HomeMy WebLinkAboutL_Proof_Signing_Authority_Carpenter_171115LIMITED LIABILITY COMPANY AGREEMENT
OF
Wei Lai Development LLC
THIS LIMITED LIABILITY COMPANY AGREEMENT of Wei Lai Development
LLC, a Washington limited liability company (the "Company") is made and entered into effective
as of 12/01/2013 by Xu Zhang, Yanbin Han, and Huaiyi Han as the initial Members of the
Company, and such additional Members as may be admitted from time to time in accordance with
the terms of this Agreement (the "Members").
AGREEMENT
The parties have agreed to organize and operate a limited liability company in accordance
with the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, the parties, intending legally to be bound, agree as follows:
Article 1
DEFINITIONS
1.1 Definitions. In this Agreement, unless otherwise specifically stated, the capitalized
terms used herein have the respective meanings specified or referred to in Annex 1, attached hereto
and incorporated herein by reference. Other terms are defined in the text of this Agreement and,
throughout this Agreement, those terms have the meanings respectively ascribed to them.
Article 2
ORGANIZATION AND PURPOSE
2.1 Organization. The Members have organized a limited liability company
pursuant to the Act and have caused the Certificate of Formation to be executed and filed for
record with the Secretary of State of the State of Washington.
2.2 Name of the Company. The name of the Company shall be Wei Lai
Development LLC. The Company may do business under that name and under any other name
or names which the Managers select. If the Company does business under a name other than that
set forth in its Certificate of Formation, then the Company shall file an assumed business name as
required by law.
2.4 Term. The term of the Company, which commenced on the date of filing of the
Certificate of Formation, shall continue until dissolved and terminated pursuant to Article 9 of
this Agreement.
2.5 Principal Office. The principal office of the Company in the State of
Washington shall be located at 12838 SE 40th PL, Unite G, Bellevue, WA 98006 or at any other
place within the State of Washington that the Managers select.
2.6 Registered Agent. The name and address of the Company's registered agent in the
State of Washington shall be:
Aimei Xi
2918 Colby Avenue, Suite 211
Everett, WA 98201
2.7 Members. The name, present mailing address, initial Capital Account balances,
number of Units, and Percentage Interest of each Member is set forth on Exhibit A as amended
from time to time.
Article 3
UNITS AND CAPITAL CONTRIBUTIONS
3.1 Initial Capital Contributions and Issuance of Units. The Capital Contributions
which each Member has made or is required to make to the Company are set forth on Exhibit A.
3.2 No Additional Capital Contributions. No Member shall be obligated to
contribute any additional capital to the Company, and no Member shall have any personal
liability for any obligation of the Company.
3.3 No Interest on Capital Contributions. Members shall not be paid interest on their
Capital Contributions.
3.4 Return of Capital Contributions. Except as otherwise provided in this
Agreement, no Member shall have the right to receive any return of any Capital Contribution.
3.5 Form of Return of Capital. If a Member is entitled to receive a return of a
Capital Contribution, the Member shall not have the right to receive anything but cash in return of
the Member's Capital Contribution.
3.6 Loans. Any Member may make or cause a loan to be made to the Company in an
amount and on those terms upon which the Company, acting through its Managers, and the
Member agree.
Article 4
ALLOCATIONS AND DISTRIBUTIONS
4.1 Allocation of Profit or Loss. After giving effect to the special allocations
set forth in Section 4.3, for any Allocation Period of the Company, Profit or Loss shall be allocated to
the Members in proportion to their Percentage Interests; provided, however, that Loss allocated
pursuant to this Section 4.1 shall not exceed the maximum amount of Loss that can be so
allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of
any taxable year. In the event that some but not all Members would have an Adjusted Capital
Account Deficit as a consequence of an allocation of Loss pursuant to this Section 4. 1, the
limitation set forth in the foregoing proviso shall be applied on a Member by Member basis so as
to allocate the maximum permissible Loss to each Member under Regulation Section 1.704-
1(b)(2)(ii)(d). In the event that in any year, Loss is allocated other than in accordance with
Percentage Interests, the next succeeding allocation of Profit shall offset such loss allocation.
4.2 Distributions.
4.2.1 Distributions for Taxes. Unless otherwise unanimously agreed to by the
Members, the Company shall, to the extent it has Available Cash, annually make distributions to the
Members in proportion to their Percentage Interests to permit the Members to pay Federal income
taxes with respect to their allocable shares of income from the Company for such taxable year. Such
annual distributions shall be made within ninety (90) days of the close of the Company's taxable year
in question. For purposes of this Section 4.2.1, and unless otherwise unanimously agreed to by the
Members, the Managers shall assume that the Members' income from the Company is subject to the
highest marginal federal income tax rate applicable to individuals.
