HomeMy WebLinkAboutCC - Articles of Incorporation Elevate Homes LIMITED LIABILITY COMPANY AGREEMENT
among
ELEVATE HOMES, LLC
and
THE MEMBERS NAMED HEREIN
dated as of
February 3,2022
This Limited Liability Company Agreement of ELEVATE HOMES, LLC, a Wyoming limited liability
company (the "Company"), is entered into as of February 3, 2022 by and among the Company, the
Members executing this Agreement as of the date hereof 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.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.Capitalized terms used herein and not otherwise defined will have the
meanings set forth in this Section 1.01:
"Acceptance Notice"has the meaning set forth in Section 9.01(d).
"Adjusted Capital Account Deficit" means, with respect to any Member, the deficit balance, if
any, in such Member's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the
following adjustments:
(a) crediting to such Capital Account any amount which such Member is obligated to
restore or is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-
l(b)(2)(ii)(c), 1.704-2(g)(1)and 1.704-2(i); and
(b) debiting to such Capital Account the items described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and(6).
"Adjusted Taxable Income" of a Member for a Fiscal Year (or portion thereof) with respect to
Units held by such Member means the federal taxable income allocated by the Company to the Member
with respect to such Units(as adjusted by any final determination in connection with any tax audit or other
proceeding)for such Fiscal Year(or portion thereof);provided,that such taxable income will be computed
(i)minus any excess taxable loss or excess taxable credits of the Company for any prior period allocable to
such Member with respect to such Units that were not previously taken into account for purposes of
determining such Member's Adjusted Taxable Income in a prior Fiscal Year to the extent such loss or credit
would be available under the Code to offset income of the Member(or,as appropriate,the direct or indirect
members of the Member) determined as if the income, loss, and credits from the Company were the only
income,loss,and credits of the Member(or,as appropriate,the direct or indirect members of the Member)
in such Fiscal Year and all prior Fiscal Years,and(ii)taking into account any special basis adjustment with
respect to such Member resulting from an election by the Company under Code Section 754.
"Affiliate" means, with respect to any Person, any other Person who, directly or indirectly
(including through one or more intermediaries),controls,is controlled by,or is under common control with,
such Person.For purposes of this definition,"control,"when used with respect to any specified Person,will
mean the power, direct or indirect,to direct or cause the direction of the management and policies of such
Person, whether through ownership of voting securities or partnership or other ownership interests, by
contract or otherwise; and the terms"controlling"and"controlled"will have correlative meanings.
"Agreement" means this Limited Liability Company Agreement, as executed and as it may be
amended,modified, supplemented or restated from time to time, as provided herein.
"Applicable Law" means all applicable provisions of (a) constitutions, treaties, statutes, laws
(including the common law),rules,regulations, decrees, ordinances, codes,proclamations, declarations or
orders of any Governmental Authority; (b)any consents or approvals of any Governmental Authority; and
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(c) any orders, decisions, advisory or interpretative opinions, injunctions,judgments, awards, decrees of,
or agreements with, any Governmental Authority.
"Applicable Offered Common Units"has the meaning set forth in Section 9.03(a)(ii).
"Applicable Offered Units"has the meaning set forth in Section 9.03(a)(ii).
"Applicable Pro Rata Portion"means:
(a) for purposes of Section 9.01, a Member's Common Pro Rata Portion of any New
Common Securities proposed to be issued or sold by the Company; and
(b) for purposes of Section 9.03,a Member's Common Pro Rata Portion of any Offered
Common Units proposed to be Transferred by an Offering Member.
"Applicable ROFR Rightholders"has the meaning set forth in Section 9.03(a)(ii).
"Award Agreements"has the meaning set forth in Section 3.03(a).
"Bankruptcy" means, with respect to a Member, the occurrence of any of the following: (a) the
filing of an application by such Member for,or a consent to,the appointment of a trustee of such Member's
assets; (b)the filing by such Member of a voluntary petition in bankruptcy or the filing of a pleading in any
court of record admitting in writing such Member's inability to pay its debts as they come due; (c) the
making by such Member of a general assignment for the benefit of such Member's creditors; (d)the filing
by such Member of an answer admitting the material allegations of, or such Member's consenting to, or
defaulting in answering a bankruptcy petition filed against such Member in any bankruptcy proceeding; or
(e) the expiration of sixty (60) days following the entry of an order,judgment or decree by any court of
competent jurisdiction adjudicating such Member a bankrupt or appointing a trustee of such Member's
assets.
"BBA"means the Bipartisan Budget Act of 2015.
"Board"has the meaning set forth in Section 8.01.
"Book Depreciation" means, with respect to any Company asset for each Fiscal Year, the
Company's depreciation,amortization,or other cost recovery deductions determined for federal income tax
purposes, except that if the Book Value of an asset differs from its adjusted tax basis at the beginning of
such Fiscal Year,Book Depreciation will be an amount which bears the same ratio to such beginning Book
Value as the federal income tax depreciation,amortization,or other cost recovery deduction for such Fiscal
Year bears to such beginning adjusted tax basis;provided,that if the adjusted basis for federal income tax
purposes of an asset at the beginning of such Fiscal Year is zero and the Book Value of the asset is positive,
Book Depreciation will be determined with reference to such beginning Book Value using any permitted
method selected by the Board in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3).
"Book Value" means, with respect to any Company asset, the adjusted basis of such asset for
federal income tax purposes, except as follows:
(a) the initial Book Value of any Company asset contributed by a Member to the
Company will be the gross Fair Market Value of such Company asset as of the date of such
contribution;
(b) immediately prior to the Distribution by the Company of any Company asset to a
Member,the Book Value of such asset will be adjusted to its gross Fair Market Value as of the date
of such Distribution;
(c) the Book Value of all Company assets will be adjusted to equal their respective
gross Fair Market Values, as determined by the Board, as of the following times:
(i) the acquisition of an additional Membership Interest in the Company by a
new or existing Member in consideration of a Capital Contribution of more than a de
minimis amount;
(ii) the Distribution by the Company to a Member of more than a de minimis
amount of property (other than cash) as consideration for all or a part of such Member's
Membership Interest in the Company;
(iii) the grant to a Service Provider of any Incentive Units; and
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(iv) the liquidation of the Company within the meaning of Treasury
Regulations Section 1.704-1(b)(2)(ii)(g);
provided,that an adjustment pursuant to clauses(i), (ii), or(iii)above need not be
made if the Board reasonably determines that such adjustment is not necessary or appropriate to
reflect the relative economic interests of the Members and that the absence of such adjustment does
not adversely and disproportionately affect any Member;
(d) the Book Value of each Company asset will be increased or decreased,as the case
may be, to reflect any adjustments to the adjusted tax basis of such Company asset pursuant to
Code Section 734(b)or Code Section 743(b),but only to the extent that such adjustments are taken
into account in determining Capital Account balances pursuant to Treasury Regulations 1.704-
1(b)(2)(iv)(m);provided, that Book Values will not be adjusted pursuant to this Section 1.01(d)to
the extent that an adjustment pursuant to Section 1.01(c) above is made in conjunction with a
transaction that would otherwise result in an adjustment pursuant to this Section 1.01(d); and
(e) if the Book Value of a Company asset has been determined pursuant to Section
1.01(a) or adjusted pursuant to Section 1.01(c) or Section 1.01(d) above, such Book Value will
thereafter be adjusted to reflect the Book Depreciation taken into account with respect to such
Company asset for purposes of computing Net Income and Net Losses.
"Budget"has the meaning set forth in Section 12.03.
"Business Day" means a day other than a Saturday, Sunday, or other day on which commercial
banks in the City of New York are authorized or required to close.
"Call Purchase Price" means the Cause Purchase Price or Fair Market Value, as applicable
pursuant to this Agreement.
"Capital Account"has the meaning set forth in Section 5.03.
"Capital Contribution" means, for any Member, the total amount of cash and cash equivalents
and the Book Value of any property contributed to the Company by such Member.
"Cause,"with respect to any particular Service Provider,has the meaning set forth in any effective
Award Agreement, employment agreement, or other written contract of engagement entered into between
the Company and such Service Provider, or if none,then"Cause"means any of the following:
(a) such Service Provider's repeated failure to perform substantially his duties as an
employee or other associate of the Company or any of the Company Subsidiaries (other than any
such failure resulting from his Disability) which failure, whether committed willfully or
negligently, has continued unremedied for more than thirty (30) days after the Company has
provided written notice thereof,provided,that a failure to meet financial performance expectations
will not,by itself,constitute a failure by the Service Provider to substantially perform his duties;
(b) such Service Provider's fraud or embezzlement;
(c) such Service Provider's material dishonesty or breach of fiduciary duty against the
Company or any of the Company Subsidiaries;
(d) such Service Provider's willful misconduct or gross negligence which is injurious
to the Company or any of the Company Subsidiaries;
(e) any conviction of, or the entering of a plea of guilty or nolo contendere to,a crime
that constitutes a felony(or any state-law equivalent)or that involves moral turpitude,or any willful
or material violation by such Service Provider of any federal, state, or foreign securities laws;
(f) any conviction of any other criminal act or act of material dishonesty, disloyalty,
or misconduct by such Service Provider that has a material adverse effect on the property,
operations,business, or reputation of the Company or any of the Company Subsidiaries;
(g) the unlawful use (including being under the influence) or possession of illegal
drugs by such Service Provider on the premises of the Company or any of the Company
Subsidiaries while performing any duties or responsibilities with the Company or any of the
Company Subsidiaries;
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(h) the material violation by such Service Provider of any rule or policy of the
Company or any of the Company Subsidiaries; or
(i) the material breach by such Service Provider of any covenant undertaken in
ARTICLE X herein,any effective Award Agreement, employment agreement, or any written non-
disclosure, non-competition, or non-solicitation covenant or agreement with the Company or any
of the Company Subsidiaries.
"Cause Purchase Price"has the meaning set forth this Agreement.
"Certificate of Formation"has the meaning set forth in the Recitals.
"Change of Control"means: (a)the sale of all or substantially all of the consolidated assets of the
Company and the Company Subsidiaries to a Third Party Purchaser; (b) a sale resulting in no less than a
majority of the Common Units on a Fully Diluted Basis being held by a Third Party Purchaser; or (c) a
merger, consolidation, recapitalization, or reorganization of the Company with or into a Third Party
Purchaser that results in the inability of the Members to designate or elect a majority of the Managers (or
the board of directors(or its equivalent)of the resulting entity or its parent company).
"Code"means the Internal Revenue Code of 1986, as amended.
"Common Pro Rata Portion"means:
(a) for purposes of this Agreement,with respect to any Pre-Emptive Member holding
Common Units, on any issuance date for New Common Securities, a fraction determined by
dividing (i) the number of Common Units on a Fully Diluted Basis owned by such Pre-Emptive
Member immediately prior to such issuance by(ii) the total number of Common Units on a Fully
Diluted Basis held by the Members on such date immediately prior to such issuance; and
(b) for purposes of Section 9.03, with respect to an Applicable ROFR Rightholder
holding Common Units, on any date of a proposed Transfer by an Offering Member, a fraction
determined by dividing (i)the number of Common Units on a Fully Diluted Basis owned by such
Applicable ROFR Rightholder immediately prior to such Transfer by (ii) the total number of
Common Units on a Fully Diluted Basis held by the Members on such date immediately prior to
such Transfer.
"Common Units"means the Units having the privileges,preference,duties,liabilities,obligations,
and rights specified with respect to"Common Units"in this Agreement.
"Company"has the meaning set forth in the Preamble.
"Company Interest Rate"has the meaning set forth in Section 7.05(c).
"Company Minimum Gain" means "partnership minimum gain" as defined in Treasury
Regulations Section 1.704-2(b)(2), substituting the term "Company" for the term "partnership" as the
context requires.
"Company Opportunity"has the meaning set forth in Section 10.03.
"Company Option Period"has the meaning set forth in Section 9.03(d)(iii).
"Company ROFR Exercise Notice"has the meaning set forth in Section 9.03(d)(iii).
"Company Subsidiary"means a Subsidiary of the Company.
"Competitor"has the meaning set forth in Section 10.01(a).
"Confidential Information"has the meaning set forth in Section 10.01(a).
"Covered Person"has the meaning set forth in Section 13.01(a).
"Act" means the Laws of the State of Wyoming, including the Wyoming Limited Liability
Company Act, Chapter 17.29, et seq., and any successor statute, as it may be amended from time to time.
"Disability"with respect to any Service Provider,has the meaning set forth in any effective Award
Agreement, employment agreement, or other written contract of engagement entered into between the
Company and such Service Provider,or if none,then"Disability"means such Service Provider's incapacity
due to physical or mental illness that: (a) will have prevented such Service Provider from performing his
duties for the Company or any of the Company Subsidiaries on a full-time basis for ninety (90)or more
consecutive days or an aggregate of one hundred eighty (180) days in any 365-day period; or (b)(i) the
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Board determines, in compliance with Applicable Law, is likely to prevent such Service Provider from
performing such duties for such period of time and(ii)thirty(30)days have elapsed since delivery to such
Service Provider of the determination of the Board and such Service Provider has not resumed such
performance(in which case the date of termination in the case of a termination for"Disability"pursuant to
this clause(b)will be deemed to be the last day of such 30-day period).
"Distribution"means a distribution made by the Company to a Member,whether in cash,property,
or securities of the Company and whether by liquidating distribution or otherwise;provided, that none of
the following will be a Distribution: (a)any redemption or repurchase by the Company or any Member of
any Units or Unit Equivalents; (b) any recapitalization or exchange of securities of the Company; (c) any
subdivision(by a split of Units or otherwise) or any combination(by a reverse split of Units or otherwise)
of any outstanding Units; or(d) any fees or remuneration paid to any Member in such Member's capacity
as a Service Provider for the Company or a Company Subsidiary. "Distribute" when used as a verb will
have a correlative meaning.
"Electronic Transmission"means any form of communication not directly involving the physical
transmission of paper that creates a record that may be retained, retrieved, and reviewed by a recipient
thereof and that may be directly reproduced in paper form by such a recipient through an automated process.
"Estimated Tax Amount" of a Member for a Fiscal Year means the Member's Tax Amount for
such Fiscal Year as estimated in good faith from time to time by the Board. In making such estimate, the
Board will take into account amounts shown on Internal Revenue Service Form 1065 filed by the Company
and similar state or local forms filed by the Company for the preceding taxable year and such other
adjustments as in the reasonable business judgment of the Board are necessary or appropriate to reflect the
estimated operations of the Company for the Fiscal Year.
"Excess Amount"has the meaning set forth in Section 7.04(c).
"Exercise Period"has the meaning set forth in this Agreement.
"Exercising Member"has the meaning set forth in this Agreement.
"Fair Market Value" of any asset as of any date means the purchase price that a willing buyer
having all relevant knowledge would pay a willing seller for such asset in an arm's length transaction, as
determined in good faith by the Board based on such factors as the Board, in the exercise of its reasonable
business judgment, considers relevant.
"Family Members"has the meaning set forth in Section 9.02(b).
"Financing Document"means any credit agreement, guarantee, financing, or security agreement
or other agreements or instruments governing indebtedness of the Company or any of the Company
Subsidiaries.
"Fiscal Year"means the calendar year,unless the Company is required to have a taxable year other
than the calendar year, in which case Fiscal Year will be the period that conforms to its taxable year.
"Forfeiture Allocations"has the meaning set forth in Section 6.02(e).
"Fully Diluted Basis"means, as of any date of determination, (a)with respect to all the Units, all
issued and outstanding Units of the Company and all Units issuable upon the exercise of any outstanding
Unit Equivalents as of such date,whether or not such Unit Equivalent is at the time exercisable,or(b)with
respect to any specified type, class, or series of Units, all issued and outstanding Units designated as such
type, class, or series and all such designated Units issuable upon the exercise of any outstanding Unit
Equivalents as of such date,whether or not such Unit Equivalent is at the time exercisable.
"GAAP"means United States generally accepted accounting principles in effect from time to time.
"Good Reason,"with respect to any Service Provider, has the meaning set forth in any effective
Award Agreement, employment agreement, or other written contract of engagement entered into between
the Company and such Service Provider, or if none, then "Good Reason" means any of the following
actions taken without the Service Provider's written consent:
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(a) a material reduction in the Service Provider's base salary or the Service Provider's
ability to participate in Company incentive or bonus plans (other than a general reduction in base
salary or bonuses that affects all salaried Service Providers equally);
(b) the failure by the Company to pay to the Service Provider any material portion of
the salary,bonus, or other benefits owed to such Service Provider;
(c) a substantial adverse change in the Service Provider's duties and responsibilities or
a material diminution in the Service Provider's title,responsibility, or authority; or
(d) a transfer of the Service Provider's primary workplace by more than fifty(50)miles
from the current workplace;
provided, that Good Reason will not be deemed to exist unless (a) the Company fails to cure the
event giving rise to Good Reason within thirty (30) days after written notice thereof given by the Service
Provider to the Board, which notice will (i) be delivered to the Board no later than twenty (20) days
following the Service Provider's initial detection of the condition, and (ii) specifically set forth the nature
of such event and the corrective action reasonably sought by the Service Provider; and (b) the Service
Provider terminates his employment within thirty (30) days following the last day of the foregoing cure
period.
"Governmental Authority" means any federal, state, local, or foreign government or political
subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any
self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority
(to the extent that the rules,regulations, or orders of such organization or authority have the force of law),
or any arbitrator, court, or tribunal of competent jurisdiction.
"Incentive Liquidation Value" means, as of the date of determination and with respect to the
relevant new Incentive Units to be issued,the aggregate amount that would be Distributed to the Members
pursuant to Section 7.02, if, immediately prior to the issuance of the relevant new Incentive Units, the
Company sold all of its assets for Fair Market Value and immediately liquidated,the Company's debts and
liabilities were satisfied, and the proceeds of the liquidation were Distributed pursuant to Section 12.03(c).
"Incentive Plan"has the meaning set forth in Section 3.03(a).
"Incentive Units"means the Units having the privileges,preference,duties,liabilities,obligations,
and rights specified with respect to "Incentive Units" in this Agreement and includes both Restricted
Incentive Units and Unrestricted Incentive Units.
"Initial Cost"means,with respect to any Unit,the purchase price paid to the Company with respect
to such Unit by the Member to whom such Unit was originally issued.
"Initial Management Member"means each Person identified as a Management Member as of the
date hereof.
"Initial Member"has the meaning set forth in the term Member.
"Issuance Notice"has the meaning set forth in this Agreement.
"Joinder Agreement" means the joinder agreement in form and substance attached hereto as
Exhibit A.
"Liquidator"has the meaning set forth in Section 12.03(a).
"Losses"has the meaning set forth in Section 13.03(a).
"Management Member"means any Member that is also a Manager.
"Manager"has the meaning set forth in Section 8.01.
