PZ - Certificate of Existence, Organization and Operating Agreement r r Utah Department of Commerce
Division of Corporations&Commercial Code
-' 160 East 300 South,2nd Floor,PO Box 146705
3)
Salt Lake City,UT 84114-6705
Service Center:(801)530-4849
r�4* Toll Free:(877)526-3994 Utah Residents
++' Fax:(801)530-6438
Web Site:http://www.commerce.utah.gov
02/03/2021
11968843-016002032021-1460383
CERTIFICATE OF EXISTENCE
Registration Number: 11968843-0160
Business Name: LOST RAPIDS DEVELOPMENT, LLC
Registered Date: September 30, 2020
Entity Type: LLC - Domestic
Status: Current
The Division of Corporations and Commercial Code of the State of Utah, custodian of the records of
business registrations, certifies that the business entity on this certificate is authorized to transact business and was
duly registered under the laws of the State of Utah. The Division also certifies that this entity has paid all fees and
penalties owed to this state; its most recent annual report has been filed by the Division(unless Delinquent); and,
that Articles of Dissolution have not been filed.
jQ S A711
• `
Jason Sterzer
Director
Division of Corporations and Commercial Code
Pagel of 1
Date: 09/30/2020
Recelpt Number:6535105
Amount Paid: $150.00
EXPEDITE
RECEIVED
CERTIFICATE OF ORGANIZATION
FOR SEP 3 0 2020
LOST.WkPIDS DEVELOPMENT,LLC Utah D v.:POT.&Comm.Code
The undersigned person,acting as organizer under the Utah Revised Unifoam Limited
Liability Company Act, adopts the.following Certificate for such Company:
I.Name
The name of the limited liability company is host Rapids Development,LLC("the
Company").
IL M.anggSMent
The management of the Company shall be by a manager or by managers. The names of
the initial managers are as follows:
Trevor Gasser
Derck Gasser
III.Registered Agent
The name and street address of the registered agent for the Company sha11 be:
Dlfek Gasser
74 East 500 South,#200
Bountiful,Lntah 84010
IV. Principal Office
The street address of the Company's principal office is:
74 East 500 South,#200
Bountiful,Utah 84010
V.Torn,
The term of the Company shall begin upon th filing of this Certificate,and its duration
shall be perpetual,
Derck Gasser,Organizer
Depa:;nten,
Division of Corporations and Commercial Code
I hereby certified that' fc regoing,has been
and approved on this day of �$20
In this office of this ivision and hereby issued
This Certificate thereof.
Ewig
Date t Z� l
Jas
1l O0 1r
OPERATING AGREEMENT
OF
LOST RAPIDS DEVELOPMENT,LLC
DATED: September 30, 2020 MEMBERS:
Trevor Gasser
DFG Development,LLC
MANAGERS:
Trevor Gasser
Derek Gasser
TABLE OF CONTENTS
1. Company Formation................................................................................................................I
Name..................................................................................................................................I
Registered Office and Registered Agent...........................................................................I
Principal Place of Business................................................................................................I
DesignatedOffice..............................................................................................................I
Purpose..............................................................................................................................I
Duration.............................................................................................................................1
2. Members ..................................................................................................................................1
InitialMembers..................................................................................................................1
AdditionalMembers..........................................................................................................2
3. Capitalization...........................................................................................................................2
InitialCapital.....................................................................................................................2
Contributionsto Capital.....................................................................................................2
Withdrawals.......................................................................................................................2
Special Contributions by Member-Managers....................................................................2
4. Profits and Losses....................................................................................................................3
Liabilityfor Losses............................................................................................................3
Allocation..........................................................................................................................3
TaxAllocations..................................................................................................................3
5. Management.............................................................................................................................3
ManagementPowers..........................................................................................................3
ManagementProcedures....................................................................................................3
Restrictions on the Managers.............................................................................................4
Electionof Managers.........................................................................................................4
Disqualification and Resignation.......................................................................................5
Removalof Managers........................................................................................................5
TimeRequired...................................................................................................................5
Compensation....................................................................................................................5
BankAccounts...................................................................................................................5
Placeof Business...............................................................................................................5
Booksand Records............................................................................................................5
Indemnity.................................................... ............ ....5
........ ...............................................
Reserves; Distributions......................................................................................................6
Fiduciary Duties of the Managers......................................................................................6
6. Accounting and Taxes..............................................................................................................6
CapitalAccounts................................................................................................................6
DrawingAccount...............................................................................................................6
Transfers from Drawing Account to Capital Account.......................................................6
Accounting Methods; Fiscal Year.....................................................................................6
Financial Statements and Tax Returns ..............................................................................6
TaxStatus..........................................................................................................................7
7. Transfer....................................................................................................................................7
Restrictions on Transfer.....................................................................................................7
Rightof First Refusal.........................................................................................................7
Transfer to Immediate Family........................................................................................9
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8. Withdrawal...............................................................................................................................9
Withdrawalof Members....................................................................................................9
ProhibitedWithdrawal.......................................................................................................9
NoDissolution...................................................................................................................9
Withdrawal of Managers...................................................................................................9
9. Dissolution and Continuation ..................................................................................................9
Dissolution.........................................................................................................................9
Continuation....................................................................................................................11
10. Settlement After Dissolution..................................................................................................11
Activities..........................................................................................................................11
AIlocations and Priorities................................................................................................11
Distributions....................................................................................................................12
11. Meetings of Members............................................................................................................12
Place.................................................................................................................................12
Meetings ..........................................................................................................................12
Notice...............................................................................................................................12
Quorum............................................................................................................................12
Voting..................................................................