4.2.2 Other Distributions. All other distributions shall in such amount and at
such time as determined by the Managers in their sole discretion.
4.2.3 Withholding. The Managers are authorized to withhold from
distributions, or with respect to allocations or payments, to Members and to pay over to the
appropriate federal, state or local governmental authority any amounts required to be withheld
pursuant to the Code or provisions of applicable state or local law. All amounts withheld
pursuant to the preceding sentence in connection with any payment, distribution or allocation to
any Member shall be treated as amounts distributed to such Member pursuant to this Section 4.2.
4.2.4 Limitation on Distributions. Notwithstanding any other provision of this
Agreement, distributions shall be permitted under this Section 4.2 only to the extent of the
Company's legally available funds for distribution as described in RCW 25.15.235.
4.3 Regulatory Allocations. The special allocations described in the following
paragraphs of this Section 4.3 shall be made for each Allocation Period in the order of the
paragraphs:
4.3.1 Minimum Gain Char eg back. Except as set forth in Regulation
Section 1.704-2(f), if, during any Allocation Period, there is a net decrease in Minimum Gain, each
Member shall be specially allocated items of gross income and gain for such Allocation Period (and,
if necessary, subsequent Allocation Periods) in an amount equal to that Member's share of the net
decrease of Minimum Gain, computed in accordance with Regulation Section 1.704-2(g).
Allocations of items of gross income and gain pursuant to this Section 4.3.1 shall be made as
described in Regulation Sections 1.704-2(f) and 0). This Section 4.3.1 is intended to comply with,
and shall be interpreted consistently with, the "minimum gain chargeback" provisions of Regulation
Section 1.704-2(f) and all other Regulation Sections relating thereto.
4.3.2 Member Minimum Gain Char eg back Except as set forth in Regulation
Section 1.704-2(i)(4), if, during any Allocation Period, there is a net decrease in Member Minimum
Gain, each Member with a share of that Member Minimum Gain as of the beginning of such year
shall be specially allocated items of gross income and gain for such Allocation Period (and, if
necessary, subsequent Allocation Periods) in an amount equal to that Member's share of the net
decrease of Member Minimum Gain, computed in accordance with Regulation Section 1.704-2(i)(4).
Allocations of items of gross income and gain pursuant to this Section 4.3.2 shall be made as
described in Regulation Sections 1.704-2(i)(4) and 0). This Section 4.3.2 is intended to comply with,
and shall be interpreted consistently with, the "minimum gain chargeback" provisions of Regulation
Section 1.704-2(i)(4) and all other Regulation Sections relating thereto.
4.3.3 Qualified Income Offset. No Member shall be allocated Losses or
deductions if the allocation causes the Member to have an Adjusted Capital Account Deficit. If a
Member unexpectedly receives any adjustments, allocations, or distributions described in Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in or increases an Adjusted Capital Account
Deficit at the end of any Allocation Period, then all items of income and gain of the Company for
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that Allocation Period shall be allocated to that Member in an amount and manner sufficient to
eliminate such Adjusted Capital Account Deficit as quickly as possible; provided that an allocation
pursuant to this Section 4.3.3 will be made if and only to the extent that such Member would have an
Adjusted Capital account Deficit after all other allocations provided for in this Article 4 have been
tentatively made as if this Section 4.3.3 were not in this Agreement. This Section 4.3.3 is intended to
comply with, and shall be interpreted consistently with, the "qualified income offset" provisions of
the Regulation Section 1.704-1(b)(2)(ii)(d) and all other Regulation Sections relating thereto.
4.3.4 Nonrecourse Deductions. Nonrecourse Deductions for an Allocation
Period or other period shall be specially allocated among the Members in proportion to their
Percentage Interests.
4.3.5 Member Nonrecourse Deductions. Any Member Nonrecourse Deductions
for any Allocation Period or other period shall be specially allocated to the Member who bears the
economic risk of loss with respect to the liability to which the Member Nonrecourse Deduction is
attributable in accordance with Regulation Section 1.704-2(i).
4.3.6 Curative Allocation. The allocations set forth in Sections 4.3.1
through 4.3.5 (the "Regulatory Allocations") are intended to comply with certain requirements of
Regulation Section 1.704-1(b) and Regulation Section 1.704-2. Notwithstanding any other provision
of this Article 4, the Company shall take the Regulatory Allocations into account in allocating other
Profits, Losses, and items of income, gain, loss and deduction to the Members so that, to the extent
possible, the net amount of such allocations of Profits and Losses and other items shall be equal to
the amount that would have been allocated to each Member if the Regulatory Allocations had not
occurred.