"Member" means (a) each Person identified on the Members Schedule as of the date hereof as a
Member and who has executed this Agreement or a counterpart thereof(each, an"Initial Member"); and
(b)and each Person who is hereafter admitted as a Member in accordance with the terms of this Agreement
and the Act,in each case so long as such Person is shown on the Company's books and records as the owner
of one or more Units. The Members will constitute the "members" (as that term is defined in the Act) of
the Company.
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"Member Nonrecourse Debt" means "partner nonrecourse debt" as defined in Treasury
Regulations Section 1.704-2(b)(4), substituting the term "Company" for the term "partnership" and the
term"Member"for the term"partner"as the context requires.
"Member Nonrecourse Debt Minimum Gain" means an amount, with respect to each Member
Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse
Debt were treated as a Nonrecourse Liability,determined in accordance with Treasury Regulations Section
1.704-2(i)(3).
"Member Nonrecourse Deduction" means "partner nonrecourse deduction" as defined in
Treasury Regulations Section 1.704-2(i), substituting the term "Member" for the term "partner" as the
context requires.
"Member ROFR Exercise Notice"has the meaning set forth in Section 9.03(d)(iv).
"Members Schedule"has the meaning set forth in Section 3.01.
"Membership Interest" means an interest in the Company owned by a Member, including such
Member's right(based on the type and class of Unit or Units held by such Member), as applicable, (a)to a
Distributive share of Net Income, Net Losses and other items of income, gain, loss and deduction of the
Company; (b)to a Distributive share of the assets of the Company; (c)to vote on, consent to or otherwise
participate in any decision of the Members as provided in this Agreement; and (d) to any and all other
benefits to which such Member may be entitled as provided in this Agreement or the Act.
"Membership Interest Purchase Agreement"means that certain Membership Interest Purchase
Agreement,dated as of the date hereof and attached hereto as Exhibit B,by and between the Company and
Member, pursuant to which Member has acquired those numbers of Common units set forth on the
Members Schedule as of the date hereof.
"Misallocated Item"has the meaning set forth in Section 6.05.
"Net Income" and "Net Loss" mean, for each Fiscal Year or other period specified in this
Agreement, an amount equal to the Company's taxable income or taxable loss, or particular items thereof,
determined in accordance with Code Section 703(a) (where, for this purpose, all items of income, gain,
loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) will be included in
taxable income or taxable loss),but with the following adjustments:
(a) any income realized by the Company that is exempt from federal income taxation,
as described in Code Section 705(a)(1)(B), will be added to such taxable income or taxable loss,
notwithstanding that such income is not includable in gross income;
(b) any expenditures of the Company described in Code Section 705(a)(2)(B),
including any items treated under Treasury Regulations Section 1.704-1(b)(2)(iv)(i) as items
described in Code Section 705(a)(2)(B), will be subtracted from such taxable income or taxable
loss,notwithstanding that such expenditures are not deductible for federal income tax purposes;
(c) any gain or loss resulting from any disposition of Company property with respect
to which gain or loss is recognized for federal income tax purposes will be computed by reference
to the Book Value of the property so disposed, notwithstanding that the adjusted tax basis of such
property differs from its Book Value;
(d) any items of depreciation, amortization and other cost recovery deductions with
respect to Company property having a Book Value that differs from its adjusted tax basis will be
computed by reference to the property's Book Value (as adjusted for Book Depreciation) in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g);
(e) if the Book Value of any Company property is adjusted as provided in the
definition of Book Value,then the amount of such adjustment will be treated as an item of gain or
loss and included in the computation of such taxable income or taxable loss; and
(f) to the extent an adjustment to the adjusted tax basis of any Company property
pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m),to be taken into account in determining Capital Accounts,the amount
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of such adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such basis).
"New Common Securities"has the meaning set forth in this Agreement.
"New Interests"has the meaning set forth in Section 3.04.
"New Securities"has the meaning set forth in this Agreement.
"Non-Exercising Member"has the meaning set forth in this Agreement.
"Nonrecourse Liability"has the meaning set forth in Treasury Regulations Section 1.704-2(b)(3).
"Offered Common Units"has the meaning set forth in Section 9.03(a)(i).
"Offered Units"has the meaning set forth in Section 9.03(a)(i).
"Offered Unrestricted Incentive Units"has the meaning set forth in this Agreement.
"Offering Member"has the meaning set forth in Section 9.03(a)(i).
"Offering Member Notice"has the meaning set forth in Section 9.03(c)(i).
"Offering Service Provider"has the meaning set forth in this Agreement.
"Officers"has the meaning set forth in Section 8.09.
"Original Agreement"has the meaning set forth in the Recitals.
"Other Business"has the meaning set forth in Section 10.03.
"Over-Allotment Exercise Period"has the meaning set forth in this Agreement.
"Over-Allotment Notice"has the meaning set forth in this Agreement.
"Permitted Transfer"means a Transfer of Common Units carried out pursuant to Section 9.02.
"Permitted Transferee"means a recipient of a Permitted Transfer.
"Person" means an individual, corporation, partnership,joint venture, limited liability company,
Governmental Authority,unincorporated organization,trust,association, or other entity.
"Pre-Emptive Member"has the meaning set forth in this Agreement.
"Profits Interest"has the meaning set forth in Section 3.03(d).
"Profits Interest Hurdle" means an amount set forth in each Award Agreement reflecting the
Incentive Liquidation Value of the relevant Incentive Units at the time the units are issued.
"Proposed Transferee"has the meaning set forth in this Agreement.
"Prospective Purchaser"has the meaning set forth in this Agreement.
"Purchasing Rightholders"has the meaning set forth in Section 9.03(e)(ii).
"Put Purchase Price"has the meaning set forth in this Agreement.
"Qualified Member"has the meaning set forth in Section 11.01.
"Qualifying Incentive Units"has the meaning set forth in Section 7.03(b).
"Quarterly Estimated Tax Amount"of a Member for any calendar quarter of a Fiscal Year means
the excess,if any of(a)the product of(i) a quarter(1/4)in the case of the first calendar quarter of the Fiscal
Year, half('/2) in the case of the second calendar quarter of the Fiscal Year, three-quarters (3/4) in the case
of the third calendar quarter of the Fiscal Year, and one(1)in the case of the fourth calendar quarter of the
Fiscal Year and (ii) the Member's Estimated Tax Amount for such Fiscal Year over (b) all Distributions
previously made during such Fiscal Year to such Member.
"Regulatory Allocations"has the meaning set forth in Section 6.02(d).
"Representative" means, with respect to any Person, any and all directors, officers, employees,
consultants, financial advisors, counsel, accountants, and other agents of such Person.
"Repurchase Notice"has the meaning set forth in this Agreement.
"Repurchased Incentive Units"has the meaning set forth in this Agreement.
"Restricted Incentive Units"has the meaning set forth in Section 3.03(b)(i).
"Restricted Period"has the meaning set forth in Section 10.02.
"Revised Partnership Audit Rules"has the meaning set forth in Section 11.03(a).
"ROFR Rightholder Option Period"has the meaning set forth in Section 9.03(d)(iv).
"Sale Notice"has the meaning set forth in this Agreement.
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"Securities Act"means the Securities Act of 1933, as amended, or any successor federal statute,
and the rules and regulations thereunder,which will be in effect at the time.
"Selling Member"has the meaning set forth in this Agreement.
"Service Provider"has the meaning set forth in Section 3.03(a).
"Service Provider Sale Notice"has the meaning set forth in this Agreement.
"Shortfall Amount"has the meaning set forth in Section 7.04(b).
"Subsidiary" means, with respect to any Person, any other Person of which a majority of the
outstanding shares or other equity interests having the power to vote for directors or comparable managers
are owned, directly or indirectly,by the first Person.
"Tax Advance"has the meaning set forth in Section 7.04(a).
"Tax Amount"of a Member for a Fiscal Year means the product of(a)the Tax Rate for such Fiscal
Year and(b)the Adjusted Taxable Income of the Member for such Fiscal Year with respect to its Units.
"Tax Matters Representative"has the meaning set forth in Section 11.03(a).
"Tax Rate" of a Member, for any period, means the highest marginal blended federal, state, and
local tax rate applicable to ordinary income,qualified dividend income,or capital gains,as appropriate, for
such period for an individual residing in Wyoming,taking into account for federal income tax purposes the
deduction under IRC Section 199A.
"Taxing Authority"has the meaning set forth in Section 7.05(b).
"Third Party Purchaser" means any Person who, immediately prior to the contemplated
transaction, (a) does not directly or indirectly own or have the right to acquire any outstanding Common
Units (or applicable Unit Equivalents) or (b) is not a Permitted Transferee of any Person who directly or
indirectly owns or has the right to acquire any Common Units (or applicable Unit Equivalents).
"Transfer" means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate,
or similarly dispose of,either voluntarily or involuntarily,by operation of law or otherwise,or to enter into
any contract, option, or other arrangement or understanding with respect to the sale, transfer, assignment,
pledge,encumbrance,hypothecation,or similar disposition of,any Units owned by a Person or any interest
(including a beneficial interest)in any Units or Unit Equivalents owned by a Person."Transfer"when used
as a noun will have a correlative meaning. "Transferor" and"Transferee"mean a Person who makes or
receives a Transfer,respectively.
"Treasury Regulations" means the final or temporary regulations issued by the United States
Department of Treasury pursuant to its authority under the Code, and any successor regulations.
"Unallocated Item"has the meaning set forth in Section 6.05.
"Unit"means a unit representing a fractional part of the Membership Interests of the Members and
will include all types and classes of Units,including the Common Units,and the Incentive Units;provided,
that any type or class of Unit will have the privileges,preference, duties, liabilities, obligations, and rights
set forth in this Agreement and the Membership Interests represented by such type or class or series of Unit
will be determined in accordance with such privileges,preference,duties,liabilities,obligations,and rights.
"Unit Equivalents" means any security or obligation that is by its terms, directly or indirectly,
convertible into,exchangeable,or exercisable for Units,and any option,warrant,or other right to subscribe
for,purchase, or acquire Units.
"Unit Purchase Agreements" means, collectively: with respect to Member, the Membership
Interest Purchase Agreement.
"Unrestricted Incentive Units"has the meaning set forth in Section 3.03(b)(ii).
"Voting Members"has the meaning set forth in Section 4.06(b).
"Voting Units"has the meaning set forth in Section 4.06(a).
"Withholding Advances"has the meaning set forth in Section 7.05(b).
Section 1.02 Interpretation. For purposes of this Agreement, (a) the words "include,"
"includes,"and"including"will be deemed to be followed by the words"without limitation"; (b)the word
"or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to
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this Agreement as a whole.The definitions given for any defined terms in this Agreement will apply equally
to both the singular and plural forms of the terms defined.Whenever the context may require, any pronoun
will include the corresponding masculine,feminine and neuter forms.Unless the context otherwise requires,
references herein: (x) to Articles, Sections, and Exhibits mean the Articles and Sections of, and Exhibits
attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement,
instrument or other document as amended, supplemented and modified from time to time to the extent
permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time
and includes any successor legislation thereto and any regulations promulgated thereunder.This Agreement
will be construed without regard to any presumption or rule requiring construction or interpretation against
the party drafting an instrument or causing any instrument to be drafted. The Exhibits referred to herein
will be construed with,and as an integral part of,this Agreement to the same extent as if they were set forth
verbatim herein.
ARTICLE II
ORGANIZATION
Section 2.01 Formation.
(a) The Company was formed on February 3, 2022, pursuant to the provisions of the
Act, upon the filing of the Certificate of Formation with the Secretary of State of the State of
Wyoming.
(b) This Agreement will constitute the"limited liability company agreement"(as that
term is used in the Act) of the Company. The rights,powers, duties, obligations, and liabilities of
the Members will be determined pursuant to the Act and this Agreement. To the extent that the
rights, powers, duties, obligations, and liabilities of any Member are different by reason of any
provision of this Agreement than they would be under the Act in the absence of such provision,
this Agreement shall,to the extent permitted by the Act, control.
Section 2.02 Name.The name of the Company is"ELEVATE HOMES,LLC"or such other name
or names as the Board may from time to time designate;provided, that the name will always contain the
words"Limited Liability Company"or the abbreviation"L.L.C."or the designation"LLC."
Section 2.03 Principal Office. The principal office of the Company is located at 184 SW 5th
Ave #210, Meridian, Idaho 83642-2994, or such other place as may from time to time be determined by
the Board. The Board will give prompt notice of any such change to each of the Members.
Section 2.04 Registered Office; Registered Agent.
(a) The registered office of the Company will be named on public record with the
Secretary of State as the Board may designate from time to time in the manner provided by the Act
and Applicable Law.
(b) The registered agent for service of process on the Company in the State of
Wyoming will be the initial registered agent named in the Certificate of Formation or such other
Person or Persons as the Board may designate from time to time in the manner provided by the Act
and Applicable Law.
Section 2.05 Purpose; Powers.
(a) The purpose of the Company is to engage in any lawful act or activity for which
limited liability companies may be formed under the Act and to engage in any and all activities
necessary or incidental thereto.
(b) The Company will have all the powers necessary or convenient to carry out the
purposes for which it is formed, including the powers granted by the Act.
Section 2.06 Term. The term of the Company commenced on the date the Certificate of
Formation was filed with the Secretary of State of the State of Wyoming and will continue in existence
perpetually until the Company is dissolved in accordance with the provisions of this Agreement.
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Section 2.07 No State-Law Partnership.The Members intend that the Company will be treated
as a partnership for federal and, if applicable, state and local income tax purposes, and, to the extent
permissible, the Company will elect to be treated as a partnership for such purposes. The Company and
each Member will file all tax returns and will otherwise take all tax and financial reporting positions in a
manner consistent with such treatment and no Member will take any action inconsistent with such
treatment. The Members intend that the Company will not be a partnership (including,without limitation,
a limited partnership) or joint venture, and that no Member,Manager, or Officer of the Company will be a
partner or joint venturer of any other Member,Manager or Officer of the Company, for any purposes other
than as set forth in the first sentence of this Section 2.07.
ARTICLE III
UNITS
Section 3.01 Units Generally. The Membership Interests of the Members will be represented
by issued and outstanding Units,which may be divided into one or more types,classes,or series.Each type,
class or series of Units will have the privileges, preference, duties, liabilities, obligations, and rights,
including voting rights, if any, set forth in this Agreement with respect to such type, class, or series. The
Board will maintain a schedule of all Members, their respective mailing addresses, and the amount and
series of Units held by them(the"Members Schedule"), and will update the Members Schedule upon the
issuance or Transfer of any Units to any new or existing Member. A copy of the Members Schedule as of
the execution of this Agreement is attached hereto as Schedule A.
Section 3.02 Authorization and Issuance of Units. Subject to compliance with Section
9.01(b),the Company is hereby authorized to issue a class of Units designated as Common Units.As of the
date hereof and after giving effect to the transactions contemplated by the Membership Interest Purchase
Agreement.
Section 3.03 Authorization and Issuance of Incentive Units.
(a) The Company is hereby authorized to issue Incentive Units to Managers,Officers,
employees, consultants or other service providers of the Company or any Company Subsidiary
(collectively,"Service Providers").The Board is hereby authorized and directed to adopt a written
plan pursuant to which all Incentive Units will be granted in compliance with Rule 701 of the
Securities Act or another applicable exemption (such plan as in effect from time to time, the
"Incentive Plan"). In connection with the adoption of the Incentive Plan and issuance of Incentive
Units, the Board is hereby authorized to negotiate and enter into award agreements with each
Service Provider to whom it grants Incentive Units (such agreements, "Award Agreements").
Each Award Agreement will include such terms, conditions, rights, and obligations as may be
determined by the Board, in its sole discretion,consistent with the terms herein.
(b) The Board will establish such vesting criteria for the Incentive Units as it
determines in its discretion and will include such vesting criteria in the Incentive Plan and/or the
applicable Award Agreement for any grant of Incentive Units. As of the date hereof, none of the
issued and outstanding Incentive Units will be deemed vested. As used in this Agreement:
(i) any Incentive Units that have not vested pursuant to the terms of the
Incentive Plan and any associated Award Agreement are referred to as "Restricted
Incentive Units"; and
(ii) any Incentive Units that have vested pursuant to the terms of the Incentive
Plan and any associated Award Agreement are referred to as "Unrestricted Incentive
Units."
(c) Immediately prior to each subsequent issuance of Incentive Units following the
initial issuance described in the second sentence of Section 3.03(a), the Board will determine in
good faith the Incentive Liquidation Value. In each Award Agreement that the Company enters
into with a Service Provider for the issuance of new Incentive Units, the Board will include an
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appropriate Profits Interest Hurdle for such Incentive Units on the basis of the Incentive Liquidation
Value immediately prior to the issuance of such Incentive Units.
(d) The Company and each Member hereby acknowledge and agree that,with respect
to any Service Provider, such Service Provider's Incentive Units constitute a "profits interest" in
the Company within the meaning of Rev. Proc. 93-27 (a"Profits Interest"), and that any and all
Incentive Units received by a Service Provider are received in exchange for the provision of
services by the Service Provider to or for the benefit of the Company in a Service Provider capacity
or in anticipation of becoming a Service Provider. The Company and each Service Provider who
receives Incentive Units hereby agree to comply with the provisions of Rev. Proc. 2001-43, and
neither the Company nor any Service Provider who receives Incentive Units will perform any act
or take any position inconsistent with the application of Rev. Proc. 2001-43 or any future Internal
Revenue Service guidance or other Governmental Authority that supplements or supersedes the
foregoing Revenue Procedures.
(e) Incentive units will receive the following tax treatment:
(i) the Company and each Service Provider who receives Incentive Units will
treat such Service Provider as the owner of such Incentive Units from the date of their
receipt, and the Service Provider receiving such Incentive Units will take into account his
Distributive share of Net Income,Net Loss, income, gain, loss, and deduction associated
with the Incentive Units in computing such Service Provider's income tax liability for the
entire period during which such Service Provider holds the Incentive Units.
(ii) each Service Provider that receives Incentive Units will make a timely and
effective election under Code Section 83(b) with respect to such Incentive Units and will
promptly provide a copy to the Company. Except as otherwise determined by the Board,
both the Company and all Members will (A)treat such Incentive Units as outstanding for
tax purposes, (B)treat such Service Provider as a partner for tax purposes with respect to
such Incentive Units and(C)file all tax returns and reports consistently with the foregoing.
Neither the Company nor any of its Members will deduct any amount (as wages,
compensation, or otherwise)with respect to the receipt of such Incentive Units for federal
income tax purposes.
(iii) in accordance with the finally promulgated successor rules to Proposed
Regulations Section 1.83-3(l) and IRS Notice 2005-43, each Member, by executing this
Agreement, authorizes and directs the Company to elect a safe harbor under which the fair
market value of any Incentive Units issued after the effective date of such Proposed
Regulations(or other guidance)will be treated as equal to the liquidation value(within the
meaning of the Proposed Regulations or successor rules) of the Incentive Units as of the
date of issuance of such Incentive Units.In the event that the Company makes a safe harbor
election as described in the preceding sentence, each Member hereby agrees to comply
with all safe harbor requirements with respect to Transfers of Units while the safe harbor
election remains effective.