Proxies.............................................................................................................................12
Consentof Absentees......................................................................................................13
ActionWithout a Meeting...............................................................................................13
12. Certificates.............................................................................................................................13
Certificateof Formation ..................................................................................................13
Amendmentto Certificate................................................................................................13
OtherDocuments.............................................................................................................13
Powerof Attorney............................................................................................................13
13. Miscellaneous ........................................................................................................................ 13
EffectiveDate..................................................................................................................13
Consentof Members........................................................................................................14
Amendment......................................................................................................................14
Actionby Managers.........................................................................................................14
Notices............................................................................................................................. 14
Successorsand Assigns...................................................................................................14
Costsof Default...............................................................................................................14
EntireAgreement.............................................................................................................14
Invalidity.......................................................... ..................14
..............................................
Interpretations..................................................................................................................15
Law..................................................................................................................................15
Taxes................................................................................................................................I s
Restrictions......................................................................................................................15
Fairness............................................................................................................................15
ii
OPERATING AGREEMENT
OF
LOST RAPIDS DEVELOPMENT,LLC
THIS OPERATING AGREEMENT("Agreement") is made as of the 30th day of September, 2020
by and between the undersigned"Members"and "Managers".
1. Company Formation. The undersigned hereby adopt this Operating Agreement for the
regulation and management of the affairs of LOST RAPIDS DEVELOPMENT, LLC (the "Company")
pursuant to the provisions of the Utah Revised Uniform Limited Liability Company Act(the"Act").
(a) Name. The Company's name shall be LOST RAPIDS DEVELOPMENT,LLC.
(b) Registered Agent and Registered Office. The name of the registered agent of the
Company and the address of the registered office of the Company are:
Derek Gasser
74 East 500 South,#200
Bountiful, Utah 84010
(c) Principal Place of Business. The address of the Company's principal place of
business is:
74 East 500 South,#200
Bountiful, Utah 84010
(d) Designated Office. The address of the Company's designated office is:
74 East 500 South, #200
Bountiful, Utah 84010
(e) Purpose. The purposes for which the Company is organized are to (a) own,
develop, manage, lease and sell real property, and (b) engage in any lawful activity for which a
limited liability company may be organized under the Act. The Company may take any action
incidental and conducive to the furtherance of these purposes.
(f) Duration. A Certificate of Organization ("Certificate") for the Company, in the
form attached hereto as Exhibit "A". has been filed with the State of Utah, Department of
Commerce, Division of Corporations and Commercial Code. The Company shall be dissolved on
the date set forth in the Certificate, unless otherwise dissolved or continued hereunder, or under the
Act.
2. Members.
(a) Initial Members. The names and addresses of the Company's initial Members are:
Trevor Gasser 74 East 500 South,#200
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Bountiful, Utah 84010
Derek Gasser 74 East 500 South,#200
Bountiful,Utah 84010
(b) Additional Members. Notwithstanding anything to the contrary contained herein,
no additional person or entity may be admitted to membership without the written consent of
Members entitled to receive at least a majority in interest of the profits of the Company.
Furthermore:
(i) Additional members (who are successors in interest to existing Members)
shall be admitted to membership in the Company only upon compliance with the provisions
for the transfer of Membership Interests(see Section 7).
(ii) Additional members (who are not successors in interest to existing
Members) may be admitted to membership in the Company only with the approval of all
Managers and upon compliance with the provisions for amendment of this Agreement(see
Section 13(c)). In the event that a new Member makes a contribution to the Company in
return for admission into the Company, the Membership Interest of all Members shall be
adjusted to such proportions as may be agreed upon by the new Member and at least one(1)
Manager and with the Consent of the Members (as defined below, excluding the new
member).
3. Capitalization.
(a) Initial Capital. The initial capital contributions of the Members (whether cash,
property, services or obligations to contribute such to the Company), and their respective
percentage interests in the initial Company capital shall be as set forth in the attached Exhibit"B".
(b) Contributions to Capital. In the event that additional capital contributions are
deemed necessary for the proper operation of the business of the Company, as determined by the
Managers or by the affirmative vote of Members holding a majority of the Membership Interests of
the Company, then:
(i) The Managers shall prepare and provide the Members with a summary of
the proposed uses for such additional capital;and
(ii) If approved by the Consent of the Members (as defined in Section 13(b)
below, then the Members shall each make such additional capital contributions, in
proportion to their Membership Interests as defined below and as so approved.
(c) Withdrawals. No Member shall be entitled to any withdrawal or distribution of any
capital or profits of the Company, except upon the approval of a majority in interest of all
Members,or except as specifically provided in this Agreement.
(d) Special Contributions by Member-Mane ers. In the event of additional capital
contributions from additional Members (pursuant to Section 2(b) above), or capital calls by the
Managers (pursuant to Section 3(b) above), or otherwise, Managers who are also Members (or who
are considered Members by the Internal Revenue Service under Revenue Procedure 95-10 or
2
similar requirements relating to the tax classification of the company) ("Member-Manager'l shall
be required (if they continue as "Managers") to make additional capital contributions to the
Company sufficient to insure that such Member-Managers collectively hold Membership Interests
of not less than one percent (1%) in the aggregate, and have capital account balances of not less
than one percent (1%) of the positive capital account balances of the Company, determined
pursuant to Internal Revenue Code §704(b)and the regulations thereunder.
