best efforts to resolve any dispute arising out of or in
connection with this Agreement by good-faith negotiation and mutual agreement. The Members
shall meet at a mutually convenient time and place to attempt to resolve any such dispute. However,
in the event that the Members are unable to resolve any Member Dispute, such parties shall first
attempt to settle such dispute through a nonbinding mediation proceeding. In the event any party to
such mediation proceeding is not satisfied with the results thereof, then any unresolved disputes
shall be finally settled in accordance with an appropriate judicial proceeding with jurisdiction and
venue in Ada County, Idaho.
Section 10.04 Notices. Except as otherwise expressly provided herein, any notice, consent,
authorization or other communication to be given hereunder shall be in writing and shall be deemed
duly given and received when delivered personally, when transmitted by facsimile if receipt is
acknowledged by the addressee, one business day after being deposited for next-day delivery with a
nationally recognized overnight delivery service, or three business days after being mailed by first
class mail, charges and postage prepaid, properly addressed to the party to receive such notice at the
address set forth in the Company's records.
Section 10.05 Severability. If any provision of this Agreement, or the application of such provision
to any Person or circumstance, shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held to be invalid or unenforceable, shall not be
Operating Agreement of Sagarra Phase I, LLC I Page 12
affected thereby.
Section 10.06 Binding Effect. Subject to Section 2.07, this Agreement shall bind and inure to the
benefit of the parties and their respective Successors.
Section 10.07 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
Section 10.08 Entire Agreement. This Agreement contains the entire agreement of the parties and
supersedes all prior or contemporaneous written or oral negotiations, correspondence,
understandings and agreements between or among the parties, regarding the subject matter hereof.
Section 10.09 Further Assurances. Each Member shall provide such further information with
respect to the Member as the Company may reasonably request, and shall execute such other and
further certificates,instruments and other documents, as may be necessary and proper to implement,
complete and perfect the transactions contemplated by this Agreement.
Section 10.10 Headings; Gender; Number; References. The headings of the Sections hereof are
solely for convenience of reference and are not part of this Agreement. As used herein, each gender
includes each other gender, the singular includes the plural and vice versa, as the context may
require. All references to Sections and subsections are intended to refer to Sections and subsections
of this Agreement, except as otherwise indicated.
Section 10.11 Parties in Interest. Except as expressly provided in the Act, nothing in this
Agreement shall confer any rights or remedies under or by reason of this Agreement on any Persons
other than the Members and their respective Successors nor shall anything in this Agreement relieve
or discharge the obligation or liability of any third Person to any party to this Agreement, nor shall
any provision give any third Person any right of subrogation or action over or against any party to
this Agreement.
Section 10.12 Amendments. All amendments to this Agreement shall be in writing and signed by
all of the Members to the agreement at the time of the amendment.
Section 10.13 Attorneys' Fees. In any dispute between or among the Company and one or more of
the Members, including, but not limited to, any Member Dispute, the prevailing party or parties in
such dispute shall be entitled to recover from the nonprevailing party or parties all reasonable fees,
costs and expenses including, without limitation, attorneys' fees, costs and expenses, all of which
shall be deemed to have accrued on the commencement of such action, proceeding or arbitration.
Attorneys' fees shall include, without limitation, fees incurred in any post-award or post-judgment
motions or proceedings, contempt proceedings, garnishment, levy, and debtor and third party
examinations, discovery, and bankruptcy litigation, and prevailing party shall mean the party that is
determined in the arbitration, action or proceeding to have prevailed or who prevails by dismissal,
default or otherwise.
Section 10.14 Remedies Cumulative. Subject to Section 10.03, remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any Member may be lawfully entitled.
Section 10.15 Jurisdiction and Venue/Equitable Remedies. The Company and each Member
Operating Agreement of Sagarra Phase 1, LLC I Page 13
hereby expressly agrees that if, under any circumstances, any dispute or controversy arising out of or
relating to or in any way connected with this Agreement shall, notwithstanding Section 10.3, be the
subject of any court action at law or in equity, such action shall be filed exclusively in the courts of
the State of Idaho or of the United States of America located in the county of Ada as selected by the
Member that is the plaintiff in the action, or that initiates the proceeding or arbitration. Each
Member agrees not to commence any action, suit or other proceeding arising from, relating to, or in
connection with this Agreement except in such a court and each Member irrevocably and
unconditionally consents and submits to the personal and exclusive jurisdiction of such courts for
the purposes of litigating any such action, and hereby grants jurisdiction to such courts and to any
appellate courts having jurisdiction over appeals from such courts or review of such proceedings.