Section 3.04 Other Issuances. In addition to the Common Units, and Incentive Units, the
Company is hereby authorized, subject to compliance with Section 9.01(b),to authorize and issue or sell to
any Person any of the following (collectively, "New Interests"): (i) any new type, class, or series of Units
not otherwise described in this Agreement, which Units may be designated as classes or series of the
Common Units, or Incentive Units but having different rights; and (ii) Unit Equivalents. The Board is
hereby authorized,subject to Section 14.09,to amend this Agreement to reflect such issuance and to fix the
relative privileges,preference,duties,liabilities,obligations,and rights of any such New Interests,including
the number of such New Interests to be issued,the preference(with respect to Distributions, in liquidation,
or otherwise)over any other Units, and any contributions required in connection therewith.
Section 3.05 Certification of Units.
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(a) The Board in its sole discretion may,but will not be required to, issue certificates
to the Members representing the Units held by such Member.
(b) In the event that the Board will issue certificates representing Units in accordance
with Section 3.05(a), then in addition to any other legend required by Applicable Law, all
certificates representing issued and outstanding Units will bear a legend substantially in the
following form:
THE UNITS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
LIMITED LIABILITY COMPANY AGREEMENT AMONG THE COMPANY AND
ITS MEMBERS,A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE UNITS REPRESENTED BY
THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH LIMITED LIABILITY COMPANY AGREEMENT.
THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED,OR UNDER
ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED EXCEPT (A) PURSUANT TO A REGISTRATION
STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS,OR(B)PURSUANT TO
AN EXEMPTION FROM REGISTRATION THEREUNDER.
ARTICLE IV
MEMBERS
Section 4.01 Admission of New Members.
(a) New Members may be admitted from time to time (i) in connection with an
issuance of Units by the Company, subject to compliance with the provisions of Section 9.01(b),
as applicable, and (ii) in connection with a Transfer of Units, subject to compliance with the
provisions of ARTICLE IX,and in either case,following compliance with the provisions of Section
4.01(b).
(b) In order for any Person not already a Member of the Company to be admitted as a
Member,whether pursuant to an issuance or Transfer of Units, such Person will have executed and
delivered to the Company a written undertaking substantially in the form of the Joinder Agreement.
Upon the amendment of the Members Schedule by the Board and the satisfaction of any other
applicable conditions, including, if a condition, the receipt by the Company of payment for the
issuance of the applicable Units, such Person will be admitted as a Member and deemed listed as
such on the books and records of the Company and thereupon will be issued his, her, or its Units.
The Board will also adjust the Capital Accounts of the Members as necessary in accordance with
Section 5.03.
Section 4.02 Representations and Warranties of Members.By execution and delivery of this
Agreement or a Joinder Agreement, as applicable, each of the Members, whether admitted as of the date
hereof or pursuant to Section 4.01,represents and warrants to the Company and acknowledges that:
(a) The Units have not been registered under the Securities Act or the securities laws
of any other jurisdiction, are issued in reliance upon federal and state exemptions for transactions
not involving a public offering and cannot be disposed of unless(i)they are subsequently registered
or exempted from registration under the Securities Act and (ii) the provisions of this Agreement
have been complied with;
(b) Such Member is an "accredited investor" within the meaning of Rule 501
promulgated under the Securities Act,as amended by Section 413(a)of the Dodd-Frank Wall Street
Reform and Consumer Protection Act,and agrees that it will not take any action that could have an
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adverse effect on the availability of the exemption from registration provided by Rule 501
promulgated under the Securities Act with respect to the offer and sale of the Units;
(c) Such Member's Units are being acquired for its own account solely for investment
and not with a view to resale or distribution thereof,
(d) Such Member has conducted its own independent review and analysis of the
business, operations, assets, liabilities, results of operations, financial condition, and prospects of
the Company and the Company Subsidiaries and such Member acknowledges that it has been
provided adequate access to the personnel, properties,premises, and records of the Company and
the Company Subsidiaries for such purpose;
(e) The determination of such Member to acquire Units has been made by such
Member independent of any other Member and independent of any statements or opinions as to the
advisability of such purchase or as to the business, operations, assets, liabilities, results of
operations, financial condition, and prospects of the Company and the Company Subsidiaries that
may have been made or given by any other Member or by any agent or employee of any other
Member;
(f) Such Member has such knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of an investment in the Company and
making an informed decision with respect thereto;
(g) Such Member is able to bear the economic and financial risk of an investment in
the Company for an indefinite period of time;
(h) The execution, delivery, and performance of this Agreement have been duly
authorized by such Member and do not require such Member to obtain any consent or approval that
has not been obtained and do not contravene or result in a default in any material respect under any
provision of any law or regulation applicable to such Member or other governing documents or any
agreement or instrument to which such Member is a party or by which such Member is bound;
(i) This Agreement is valid, binding, and enforceable against such Member in
accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws of general applicability relating to or affecting creditors'rights
or general equity principles(regardless of whether considered at law or in equity); and
0) Neither the issuance of any Units to any Member nor any provision contained
herein will entitle the Member to remain in the employment of the Company or any Company
Subsidiary or affect the right of the Company or any Company Subsidiary to terminate the
Member's employment at any time for any reason, other than as otherwise provided in such
Member's employment agreement or other similar agreement with the Company or Company
Subsidiary, if applicable.
None of the foregoing will replace, diminish, or otherwise adversely affect any Member's
representations and warranties made by it in any Unit Purchase Agreement or Award Agreement, as
applicable.
Section 4.03 No Personal Liability. Except as otherwise provided in the Act, by Applicable
Law or expressly in this Agreement, no Member will be obligated personally for any debt, obligation, or
liability of the Company or of any Company Subsidiaries or other Members, whether arising in contract,
tort, or otherwise, solely by reason of being a Member.
Section 4.04 Death. The death of any Member will not cause the dissolution of the Company.
In such event the Company and its business will be continued by the remaining Member or Members and
the Units owned by the deceased Member will automatically be Transferred to such Member's heirs;
provided, that within a reasonable time after such Transfer, the applicable heirs will sign a written
undertaking substantially in the form of the Joinder Agreement.
Section 4.05 Voting.
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(a) Except as otherwise provided by this Agreement (including Section 14.09) or as
otherwise required by the Act or Applicable Law:
(i) each Member will be entitled to one vote per Common Unit on all matters
upon which the Members have the right to vote under this Agreement; and
(ii) The Incentive Units (including the Unrestricted Incentive Units) will not
entitle the holders thereof to vote on any matters required or permitted to be voted on by
the Members.
(iii) the issuance of any securities by any Company Subsidiary beyond those
issued and outstanding as of the date hereof;
(iv) a merger,consolidation,conversion,or other similar transaction involving
the Company or any of the Company Subsidiaries in which the holders of the Common
Units(or equivalent Company Subsidiary securities)immediately prior to such transaction
hold in the aggregate less than a majority of the outstanding voting equity securities of the
surviving entity immediately after such transaction;
(v) the sale, lease, or conveyance of all or substantially all of the assets of the
Company and the Company Subsidiaries on a consolidated basis; or
(vi) any action that results in a liquidation or dissolution of the Company or
any Company Subsidiary.
Section 4.06 Meetings.
(a) Voting Units.As used herein,the term"Voting Units"will mean:
(i) the Common Units, for purposes of calling or holding any meeting of the
Members holding Common Units, providing notice of such a meeting, forming a quorum
for such a meeting,or taking any action by vote at a meeting or by written consent without
a meeting, in all cases to take any action or conduct any business not described in this
Agreement; and
(b) Calling the Meeting.Meetings of the Members may be called by(i)the Board or
(ii) by a Member or group of Members holding more than 20% of the then-outstanding votes
attributable to the relevant Voting Units. Only Members who hold the relevant Voting Units
("Voting Members")will have the right to attend meetings of the Members.
(c) Notice.Written notice stating the place, date, and time of the meeting and, in the
case of a meeting of the Members not regularly scheduled, describing the purposes for which the
meeting is called,will be delivered not fewer than ten(10)days and not more than thirty(30)days
before the date of the meeting to each Voting Member, by or at the direction of the Board or the
Member(s)calling the meeting,as the case may be. The Voting Members may hold meetings at the
Company's principal office or at such other place as the Board or the Member(s)calling the meeting
may designate in the notice for such meeting.
(d) Participation. Any Voting Member may participate in a meeting of the Voting
Members by means of conference telephone or other communications equipment by means of
which all Persons participating in the meeting can hear each other, and participation in a meeting
by such means will constitute presence in person at such meeting.
(e) Vote by Proxy.On any matter that is to be voted on by Voting Members,a Voting
Member may vote in person or by proxy, and such proxy may be granted in writing, by means of
Electronic Transmission, or as otherwise permitted by Applicable Law. Every proxy will be
revocable in the discretion of the Voting Member executing it unless otherwise provided in such
proxy;provided, that such right to revocation will not invalidate or otherwise affect actions taken
under such proxy prior to such revocation.
(f) Conduct of Business. The business to be conducted at such meeting need not be
limited to the purpose described in the notice and can include business to be conducted by Voting
Members holding Common Units;provided, that the appropriate Voting Members will have been
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notified of the meeting in accordance with Section 4.06(c); and provided,further,that any Voting
Member holding the appropriate Voting Units will have the right to request removal from the
meeting of any Voting Member holding only Common Units prior to any discussion of business at
the meeting for which such Units do not have a vote pursuant to the provisions of this Agreement.
Attendance of a Member at any meeting will constitute a waiver of notice of such meeting, except
where a Member attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
Section 4.07 Quorum. A quorum of any meeting of the Voting Members will require the
presence of the Members holding a majority of the appropriate Voting Units held by all Members. Subject
to Section 4.08, no action at any meeting may be taken by the Members unless the appropriate quorum is
present. Subject to Section 4.08,no action may be taken by the Members at any meeting at which a quorum
is present without the affirmative vote of Members holding a majority of the appropriate Voting Units held
by all Members.
Section 4.08 Action Without Meeting. Notwithstanding the provisions of Section 4.07, any
matter that is to be voted on,consented to,or approved by Voting Members may be taken without a meeting,
without prior notice and without a vote if consented to, in writing or by Electronic Transmission, by a
Member or Members holding not less than a majority of the appropriate Voting Units held by all Members.
A record will be maintained by the Board of each such action taken by written consent of a Member or
Members.
Section 4.09 Power of Members. The Members will have the power to exercise any and all
rights or powers granted to Members pursuant to the express terms of this Agreement and the Act. Except
as otherwise specifically provided by this Agreement or required by the Act,no Member, in its capacity as
a Member,will have the power to act for or on behalf of, or to bind,the Company.
Section 4.10 No Interest in Company Property.No real or personal property of the Company
will be deemed to be owned by any Member individually, but will be owned by, and title will be vested
solely in, the Company. Without limiting the foregoing, 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 the property of the Company.
ARTICLE V
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
Section 5.01 Initial Capital Contributions. Contemporaneously with the execution of this
Agreement and as set forth in the respective Unit Purchase Agreements, each Initial Member owning
Common Units has made the Capital Contribution giving rise to such Initial Member's initial Capital
Account and is deemed to own the number,type, series,and class of Units,in each case,in the amounts set
forth opposite such Initial Member's name on the Members Schedule as in effect on the date hereof.
Section 5.02 Additional Capital Contributions.
(a) No Member will be required to make any additional Capital Contributions to the
Company. Any future Capital Contributions made by any Member will only be made with the
consent of the Board and in connection with an issuance of Units made in compliance with this
Agreement.
(b) No Member will be required to lend any funds to the Company and no Member
will have any personal liability for the payment or repayment of any Capital Contribution by or to
any other Member.
Section 5.03 Maintenance of Capital Accounts.The Company will establish and maintain for
each Member a separate capital account(a"Capital Account")on its books and records in accordance with
this Section 5.03.Each Capital Account will be established and maintained in accordance with the following
provisions:
(a) Each Member's Capital Account will be increased by the amount of-
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(i) such Member's Capital Contributions, including such Member's initial
Capital Contribution;
(ii) any Net Income or other item of income or gain allocated to such Member
pursuant to ARTICLE VI; and
(iii) any liabilities of the Company that are assumed by such Member or
secured by any property Distributed to such Member.
(b) Each Member's Capital Account will be decreased by:
(i) the cash amount or Book Value of any property Distributed to such
Member pursuant to ARTICLE VII and Section 12.03(c);
(ii) the amount of any Net Loss or other item of loss or deduction allocated to
such Member pursuant to ARTICLE VI; and
(iii) the amount of any liabilities of such Member assumed by the Company or
which are secured by any property contributed by such Member to the Company.
Section 5.04 Succession Upon Transfer. In the event that any Units are Transferred in
accordance with the terms of this Agreement, the Transferee will succeed to the Capital Account of the
Transferor to the extent it relates to the Transferred Units and, subject to Section 6.04, will receive
allocations and Distributions pursuant to ARTICLE VI, ARTICLE VII, and ARTICLE XII in respect of
such Units.
Section 5.05 Negative Capital Accounts. In the event that any Member will have a deficit
balance in his, her or its Capital Account, such Member will have no obligation, during the term of the
Company or upon dissolution or liquidation thereof, to restore such negative balance or make any Capital
Contributions to the Company by reason thereof,except as may be required by Applicable Law or in respect
of any negative balance resulting from a withdrawal of capital or dissolution in contravention of this
Agreement.
Section 5.06 No Withdrawal. No Member will be entitled to withdraw any part of his, her or
its Capital Account or to receive any Distribution from the Company,except as provided in this Agreement.
No Member will receive any interest, salary, or drawing with respect to its Capital Contributions or its
Capital Account,except as otherwise provided in this Agreement. The Capital Accounts are maintained for
the sole purpose of allocating items of income,gain,loss,and deduction among the Members and will have
no effect on the amount of any Distributions to any Members, in liquidation or otherwise.
Section 5.07 Treatment of Loans from Members.Loans by any Member to the Company will
not be considered Capital Contributions and will not affect the maintenance of such Member's Capital
Account, other than to the extent provided in Section 5.03(a)(iii),if applicable.
Section 5.08 Modifications. The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury
Regulations Section 1.704-1(b) and will be interpreted and applied in a manner consistent with such
Treasury Regulations. If the Board determines that it is prudent to modify the manner in which the Capital
Accounts,or any increases or decreases to the Capital Accounts,are computed in order to comply with such
Treasury Regulations,the Board may authorize such modifications.
ARTICLE VI
ALLOCATIONS
Section 6.01 Allocation of Net Income and Net Loss.For each Fiscal Year(or portion thereof),
except as otherwise provided in this Agreement, Net Income and Net Loss (and, to the extent necessary,
individual items of income,gain,loss,or deduction)of the Company will be allocated among the Members
in a manner such that, after giving effect to the special allocations set forth in Section 6.02, the Capital
Account balance of each Member, immediately after making such allocations, is, as nearly as possible,
equal to (i) the Distributions that would be made to such Member pursuant to Section 12.03(c) if the
Company were dissolved, its affairs wound up and its assets sold for cash equal to their Book Value, all
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Company liabilities were satisfied (limited with respect to each Nonrecourse Liability to the Book Value
of the assets securing such liability), and the net assets of the Company were Distributed, in accordance
with Section 12.03(c),to the Members immediately after making such allocations,minus(ii)such Member's
share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain,computed immediately
prior to the hypothetical sale of assets.
Section 6.02 Regulatory and Special Allocations.Notwithstanding the provisions of Section
6.01:
(a) If there is a net decrease in Company Minimum Gain (determined according to
Treasury Regulations Section 1.704-2(d)(1))during any Fiscal Year,each Member will be specially
allocated Net Income for such Fiscal Year(and,if necessary,subsequent Fiscal Years)in an amount
equal to such Member's share of the net decrease in Company Minimum Gain, determined in
accordance with Treasury Regulations Section 1.704-2(g). The items to be so allocated will be
determined in accordance with Treasury Regulations Sections 1.704-2(f)(6)and 1.704-20)(2).This
Section 6.02(a) is intended to comply with the "minimum gain chargeback" requirement in
Treasury Regulations Section 1.704-2(f) and will be interpreted consistently therewith.
(b) Member Nonrecourse Deductions will be allocated in the manner required by
Treasury Regulations Section 1.704-2(i). Except as otherwise provided in Treasury Regulations
Section 1.704-2(i)(4),if there is a net decrease in Member Nonrecourse Debt Minimum Gain during
any Fiscal Year, each Member that has a share of such Member Minimum Gain will be specially
allocated Net Income for such Fiscal Year(and,if necessary,subsequent Fiscal Years)in an amount
equal to that Member's share of the net decrease in Member Nonrecourse Debt Minimum Gain.
Items to be allocated pursuant to this paragraph will be determined in accordance with Treasury
Regulations Sections 1.704-2(i)(4) and 1.704-20)(2). This Section 6.02(b) is intended to comply
with the "minimum gain chargeback"requirements in Treasury Regulations Section 1.704-2(i)(4)
and will be interpreted consistently therewith.
(c) In the event any Member unexpectedly receives any adjustments, allocations or
Distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), Net
Income will be specially allocated to such Member in an amount and manner sufficient to eliminate
the Adjusted Capital Account Deficit created by such adjustments, allocations or Distributions as
quickly as possible. This Section 6.02(c) is intended to comply with the qualified income offset
requirement in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and will be interpreted
consistently therewith.
(d) The allocations set forth in Section 6.02(a), Section 6.02(b), and Section 6.02(c)
above (the "Regulatory Allocations") are intended to comply with certain requirements of the
Treasury Regulations under Code Section 704. Notwithstanding any other provisions of this
ARTICLE VI (other than the Regulatory Allocations), the Regulatory Allocations will be taken
into account in allocating Net Income and Net Losses among Members so that, to the extent
possible,the net amount of such allocations of Net Income and Net Losses and other items and the
Regulatory Allocations to each Member will be equal to the net amount that would have been
allocated to such Member if the Regulatory Allocations had not occurred.
(e) The Company and the Members acknowledge that allocations like those described
in Proposed Treasury Regulations Section 1.704-1(b)(4)(xii)(c) ("Forfeiture Allocations")result
from the allocations of Net Income and Net Loss provided for in this Agreement.For the avoidance
of doubt,the Company is entitled to make Forfeiture Allocations and, once required by applicable
final or temporary guidance, allocations of Net Income and Net Loss will be made in accordance
with Proposed Treasury Regulations Section 1.704-1(b)(4)(xii)(c) or any successor provision or
guidance.
Section 6.03 Tax Allocations.