4. Profits and Losses.
(a) Liability for Losses. The Members shall not be personally liable for any of the
obligations of the Company,except as required by law or as they may otherwise agree.
(b) Allocation. The Company shall allocate its net profits or net losses (including each
material item of income, gain, loss, deduction or credit) for each fiscal year to the Members in
accordance with their respective percentage interest in the Company ("Membership Interests"), as
set forth in the attached Exhibit B.
(c) Tax Allocations. In accordance with Internal Revenue Code § 704(c) and the
regulations thereunder, income, gain, loss and deduction with respect to any property contributed to
the capital of the Company shall, solely for tax purposes, be allocated among the Members 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 initial fair market value computed at the time of contribution.
5. Management.
(a) Management Powers. The Company shall be managed by one or more Manager(s),
whose powers include, but are not limited to, the power to (i) hire, supervise and discharge
employees and agents; (H) compromise, negotiate and sign all contracts, regulatory agreements,
deeds, leases, promissory notes, mortgages and other documents (including the obligations of
Members to return money or property to the Company); (iii) invest Company funds in interest
bearing accounts, commercial paper, government securities, certificates of deposit, real property or
similar investments; and (iv)purchase, sell, borrow, loan, lease, disburse and take any other actions
in the best interests of the Company and its Members, whether or not in the ordinary course of
Company business. The Members shall have no power or authority to act for or bind the Company
and shall take no part in the control of its affairs, except as specifically provided by law or in this
Agreement.
(b) Management Procedures. All real and personal property owned or acquired by the
Company shall be acquired and held in the name of the Company. All agreements and documents
for the acquisition, financing or disposition of property of the Company, or any other action by the
Company, shall be valid and binding upon the Company if executed by one or more of the
Managers, and each Manager shall separately have full power and authority to act on behalf of the
Company, and to bind the Company thereby, without the approval of any other Manager, except as
otherwise prohibited by other provisions of this Agreement (specifically including Section 5(c)
below), and except that approval of all Managers shall be required before any Manager may:
(i) Borrow any funds on behalf of the Company in excess of Ten Thousand
Dollars($1 0,4UU.OU);
3
(ii) Pledge or encumber any of the assets of the Company;
(iii) Execute any contract in excess of Ten Thousand Dollars($10,000.00);
(iv) Enter into any agreement for the purchase, sale, exchange, distribution or
other acquisition or disposition of any real property of the Company;or
(v) Enter into any agreement for the management of the Company or its assets.
(c) Restrictions on the Managers. Notwithstanding the foregoing, the Managers must
obtain the consent of a majority in interest of all Members before they may:
(i) Confess a judgment against the Company;
(ii) Pledge the credit of the Company in any way except in the ordinary course
of Company business (where "ordinary course" includes: the construction and permanent
financing which is related to the purchase or improvement of any real or personal property,
the initial financing of properties acquired free and clear of encumbrances, or the
refinancing or structuring of previous obligations);
(iii) Guarantee any debt or obligation of others on behalf of, or in the name of,
the Company;
(iv) Assign the Company's assets in trust for creditors or on an assignee's
promise to pay the debts of the Company;
(v) Submit any Company claim or liability to arbitration or reference;
(vi) Use or possess Company property except in furtherance of Company
poses;
(vii) Do any act which would make it impossible or impractical to carry on the
ordinary business of the Company;
(viii) Do any act in contravention of this Agreement;or
(ix) Sell,exchange or otherwise dispose of any portion of Company property.
(d) Election of Managers. The Members may at any time by unanimous agreement
elect any one or more persons as Managers. Such persons need not be members of the Company.
However, all Member-Managers (if any, as defined above) shall collectively have Membership
Interests of not less than one percent (1%), and the effectiveness of the election of any Member-
Manager shall be contingent upon satisfaction of such requirement. In the event of the
disqualification or removal or resignation of any Manager, such Manager shall be replaced by vote
of a majority in interest of all Members, to fill the then unexpired portion of the term of the former
Manager.
4
The initial Managers shall be DEREK GASSER AND TREVOR GASSER who are hereby
elected to serve for a term commencing with the filing of the Certificate and continuing thereafter
for the duration of the Company or until the amendment of this Agreement.
(e) Di ualification and Resignation. Any Manager shall be disqualified and shall
cease to hold such position upon his death, disability (as determined by court order), bankruptcy (as
defined in Section 9 below) resignation or removal as Manager. Any Manager may resign at any
time by written notice to all Members and Managers. The disqualification of any Manager shall not
affect his status as a Member except as may be specifically required by other provisions of this
Agreement, if any, or as may be required by law.
(f) Removal of Mana ers. Any Manager may be removed for embezzlement or gross
negligence, but not ordinary negligence, at any time prior to the expiration of the term for which he
was elected, by agreement of at least a majority in interest of all Members, including the interest of
the Manager being removed. Any such removal shall be effective at such time thereafter as
determined by such agreement.
(g) Time Required. The Managers have other business activities that take a substantial
amount of time and attention. Accordingly, the Managers are required to devote to the Company
only time and attention which is reasonably necessary to the prudent conduct of Company business.