Because the breach of the provisions of this Section would cause irreparable harm and significant
injury to the Company and the other Members,which would be difficult to ascertain and which may
not be compensable by damages alone, each Member agrees that the Company and the other
Members will have the right to enforce the provisions of this Section by injunction, specific
performance or other equitable relief in addition to any and all other remedies available to such party
or parties without showing or proving any actual damage to such parties. Members will be entitled to
recover all reasonable costs and expenses, including but not limited to all reasonable attorneys' fees,
expert and consultants' fees,incurred in connection with the enforcement of this Section.
Section 10.16 Exhibits. Attached hereto as Exhibit A is a listing of the Members. Attached hereto
as Exhibit B is the Development Budget. These documents are incorporated herein.
IN WITNESS WHEREOF, this Limited Liability Company Operating Agreement has been duly
executed by or on behalf of the parties hereto as of the date first above written.
DAHLE CONSTRUCTION,LLC ACCOMPLICE,LLC
CAAbok Mce�S&";w
Charles La Moure(May 19,2022 22:53 MDT) Michael 5lavin(May 9,2022 08:47 MDT)
By: Charles LaMoure By: MichaelSlavin
Its: CFO Its: Managing Member
LAKESIDE CAPITAL FUND I,LLC LYNX INVESTMENTS,LLLP
X�zth gelf R-efta
Kathleen Presta(May 10,202212:36 CDT) Joe fivarie(May 6,202217:24 MDT)
By: Kathleen Presta By: Joe Huarte
Its: Managing Member Its: General Partner
COSENZA CAPITAL, INC
I(W&eelf R-2ft61
Kathleen Presta(May 10,202212:36 CDT)
By: Kathleen Presta
Its: President
Operating Agreement of Sagarra Phase I, LLC Page 14
EXHIBIT A
LLC HORIZONTAL MEMBERS AND INITIAL CONTRIBUTIONS
Name &Address Initial Contribution Membership Horizontal
Membership
Interest
Dahle Construction LLC Construction Services Horizontal 51.62%
90 HWY 93 North valued at$960,000.00 Member
Salmon,ID 83647
Cosenza Capital, Inc. $0.00 Horizontal 12.71%
108 Syrah Circle Member
Lakeway,Texas 78738
Lakeside Capital Fund 1, $900,000 in U.S. Money Horizontal 35.68%
LLC. Member
108 Syrah Circle
Lakeway,Texas 78738
LLC VERTICAL MEMBERS AND INITIAL CONTRIBUTIONS
Name &Address Initial Contribution Membership Membership
Interest
Accomplice,LLC $0.00 Vertical Member 60.0%
408 S. Eagle Road, Ste.
208
Eagle, ID 83616
Lynx Investments,LLLP Real Property valued at Vertical Member 40.0%
198 N Al Fresco PI $1,600,000.
Boise, ID 83712
Operating Agreement of Sagarra Phase I, LLC I Page 15
EXHIBIT B
DEVELOPMENT BUDGET
Dahle Construction - $900,000
Underground Work
Nampa Paving-Horizontal $650,000
Construction
Engineering& Other Soft $850,000
Costs
Nampa Paving Interest Costs $58,000
Total Development Costs (with $2,458,500
interest)
Operating Agreement of Sagarra Phase 1, LLC Page 16
EXHIBIT C
PROPERTY DESCRIPTION/DRAWINGS
J
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FUN�ion I - 1 '1 i � 0 0 0 0 0 � � �'Z►
lA 7' wince
90
s
i. 1 . io s 1 ire ' aS emu,-°
al LA �s-4-7 ,a
ea
Operating Agreement of Sagarra Phase I, LLC Page 17
Sagarra Phase I , LLC. OA v2.7 clean
Final Audit Report 2022-05-20
Created: 2022-05-06
By: scott presta(scott@bbldata.com)
Status: Signed
Transaction ID: CBJCHBCAABAALuv7XL7zF6zvJNt6eSB5ux9Y6XEtBb-H
"Sagarra Phase I, LLC. OA v2.7 clean" History
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