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(a) Subject to Section 6.03(b) through Section 6.03(e), all income, gains, losses, and
deductions of the Company will be allocated, for federal, state, and local income tax purposes,
among the Members in accordance with the allocation of such income,gains,losses,and deductions
among the Members for computing their Capital Accounts, except that if any such allocation for
tax purposes is not permitted by the Code or other Applicable Law, the Company's subsequent
income,gains,losses,and deductions will be allocated among the Members for tax purposes,to the
extent permitted by the Code and other Applicable Law, so as to reflect as nearly as possible the
allocation set forth herein in computing their Capital Accounts.
(b) Items of Company taxable income, gain, loss, and deduction with respect to any
property contributed to the capital of the Company will be allocated among the Members in
accordance with Code Section 704(c) and the traditional method of Treasury Regulations Section
1.704-3(b), so as to take account of any variation between the adjusted basis of such property to
the Company for federal income tax purposes and its Book Value.
(c) If the Book Value of any Company asset is adjusted pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(f) as provided in clause(c)of the definition of Book Value,
subsequent allocations of items of taxable income, gain, loss, and deduction with respect to such
asset will take account of any variation between the adjusted basis of such asset for federal income
tax purposes and its Book Value in the same manner as under Code Section 704(c).
(d) Allocations of tax credit,tax credit recapture,and any items related thereto will be
allocated to the Members according to their interests in such items as determined by the Board
taking into account the principles of Treasury Regulations Section 1.704-1(b)(4)(ii).
(e) The Company will make allocations pursuant to this Section 6.03 in accordance
with the traditional method in accordance with Treasury Regulations Section 1.704-3(d).
(f) Allocations pursuant to this Section 6.03 are solely for purposes of federal, state,
and local taxes and will not affect,or in any way be taken into account in computing,any Member's
Capital Account or share of Net Income,Net Losses, Distributions, or other items pursuant to any
provisions of this Agreement.
Section 6.04 Allocations in Respect of Transferred Units.In the event of a Transfer of Units
during any Fiscal Year made in compliance with the provisions of ARTICLE IX,Net Income,Net Losses,
and other items of income, gain, loss, and deduction of the Company attributable to such Units for such
Fiscal Year will be determined using the interim closing of the books method.
Section 6.05 Curative Allocations.In the event that the Partnership Representative determines,
after consultation with counsel experienced in income tax matters, that the allocation of any item of
Company income, gain, loss, or deduction is not specified in this ARTICLE VI (an"Unallocated Item"),
or that the allocation of any item of Company income, gain, loss, or deduction hereunder is clearly
inconsistent with the Members'economic interests in the Company(determined by reference to the general
principles of Treasury Regulations Section 1.704-1(b) and the factors set forth in Treasury Regulations
Section 1.704-1(b)(3)(ii)) (a"Misallocated Item"), then the Board may allocate such Unallocated Items,
or reallocate such Misallocated Items, to reflect such economic interests;provided, that no such allocation
will be made without the prior consent of each Member that would be adversely and disproportionately
affected thereby;and provided,further,that no such allocation will have any material effect on the amounts
Distributable to any Member,including the amounts to be Distributed upon the complete liquidation of the
Company.
ARTICLE VII
DISTRIBUTIONS
Section 7.01 General.
(a) Subject to Section 7.01(b),Section 7.02,and Section 7.04,the Board will have sole
discretion regarding the amounts and timing of Distributions to Members, including to decide to
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forego payment of Distributions in order to provide for the retention and establishment of reserves
of, or payment to third parties of, such funds as it deems necessary with respect to the reasonable
business needs of the Company(which needs may include the payment or the making of provision
for the payment when due of the Company's obligations, including,but not limited to,present and
anticipated debts and obligations, capital needs and expenses,the payment of any management or
administrative fees and expenses, and reasonable reserves for contingencies).
(b) Notwithstanding any provision to the contrary contained in this Agreement, the
Company will not make any Distribution to Members if such Distribution would violate the Act or
other Applicable Law.
Section 7.02 Priority of Distributions. After making all Distributions required for a given
Fiscal Year under Section 7.04 and subject to the priority of Distributions pursuant to Section 12.03(c), if
applicable, all Distributions determined to be made by the Board pursuant to Section 7.01 will be made in
the following manner:
(a) First, to the Members pro rata in proportion to their holdings of Common Units,
until Distributions under this Section 7.02(a) equal the aggregate amount of Capital Contributions
attributable to the Members in respect of their acquisitions of Common Units; and
(b) Second, any remaining amounts to the Members holding Common Units and
Incentive Units (subject to Section 7.03) pro rata in proportion to their aggregate holdings of
Common Units and Incentive Units treated as one class of Units.
Section 7.03 Limitations on Distributions to Incentive Units.
(a) Notwithstanding the provisions of Section 7.02(b), no Distribution (other than
Distributions pursuant to Section 7.04) will be made to a Member on account of its Restricted
Incentive Units. Any amount that would otherwise be Distributed to such a Member but for the
application of the preceding sentence will instead be retained in a segregated Company account to
be Distributed in accordance with Section 7.02(b)by the Company and paid to such Member if,as
and when the Restricted Incentive Unit to which such retained amount relates vests pursuant to
Section 3.03(b).
(b) It is the intention of the parties to this Agreement that Distributions to any Service
Provider with respect to his Incentive Units be limited to the extent necessary so that the related
Membership Interest constitutes a Profits Interest. In furtherance of the foregoing, and
notwithstanding anything to the contrary in this Agreement,the Board shall,if necessary,limit any
Distributions to any Service Provider with respect to his Incentive Units so that such Distributions
do not exceed the available profits in respect of such Service Provider's related Profits Interest.
Available profits will include the aggregate amount of profit and unrealized appreciation in all of
the assets of the Company between the date of issuance of such Incentive Units and the date of such
Distribution,it being understood that such unrealized appreciation will be determined on the basis
of the Profits Interest Hurdle applicable to such Incentive Unit.In the event that a Service Provider's
Distributions and allocations with respect to his Incentive Units are reduced pursuant to the
preceding sentence, an amount equal to such excess Distributions will be treated as instead
apportioned to the holders of Common Units and Incentive Units that have met their Profits Interest
Hurdle (such Incentive Units, "Qualifying Incentive Units"), pro rata in proportion to their
aggregate holdings of Common Units and Qualifying Incentive Units treated as one class of Units.
Section 7.04 Tax Advances.
(a) Subject to any restrictions in any of the Company's and/or any Company
Subsidiary's then applicable debt-financing arrangements,and subject to the Board's sole discretion
to retain any other amounts necessary to satisfy the Company's and/or the Company Subsidiaries'
obligations, at least five (5) days before each date prescribed by the Code for a calendar-year
corporation to pay quarterly installments of estimated tax, the Company will use commercially
reasonable efforts to Distribute cash to each Member in proportion to and to the extent of such
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Member's Quarterly Estimated Tax Amount for the applicable calendar quarter (each such
Distribution,a"Tax Advance").
(b) If,at any time after the final Quarterly Estimated Tax Amount has been Distributed
pursuant to Section 7.04(a) with respect to any Fiscal Year, the aggregate Tax Advances to any
Member with respect to such Fiscal Year are less than such Member's Tax Amount for such Fiscal
Year(a"Shortfall Amount"),the Company will use commercially reasonable efforts to Distribute
cash in proportion to and to the extent of each Member's Shortfall Amount. The Company will use
commercially reasonable efforts to Distribute Shortfall Amounts with respect to a Fiscal Year
before the 75th day of the next succeeding Fiscal Year;provided, that if the Company has made
Distributions other than pursuant to this Section 7.04, the Board may apply such Distributions to
reduce any Shortfall Amount.
(c) If the aggregate Tax Advances made to any Member pursuant to this Section 7.04
for any Fiscal Year exceed such Member's Tax Amount (an "Excess Amount"), such Excess
Amount will reduce subsequent Tax Advances that would be made to such Member pursuant to
this Section 7.04,except to the extent taken into account as an advance pursuant to Section 7.04(d).
(d) Any Distributions made pursuant to this Section 7.04 will be treated for purposes
of this Agreement as advances on Distributions pursuant to Section 7.02 and will reduce, dollar-
for-dollar,the amount otherwise Distributable to such Member pursuant to Section 7.02.
Section 7.05 Tax Withholding;Withholding Advances.
(a) Tax Withholding.If requested by the Board, each Member shall, if able to do so,
deliver to the Board:
(i) an affidavit in form satisfactory to the Board that the applicable Member
(or its members, as the case may be) is not subject to withholding under the provisions of
any federal, state, local, foreign, or other Applicable Law;
(ii) any certificate that the Board may reasonably request with respect to any
such laws; and/or
(iii) any other form or instrument reasonably requested by the Board relating
to any Member's status under such law.
If a Member fails or is unable to deliver to the Board the affidavit described in
Section 7.05(a)(i),the Board may withhold amounts from such Member in accordance with Section
7.05(b).
(b) Withholding Advances. The Company is hereby authorized at all times to make
payments ("Withholding Advances") with respect to each Member in amounts required to
discharge any obligation of the Company(as determined by the Tax Matters Representative based
on the advice of legal or tax counsel to the Company)to withhold or make payments to any federal,
state,local, or foreign taxing authority(a"Taxing Authority")with respect to any Distribution or
allocation by the Company of income or gain to such Member(including payments made pursuant
to Code Section 6225 and allocable to a Member as determined by the Tax Matters Representative
in its sole discretion) and to withhold the same from Distributions to such Member. Any funds
withheld from a Distribution by reason of this Section 7.05(b) will nonetheless be deemed
Distributed to the Member in question for all purposes under this Agreement and, at the option of
the Board,will be charged against the Member's Capital Account.
(c) Repayment of Withholding Advances. Any Withholding Advance made by the
Company to a Taxing Authority on behalf of a Member and not simultaneously withheld from a
Distribution to that Member shall,with interest thereon accruing from the date of payment at a rate
equal to the prime rate published in the Wall Street Journal on the date of payment plus two percent
(2.0%)per annum(the"Company Interest Rate"):
(i) be promptly repaid to the Company by the Member on whose behalf the
Withholding Advance was made (which repayment by the Member will not constitute a
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Capital Contribution,but will credit the Member's Capital Account if the Board will have
initially charged the amount of the Withholding Advance to the Capital Account); or
(ii) with the consent of the Board, be repaid by reducing the amount of the
next succeeding Distribution or Distributions to be made to such Member(which reduction
amount will be deemed to have been Distributed to the Member,but which will not further
reduce the Member's Capital Account if the Board will have initially charged the amount
of the Withholding Advance to the Capital Account).
Interest will cease to accrue from the time the Member on whose behalf the
Withholding Advance was made repays such Withholding Advance (and all accrued interest) by
either method of repayment described above.
(d) Indemnification.Each Member hereby agrees to indemnify and hold harmless the
Company and the other Members from and against any liability with respect to taxes, interest, or
penalties which may be asserted by reason of the Company's failure to deduct and withhold tax on
amounts Distributable or allocable to such Member. The provisions of this Section 7.05(d)and the
obligations of a Member pursuant to Section 7.05(c) will survive the termination, dissolution,
liquidation, and winding up of the Company and the withdrawal of such Member from the
Company or Transfer of its Units. The Company may pursue and enforce all rights and remedies it
may have against each Member under this Section 7.05, including bringing a lawsuit to collect
repayment with interest of any Withholding Advances.
(e) Overwithholding. Neither the Company nor the Board will be liable for any
excess taxes withheld in respect of any Distribution or allocation of income or gain to a Member.
In the event of an overwithholding,a Member's sole recourse will be to apply for a refund from the
appropriate Taxing Authority.
Section 7.06 Distributions in Kind.
(a) The Board is hereby authorized, in its sole discretion,to make Distributions to the
Members in the form of securities or other property held by the Company;provided, that Tax
Advances will only be made in cash. In any non-cash Distribution, the securities or property so
Distributed will be Distributed among the Members in the same proportion and priority as cash
equal to the Fair Market Value of such securities or property would be Distributed among the
Members pursuant to Section 7.02.
(b) Any Distribution of securities will be subject to such conditions and restrictions as
the Board determines are required or advisable to ensure compliance with Applicable Law. In
furtherance of the foregoing, the Board may require that the Members execute and deliver such
documents as the Board may deem necessary or appropriate to ensure compliance with all federal
and state securities laws that apply to such Distribution and any further Transfer of the Distributed
securities,and may appropriately legend the certificates that represent such securities to reflect any
restriction on Transfer with respect to such laws.
ARTICLE VIII
MANAGEMENT
Section 8.01 Establishment of the Board.A board of managers of the Company(the"Board")
is hereby established and will be comprised of natural Persons (each such Person, a"Manager")who will
be appointed in accordance with the provisions of Section 8.02. The business and affairs of the Company
will be managed, operated, and controlled by or under the direction of the Board, and the Board will have,
and is hereby granted, the full and complete power, authority, and discretion for, on behalf of and in the
name of the Company, to take such actions as it may in its sole discretion deem necessary or advisable to
carry out any and all of the objectives and purposes of the Company, subject only to the terms of this
Agreement.
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Section 8.02 Board Composition;Vacancies.
(a) The number of managers constituting the Board is two (2). The Board will be
comprised as follows:
(i) Christopher Wolford, an Idaho State resident and individual; and
(ii) Adam J. Markowich, an Idaho State resident and individual.
At all times, the composition of any board of directors of any wholly owned
Company Subsidiary will be the same as that of the Board.
(b) In the event that a vacancy is created on the Board at any time due to the death,
Disability,retirement, resignation or removal of a Manager, then the Members will have the right
to designate an individual to fill such vacancy and the Company and each Member hereby agree to
take such actions as may be required to ensure the election or appointment of such designee to fill
such vacancy on the Board. In the event that a majority of Members fail to designate in writing a
representative to fill a vacant Manager position on the Board, and such failure will continue for
more than thirty (30 days after notice from the Company to Member with respect to such failure,
then the vacant position will be filled by an individual designated by the Managers then in office;
provided, that such individual will be removed from such position if a majority of Members so
direct and simultaneously designate a new Manager.
(c) If any person serving as the Chief Executive Officer of the Company resigns, is
removed, or is otherwise replaced, such person will automatically, and without any action by the
Board or Members, cease to be a Manager, and the Company's successor Chief Executive Officer
appointed pursuant to Section 8.09 will automatically become a Manager.
Section 8.03 Removal; Resignation.
(a) A Manager may be removed or replaced at any time from the Board,with or
without cause,upon, and only upon,the written request of a majority of Members. The Chief
Executive Officer may be removed in the same manner as any other Officer of the Company, in
accordance with Section 8.09.
(b) A Manager may resign at any time from the Board by delivering his written
resignation to the Board. Any such resignation will be effective upon receipt thereof unless it is
specified to be effective at some other time or upon the occurrence of some other event. The
Board's acceptance of a resignation will not be necessary to make it effective.
Section 8.04 Meetings.
(a) Generally. The Board will meet at such time and at such place as the Board may
designate. Meetings of the Board may be held either in person or by means of telephone or video
conference or other communications device that permits all Managers participating in the meeting
to hear each other, at the offices of the Company or such other place (either within or outside the
State of Wyoming) as may be determined from time to time by the Board. Written notice of each
meeting of the Board will be given to each Manager at least 24 hours prior to each such meeting.
(b) Special Meetings. Special meetings of the Board will be held on the call of any
three(3)Managers upon at least five(5)days'written notice(if the meeting is to be held in person)
or one (1) day's written notice (if the meeting is to be held by telephone communications or video
conference)to the Managers, or upon such shorter notice as may be approved by all the Managers.
Any Manager may waive such notice as to himself.
(c) Attendance and Waiver of Notice.Attendance of a Manager at any meeting will
constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the
express purpose of objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board need be specified in the notice or waiver of notice of such
meeting.
Section 8.05 Quorum; Manner of Acting.
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(a) Quorum. A majority of the Managers serving on the Board will constitute a
quorum for the transaction of business of the Board. At all times when the Board is conducting
business at a meeting of the Board, a quorum of the Board must be present at such meeting. If a
quorum will not be present at any meeting of the Board, then the Managers present at the meeting
may adjourn the meeting from time to time,without notice other than announcement at the meeting,
until a quorum will be present.
(b) Participation.Any Manager may participate in a meeting of the Board by means
of telephone or video conference or other communications device that permits all Managers
participating in the meeting to hear each other, and participation in a meeting by such means will
constitute presence in person at such meeting. A Manager may vote or be present at a meeting
either in person or by proxy, and such proxy may be granted in writing, by means of Electronic
Transmission, or as otherwise permitted by Applicable Law.
(c) Binding Act. Each Manager will have one vote on all matters submitted to the
Board or any committee thereof. With respect to any matter before the Board,the act of a majority
of the Managers constituting a quorum will be the act of the Board.
Section 8.06 Action By Written Consent.Notwithstanding anything herein to the contrary,any
action of the Board(or any committee of the Board)may be taken without a meeting if either(a)a written
consent of a majority of the Managers on the Board(or committee)will approve such action;provided,that
prior written notice of such action is provided to all Managers at least one day before such action is taken,
or (b) a written consent constituting all of the Managers on the Board (or committee) will approve such
action. Such consent will have the same force and effect as a vote at a meeting where a quorum was present
and may be stated as such in any document or instrument filed with the Secretary of State of Wyoming.
Section 8.07 Compensation; No Employment.
(a) Each Manager will be reimbursed for his reasonable out-of-pocket expenses
incurred in the performance of his duties as a Manager, pursuant to such policies as from time to
time established by the Board.Nothing contained in this Section 8.07 will be construed to preclude
any Manager from serving the Company in any other capacity and receiving reasonable
compensation for such services.
(b) This Agreement does not, and is not intended to, confer upon any Manager any
rights with respect to continued employment by the Company, and nothing herein should be
construed to have created any employment agreement with any Manager.
Section 8.08 Committees.
(a) Establishment. The Board may, by resolution, designate from among the
Managers one or more committees, each of which will be comprised of one or more Managers;
provided, that in no event may the Board designate any committee with all of the authority of the
Board. Subject to the immediately preceding proviso, any such committee, to the extent provided
in the resolution forming such committee, will have and may exercise the authority of the Board,
subject to the limitations set forth in Section 8.08(b). The Board may dissolve any committee or
remove any member of a committee at any time.
(b) Limitation of Authority. No committee of the Board will have the authority of
the Board in reference to:
(i) authorizing or making Distributions to the Members;
(ii) authorizing the issuance of Common Units;
(iii) approving a plan of merger or sale of the Company;
(iv) recommending to the Members a voluntary dissolution of the Company or
a revocation thereof;
(v) filling vacancies in the Board; or
(vi) altering or repealing any resolution of the Board that by its terms provides
that it will not be so amendable or repealable.