(h) Compensation. The Managers shall be reasonably compensated each year for
management of the Company and its business, but shall not be paid more than that for which
comparable services could be obtained from independent management, and the amount of such
compensation shall be determined by the Managers under Section 5(b). Such compensation shall
be deducted from Company income, like any other business expense, in determining the net profit
or net loss of the Company. The payment of such compensation shall be an obligation of the
Company and not an obligation of any of the individual Members.
(i) Bank Accounts. All funds received by the Company shall be deposited in bank
accounts maintained by the Managers. Withdrawals may be made from such accounts as the
Managers determine from time to time.
0) Place of Business. The Company shall have such places of business in Utah or
elsewhere as the Managers determine from time to time.
(k) Books and Records. The Company shall maintain all books and records required by
law at its principal place of business. Such records shall be available for inspection and copying by
any Member during ordinary business hours at the reasonable request and expense of such Member.
Such books and records shall include, but are not limited to, bank statements, invoices and deposit
records, as well as general ledgers and financial statements.
(1) Indemnily. No Manager shall be liable to the Company or the Members for any act
or omission by him pursuant to the authority granted by this Agreement, other than a breach of any
term or covenant contained in this Agreement, fraud, bad faith, willful misfeasance or gross
negligence. Each Manager shall indemnify and save harmless each Member from any loss or
liability arising out of his breach of any term or covenant contained in this Agreement, fraud, bad
faith, willful misfeasance or gross negligence. The Company shall indemnify and save each
Manager harmless from any loss or liability incurred by him by reason of any act performed on
5
behalf of the Company or in furtherance of the Company's interest other than his breach of any
term or covenant contained in this Agreement, fraud, bad faith, willful misfeasance or gross
negligence. During the continuation of the Company, any Manager or Member may acquire,
promote, develop, operate and manage real property or other investments on his own behalf or on
behalf of other entities with which he is affiliated or associated.
(m) Reserves; Distributions. The Managers may establish and maintain such reserves as
may be reasonably necessary for the business of the Company. The Managers may, but have no
obligation to, distribute to the Members from time to time, any Company cash or other assets not
reasonably required by the Company business, but only with the approval of a majority in interest
of all Members; provided, however, that such distribution is not reasonably expected to impair the
management of the Company or its business; and provided further that such distribution is made to
all Members in proportion to their respective rights to share in the profits of the Company; and
provided further that the fair value of the assets of the Company is sufficient to permit such
distribution under applicable law.
(n) Fiduciary Duties of the Managers. Each Manager shall, in all events,account to the
Company and to the Members for any benefit, and hold as trustee for the Company and the
Members any profits derived by such Manager from any transaction connected with the formation,
conduct or liquidation of the Company or from any use by such Manager of Company property and
such duty extends to the personal representatives of any deceased Member involved in the
liquidation of the Company. All management, investments, accountings, and distributions shall be
conducted by the Manager subject to the obligations, duties and liabilities of fiduciaries in general.
5. Accounting and Taxes.
(a) Capital Accounts. The Company shall maintain a Capital Account for each
Member which shall consist of his share of the initial Company capital, increased by: (i) his
additional contributions to capital, and (ii) his share of Company profits transferred from his
Drawing Account; and decreased by: (iii) any distributions to him in reduction of his share of
Company capital, and (iv)his share of Company losses transferred from his Drawing Account.
(b) Drawing Account. The Company shall maintain a Drawing Account for each
Member which shall consist of his share of Company profits and losses, decreased by all
distributions to him, other than from his Capital Account, and adjusted for all transfers to his
Capital Account.
(c) Transfers from Drawing Account to Capital Account. The Managers may transfer
all or part of any balance in a Member's Drawing Account to his respective Capital Account at any
time.
(d) Accounting Methods-, Fiscal Year. The Company shall use the accrual method for
tax and accounting purposes; and its fiscal year for tax and accounting purposes shall be the
calendar year.
(e) Financial Statements and Tax Returns. At least annually and as soon as reasonably
possible after completion of the Company tax returns, the Managers shall provide copies of the
Company tax returns and financial statements to all Members.
6
(f) Tax Status. It is the intent of the Members that the Company be classified as a
partnership for state and federal income tax purposes. Subject to the limitation on action by the
Managers in Section 5 above, the Managers are authorized and directed to take such action,
consistent with this Agreement, which they may determine to be reasonably necessary to maintain
such partnership tax classification.
7. Transfer.
(a) Restrictions on Transfer. No Membership Interest may be the subject of any sale,
gift, transfer, encumbrance, pledge or other disposition whether voluntary or involuntary
("Transfer"), without the consent of at least one (1) Manager and of a majority in interest of the
non-transferring Members, and compliance with Section 2(b), unless such restrictions are
unenforceable as a matter of law. Except as provided above and in Section 2(b) above, any
Membership Interest is assignable in whole or in part; provided that:
(i) Without the consent of non-transferring Members entitled to receive at least
a majority in interest of the profits of the Company, the assignee under any Transfer of any
Membership Interest is not entitled to participate in the management of the business and
affairs of the Company or to become a Member. Without such consent, an assignment
merely entitles the assignee to receive, to the extent assigned, only the distributions to
which the assignor would otherwise be entitled.
(ii) An assignee of any Membership Interest may become a Member if and to
the extent that the assignor gives the assignee that right, at least one (1) Manager gives his
consent, a majority in interest of the non-transferring Members give their consent, and the
assignee executes this Agreement, and any amendments thereto and agrees to be bound
thereby.