4.3.7 Overriding Allocation. It is the intent of the Company that each Member's
share of income, gain, loss, deduction or credit (or item thereof) shall be allocated in accordance with
Section 4.1 to the fullest extent permitted by Section 704(b) of the Code. To preserve and protect the
allocations provided for in Sections 4. 1, the Members are authorized and directed to allocate income,
gain, loss, deduction or credit (or item thereof) arising in any year differently than otherwise
provided for in Section 4.1 if, and to the extent that, the allocations under Sections 4.1 would cause
the allocations to violate Section 704(b) of the Code. Any allocation made pursuant to this
Section 4.3.7 shall be deemed to be a complete substitute for any allocation otherwise provided for in
Section 4.1 and no amendment of this Agreement or approval of any Member shall be required.
4.4 Tax Allocations.
4.4.1 Tax Allocations Follow Book Allocations. Except as otherwise provided
herein, and to the extent permitted by Section 1.704-1(b)(4)(i) of the Regulations for federal and state
income tax purposes each item of income, gain, loss and deduction of the Company shall be
allocated to the Members in a manner that equitably reflects the manner its corresponding item of
"book" income, gain, loss or deduction has been allocated under Section 4.1 and 4.3.
4.4.2 Contributed Properly and Book -ups. To the extent permitted or required by
Section 704(c) of the Code and the Regulations thereunder, Regulation
Section 1.704-1(b)(2)(iv)(d)(3) and Regulation Section 1.704-1(b)(2)(iv)(f), income, gain, loss, and
deduction with respect to any property contributed (or deemed contributed) to 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 the property to the Company for federal income tax purposes and its
Gross Asset Value. If the Gross Asset Value of any Company asset is adjusted pursuant to the
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definition of Gross Asset Value herein, subsequent allocations of income, gain, loss, and deduction
with respect to the asset shall take account of any variation between the adjusted basis of the asset for
federal income tax purposes and its Gross Asset Value in the manner required under Section 704(c)
of the Code and the Regulations thereunder.
4.4.3 Election under Section 754 of the Code. To the extent an adjustment to the
tax basis of any Company asset pursuant to Section 734(b) or Section 743(b) of the Code is required,
pursuant to Regulation Section 1.704- 1 (b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of the adjustment to the Capital Accounts shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment decreases basis), and the
gain or loss shall be specially allocated to the Members in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to that Section of the Regulations.
4.4.4 Recapture. In making any allocation among the Members of income or
gain from the sale or other disposition of a Company asset, the ordinary income portion, if any, of
such income and gain resulting from the recapture of cost recovery or other deductions shall be
allocated among those Members who were previously allocated (or whose predecessors -in -interest
were previously allocated) the cost recovery deductions or other deductions resulting in the recapture
items, in proportion to the amount of such cost recovery deductions or other deductions previously
allocated to them.
4.4.5 Guaranteed Payments. To the extent any compensation paid to any
Member by the Company is determined by the Internal Revenue Service not to be a guaranteed
payment under Section 707(c) of the Code or is not paid to the Member other than in the Person's
capacity as a Member within the meaning of Section 707(a) of the Code, the Member shall be
specially allocated gross income of the Company in an amount equal to the amount of that
compensation, and the Member's Capital Account shall be adjusted to treat the payment of that
compensation as a distribution.
4.4.6 Other Allocations. All items of Company income, gain, loss, deduction and
credit the allocation of which is not otherwise provided for in this Agreement, including allocation of
such items for tax purposes, shall be allocated among the Members in the same proportions as they
share Profits or Losses for the Allocation Period pursuant to this Arlicle 4.
4.5 General.
4.5.1 Except as otherwise provided in this Agreement, the timing and amount
of all distributions shall be determined by the Managers.
4.5.2 Profit, Loss and any other items of income, gain, loss or deduction shall
be allocated to the Members pursuant to this Article 4 as of the last day of each Fiscal Year,
provided that Profit, Loss and such other items shall also be allocated at such times as the Gross
Asset Values of Company assets are adjusted pursuant to clause (ii) of the definition of "Gross
Asset Value".