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Section 8.09 Officers. The Board may appoint individuals as officers of the Company (the
"Officers") as it deems necessary or desirable to carry on the business of the Company and the Board may
delegate to such Officers such power and authority as the Board deems advisable. No Officer need be a
Member or Manager, except that the Chief Executive Officer will automatically become a Manager
pursuant to Section 8.01.Any individual may hold two or more offices of the Company. Each Officer will
hold office until his successor is designated by the Board or until his earlier death,resignation,or removal.
Any Officer may resign at any time upon written notice to the Board. Any Officer may be removed by the
Board (acting by majority vote of all Managers other than the Officer being considered for removal, if
applicable) with or without cause at any time. A vacancy in any office occurring because of death,
resignation,removal, or otherwise,may,but need not,be filled by the Board.
Section 8.10 No Personal Liability. Except as otherwise provided in the Act, by Applicable
Law or expressly in this Agreement, no Manager will be obligated personally for any debt, obligation, or
liability of the Company or of any Company Subsidiaries, whether arising in contract, tort, or otherwise,
solely by reason of being a Manager.
ARTICLE IX
TRANSFER
Section 9.01 General Restrictions on Transfer.
(a) Each Member acknowledges and agrees that such Member (or any Permitted
Transferee of such Member) will not Transfer any Units or Unit Equivalents except as permitted
pursuant to Section 9.02 or in accordance with the procedures described in Section 9.03, as
applicable.Notwithstanding the foregoing or anything in this Agreement to the contrary,
(i) Transfers of Incentive Units will not be permitted except:
(A) pursuant to Section 9.02; or
(B) as set forth in the Incentive Plan or applicable Award Agreement.
No Transfer of Units or Unit Equivalents to a Person not already a Member of the
Company will be deemed completed until the prospective Transferee is admitted as a Member of
the Company in accordance with Section 4.01(b)hereof.
(b) Notwithstanding any other provision of this Agreement (including Section 9.02),
each Member agrees that it will not, directly or indirectly, Transfer any of its Units or Unit
Equivalents, and the Company agrees that it will not issue any Units or Unit Equivalents:
(i) except as permitted under the Securities Act and other applicable federal
or state securities or blue sky laws, and then, with respect to a Transfer of Units or Unit
Equivalents, if requested by the Company, only upon delivery to the Company of an
opinion of counsel in form and substance satisfactory to the Company to the effect that
such Transfer may be effected without registration under the Securities Act;
(ii) if such Transfer or issuance would cause the Company to be considered a
"publicly traded partnership" under Section 7704(b) of the Code within the meaning of
Treasury Regulations Section 1.7704-1(h)(1)(ii), including the look-through rule in
Treasury Regulations Section 1.7704-1(h)(3);
(iii) if such Transfer or issuance would affect the Company's existence or
qualification as a limited liability company under the Act;
(iv) if such Transfer or issuance would cause the Company to lose its status as
a partnership for federal income tax purposes;
(v) if such Transfer or issuance would cause the Company or any of the
Company Subsidiaries to be required to register as an investment company under the
Investment Company Act of 1940, as amended; or
(vi) if such Transfer or issuance would cause the assets of the Company or any
of the Company Subsidiaries to be deemed"Plan Assets" as defined under the Employee
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Retirement Income Security Act of 1974 or its accompanying regulations or result in any
"prohibited transaction"thereunder involving the Company or any Company Subsidiary.
In any event, the Board may refuse the Transfer to any Person if such Transfer
would have a material adverse effect on the Company as a result of any regulatory or other
restrictions imposed by any Governmental Authority.
(c) Any Transfer or attempted Transfer of any Units or Unit Equivalents in violation
of this Agreement will be null and void,no such Transfer will be recorded on the Company's books,
and the purported Transferee in any such Transfer will not be treated(and the purported Transferor
will continue be treated) as the owner of such Units or Unit Equivalents for all purposes of this
Agreement.
(d) For the avoidance of doubt, any Transfer of Units or Unit Equivalents permitted
by Section 9.02 or made in accordance with the procedures described in Section 9.03,as applicable,
and purporting to be a sale,transfer,assignment,or other disposal of the entire Membership Interest
represented by such Units or Unit Equivalents,inclusive of all the rights and benefits applicable to
such Membership Interest as described in the definition of the term"Membership Interest,"will
be deemed a sale,transfer,assignment,or other disposal of such Membership Interest in its entirety
as intended by the parties to such Transfer, and will not be deemed a sale, transfer, assignment, or
other disposal of any less than all of the rights and benefits described in the definition of the term
"Membership Interest,"unless otherwise explicitly agreed to by the parties to such Transfer.
Section 9.02 Permitted Transfers.The transfer restrictions detailed in this Agreement will not
apply to any of the following Transfers by any Member of any of its Units or Unit Equivalents:
(a) With respect to Member, to (i) any Affiliate of Member and (ii) in the event of a
winding up of Member, any of its limited partners in accordance with its constitutive documents;
or
(b) With respect to any Management Member, to (i) such Management Member's
spouse, parent, siblings, descendants (including adoptive relationships and stepchildren), and the
spouses of each such natural persons (collectively, "Family Members"), (ii) a trust under which
the distribution of Units may be made only to such Management Member and/or any Family
Member of such Management Member, (iii) a charitable remainder trust, the income from which
will be paid to such Management Member during his life,(iv)a corporation,partnership,or limited
liability company, the stockholders, partners, or members of which are only such Management
Member and/or Family Members of such Management Member, or (v) by will or by the laws of
intestate succession, to such Management Member's executors, administrators, testamentary
trustees, legatees, or beneficiaries;provided, that any Management Member who Transfers Units
will remain bound by the provisions of Section 10.01.
Section 9.03 Right of First Refusal.
(a) Offered Units.
(i) The Company, first, and each Member holding Common units(as
applicable), second,will have a right of first refusal if any other Member(the"Offering
Member")receives a bona fide offer that the Offering Member desires to accept to
Transfer all or any portion of the Common Units (or applicable Unit Equivalents) (the
"Offered Common Units")it owns(the Offered Common Units, collectively,the
"Offered Units").
(ii) As used herein,the term"Applicable Offered Units"will mean the
Offered Common Units with respect to those Members holding Common Units(or
applicable Unit Equivalents)(the"Applicable Offered Common Units").As used
herein,the term"Applicable ROFR Rightholders"will mean, in the case of a proposed
Transfer of Common Units(or applicable Unit Equivalents), all Members other than the
Offering Member holding Common Units(or applicable Unit Equivalents);provided,that
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in the case of the Member, in each case,Applicable ROFR Rightholder will include the
Member and each of its Affiliates(including funds and other investment vehicles that
have affiliated but not identical managing members or general partners).
(b) Offering; Exceptions. Each time the Offering Member receives an offer for a
Transfer of any of its Common units(or applicable Unit Equivalents) (other than Transfers that(i)
are permitted by Section 9.02„ the Offering Member will first make an offering of the Offered
Units to the Company,first,and the Applicable ROFR Rightholders,second,all in accordance with
the following provisions of this Section 9.03, prior to Transferring such Offered Units to the
proposed purchaser.
(c) Offer Notice.
(i) The Offering Member shall, within five (5) Business Days of receipt of
the Transfer offer, give written notice (the "Offering Member Notice") to the Company
and the Applicable ROFR Rightholders stating that it has received a bona fide offer for a
Transfer of its Common units(or applicable Unit Equivalents)and specifying:
(A) the number of Offered Common Units to be Transferred by the
Offering Member;
(B) the proposed date, time, and location of the closing of the
Transfer,which will not be less than 60 (sixty) days from the date of the Offering
Member Notice;
(C) the purchase price per Applicable Offered Unit (which will be
payable solely in cash)and the other material terms and conditions of the Transfer;
and
(D) the name of the Person who has offered to purchase such Offered
Units.
(ii) The Offering Member Notice will constitute the Offering Member's offer
to Transfer the Offered Units to the Company and the Applicable ROFR Rightholders,
which offer will be irrevocable until the end of the ROFR Rightholder Option Period
described in Section 9.03(d)(iv).
(iii) By delivering the Offering Member Notice, the Offering Member
represents and warrants to the Company and each Applicable ROFR Rightholder that:
(A) the Offering Member has full right,title,and interest in and to the
Offered Units;
(B) the Offering Member has all the necessary power and authority
and has taken all necessary action to Transfer such Offered Units as contemplated
by this Section 9.03; and
(C) the Offered Units are free and clear of any and all liens other than
those arising as a result of or under the terms of this Agreement.
(d) Exercise of Right of First Refusal.
(i) Upon receipt of the Offering Member Notice, the Company and each
Applicable ROFR Rightholder will have the right to purchase the Applicable Offered Units
in the following order of priority:first, the Company will have the right to purchase all or
any portion of the Offered Units in accordance with the procedures set forth in Section
9.03(d)(iii), and thereafter, the Applicable ROFR Rightholders will have the right to
purchase the Applicable Offered Units, in accordance with the procedures set forth in
Section 9.03(d)(iv), to the extent the Company does not exercise its right in full.
Notwithstanding the foregoing,the Company and the Applicable ROFR Rightholders may
only exercise their right to purchase the Offered Units if,after giving effect to all elections
made under this Section 9.03(d),no less than all of the Offered Units will be purchased by
the Company and/or the Applicable ROFR Rightholders.
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(ii) For the avoidance of doubt, in the event of a proposed Transfer of both
Common units (and/or applicable Unit Equivalents), the Offering Member may deliver a
single Offering Member Notice to the Company and all Members holding any Common
Units (and/or applicable Unit Equivalents). Upon their receipt of the Offering Member
Notice:first,the Company will have the right to elect to purchase all or any portion of the
Offered Common Units;provided, in all cases,that the Company's and Applicable ROFR
Rightholders' rights to purchase any Offered any Offered Common Units will only be
exercisable if, after giving effect to all elections made under this Section 9.03(d), the
Company and/or the Applicable ROFR Rightholders will have elected to purchase no less
than all the Offered Common Units.
(iii) The initial right of the Company to purchase any Offered Units will be
exercisable with the delivery of a written notice(the"Company ROFR Exercise Notice")
by the Company to the Offering Member and the Applicable ROFR Rightholders within
ten (10) Business Das of receipt of the Offering Member Notice (the "Company Option
Period"), stating the number (including where such number is zero) and type of Offered
Units the Company elects irrevocably to purchase on the terms and respective purchase
prices set forth in the Offering Member Notice. The Company ROFR Exercise Notice will
be binding upon delivery and irrevocable by the Company.
(iv) If the Company will have indicated an intent to purchase any less than all
of the Offered Common Units, the Applicable ROFR Rightholders will have the right to
purchase the remaining Applicable Offered Units not selected by the Company. For a
period of fifteen (15) Business Days following the receipt of a Company ROFR Exercise
Notice in which the Company has elected to purchase less than all the Offered Units(such
period, the "ROFR Rightholder Option Period"), each Applicable ROFR Rightholder
will have the right to elect irrevocably to purchase all or none of its Common Pro Rata
Portion of the remaining Applicable Offered Common Units by delivering a written notice
to the Company and the Offering Member (a "Member ROFR Exercise Notice")
specifying its desire to purchase its Common Pro Rata Portion of the remaining Applicable
Offered Common Units, on the terms and respective purchase prices set forth in the
Offering Member Notice. In addition, each Applicable ROFR Rightholder will include in
its Member ROFR Exercise Notice the number of remaining Applicable Offered Units that
it wishes to purchase if any other Applicable ROFR Rightholders do not exercise their
rights to purchase their entire Applicable Pro Rata Portions of the remaining Applicable
Offered Units. Any Member ROFR Exercise Notice will be binding upon delivery and
irrevocable by the Applicable ROFR Rightholder.
(v) The failure of the Company or any Applicable ROFR Rightholder to
deliver a Company ROFR Exercise Notice or Member ROFR Exercise Notice,
respectively, by the end of the Company Option Period or ROFR Rightholder Option
Period,respectively,will constitute a waiver of their respective rights of first refusal under
this Section 9.03 with respect to the Transfer of Offered Units, but will not affect their
respective rights with respect to any future Transfers.
(e) Allocation of Offered Units. Upon the expiration of the ROFR Rightholder
Option Period,the Applicable Offered Units not selected for purchase by the Company pursuant to
Section 9.03(d)(iii) will be allocated for purchase among the Applicable ROFR Rightholders as
follows:
(i) First,to each Applicable ROFR Rightholder having elected to purchase its
entire Applicable Pro Rata Portion of such Units, such Applicable ROFR Rightholder's
Applicable Pro Rata Portion of such Units; and
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(ii) Second, the balance, if any, not allocated under clause (i) above (and not
purchased by the Company pursuant to Section 9.03(d)(iii)), will be allocated to those
Applicable ROFR Rightholders who set forth in their Member ROFR Exercise Notices a
number of Applicable Offered Units that exceeded their respective Applicable Pro Rata
Portions (the "Purchasing Rightholders"), in an amount, with respect to each such
Purchasing Rightholder,that is equal to the lesser of.
(A) the number of Applicable Offered Units that such Purchasing
Rightholder elected to purchase in excess of its Applicable Pro Rata Portion; or
(B) the product of(x) the number of Applicable Offered Units not
allocated under Section 9.03(e)(i)(and not purchased by the Company pursuant to
Section 9.03(d)(iii)), multiplied by (y) a fraction, the numerator of which is the
number of Applicable Offered Units that such Purchasing Rightholder was
permitted to purchase pursuant to clause (i), and the denominator of which is the
aggregate number of Applicable Offered Units that all Purchasing Rightholders
were permitted to purchase pursuant to Section 9.03(e)(i).
The process described in Section 9.03(e)(ii)will be repeated until no Offered Units
remain or until such time as all Purchasing Rightholders have been permitted to purchase all
Applicable Offered Units that they desire to purchase.
(f) Consummation of Sale. In the event that the Company and/or the Applicable
ROFR Rightholders will have,in the aggregate,exercised their respective rights to purchase all and
not less than all of the Offered Units,then the Offering Member will sell such Offered Units to the
Company and/or the Applicable ROFR Rightholders, and the Company and/or the Applicable
ROFR Rightholders, as the case may be, will purchase such Offered Units, within sixty(60) days
following the expiration of the ROFR Rightholder Option Period (which period may be extended
for a reasonable time not to exceed ninety (90) days to the extent reasonably necessary to obtain
required approvals or consents from any Governmental Authority). Each Member will take all
actions as may be reasonably necessary to consummate the sale contemplated by this Section
9.03(f), including, without limitation, entering into agreements and delivering certificates and
instruments and consents as may be deemed necessary or appropriate. At the closing of any sale
and purchase pursuant to this Section 9.03(f), the Offering Member will deliver to the Company
and/or the participating Applicable ROFR Rightholders certificates (if any) representing the
Offered Units to be sold, free and clear of any liens or encumbrances (other than those contained
in this Agreement), accompanied by evidence of transfer and all necessary transfer taxes paid and
stamps affixed,if necessary,against receipt of the purchase price therefor from the Company and/or
such Applicable ROFR Rightholders by certified or official bank check or by wire transfer of
immediately available funds.
(g) Sale to Proposed Purchaser.In the event that the Company and/or the Applicable
ROFR Rightholders will not have collectively elected to purchase all of the Offered Units, then,
provided the Offering Member has also complied with the provisions of this Agreement, to the
extent applicable, the Offering Member may Transfer all of such Offered Units, at a price per
Applicable Offered Unit not less than specified in the Offering Member Notice and on other terms
and conditions which are not materially more favorable in the aggregate to the proposed purchaser
than those specified in the Offering Member Notice,but only to the extent that such Transfer occurs
within ninety(90)days after expiration of the ROFR Rightholder Option Period.Any Offered Units
not Transferred within such 90-day period will be subject to the provisions of this Section 9.03
upon subsequent Transfer.
ARTICLE X
COVENANTS
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Section 10.01 Confidentiality.
(a) Each Management Member acknowledges that during the term of this Agreement,
he will have access to and become acquainted with trade secrets, proprietary information, and
confidential information belonging to the Company,the Company Subsidiaries,and their Affiliates
that are not generally known to the public, including, but not limited to, information concerning
business plans, financial statements, and other information provided pursuant to this Agreement,
operating practices and methods, expansion plans, strategic plans, marketing plans, contracts,
customer lists,or other business documents which the Company treats as confidential,in any format
whatsoever (including oral, written, electronic or any other form or medium) (collectively,
"Confidential Information"). In addition, each Management Member acknowledges that: (i) the
Company has invested, and continues to invest, substantial time, expense, and specialized
knowledge in developing its Confidential Information; (ii) the Confidential Information provides
the Company with a competitive advantage over others in the marketplace; and(iii)the Company
would be irreparably harmed if the Confidential Information were disclosed to competitors or made
available to the public. Without limiting the applicability of any other agreement to which any
Management Member is subject, no Management Member shall, directly or indirectly, disclose or
use(other than solely for the purposes of such Management Member monitoring and analyzing his
investment in the Company or performing his duties as a Manager, Officer, employee, consultant,
or other service provider of the Company) at any time, including, without limitation, use for
personal, commercial, or proprietary advantage or profit, either during his association or
employment with the Company or thereafter, any Confidential Information of which such
Management Member is or becomes aware. Each Management Member in possession of
Confidential Information will take all appropriate steps to safeguard such information and to protect
it against disclosure,misuse, espionage, loss, and theft.
(b) Nothing contained in Section 10.01(a)will prevent any Management Member from
disclosing Confidential Information: (i)upon the order of any court or administrative agency; (ii)
upon the request or demand of any regulatory agency or authority having jurisdiction over such
Management Member; (iii) to the extent compelled by legal process or required or requested
pursuant to subpoena, interrogatories, or other discovery requests; (iv) to the extent necessary in
connection with the exercise of any remedy hereunder; (v) to other Members; (vi) to such
Management Member's Representatives who, in the reasonable judgment of such Management
Member, need to know such Confidential Information and agree to be bound by the provisions of
this Section 10.01 as if a Management Member; or (vii) to any potential Permitted Transferee in
connection with a proposed Transfer of Units from such Management Member, as long as such
Transferee agrees to be bound by the provisions of this Section 10.01 as if a Management Member;
provided, that in the case of clause (i), (ii) or (iii), such Management Member will notify the
Company and other Members of the proposed disclosure as far in advance of such disclosure as
practicable (but in no event make any such disclosure before notifying the Company and other
Members) and use reasonable efforts to ensure that any Confidential Information so disclosed is
accorded confidential treatment satisfactory to the Company,when and if available.
(c) The restrictions of Section 10.01(a)will not apply to Confidential Information that:
(i) is or becomes generally available to the public other than as a result of a disclosure by a
Management Member in violation of this Agreement;(ii)is or becomes available to a Management
Member or any of its Representatives on a non-confidential basis prior to its disclosure to the
receiving Management Member and any of its Representatives in compliance with this Agreement;
(iii) is or has been independently developed or conceived by such Management Member without
use of Confidential Information; or(iv)becomes available to the receiving Management Member
or any of its Representatives on a non-confidential basis from a source other than the Company,
any other Member or any of their respective Representatives;provided, that such source is not
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known by the recipient of the Confidential Information to be bound by a confidentiality agreement
with the disclosing Member or any of its Representatives.