(iii) As assignee of a Membership Interest held by a Manager shall not thereby
become a Manager. If the assignor ceases to be a Manager, he shall be replaced pursuant to
the terms of Section 5.
(iv) In recognition of the purposes of the Company, relationships existing
between the Members, and the intention of the Members to restrict ownership of the
Membership Interests to the Members and others enjoying similar relationships with the
Members,any consent of the Members may be withheld for any reason.
(b) Right of First Refusal. No Member will Transfer, as defined in Section 7(a)above,
any of his Membership Interest except as permitted by this Agreement and after compliance with
this section:
(i) Any Member who wishes to Transfer any of his Membership Interest, or
who has reason to believe that an involuntary Transfer or a Transfer by operation of law is
reasonable foreseeable, shall first give every other Member written notice of his intent to
Transfer such Membership Interest or of his knowledge that such involuntary Transfer or
Transfer by operation of law is reasonably foreseeable. Such notice must contain a
description of what portion of his total Membership Interest will be so transferred, the
consideration that will be paid, if any, and the terms of the Transfer, including, but not
limited to, the relative percentages of cash and debt, and the duration, interest rate, and
7
payment schedule of any debt instruments, and the name, address and business or
occupation of the person to whom such Membership Interest would be transferred, and
other facts which are or would reasonably be deemed material to the proposed Transfer.
(H) Upon the receipt of such notice, every other Member (but not the assignee
of a member who has not yet been accepted as a Member) shall have a right to buy a
proportionate share of the offered Membership Interest described in the notice. Each
member may buy a share of such Membership Interest as his own Membership Interest
bears to those of all Members,except the transferring member. Each Member may exercise
this right of first refusal by giving the transferring Member written notice within thirty (30)
calendar days after receipt of the latter's notice. Such rights to purchase are not assignable
except to other Members or to the Company.
(iii) If the Members do not elect to purchase all of the offered Membership
Interest,the transferring Member may complete the intended Transfer as to that portion for
which no election to purchase was timely made. If such Transfer is not completed within
sixty (60) calendar days after expiration of the last exercise period, any attempted Transfer
will be deemed pursuant to a new offer and this Section 7(b) shall again apply.
(iv) If and to the extend the proposed Transfer for which notice is given under
this section is a transfer for value, then each Member who elects to buy part of the offered
Membership Interest under this section shall do so at the same purchase price and terms,
proportionately, as were contained in the transferring Member's written notice of intent to
Transfer.
(v) If and to the extent the proposed Transfer is not a transfer for value, then
each Member who elects to buy all or any part of the offered Membership Interest under
this section shall do so at its fair market value. The fair market value of such Membership
Interest shall be determined by the Managers, provided that the fair market value of any real
property owned by the Company shall be determined by an independent appraisal
performed by a certified MAI appraiser selected by the Managers, whose decision in this
matter shall be conclusive. Unless otherwise agreed upon by the selling Member and the
purchasing Member, such purchase price shall be paid at the closing for the sale of such
Membership Interest, as follows: one-quarter(1/4) of such purchase price in cash at closing,
and the balance in twenty (20) equal quarterly principal payments beginning three months
after the date of such closing, with simple interest added to each installment, computed
against the outstanding principal balance at the prevailing prime interest rate charged by
ZIONS FIRST NATIONAL BANK of Salt Lake City, Utah, on the date of such closing.
The buyer will give the selling Member a promissory note as evidence of this debt, and the
buyer may prepay all or any part of the principal balance of the note at any time without
penalty or premium.
(vi) The purchase of a Membership Interest pursuant to this Section 7(b) will
take place at a closing to be held not later than the tenth (I Oth) day after the earlier of. (1)
the date on which the Members' purchase options all have expired; or (2) the earliest date
on which the Members in the aggregate exercise their purchase options, if any,to buy all of
the offered Membership Interest. The closing will be held during normal business hours at
the Company's principal business office, or at any other place to which the parties agree.
8
At the closing, the buyer will pay for the Membership Interest and the Company will enter
the change of Membership Interest in its records.
(c) Transfer to Immediate Family. Subject to the restrictions in Section 7(a); but
notwithstanding any contrary provision in Section 7(b), any Member may make a Transfer of any
part or all of his Membership Interest without compliance with the right of first refusal found in
Section 7(b), but only if made to or for the benefit of members of his Immediate Family or to a trust
for the benefit of any such Immediate Family or to a corporation or partnership wholly owned by
such Member or such Member's Immediate Family; and provided that the Transfer must include
the designation of not more than one (1) person to act as the sole representative of the Member and
his successors for purposes of representation at meetings and voting on Company issues as set forth
herein. "Immediate Family" is defined to mean the children or grandchildren of a Member. The
transferees of a Transfer made hereunder shall hold the transferred Membership Interest subject to
all the provisions of this Agreement.
8. Withdrawal.
(a) Withdrawal of Members. A Member may voluntarily withdraw,retire or resign as a
Member of the Company if he makes a transfer of all of his Membership Interest in a manner
permitted under this Agreement. No Member may otherwise voluntarily withdraw, retire or resign
from Membership in the Company without the Consent of the Members and at least one (1)
Manager. No Member may be involuntarily expelled or removed, nor his Membership Interest be
terminated, except upon dissolution of the Company, or by written agreement between such
Member and the Company, or by court order.
(b) Prohibited Withdrawal. Any withdrawal by a Member which is not expressly
permitted hereby shall be null and void, and the attempt thereof shall be a violation of this
Agreement.
(c) No Dissolution. The withdrawal, retirement or resignation of a Member,whether or
not such Member is also a Manager, shall not result in the dissolution of the Company, unless such
action is an Event of Dissolution as defined in Section 9 below.
(d) Withdrawal of Managers. The withdrawal, retirement or resignation by a Member
who is also a Manager shall not, of itself,affect the rights or obligation or status of such person as a
Manager.
9. Dissolution and Continuation.
(a) Dissolution. Upon the occurrence of the first of the following ("Event of
Dissolution"), the Company shall be deemed dissolved and shall proceed to wind up (unless the
Company is otherwise continued hereunder):
(i) Expiration of the term stated in Section I(f)above;
(ii) An event of dissolution of the Company occurring as a matter of law which
is not specifically described herein;
(iii) When the Company fails to have at least one(1)remaining Member;
9
(iv) Any Member is expelled or removed as a Member by a court of proper
jurisdiction;
(v) Upon the bankruptcy of any Member ("Bankruptcy"), which is hereby
defined to occur when such Member:
(A) Makes an assignment for the benefit of creditors;
(B) Files a voluntary petition in bankruptcy;
(C) Is adjudicated as bankrupt or insolvent;
(D) Files a petition or answer seeking for himself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar relief
under any statute, law, or regulation;
(E) Files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against him in any proceeding described in
the foregoing subsection(d);or
(F) Seeks, consents to, or acquiesces in the appointment of a trustee,
receiver, or liquidator of the Member or of all or any substantial part of his
properties;
(vi) After one hundred twenty (I20) days from the commencement of any
proceeding against any Member seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation,
the proceeding has not been dismissed, or if within ninety (90) days after the appointment
without his consent or acquiescence of a trustee, receiver,or liquidator of the Member or of
all or any substantial part of his properties, the appointment is not vacated or stayed or
within ninety(90)days after the expiration of any such stay,the appointment is not vacated;
(vii) In the case of any Member who is a natural person:
(A) His death;or
(B) The entry of an order by a court of competent jurisdiction
adjudicating him incompetent to manage his person or his estate.
(viii) In the case of any Member which is a trust, the termination of the trust, but
not merely the substitution of a new trustee;
(ix) In the case of any Member that is a separate partnership or limited liability
company,the dissolution and commencement of winding up of such separate partnership or
limited liability company;
(x) In the case of any Member that is a corporation,the fling of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its charter;
10
(xi) In the case of any Member which is an estate, the distribution by the
fiduciary of the estate's entire interest in the Company;or
(xii) On the effective date of a written agreement of dissolution signed by all
Members or a notice of dissolution signed by all Managers, and with the Consent of the
Members then outstanding, excluding those held by Members then described in 9(a)(iv)-
(xi)above.
(b) Continuation. Notwithstanding the occurrence of any Event of Dissolution, the
Company and its business shall not be wound up and liquidated, but shall be continued if:
(i) The Event of Dissolution was an event described in Section 9(a)(i) through
(xi)above;and
(ii) There is a future date certain set for the dissolution of the Company
approved by written agreement ("Continuation Agreement") of the heirs, devisees,
personal representatives, successors or assigns of the Members holding at least a majority-
in-interest of all Membership Interests then outstanding(and all profits, interests and capital
interests as determined by the approving Manager consistent with Section 5 herein),
excluding those held by Members then described in subsections (a)(iv)-(xi) above, which is
executed within three hundred sixty (360) days after written notice to the Company of the
Event of Dissolution. If the Company is continued pursuant to such Continuation
Agreement, and except as otherwise provided in such Continuation Agreement, the
Company and its business, with all of its assets and liabilities as of the Event of Dissolution,
shall continue notwithstanding the Event of Dissolution, subject to the same terms and
conditions as set forth in the Certificate and this Agreement.
10. Settlement After Dissolution. After an Event of Dissolution, and unless the Company is
thereafter required to be continued,all Company affairs shall be wound up, its accounts shall be settled and
the Company shall be liquidated as soon as reasonably practicable in the manner required by law, but
subject to the following:
(a) Activities. After the Event of Dissolution, the Company shall conduct only the
activities reasonably necessary to wind up its affairs. The Company may continue to do so as long
as reasonably necessary for the orderly payment of its obligations and sale or distribution of its net
assets. The Managers shall wind up the Company's affairs.
(b) Allocations and Priorities. The Members shall continue to share profits and losses,
including each material item of income, gain, loss, deduction and credit, during the period of
winding up in the same proportions as before the Event of Dissolution. The proceeds of liquidation
shall be paid or reserved for payment or distribution,as follows:
0) First, to the creditors of the Company, including any Members who are
creditors, except for those liabilities to Members on account of their contributions (but in
the order of priority otherwise required by law);and
(ii) Second, to the Members in respect of and as a return of their contribution to
the capital of the Company;and
11
(iii) Third, to the Members in the same proportions as profits are allocated
among them.
(c) Distributions. Liquidating payments or distributions, either in cash or in-kind, shall
be made as the Managers shall reasonably determine,subject to the following limitations:
(i) If the Managers shall determine that a portion of the Company's assets
should be distributed in kind to the Members, the Company shall distribute such assets to
the Members in undivided interests as tenants-in-common in proportion to their
Membership Interests.