Section 10.02 Non-Solicit.
(a) Non-Solicit of Employees. In light of each Management Member's access to
Confidential Information and position of trust and confidence with the Company, each
Management Member further agrees that, during the Restricted Period, he will not, directly or
indirectly through one or more of any of their respective Affiliates,hire or solicit,or encourage any
other Person to hire or solicit, any individual who has been employed by the Company or any
Company Subsidiary within one(1)year prior to the date of such hiring or solicitation,or encourage
any such individual to leave such employment. This Section 10.02(a) will not prevent a
Management Member from hiring or soliciting any employee or former employee of the Company
or any Company Subsidiary who responds to a general solicitation that is a public solicitation of
prospective employees and not directed specifically to any Company or Company Subsidiary
employees.
(b) Non-Solicit of Clients. In light of each Management Member's access to
Confidential Information and position of trust and confidence with the Company, each
Management Member further agrees that, during the Restricted Period, he will not, directly or
indirectly through one or more of any of their respective Affiliates, solicit or entice, or attempt to
solicit or entice, any clients, customers, or suppliers of the Company or any Company Subsidiary
for purposes of diverting their business or services from the Company.
(c) Blue Pencil. If any court of competent jurisdiction determines that any of the
covenants set forth in this Section 10.02, or any part thereof, is unenforceable because of the
duration or geographic scope of such provision,such court will have the power to modify any such
unenforceable provision in lieu of severing such unenforceable provision from this Agreement in
its entirety, whether by rewriting the offending provision, deleting any or all of the offending
provision,adding additional language to this Section 10.02,or by making such other modifications
as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the
maximum extent permitted by Applicable Law. The parties hereto expressly agree that this
Agreement as so modified by the court will be binding upon and enforceable against each of them.
Section 10.03 Other Business Activities. The parties hereto expressly acknowledge and agree
that: (i) Member and its Affiliates are permitted to have, and may presently or in the future have,
investments or other business relationships,ventures,agreements,or arrangements with entities engaged in
the business of the Company, other than through the Company and the Company Subsidiaries (an"Other
Business"); (ii)the Member and its Affiliates have or may develop a strategic relationship with businesses
that are or may be competitive with the Company and the Company Subsidiaries; (iii)none of the Member
or its Affiliates will be prohibited by virtue of the Member's investment in the Company from pursuing and
engaging in any such activities; (iv) none of the Members or its Affiliates will be obligated to inform the
Company or any Management Member of any such opportunity,relationship, or investment(a"Company
Opportunity") or to present Company Opportunity, and the Company hereby renounces any interest in a
Company Opportunity and any expectancy that a Company Opportunity will be offered to it. The parties
hereto expressly authorize and consent to the involvement of the Member and/or its Affiliates in any Other
Business;provided, that any transactions between the Company and/or the Company Subsidiaries and an
Other Business will be on terms no less favorable to the Company and/or the Company Subsidiaries than
would be obtainable in a comparable arm's-length transaction. The parties hereto expressly waive, to the
fullest extent permitted by Applicable Law, any rights to assert any claim that such involvement breaches
any fiduciary or other duty or obligation owed to the Company or any Member or to assert that such
involvement constitutes a conflict of interest by such Persons with respect to the Company or any Member.
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ARTICLE XI
ACCOUNTING; TAX MATTERS
Section 11.01 Financial Statements.The Company will furnish to each Member holding 5%or
more of the Common Units of the Company(each, a"Qualified Member")the following reports:
(a) Annual Financial Statements.As soon as available, and in any event within one
hundred twenty(120)days after the end of each Fiscal Year,audited consolidated balance sheets of
the Company and Company Subsidiaries as at the end of each such Fiscal Year and audited
consolidated statements of income, cash flows, and Members' equity for such Fiscal Year, in each
case setting forth in comparative form the figures for the previous Fiscal Year,accompanied by the
certification of independent certified public accountants of recognized national standing selected
by the Board,certifying to the effect that,except as set forth therein,such financial statements have
been prepared in accordance with GAAP, applied on a basis consistent with prior years, and fairly
present in all material respects the financial condition of the Company and Company Subsidiaries
as of the dates thereof and the results of their operations and changes in their cash flows and
Members' equity for the periods covered thereby.
(b) Quarterly Financial Statements. As soon as available, and in any event within
forty-five (45) days after the end of each quarterly accounting period in each Fiscal Year (other
than the last fiscal quarter of the Fiscal Year), unaudited consolidated balance sheets of the
Company and Company Subsidiaries as at the end of each such fiscal quarter and for the current
Fiscal Year to date and unaudited consolidated statements of income, cash flows, and Members'
equity for such fiscal quarter and for the current Fiscal Year to date, in each case setting forth in
comparative form the figures for the corresponding periods of the previous fiscal quarter, all in
reasonable detail and all prepared in accordance with GAAP, consistently applied (subject to
normal year-end audit adjustments and the absence of notes thereto), and certified by the principal
financial or accounting officer of the Company.
(c) Monthly Financial Statements. As soon as available, and in any event within
thirty (30) days after the end of each monthly accounting period in each fiscal quarter(other than
the last month of the fiscal quarter), unaudited consolidated balance sheets of the Company and
Company Subsidiaries as at the end of each such monthly period and for the current Fiscal Year to
date and unaudited consolidated statements of income, cash flows, and Members' equity for each
such monthly period and for the current Fiscal Year to date,all in reasonable detail and all prepared
in accordance with GAAP, consistently applied(subject to normal year-end audit adjustments and
the absence of notes thereto).
Section 11.02 Inspection Rights. Upon reasonable notice from a Qualified Member, the
Company shall, and will cause its Managers, Officers, and employees to, afford each Qualified Member
and its Representatives reasonable access during normal business hours to (i) the Company's and the
Company Subsidiaries' properties, offices, plants, and other facilities, (ii) the corporate, financial and
similar records,reports,and documents of the Company and the Company Subsidiaries,including,without
limitation, all books and records, minutes of proceedings, internal management documents, reports of
operations,reports of adverse developments, copies of any management letters, and communications with
Members or Managers, and to permit each Qualified Member and its Representatives to examine such
documents and make copies thereof,and(iii)the Company's and the Company Subsidiaries'Officers,senior
employees, and public accountants, and to afford each Qualified Member and its Representatives the
opportunity to discuss and advise on the affairs, finances, and accounts of the Company and the Company
Subsidiaries with their Officers, senior employees, and public accountants (and the Company hereby
authorizes said accountants to discuss with such Qualified Member and its Representatives such affairs,
finances, and accounts).
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Section 11.03 Tax Matters Representative.
(a) Appointment. The Members hereby appoint the CEO or President as the
"partnership representative" as provided in Code Section 6223(a) (the "Tax Matters
Representative"). If Member ceases to be the Tax Matters Representative for any reason, the
Board will appoint a new Tax Matters Representative.The Tax Matters Representative will appoint
an individual meeting the requirements of Treasury Regulation Section 301.6223-1(c)(3) as the
sole person authorized to represent the Tax Matters Representative in audits and other proceedings
governed by the partnership audit procedures set forth in Subchapter C of Chapter 63 of the Code
as amended by the BBA(the"Revised Partnership Audit Rules").
(b) Tax Examinations and Audits.The Tax Matters Representative is authorized and
required to represent the Company(at the Company's expense)in connection with all examinations
of the Company's affairs by Taxing Authorities, including resulting administrative and judicial
proceedings, and to expend Company funds for professional services and costs associated
therewith.The Tax Matters Representative will have sole authority to act on behalf of the Company
in any such examinations and any resulting judicial proceedings, and will have sole discretion to
determine whether the Company(either on its own behalf or on behalf of the Members)will contest
or continue to contest any tax deficiencies assessed or proposed to be assessed by any Taxing
Authority. The Company and its Members will be bound by the actions taken by the Tax Matters
Representative.
(c) US Federal Tax Proceedings. In the event of an audit of the Company that is
subject to the Revised Partnership Audit Rules, the Tax Matters Representative, in its sole
discretion,will have the right to make any and all elections and to take any actions that are available
to be made or taken by the Tax Matters Representative or the Company under the Revised
Partnership Audit Rules (including any election under Code Section 6226). If an election under
Code Section 6226(a) is made,the Company will furnish to each Member for the year under audit
a statement of the Member's share of any adjustment set forth in the notice of final partnership
adjustment, and each Member will take such adjustment into account as required under Code
Section 6226(b).To the extent that the Tax Matters Representative does not make an election under
Code Section 6221(b) or Code Section 6226, the Company will use commercially reasonable
efforts to make any modifications available under Code Section 6225(c)(3), (4), and (5), to the
extent such modification would reduce any taxes payable by the Company. Each Member agrees
to cooperate with the Tax Matters Representative and to do or refrain from doing any or all things
reasonably requested by the Tax Matters Representative with respect to the conduct of
examinations under the Revised Partnership Audit Rules; provided, that a Member will not be
required to file an amended federal income tax return, as described in Code Section 6225(c)(2)(A)
, or pay any tax due and provide information to the Internal Revenue Service as described in Code
Section 6225(c)(2)(B).
(d) Tax Returns and Tax Deficiencies.Each Member agrees that such Member will
not treat any Company item inconsistently on such Member's federal,state,foreign,or other income
tax return with the treatment of the item on the Company's return.Any deficiency for taxes imposed
on any Member(including penalties,additions to tax,or interest imposed with respect to such taxes
and any tax deficiency imposed pursuant to Code Section 6226)will be paid by such Member and
if required to be paid(and actually paid)by the Company,will be recoverable from such Member
as provided in Section 7.05(d).
Section 11.04 Tax Returns. At the expense of the Company, the Board (or any Officer that it
may designate pursuant to Section 8.09)will endeavor to cause the preparation and timely filing(including
extensions) of all tax returns required to be filed by the Company pursuant to the Code as well as all other
required tax returns in each jurisdiction in which the Company and the Company Subsidiaries own property
or do business. As soon as reasonably possible after the end of each Fiscal Year, the Board or designated
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Officer will cause to be delivered to each Person who was a Member at any time during such Fiscal Year,
IRS Schedule K-1 to Form 1065 and such other information with respect to the Company as may be
necessary for the preparation of such Person's federal, state and local income tax returns for such Fiscal
Year.
Section 11.05 Company Funds. All funds of the Company will be deposited in its name, or in
such name as may be designated by the Board, in such checking, savings, or other accounts, or held in its
name in the form of such other investments as will be designated by the Board. The funds of the Company
will not be commingled with the funds of any other Person.All withdrawals of such deposits or liquidations
of such investments by the Company will be made exclusively upon the signature or signatures of such
Officer or Officers as the Board may designate.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
Section 12.01 Events of Dissolution. The Company will be dissolved and its affairs wound up
only upon the occurrence of any of the following events:
(a) The determination of the Board to dissolve the Company;
(b) An election to dissolve the Company made by holders of a majority of the
Common Units;
(c) The sale, exchange, involuntary conversion, or other disposition or Transfer of all
or substantially all the assets of the Company; or
(d) The entry of a decree of judicial dissolution.
Section 12.02 Effectiveness of Dissolution.Dissolution of the Company will be effective on the
day on which the event described in Section 12.01 occurs, but the Company will not terminate until the
winding up of the Company has been completed, the assets of the Company have been Distributed as
provided in Section 12.03 and the Certificate of Formation will have been cancelled as provided in Section
12.04.
Section 12.03 Liquidation.If the Company is dissolved pursuant to Section 12.01,the Company
will be liquidated and its business and affairs wound up in accordance with the Act and the following
provisions:
(a) Liquidator. The Board, or, if the Board is unable to do so, a Person selected by
the holders of a majority of the Common Units,will act as liquidator to wind up the Company(the
"Liquidator").The Liquidator will have full power and authority to sell,assign,and encumber any
or all of the Company's assets and to wind up and liquidate the affairs of the Company in an orderly
and business-like manner.
(b) Accounting. As promptly as possible after dissolution and again after final
liquidation, the Liquidator will cause a proper accounting to be made by a recognized firm of
certified public accountants of the Company's assets,liabilities,and operations through the last day
of the calendar month in which the dissolution occurs or the final liquidation is completed, as
applicable.
(c) Distribution of Proceeds.The Liquidator will liquidate the assets of the Company
and Distribute the proceeds of such liquidation in the following order of priority,unless otherwise
required by mandatory provisions of Applicable Law:
(i) First, to the payment of all of the Company's debts and liabilities to its
creditors (including Members, if applicable) and the expenses of liquidation (including
sales commissions incident to any sales of assets of the Company);
(ii) Second, to the establishment of and additions to reserves that are
determined by the Board in its sole discretion to be reasonably necessary for any contingent
unforeseen liabilities or obligations of the Company; and
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(iii) Third,to the Members in the same manner as Distributions are made under
Section 7.02.
(d) Discretion of Liquidator.Notwithstanding the provisions of Section 12.03(c)that
require the liquidation of the assets of the Company,but subject to the order of priorities set forth
in Section 12.03(c), if upon dissolution of the Company the Liquidator determines that an
immediate sale of part or all of the Company's assets would be impractical or could cause undue
loss to the Members,the Liquidator may defer the liquidation of any assets except those necessary
to satisfy Company liabilities and reserves, and may, in its absolute discretion, Distribute to the
Members, in lieu of cash, as tenants in common and in accordance with the provisions of Section
12.03(c), undivided interests in such Company assets as the Liquidator deems not suitable for
liquidation. Any such Distribution in kind will be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems reasonable and equitable
and to any agreements governing the operating of such properties at such time.For purposes of any
such Distribution, any property to be Distributed will be valued at its Fair Market Value.
Section 12.04 Termination of Certificate.Upon completion of the Distribution of the assets of
the Company as provided in Section 12.03(c)hereof, the Company will be terminated and the Liquidator
will cause the termination of the Certificate of Formation in the State of Wyoming and of all qualifications
and registrations of the Company as a foreign limited liability company in jurisdictions other than the State
of Wyoming and will take such other actions as may be necessary to terminate the Company.
Section 12.05 Survival of Rights, Duties, and Obligations. Dissolution, liquidation, winding
up, or termination of the Company for any reason will not release any party from any Loss which at the
time of such dissolution, liquidation, winding up, or termination already had accrued to any other party or
which thereafter may accrue in respect of any act or omission prior to such dissolution,liquidation,winding
up, or termination. For the avoidance of doubt, none of the foregoing will replace, diminish, or otherwise
adversely affect any Member's right to indemnification pursuant to Section 13.03.
Section 12.06 Recourse for Claims.Each Member will look solely to the assets of the Company
for all Distributions with respect to the Company, such Member's Capital Account, and such Member's
share of Net Income, Net Loss, and other items of income, gain, loss, and deduction, and will have no
recourse therefor(upon dissolution or otherwise)against the Board,the Liquidator or any other Member.
ARTICLE XIII
EXCULPATION AND INDEMNIFICATION
Section 13.01 Exculpation of Covered Persons.
(a) Covered Persons.As used herein,the term"Covered Person"will mean(i)
each Member, (ii) each officer, director, shareholder,partner,member, controlling Affiliate,
employee, agent, or representative of each Member,and each of their controlling Affiliates, and
(iii)each Manager, Officer, employee, agent, or representative of the Company.
(b) Standard of Care.No Covered Person will be liable to the Company or any
other Covered Person for any loss, damage, or claim incurred by reason of any action taken or
omitted to be taken by such Covered Person in his,her, or its capacity as a Covered Person, so
long as such action or omission does not constitute fraud or willful misconduct by such Covered
Person.
(c) Good Faith Reliance.A Covered Person will be fully protected in relying in good
faith upon the records of the Company and upon such information,opinions,reports, or statements
(including financial statements and information, opinions, reports, or statements as to the value or
amount of the assets, liabilities,Net Income, or Net Losses of the Company or any facts pertinent
to the existence and amount of assets from which Distributions might properly be paid) of the
following Persons or groups: (i) another Manager; (ii) one or more Officers or employees of the
Company; (iii) any attorney, independent accountant, appraiser, or other expert or professional
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employed or engaged by or on behalf of the Company; or (iv) any other Person selected in good
faith by or on behalf of the Company,in each case as to matters that such relying Person reasonably
believes to be within such other Person's professional or expert competence.
Section 13.02 Liabilities and Duties of Covered Persons.
(a) Limitation of Liability. This Agreement is not intended to, and does not, create
or impose any fiduciary duty on any Covered Person. Furthermore, each of the Members and the
Company hereby waives any and all fiduciary duties that, absent such waiver, may be implied by
Applicable Law, and in doing so, acknowledges and agrees that the duties and obligation of each
Covered Person to each other and to the Company are only as expressly set forth in this Agreement.
The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a
Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such
other duties and liabilities of such Covered Person.
(b) Duties.Whenever in this Agreement a Covered Person is permitted or required to
make a decision(including a decision that is in such Covered Person's"discretion"or under a grant
of similar authority or latitude),the Covered Person will be entitled to consider only such interests
and factors as such Covered Person desires, including its own interests, and will have no duty or
obligation to give any consideration to any interest of or factors affecting the Company or any other
Person.Whenever in this Agreement a Covered Person is permitted or required to make a decision
in such Covered Person's "good faith," the Covered Person will act under such express standard
and will not be subject to any other or different standard imposed by this Agreement or any other
Applicable Law.
Section 13.03 Indemnification.
(a) Indemnification.To the fullest extent permitted by the Act,as the same now exists
or may hereafter be amended, substituted, or replaced (but, in the case of any such amendment,
substitution, or replacement only to the extent that such amendment, substitution, or replacement
permits the Company to provide broader indemnification rights than the Act permitted the
Company to provide prior to such amendment, substitution, or replacement), the Company will
indemnify, hold harmless, defend, pay, and reimburse any Covered Person against any and all
losses, claims, damages,judgments, fines, or liabilities, including reasonable legal fees or other
expenses incurred in investigating or defending against such losses, claims, damages,judgments,
fines,or liabilities, and any amounts expended in settlement of any claims(collectively,"Losses")
to which such Covered Person may become subject by reason of-
(i) Any act or omission or alleged act or omission performed or omitted to be
performed on behalf of the Company, any Member, or any direct or indirect Subsidiary of
the foregoing in connection with the business of the Company; or
(ii) The fact that such Covered Person is or was acting in connection with the
business of the Company as a partner,member,stockholder,controlling Affiliate,manager,
director, officer, employee, or agent of the Company, any Member, or any of their
respective controlling Affiliates, or that such Covered Person is or was serving at the
request of the Company as a partner, member, manager, director, officer, employee, or
agent of any Person including the Company or any Company Subsidiary;
provided, that (x) such Covered Person acted in good faith and in a manner
believed by such Covered Person to be in,or not opposed to,the best interests of the Company and,
with respect to any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful, and(y) such Covered Person's conduct did not constitute fraud or willful misconduct, in
either case as determined by a final, nonappealable order of a court of competent jurisdiction. In
connection with the foregoing, the termination of any action, suit, or proceeding by judgment,
order, settlement,conviction, or upon a plea of nolo contendere or its equivalent,will not,of itself,
create a presumption that the Covered Person did not act in good faith or, with respect to any
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criminal proceeding, had reasonable cause to believe that such Covered Person's conduct was
unlawful, or that the Covered Person's conduct constituted fraud or willful misconduct.