(ii) All in-kind distributions of encumbered property shall be subject to any
remaining Company obligations under such encumbrances. Each Member receiving
encumbered property shall specifically agree to assume and hold the Company harmless
from his proportionate share of such obligations effective upon the distribution of such
property to him.
11. Meetings of Members.
(a) Place. All meetings of Members shall be held at the principal place of business of
the Company or at such other place, within or without the State of Utah, as may be designated for
that purpose by any Manager.
(b) Meetings. Meetings of the Members may be called by any Manager, and must be
called by any Manager upon written request of Members holding not less than ten percent(1 U%)of
the Membership Interests entitled to vote at the meeting so called. Any or all Members may
participate in the meeting by, or conduct the meeting through, the use of any means of
communication by which all Members may hear each other during the meeting.
(c) Notice. Unless waived in writing, written notice of such meeting stating the place,
the date, and hour of the meeting, the purpose or purposes for which it is called, and the name of
the person by whom or at whose direction the meeting is called shall be given by the Company to
all Members and Managers.
(d) Quorum. The Members representing a majority of the Membership Interests
entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the
Members. Business may be continued notwithstanding the withdrawal of Members in such
numbers that less than a quorum remains.
(e) Voting. Unless otherwise specifically required in the Certificate or this Agreement,
the vote of the holders of a majority in interest of the Membership Interests entitled to vote and
represented at a meeting at which a quorum is present shall be the act of the Members.
(f) Proxies. A Member may vote either in person or by proxy executed in writing by
the Member or by his duly authorized attorney-in-fact, and filed with the Company. No proxy shall
be valid after eleven (11) months from the date of its execution unless otherwise provided therein.
Each proxy shall be revocable unless expressly provided therein to be irrevocable, and in no event
shall it remain irrevocable for a period of more than eleven (11) months.
12
(g) Consent of Absentees. No defect in the call or notice of a meeting of Members will
affect the validity of any action at the meeting if a quorum is present and if each Member not
present in person or by proxy signs a written waiver of notice, a consent to the holding of the
meeting, or approval of the minutes, either before or after the meeting, and such waivers, consents,
or approvals are filed with Company's records or made a part of the minutes of the meeting.
(h) Action Without a Meeting. Any action required or permitted to be taken at any
meeting of the Members may be taken without a meeting, without prior notice and without a vote,
if a consent or consents in writing setting forth the action so taken, is signed by Members having
not less than the minimum interest in the Company that would be necessary to take such action at a
meeting at which all Members entitled to vote on the action were present and voted. Action taken
pursuant hereto, with the written consent of all Members, shall be effective on the date the last
written consent is received by the Company, unless all such consents specify a later effective date,
in which case the later date shall be the effective date of the action. Action taken pursuant hereto
with the written consent of less than all Members shall be effective ten (10) days after written
notice of the action is given to those Members who did not consent in writing. The consents and
notices described herein may be given by facsimile or by other electronic transmission, provided
that such transmission includes the necessary signatures.
12. Certificates. The Members and Managers shall sign and file all certificates and documents
reasonably required for the organization, operation and dissolution of the Company, including the
following;
(a) Certificate of Organization. The Members or Managers have caused the Certificate
of Organization to be filed with the Utah Division of Corporations.
(b) Amendment to Certificate. When required by law,or when reasonably requested by
any Manager to accurately reflect the agreement among the Members, amendment(s) to the
Certificate shall be prepared by the Company and signed and filed as permitted by law
("Amendments").
(c) Other Documents. All Members and Managers shall sign and file any required
name reservation, assumed name application, annual report, Amendments, Articles of Dissolution
or similar documents and any amendments thereto as may be consistent with this Agreement and
required by law. The Managers shall file such certificates or documents as required by law.
(d) Power of Attorne . Each Member constitutes and appoints each present or future
Manager as his true and lawful attorney, to make, sign, acknowledge, and file on his behalf all
certificates, reports and documents required by this Section 12 which are consistent with the
provisions of this Agreement and the Certificate. This power of attorney is coupled with an interest
herein and is irrevocable.
13. Miscellaneous.
(a) Effective Date. This Agreement shall be effective upon execution hereof by all
those named as Members herein.
13
(b) Consent of Members. Except as otherwise specifically required by this Agreement,
any consent or action by Members holding at least a seventy-five percent(75%) majority in interest
of all Membership Interests then outstanding shall be deemed the consent or action of all Members
("Consent"). Nevertheless, no Member shall have any personal liability to the Company or to the
other Members for any consent or action deemed given hereunder without his actual consent,
provided that written notice of his objection to such action or consent is given to the Company
within a reasonable time.
(c) Amendment. This Agreement may be amended with the Consent of the Members,
as defined above,provided that neither this provision nor any provision of this Agreement requiring
the consent or action of holders of a greater percentage of the Membership Interests ("Super
Majority'}than for such Consent may be amended to require less than such Super Majority except
upon the consent of such Super Majority.
(d) Action by Managers. Except as otherwise specifically required by this Agreement,
any consent or action by any Manager shall be deemed the consent or action of the Company.
Nevertheless, no Manager shall have any personal liability to the Company or to its Members for
any consent or action by the Company which is undertaken without his actual consent, provided
that written notice of his objection to such action or consent is given to the Company within a
reasonable time.
(e) Notices. Any notice to a Member or Manager required or permitted under this
Agreement shall be deemed sufficient if in writing, and if personally delivered or mailed first class,
properly addressed and postage prepaid, to the intended recipient at his address as it appears on the
Company records. Notice given by mail shall be deemed complete forty eight (48) hours after
deposit in the United States mail.
(f) Successors and Assigns. This Agreement shalt be binding upon and inure to the
benefit of the heirs, devisees, personal representatives, successors and assigns of all parties hereto
(including successors by voluntary or involuntary event or operation of law).
(g) Costs of Default. In the event of default hereunder by any party hereto, the
defaulting party shall pay all costs and expenses of each other party, including reasonable
attorneys' fees and other legal expenses whether or not there is a lawsuit,which may be incurred by
them in enforcing their rights and remedies resulting from such default. Costs and expenses shall
specifically include attorneys' fees and legal expenses for bankruptcy proceedings, including efforts
to modify or vacate any automatic stay or injunction, all appearances in bankruptcy or insolvency
proceedings, fees and expenses incurred in connection with the appointment of a receiver, appeals
and any anticipated post judgment collection services, and all court costs and such additional fees
as may be directed by the court.
(h) Entire Agreement. This Agreement, the Certificate, and the other documents
referred to herein constitute the entire agreement of the parties hereto with respect to the subject
matter hereof. Any and all prior understandings or commitments pertaining thereto, oral or written,
are hereby canceled.
(i) Invalidity. If any part of this Agreement is or becomes invalid or unenforceable for
any reason, that part shall be deemed severable from the remainder hereof, and shall in no way
affect the validity of the remainder of this Agreement.
14
I
(j} Inte retations. The headings of this Agreement are included solely for
convenience of reference and shall not be construed as limiting or in any other way modifying the
text of the Agreement. The masculine includes the feminine and the neuter, the singular includes
the plural,and vice versa, as the context may require.
(k) Law. This Agreement shall be governed by the laws of Utah, and all claims or
disputes arising hereunder shall be subject only to the jurisdiction of the state and federal courts in
Utah,and of the courts to which appeals may be taken from such Utah courts.
(1) Taxes. Each party acknowledges that the transactions contemplated in this
Agreement may be taxable. Each party represents and agrees that he has carefully considered his
own potential tax consequences, consulted with his regular tax advisor and/or such other tax
advisors as he has deemed appropriate, and has the economic resources to bear any tax burden
which may result therefrom.
(m) Restrictions. If any restrictive provision hereof is found to be unreasonable in
extent and unenforceable, but would be enforceable if the extent of such restriction were reduced or
modified, then such restriction shall apply with such reduction or modification as may be necessary
to render it valid and enforceable.
(n) Fairness. Each party represents and agrees that the terms of this Agreement and the
transactions contemplated herein are fair and reasonable to such party, taking into account all
existing circumstances affecting the parties to this Agreement.
IN WITNESS WHEREOF, the undersigned, intending to be bound hereby, have duly executed this
Agreement as of the day and date first set forth above.
MANAGERS:
r�
Derek Gasser, an individual Trevor Gasser, an indi ual
MEMBERS:
Trevor Gasser,an ind ideal
DFG DEVELOPMENT,LLC,
a Utah limited liability company
By: Derek Gasser
Its: Manager
15
0) in__t_erQret$tions. The headings of this Agreement are included solely for
convenience of reference and shall not be construed as limiting or in any other way modifying the
text of the Agreement. The masculine includes the feminine and the neuter, the singular includes
the plural,and vice versa,as the context may require.
(lc) Law. This Agreement shall be governed by the laws of Utah, and all claims or
disputes arising hereunder shall be subject only to the jurisdiction of the state and federal courts in
Utah,and of the courts to which appeals may be taken from such Utah courts.
(1) Taxes. Each party acknowledges that the transactions contemplated in this
Agreement may be taxable. Each party represents and agrees that he has carefWly considered his
own potential tax consequences, consulted with his regular tax advisor and/or such other tax
advisors as he has deemed appropriate, and has the economic resources to bear any tax burden
which may result therefrom.
(m) Restrictions, if any restrictive provision hereof is found to be unreasonable in
extent and unenforceable,but would be enforceable if the extent of such restriction were reduced or
modified,then such restriction shall apply with such reduction or modification as may be necessary
to render it valid and enforceable.
(n) Fairness. Each party represents and agrees that the terms of this Agreement and the
transactions contemplated herein are fair and reasonable to such party, taking into account all
existing circumstances affecting the parties to this Agreement.
IN WITNESS WHEREOF,the undersigned, intending to be bound hereby, have duly executed this
Agreement as of the day and date first set forth above.
MANAGERS:
4
Derek Gasser,an individual Trevor Gasser,an individual
MEMBERS:
8
Trevor Gasser,an individual
DFG DEVELOPMENT,LLC,
a Utah limi liability company
By: Derek asser
Its: Manager
i
EXIHBIT"A"
Certificate of Organization
EXHIBIT'"A"
EXHIBIT"B"
Capital Contribution 1 Membership Interest
MEMBER CAPITAL CONTRIBUTION MEMBERSHIP INTEREST
DFG Development, LLC $ 50%
Trevor Gasser $ 50%
TOTAL $ 100%
EXHIBIT`B"