(b) Reimbursement. The Company will promptly reimburse (and/or advance to the
extent reasonably required) each Covered Person for reasonable legal or other expenses (as
incurred) of such Covered Person in connection with investigating, preparing to defend, or
defending any claim, lawsuit, or other proceeding relating to any Losses for which such Covered
Person may be indemnified pursuant to this Section 13.03;provided, that if it is finally judicially
determined that such Covered Person is not entitled to the indemnification provided by this Section
13.03, then such Covered Person will promptly reimburse the Company for any reimbursed or
advanced expenses.
(c) Entitlement to Indemnity. The indemnification provided by this Section 13.03
will not be deemed exclusive of any other rights to indemnification to which those seeking
indemnification may be entitled under any agreement or otherwise. The provisions of this Section
13.03 will continue to afford protection to each Covered Person regardless of whether such Covered
Person remains in the position or capacity pursuant to which such Covered Person became entitled
to indemnification under this Section 13.03 and will inure to the benefit of the executors,
administrators, legatees, and distributees of such Covered Person.
(d) Insurance. To the extent available on commercially reasonable terms, the
Company may purchase, at its expense, insurance to cover Losses covered by the foregoing
indemnification provisions and to otherwise cover Losses for any breach or alleged breach by any
Covered Person of such Covered Person's duties in such amount and with such deductibles as the
Board may determine;provided,that the failure to obtain such insurance will not affect the right to
indemnification of any Covered Person under the indemnification provisions contained herein,
including the right to be reimbursed or advanced expenses or otherwise indemnified for Losses
hereunder. If any Covered Person recovers any amounts in respect of any Losses from any
insurance coverage,then such Covered Person shall,to the extent that such recovery is duplicative,
reimburse the Company for any amounts previously paid to such Covered Person by the Company
in respect of such Losses.
(e) Funding of Indemnification Obligation. Notwithstanding anything contained
herein to the contrary,any indemnity by the Company relating to the matters covered in this Section
13.03 will be provided out of and to the extent of Company assets only, and no Member (unless
such Member otherwise agrees in writing)will have personal liability on account thereof or will be
required to make additional Capital Contributions to help satisfy such indemnity by the Company.
(f) Savings Clause. If this Section 13.03 or any portion hereof will be invalidated on
any ground by any court of competent jurisdiction,then the Company will nevertheless indemnify
and hold harmless each Covered Person pursuant to this Section 13.03 to the fullest extent permitted
by any applicable portion of this Section 13.03 that will not have been invalidated and to the fullest
extent permitted by Applicable Law.
(g) Amendment. The provisions of this Section 13.03 will be a contract between the
Company,on the one hand,and each Covered Person who served in such capacity at any time while
this Section 13.03 is in effect, on the other hand, pursuant to which the Company and each such
Covered Person intend to be legally bound.No amendment,modification, or repeal of this Section
13.03 that adversely affects the rights of a Covered Person to indemnification for Losses incurred
or relating to a state of facts existing prior to such amendment, modification, or repeal will apply
in such a way as to eliminate or reduce such Covered Person's entitlement to indemnification for
such Losses without the Covered Person's prior written consent.
Section 13.04 Survival. The provisions of this ARTICLE XIII will survive the dissolution,
liquidation,winding up, and termination of the Company.
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ARTICLE XIV
MISCELLANEOUS
Section 14.01 Expenses.Except as otherwise expressly provided herein, all costs and expenses,
including fees and disbursements of counsel, financial advisors, and accountants, incurred in connection
with the preparation and execution of this Agreement, or any amendment or waiver hereof, and the
transactions contemplated hereby will be paid by the party incurring such costs and expenses.
Section 14.02 Further Assurances.In connection with this Agreement and the transactions
contemplated hereby,the Company and each Member hereby agrees, at the request of the Company or
any other Member,to execute and deliver such additional documents, instruments,conveyances, and
assurances and to take such further actions as may be required to carry out the provisions hereof and give
effect to the transactions contemplated hereby.
Section 14.03 Notices. All notices, requests, consents, claims, demands, waivers, and other
communications hereunder will be in writing and will be deemed to have been given: (a) when delivered
by hand(with written confirmation of receipt); (b) when received by the addressee if sent by a nationally
recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email of a PDF
document(with confirmation of transmission)if sent during normal business hours of the recipient, and on
the next Business Day if sent after normal business hours of the recipient; or(d) on the third day after the
date mailed,by certified or registered mail,return receipt requested,postage prepaid. Such communications
must be sent to the respective parties at the addresses stated below each parry's signature hereto(or at such
other address for a party as will be specified in a notice given in accordance with this Section 14.03):
If to a Management Member, to such Management Member's respective mailing address as set forth
on the Members Schedule.
Section 14.04 Headings. The headings in this Agreement are inserted for convenience or
reference only and are in no way intended to describe, interpret, define, or limit the scope, extent, or intent
of this Agreement or any provision of this Agreement.
Section 14.05 Severability. If any term or provision of this Agreement is held to be invalid,
illegal, or unenforceable under Applicable Law in any jurisdiction, such invalidity, illegality, or
unenforceability will not affect any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction. Subject to Section 10.02(c), upon such
determination that any term or other provision is invalid, illegal, or unenforceable, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in a mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
Section 14.06 Entire Agreement.
(a) This Agreement, together with the Certificate of Formation, the Incentive Plan,
each Award Agreement,the Membership Interest Purchase Agreement and all related Exhibits and
Schedules, constitutes the sole and entire agreement of the parties to this Agreement with respect
to the subject matter contained herein and therein, and supersedes all prior and contemporaneous
understandings, agreements,representations, and warranties,both written and oral,with respect to
such subject matter, including the Original Agreement.
(b) In the event of an inconsistency or conflict between the provisions of this
Agreement and any provision of the Incentive Plan or an applicable Award Agreement with respect
to the subject matter of the Incentive Plan or Award Agreement,the Board will resolve such conflict
in its sole discretion.
Section 14.07 Successors and Assigns. Subject to the restrictions on Transfers set forth herein,
this Agreement will be binding upon and will inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors, and assigns.
Section 14.08 No Third-party Beneficiaries.Except as provided in ARTICLE XIII,which will
be for the benefit of and enforceable by Covered Persons as described therein, this Agreement is for the
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sole benefit of the parties hereto (and their respective heirs, executors, administrators, successors, and
assigns) and nothing herein, express or implied, is intended to or will confer upon any other Person,
including any creditor of the Company, any legal or equitable right, benefit, or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 14.09 Amendment.No provision of this Agreement may be amended or modified except
by an instrument in writing executed by the Company and Members holding a majority of the Common
Units.Any such written amendment or modification will be binding upon the Company and each Member;
provided, that an amendment or modification modifying the rights or obligations of any Member in a
manner that is disproportionately adverse to (i) such Member relative to the rights of other Members in
respect of Units of the same class or series or(ii) a class or series of Units relative to the rights of another
class or series of Units,will in each case be effective only with that Member's consent or the consent of the
Members holding a majority of the Units in that class or series, as applicable. Notwithstanding the
foregoing, amendments to the Members Schedule following any new issuance, redemption, repurchase or
Transfer of Units in accordance with this Agreement may be made by the Board without the consent of or
execution by the Members.
Section 14.10 Waiver.No waiver by any party of any of the provisions hereof will be effective
unless explicitly set forth in writing and signed by the party so waiving.No waiver by any party will operate
or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such
written waiver,whether of a similar or different character,and whether occurring before or after that waiver.
No failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this
Agreement will operate or be construed as a waiver thereof, nor will any single or partial exercise of any
right,remedy,power, or privilege hereunder preclude any other or further exercise thereof or the exercise
of any other right,remedy,power,or privilege.For the avoidance of doubt,nothing contained in this Section
14.10 will diminish any of the explicit and implicit waivers described in this Agreement, including in
Section 4.06(f), Section 8.04(c), Section 9.03(d)(v), and Section 14.13 hereof.
Section 14.11 Governing Law. All issues and questions concerning the application,
construction,validity,interpretation,and enforcement of this Agreement will be governed by and construed
in accordance with the internal laws of the State of Wyoming,without giving effect to any choice or conflict
of law provision or rule (whether of the State of Wyoming or any other jurisdiction)that would cause the
application of laws of any jurisdiction other than those of the State of Wyoming.
Section 14.12 Submission to Jurisdiction. The parties hereby agree that any suit, action, or
proceeding seeking to enforce any provision of,or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby, whether in contract, tort, or otherwise, will be
brought in the United States District Court for the District of Wyoming (or, if such court lacks subject
matter jurisdiction, in the District Court of the State of Wyoming), so long as one of such courts will have
subject-matter jurisdiction over such suit, action, or proceeding, and that any case of action arising out of
this Agreement will be deemed to have arisen from a transaction of business in the State of Wyoming.Each
of the parties hereby irrevocably consents to the jurisdiction of such courts(and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in
any such court has been brought in an inconvenient form. Service of process, summons, notice, or other
document by registered mail to the address set forth in Section 14.03 will be effective service of process
for any suit, action, or other proceeding brought in any such court.
Section 14.13 Waiver Of Jury Trial.EACH PARTY HERETO HEREBY ACKNOWLEDGES
AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH
SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
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TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 14.14 Equitable Remedies.Each party hereto acknowledges that a breach or threatened
breach by such parry of any of its obligations under this Agreement would give rise to irreparable harm to
the other parties,for which monetary damages would not be an adequate remedy, and hereby agrees that in
the event of a breach or a threatened breach by such party of any such obligations,each of the other parties
hereto shall,in addition to any and all other rights and remedies that may be available to them in respect of
such breach,be entitled to equitable relief, including a temporary restraining order, an injunction, specific
performance and any other relief that may be available from a court of competent jurisdiction(without any
requirement to post bond).
Section 14.15 Attorneys'Fees.In the event that any party hereto institutes any legal suit,action,
or proceeding, including arbitration, against another party in respect of a matter arising out of or relating to
this Agreement, the substantially prevailing party in the suit, action, or proceeding will be entitled to
receive, in addition to all other damages to which it may be entitled, the costs incurred by such party in
conducting the suit,action or proceeding,including reasonable attorneys'fees and expenses,and court costs.
Section 14.16 Remedies Cumulative. The rights and remedies under this Agreement are
cumulative and are in addition to and not in substitution for any other rights and remedies available at law
or in equity or otherwise, except to the extent expressly provided in Section 13.02 to the contrary.
Section 14.17 Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original,but all of which together will be deemed to be one and the same agreement. A
signed copy of this Agreement delivered by facsimile, email, or other means of Electronic Transmission
will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF,the parties hereto have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly authorized.
The Company:
ELEVATE HOMES,LLC,
a Wyoming limited liability company
By: al
Name: Christopher Wolford
Title: Managing Member
��
By:
Name: Adam J. Markowich
Title: Managing Member
The Members:
CHSM1 HOLDINGS LLC,
a Wyoming limited liability company
By: �.
Name: Christopher Wolford
Title: Managing Member
WAAM HOLDINGS LLC,
a Wyoming limited liability company
By:
Name: Adam J. Markowich
Title: Managing Member
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SCHEDULE A
MEMBERS SCHEDULE
Member Name and Address Common Incentive Units
Units
CHSM1 HOLDINGs LLC, 1,000 0
a Wyoming limited liability company
c/o Christopher Wolford
184 SW 5th Ave#210
Meridian,Idaho 83642-2994
WAAM HOLDINGS LLC, 1,000 0
a Wyoming limited liability company
c/o Adam J. Markowich
184 SW 5th Ave#210
Meridian,Idaho 83642-2994
Total: 2,000 0
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EXHIBIT A
FORM OF JOINDER AGREEMENT
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JOINDER AGREEMENT
Reference is hereby made to the Limited Liability Company Agreement (the "Operating
Agreement"),dated December 1,2021,by and between the Members and ELEVATE HOMES LLC,an Idaho
limited liability company (the "Company"). Pursuant to and in accordance with Section 4.01(b) of the
Operating Agreement,the undersigned(the"New Member")hereby agrees that upon the execution of this
Joinder Agreement, it shall become a party to the Operating Agreement and shall be fully bound by, and
subject to, all of the covenants, terms and conditions of the Operating Agreement as though an original
party thereto and shall be deemed to be a Member of the Company for all purposes thereof.
Capitalized terms used herein without definition shall have the meanings ascribed thereto in the
Operating Agreement.
This Joinder Agreement may be executed in counterparts, each of which shall be deemed an
original,but all of which together shall constitute the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Joinder Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.
COMPANY:
ELEVATE HOMES LLC
By:
Name:
Title:
NEW MEMBER:
[New Member Name]
By:
Name:
Title:
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EXHIBIT B
MEMBERSHIP INTEREST PURCHASE AGREEMENT
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UNIT PURCHASE AGREEMENT
This Unit Purchase Agreement ("Agreement") is made and entered as of December 1, 2021
("Effective Date"), by and between ELEVATE HOMES LLC, an Idaho limited liability company
("Company") and the undersigned Purchaser ("Purchaser"). Capitalized terms used herein but not
otherwise defined will have the meaning set forth in that certain Limited Liability Company Agreement(as
may be amended or modified from time to time, the "LLC Agreement") of Company, dated at or around
the date of this Agreement by and between Company and the Members.
WHEREAS, Company is a limited liability company formed under the laws of the state of Idaho
on December 1,2021; and
WHEREAS,Purchaser desires to purchase, and Company desires to sell to Purchaser,that number
of units of Company (collectively, the "Units" and each, a"Unit") and for the purchase price set forth on
the signature page to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants
hereinafter set forth,the parties agree as follows:
1. Purchase. Subject to the terms and conditions of this Agreement,upon the Closing(as defined
below), Purchaser, a new member of Company,will purchase, and Company will sell to Purchaser twenty
(20) Common Units which represent a twenty percent(20 %)equity interest in Company. The Units will
be issued in exchange for Purchaser's payment of the purchase price in-kind as represented certain
Licensing Agreement and Marketing Agreement dated on or about the date of this Agreement presently
valued at Eight Hundred and NO/100 Dollars ($800 USD) (Purchase Price). The Purchase Price will be
paid to Company in cash or other immediately available funds at the Closing.
2. Closing.The consummation of the purchase of the Units will be effected through the"Closing"
that will occur and be effective upon the satisfaction of,and will be conditioned upon,each of the following:
(i) Purchaser's execution and delivery to Company of this Agreement; (ii) Purchaser's delivery of the
Purchase Price to Company; and(iii) Company's execution of this Agreement.
3. LLC Agreement. Purchaser acknowledges and agrees that: (i) Upon execution of the Joinder
Agreement, they will be a party to the LLC Agreement; and (ii) That, upon the Closing, the Units issued
thereunder(and Purchaser's rights associated with such Units)will be governed by the terms and conditions
of the LLC Agreement.
4.Representations and Warranties of Purchaser.Purchaser represents and warrants to Company
as of the date hereof as follows:
(a)Authority. Purchaser has all requisite power and authority to execute and deliver this
Agreement,the Joinder Agreement and the LLC Agreement and to perform their obligations hereunder and
thereunder.
(b) No Conflict. The execution and delivery by Purchaser of this Agreement, the Joinder
Agreement and the LLC Agreement do not, and the consummation by Purchaser of the transactions
contemplated hereby and thereby will not(with or without the giving of notice or the lapse of time or both),
contravene, conflict with or result in a breach or violation of, or a default under: (i)Any judgment, order,
decree,statute,rule,regulation or other law applicable to Purchaser;or(ii)Any material contract,agreement
or instrument by which Purchaser is bound. No material consent, approval, order or authorization of, or
UNIT PURCHASE AGREEMENT PAGE 1 OF 6
ELEVATE HOMES LLC
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registration, declaration or filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is required by or with respect to Purchaser
in connection with the execution and delivery by Purchaser of this Agreement, the Joinder Agreement or
the LLC Agreement or the consummation by Purchaser of the transactions contemplated hereby or thereby.
(c) Access to and Evaluation of Information Concerning Company; General
Solicitation. Purchaser has: (i) Such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of purchase the Units, including the risk that
Purchaser could lose the entire value of the Units, and has so evaluated the merits and risks of such
investment; (ii) Been given access to and an opportunity to examine such documents, materials and
information concerning Company as Purchaser deems to be necessary or advisable in order to reach an
informed decision as to an investment in Company,to the extent that Company possesses such information,
has carefully reviewed and understands these materials and has had answered to Purchaser's full satisfaction
any and all questions regarding such information; (iii) Made such independent investigation of Company,
its management, and related matters as Purchaser deems to be necessary or advisable in connection with
the purchase of the Units, and is able to bear the economic and financial risk of purchasing the Units
(including the risk that Purchaser could lose the entire value of the Units); and (iv) Not been offered the
Units by any means of general solicitation or general advertising.
(d)Accredited Investor; No Public Distribution Intent.Purchaser is: (i)An"accredited
investor"as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933,as amended
(the"Securities Act");and(ii)Purchasing the Units for Purchaser's own benefit and account for investment
only and not with a view to, or for resale in connection with, a public offering or distribution thereof.
5. Acknowledgements and Agreements of Purchaser. Purchaser acknowledges and agrees as
follows:
(a)No Market for Units.No market for the resale of any of the Units currently exists,and
no such market may ever exist. Accordingly, Purchaser must bear the economic and financial risk of an
investment in the Units for an indefinite period of time.
(b) No Registration. The Units have not been registered under the Securities Act or the
securities laws of any other jurisdiction and the offer and sale of the Units are being made in reliance on
one or more exemptions for private offerings under Section 4(2) of the Securities Act and applicable
securities laws.Accordingly,no Transfer(as defined in the LLC Agreement)of any of the Units is permitted
unless such Transfer is registered under the Securities Act and other applicable securities laws, or an
exemption from such registration is available.
(c)Transfer Restrictions. The Units are subject to the restrictions on Transfer(as defined
in the LLC Agreement). Accordingly, no Transfer of any of the Units is permitted unless such Transfer
complies with the applicable provisions of the LLC Agreement.In addition,any certificate representing the
Units will bear a restrictive legend noting such restrictions.
(d) Disclosure. Other than the representations and warranties of Company set forth in
Section 6, neither Company nor any other Person (as defined in the LLC Agreement) makes any
representation or warranty, expressed or implied, as to the accuracy or completeness of the information
provided or to be provided to Purchaser by or on behalf of Company or related to the transactions
contemplated hereby,and nothing contained in any documents provided or statements made by or on behalf
of Company to Purchaser is,or will be relied upon as,a promise or representation by Company or any other
Person that any such information is accurate or complete.
UNIT PURCHASE AGREEMENT PAGE 2 OF 6
ELEVATE HOMES LLC
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6.Representations and Warranties of Company.Company represents and warrants to Purchaser
as of the date hereof as follows:
(a) Organization and Standing. Company is duly formed, validly existing and in good
standing under the laws of the State of Idaho.Company has all requisite power and authority to own,license
and operate its properties,to carry on its business as now conducted and as proposed to be conducted and
to execute and deliver this Agreement and the LLC Agreement and to perform its obligations hereunder
and thereunder.
(b) Authority. The execution and delivery by Company of this Agreement and the LLC
Agreement and the consummation by Company of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of Company. This Agreement and the LLC
Agreement have been duly executed and delivered by Company, and this Agreement and the LLC
Agreement constitute legal, valid and binding obligations of Company, enforceable against Company in
accordance with their terms.
(c)No Conflict. The execution and delivery by Company of this Agreement and the LLC
Agreement does not, and the consummation by Company of the transactions contemplated hereby and
thereby will not(with or without the giving of notice or the lapse of time or both),contravene,conflict with
or result in a breach or violation of, or a default under: (i) Company's certificate of formation, LLC
Agreement or by-laws;(ii)Subject to the accuracy of Purchaser's representations and warranties in Section
4 of this Agreement, in any material respects, any judgment,order,decree, statute,rule,regulation or other
law applicable to Company;or(iii)In any material respects,any material contract,agreement or instrument
by which Company is bound. No material consent, approval, order or authorization of, or registration,
declaration or filing with, any court,administrative agency or commission or other governmental authority
or instrumentality, domestic or foreign, is required by or with respect to Company in connection with the
execution and delivery by Company of this Agreement or the LLC Agreement or the consummation by
Company of the transactions contemplated hereby or thereby, except such filings as have been made prior
to the Closing, or such post-closing filings as may be required under Rule 506 of Regulation D of the
Securities Act and applicable state securities laws.
(d) Validity of Units. Prior to the Closing, the Units will have been duly authorized and,
when issued and paid for in accordance with the terms of this Agreement,will be validly issued to Purchaser
free of any liens, claims or other encumbrances, except for restrictions on transfer provided for herein, in
the LLC Agreement or under the Securities Act or other applicable securities laws.
7. Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to
this Agreement with respect to the subject matter contained herein, and supersedes all prior and
contemporaneous understandings and agreements,both written and oral,with respect to such subject matter.
8. Successor and Assigns. This Agreement will be binding upon and will inure to the benefit of
the parties hereto and their respective successors and permitted assigns. However, neither this Agreement
nor any of the rights of the parties hereunder may otherwise be transferred or assigned by any party hereto
without the prior written consent of the other party.
9. Amendment and Modification; Waiver. This Agreement may only be amended, modified or
supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of
the provisions hereof will be effective unless explicitly set forth in writing and signed by the party so
waiving.No waiver by any party will operate or be construed as a waiver in respect of any failure, breach
or default not expressly identified by such written waiver, whether of a similar or different character, and
whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights,
UNIT PURCHASE AGREEMENT PAGE 3 OF 6
ELEVATE HOMES LLC
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remedy, power or privilege arising from this Agreement will operate or be construed as a waiver thereof;
nor will any single or partial exercise of any right,remedy,power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right,remedy,power or privilege.
10. Severability.If any term or provision of this Agreement is invalid, illegal or unenforceable in
any jurisdiction, such invalidity,illegality or unenforceability will not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
11.Governing Law; Submission to Jurisdiction;Waiver of Jury Trial.This Agreement will be
governed and construed for all purposes in accordance with the laws(without giving effect to the principles
governing conflicts of laws)of the State of Idaho. The parties hereby subject themselves to the jurisdiction
of the federal and state courts located within the State of Idaho and agree that the exclusive venue and place
of jurisdiction for any lawsuit arising under or related to the offering will be the State of Idaho. Each party
irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action
arising out of or relating to this Agreement or the transactions contemplated hereby.
12. Counterparts, Electronic Transmission. This Agreement may be executed in counterparts,
each of which will be deemed an original,but all of which together will be deemed to be one and the same
agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic
transmission will be deemed to have the same legal effect as delivery of an original signed copy of this
Agreement.
[SIGNATURE PAGE FOLLOWS]
UNIT PURCHASE AGREEMENT PAGE 4 OF 6
ELEVATE HOMES LLC
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IN WITNESS WHEREOF,the parties hereto have executed this Unit Purchase Agreement on the
date first written above.
Number of Units 20 Units
Representing* 20%
Purchase Price In-Kind Contribution
Valued at$800
*Based on a total of 100 outstanding Units including those
issued hereunder
ELEVATE HOMES LLC
By
Manager Name:
PURCHASER
By
Name:
Individual:
Title:
Address:
SIGNATURE PAGE TO UNIT PURCHASE AGREEMENT
UNIT PURCHASE AGREEMENT PAGE 5 OF 6
ELEVATE HOMES LLC
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SCHEDULE A
Joinder Agreement
"Intentionally Omitted"
UNIT PURCHASE AGREEMENT PAGE 6 OF 6
ELEVATE HOMES LLC
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ............................................................................................... 1
Section 1.01 Definitions. ........................................................................................... 1
Section 1.02 Interpretation........................................................................................ 9
ARTICLE 11 ORGANIZATION........................................................................................ 10
Section2.01 Formation. .......................................................................................... 10
Section2.02 Name. .................................................................................................. 10
Section 2.03 Principal Office. ................................................................................. 10
Section 2.04 Registered Office; Registered Agent. .............................................. 10
Section 2.05 Purpose; Powers................................................................................ 10
Section2.06 Term.................................................................................................... 10
Section 2.07 No State-Law Partnership. ................................................................ 11
ARTICLE III UNITS ....................................................................................................... 11
Section 3.01 Units Generally. ................................................................................. 11
Section 3.03 Authorization and Issuance of Common Units. .............................. 11
Section 3.04 Authorization and Issuance of Incentive Units. .............................. 11
Section 3.05 Other Issuances................................................................................. 12
Section 3.06 Certification of Units.......................................................................... 12
ARTICLE IV MEMBERS................................................................................................ 13
Section 4.01 Admission of New Members. ............................................................ 13
Section 4.02 Representations and Warranties of Members................................. 13
Section 4.03 No Personal Liability. ........................................................................ 14
Section4.05 Death................................................................................................... 14
Section4.06 Voting.................................................................................................. 14
Section4.07 Meetings. ............................................................................................ 15
Section4.08 Quorum............................................................................................... 16
Section 4.09 Action Without Meeting..................................................................... 16
Section 4.10 Power of Members............................................................................. 16
Section 4.11 No Interest in Company Property..................................................... 16
ARTICLE V CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS ............................... 16
Section 5.01 Initial Capital Contributions. ............................................................. 16
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Section 5.02 Additional Capital Contributions...................................................... 16
Section 5.03 Maintenance of Capital Accounts..................................................... 16
Section 5.04 Succession Upon Transfer. .............................................................. 17
Section 5.05 Negative Capital Accounts................................................................ 17
Section 5.06 No Withdrawal.................................................................................... 17
Section 5.07 Treatment of Loans from Members.................................................. 17
Section 5.08 Modifications...................................................................................... 17
ARTICLE VI ALLOCATIONS......................................................................................... 17
Section 6.01 Allocation of Net Income and Net Loss. .......................................... 17
Section 6.02 Regulatory and Special Allocations. ................................................ 18
Section 6.03 Tax Allocations. ................................................................................. 18
Section 6.04 Allocations in Respect of Transferred Units. .................................. 19
Section 6.05 Curative Allocations. ......................................................................... 19
ARTICLE VII DISTRIBUTIONS ..................................................................................... 19
Section7.01 General. .............................................................................................. 19
Section 7.02 Priority of Distributions..................................................................... 20
Section 7.03 Limitations on Distributions to Incentive Units............................... 20
Section 7.04 Tax Advances..................................................................................... 20
Section 7.05 Tax Withholding; Withholding Advances. ....................................... 21
Section 7.06 Distributions in Kind.......................................................................... 22
ARTICLE VIII MANAGEMENT......................................................................................22
Section 8.01 Establishment of the Board. ............................................................. 22
Section 8.02 Board Composition; Vacancies........................................................23
Section 8.03 Removal; Resignation. ...................................................................... 23
Section8.04 Meetings. ............................................................................................23
Section 8.05 Quorum; Manner of Acting. .............................................................. 23
Section 8.06 Action By Written Consent. .............................................................. 24
Section 8.07 Compensation; No Employment....................................................... 24
Section 8.08 Committees. ....................................................................................... 24
Section8.09 Officers. .............................................................................................. 25
Section 8.10 No Personal Liability. ........................................................................ 25
ARTICLE IX TRANSFER .............................................................................................. 25
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Section 9.01 General Restrictions on Transfer. ....................................................25
Section 9.02 Permitted Transfers........................................................................... 26
Section 9.03 Right of First Refusal......................................................................... 26
ARTICLE X COVENANTS ............................................................................................29
Section 10.01 Confidentiality.................................................................................. 30
Section 10.02 Non-Compete; Non-Solicit. ............................................................. 31
Section 10.03 Other Business Activities. .............................................................. 31
ARTICLE XI ACCOUNTING; TAX MATTERS............................................................... 32
Section 11.01 Financial Statements....................................................................... 32
Section 11.02 Inspection Rights............................................................................. 32
Section 11.04 Tax Matters Representative. ........................................................... 33
Section 11.05 Tax Returns. ..................................................................................... 33
Section 11.06 Company Funds............................................................................... 34
ARTICLE XII DISSOLUTION AND LIQUIDATION ........................................................ 34
Section 12.01 Events of Dissolution. ..................................................................... 34
Section 12.02 Effectiveness of Dissolution........................................................... 34
Section 12.03 Liquidation. ...................................................................................... 34
Section 12.04 Cancellation of Certificate............................................................... 35
Section 12.05 Survival of Rights, Duties, and Obligations. ................................. 35
Section 12.06 Recourse for Claims........................................................................ 35
ARTICLE XIII EXCULPATION AND INDEMNIFICATION ............................................. 35
Section 13.01 Exculpation of Covered Persons.................................................... 35
Section 13.02 Liabilities and Duties of Covered Persons. ................................... 36
Section 13.03 Indemnification. ............................................................................... 36
Section13.04 Survival............................................................................................. 37
ARTICLE XIV MISCELLANEOUS................................................................................. 38
Section14.01 Expenses. ......................................................................................... 38
Section 14.02 Further Assurances......................................................................... 38
Section14.03 Notices.............................................................................................. 38
Section14.04 Headings........................................................................................... 38
Section 14.05 Severability....................................................................................... 38
Section 14.06 Entire Agreement............................................................................. 38
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Section 14.07 Successors and Assigns. ............................................................... 38
Section 14.08 No Third-party Beneficiaries........................................................... 38
Section 14.09 Amendment. ..................................................................................... 39
Section14.10 Waiver............................................................................................... 39
Section 14.11 Governing Law.................... ............ 39
.................................................
Section 14.12 Submission to Jurisdiction............................................................. 39
Section 14.13 Waiver Of Jury Trial......................................................................... 39
Section 14.14 Equitable Remedies.........................................................................40
Section 14.15 Attorneys' Fees. ...............................................................................40
Section 14.16 Remedies Cumulative......................................................................40
Section 14.17 Counterparts. ...................................................................................40
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ELEVATE HOMES,LLC
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MINUTES OF THE INITIAL MEETING OF THE MEMBERS
and Waiver of Notice of
ELEVATE HOMES, LLC
The initial meeting of the Members of ELEVATE HOMES, LLC, a Wyoming limited liability
company (the "Company" or the "LLC"), was held on the 3rd day of February, 2022. Christopher
Wolford was elected as Chairperson for the meeting and Adam J. Markowich was elected as the
Secretary.
We,the undersigned Members declare and confirm that we consented to the initial meeting of
the Members of ELEVATE HOMES,LLC on February 3, 2022 at its principal office located at 184 SW
5th Ave#210, Meridian, Idaho 83642-2994.
RESOLVED: Christopher Wolford and Adam J. Markowich are hereby named as Managing
Members pursuant to that certain LLC Agreement effective as of February 3, 2022.
RESOLVED: that ELEVATE HOMES,LLC was organized on February 3, 2022 in the State of
Wyoming with assigned Original ID: 2022-001077143.
RESOLVED: that the copy of the Articles of Organization of the above named Limited
Liability Company is complete, having been reviewed, approved, ratified, and adopted. A true and
correct copy of the Articles of Organization presented is attached to these minutes.
RESOLVED: that the general provisions of an Operating Agreement presented and
considered by the Members be adopted and included as official records of the Limited Liability
Company. A true and correct copy of the Operating Agreement presented is attached to these minutes.
RESOLVED: that the acts of the Organizer, Morgan Noble, of Northwest Registered Agent
Service, Inc., taken on behalf of the LLC are ratified and adopted as acts of the LLC. The LLC is
directed and authorized to pay all fees and expenses incurred by the Organizer and any other
organization involved with the formation of the LLC.
RESOLVED: that Manager has formed a limited liability company and is entitled to the full
extent of their limitation of liability pursuant to state law. Furthermore,Manager's failure to maintain
formalities of a limited liability company does not preclude them from liability protection under state
law.
RESOLVED: that the form for the LLC Membership Certificate presented will be the form
used to issue Membership Interests. A sample of such form will be attached to these minutes.
2022 MINUTES,WAIVER AND CONSENT
ELEVATE HOMES,LLC
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ELECTION OF DIRECTORS
RESOLVED: The undersigned Members of the Company hereby elect the following named
individuals to the Board of Directors of the Company, to serve until the next annual meeting of the
Members and until their successors are elected and qualified, unless earlier removed in accordance
with law:
Christopher Wolford
Adam J. Markowich
APPOINTMENT OF OFFICERS
RESOLVED: The undersigned newly elected Directors of the Company hereby appoint the
following named individuals to the offices set forth below, to serve until the next annual meeting of
the Board of Directors or until their successors are appointed pursuant to the Company's Operating
Agreement:
Chief Executive Officer: Christopher Wolford
President Adam J. Markowich
Treasurer: Christopher Wolford
Secretary: Adam J. Markowich
RATIFICATION OF COMPANY ACTS
RESOLVED: All acts and actions taken by the Directors and Officers of the Company on
behalf of the Company in connection with its business and operations, from the date of the last
meeting of the Board of Directors through the present, are approved, affirmed and ratified in all
respects as acts of the Company.
RESOLVED: that the Managing Member shall and has the authority to open a corporate bank
account and to conduct any and all the affairs of the LLC including but not limited to purchasing and
selling property,making and obtaining loans,and entering into contracts. All actions of the Managing
Member will be made in the best interest of the LLC. The financial institution named herein is
designated as a depository for the funds of this LLC, which may be withdrawn on checks, drafts,
advices of debit, notes, or other orders for payments bearing any officer or authorized employee of
this LLC.
Name of Financial Institution:
RESOLVED: that the financial institution will accept and pay on,without further inquiry,any
checks or debits drawn against any of the LLC's accounts. The checks or debits will be honored by
the financial institution whether the item has been drawn or endorsed to the order of any authorized
officer or employee signing;tendered by the authorized officer or employee for the purpose of cashing
or payment; or for deposit to the officer's or employee's personal account. The financial institution
will not be required to inquire as to the use of any check or debit signed in accordance with the
resolutions contained herein.
2022 MINUTES,WAIVER AND CONSENT
ELEVATE HOMES,LLC 2
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RESOLVED: that the officers or authorized employees may execute other agreements,
including, but not limited to, special depository agreements, and arrangements concerning the
manner, condition, and/or purposes for which funds, checks, debits, or items of the LLC may be
deposited, collected, or withdrawn, as long as these other agreements are not contrary to the
provisions contained in this resolution.
RESOLVED: that the power granted to the LLC's officers or authorized employees will
remain in full force and effect until written notice has been delivered and received by the financial
institution at each location where an account is maintained. The financial institution will be
indemnified and held harmless from any losses suffered or liabilities incurred by continuing to act in
accordance with this resolution.
RESOLVED: that the LLC will report annually to the State Department of Revenue its profit
and losses as required by law.
RESOLVED: that the next annual meeting will be on the anniversary date of the organization
of the LLC or on a date agreed to by all Members. Additional meetings may be called as deemed
necessary by the Members.
The following Members further attest that the persons named below occupy the stated position, as
indicated by their signature, and that the resolutions contained in this document are recorded on the
books of the LLC, and these resolutions are in full force and effect and have not been altered in any
way.
This document may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute the same document, whether or not all parties
execute each counterpart.
DATED as of February 3, 2022.
MEMBER: DIRECTORS:
CHSMI HOLDINGS LLC,
a Wyoming limited liability company
By: �//
Christopher Wolford,Manager/Chairperson Christopher Wolford, CEO/Treasurer
WAAM HOLDINGS LLC,
a Wyoming limited liability company
By.
Adam J. Markowich, Manager/Secretary Adam J. Markowich, President/ Secretary
2022 MINUTES,WAIVER AND CONSENT
ELEVATE HOMES,LLC 3
Doc ID: c9311280b6b91fca784fec22d02e1234601d6132
OHELLOSIGN Audit Trail
TITLE Elevate Homes LLC (WY)- Organizational Documents
FILE NAME Elevate Homes LLC...nal Documents.pdf
DOCUMENT ID c9311280b6b91fca784fec22d02e1234601d6132
AUDIT TRAIL DATE FORMAT MM / DD/YYYY
STATUS Signed
Document History
0 03/26/2022 Sent for signature to Christopher Wolford
SENT 18:38:33 UTC (208idahohomes@gmail.com) and Adam J. Markowich
(adam@elevatehomesidaho.com)from jschuman@gravislaw.com
IP: 64.16.8.242
03/26/2022 Viewed by Christopher Wolford (208idahohomes@gmail.com)
VIEWED 23:33:42 UTC IP: 172.58.131.234
03/26/2022 Signed by Christopher Wolford (208idahohomes@gmail.com)
SIGNED 23:38:43 UTC IP: 172.58.131.234
(0 03/28/2022 Viewed by Adam J. Markowich (adam@elevatehomesidaho.com)
VIEWED 00:23:54 UTC IP: 172.58.131.114
03/28/2022 Signed by Adam J. Markowich (adam@elevatehomesidaho.com)
SIGNED 15:48:07 UTC IP: 174.27.221.242
G✓ 03/28/2022 The document has been completed.
COMPLETED 15:48:07 UTC
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