4.5.3 If any assets of the Company are distributed in kind to the Members,
those assets shall be valued on the basis of their fair market value, and any Member entitled to
any interest in those assets shall receive that interest as a tenant-in-common with all other
Members so entitled. Unless the Members otherwise agree, the fair market value of the assets
shall be determined by an independent appraiser who shall be selected by the Managers. The
Profit or Loss for each unsold asset shall be determined as if the asset had been sold at its fair
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market value, and the Profit or Loss shall be allocated as provided in Section 4.1 and shall be
properly credited or charged to the Capital Accounts of the Members prior to the distribution of
the assets in liquidation pursuant to Section 9.3.
4.5.4 All Profit and Loss shall be allocated, and all distributions shall be made,
to the Persons shown on the records of the Company to have been Members as of the last day of
the Allocation Period for which the allocation or distribution is to be made. Notwithstanding the
foregoing, unless the Company's taxable year is separated into segments, if there is a Transfer or
an event which terminates the continued membership of a Member in the Company under RCW
25.15.130 during the taxable year, the Profit and Loss shall be allocated between the original
Member and the successor on the basis of the number of days each was a Member during the
taxable year; provided, however, to the extent permitted under Section 706 of the Code, the
Company's taxable year shall be segregated into two or more segments in order to account for
Profit, Loss, or proceeds attributable to any extraordinary nonrecurring items of the Company.
4.5.5 The Managers are hereby authorized, upon the advice of the Company's tax
counsel, to amend this Article 4 to comply with the Code and the Regulations promulgated under
Section 704(b) of the Code; provided, however, that no amendment shall materially affect
distributions to a Member without the Member's prior written consent.
Article 5
MANAGEMENT
5.1 Election of Managers. Except as otherwise expressly provided in this
Agreement, the powers of the Company shall be exercised by or under the authority of, and the
business and affairs of the Company shall be managed under the direction of, a manager or
managers (each a "Manager"). The initial Manager(s) of the Company shall be:
Xu Zhang & Yanbin Han
("Initial Manager"). Except as otherwise provided in this Agreement, each successor Manager (a
"Successor Manager") shall be elected by the Super Majority Vote of the Members in accordance
with Article 6 hereof.
5.2 Powers of the Managers. The Managers shall have complete discretion and
authority in the management and control of the business and affairs of the Company, including
the right to make and control all ordinary and usual decisions concerning the business and affairs
of the Company. For the avoidance of doubt, each Manager acting alone shall have all of the
powers alone delegated to the Managers or any Manager and whenever this Agreement refers to
the Managers or a Manager, such reference shall be interpreted to mean any Manager whether
acting alone or together with other Managers. In the event of a conflict between the Managers
with respect to a particular decision, such conflict shall be decided by the Members according to
their Percentage Interest. Notwithstanding the foregoing, any Person who deals with the Company
may rely (without duty of further inquiry) upon a certificate signed by any of the Managers as to the
identity and authority of any Manager or other persons to act on behalf of the Company. The
Managers shall, subject to Section 5.3, possess all power on behalf of the Company, to do or
authorize the Company or employees and agents of the Company, on behalf of the Company, to
do all things necessary or convenient to carry out the business and affairs of the Company,
including but not limited to the following:
5.2.1 To conduct the Company's business;
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5.2.2 To maintain bank accounts and draw checks or other orders for the
payment of money and to maintain brokerage, mutual funds and similar accounts;
5.2.3 To bring or defend, pay, collect, compromise, arbitrate, resort to legal
action, or otherwise adjust claims or demands of or against the Company;
5.2.4 To deposit, withdraw, invest, pay, retain, and distribute the Company's
funds in a manner consistent with the provisions of this Agreement;
5.2.5 To take all action which may be necessary or appropriate for the
continuation of the Company's valid existence as a limited liability company under the laws of
the State of Washington and of each other jurisdiction in which such existence is necessary to
protect the limited liability of the Members or to enable the Company to conduct the business in
which it is engaged;
5.2.6 To invest temporarily Company property in short-term instruments or
money market funds;
5.2.7 To purchase from other Persons, at the expense of the Company,
contracts of liability, casualty and other insurance that the Managers deem advisable, appropriate
or convenient for the protection of the Company property or for any purpose convenient or
beneficial to the Company;
5.2.8 To acquire by purchase, lease, or otherwise, any real or personal
property, tangible or intangible, and to execute or modify leases with respect to any part or all of
the assets of the Company;
5.2.9 To construct, operate, maintain, finance, and improve, and to own, sell,
convey, assign, mortgage, or lease any real estate and any personal property;
5.2. 10 To borrow money for and on behalf of the Company, and, in connection
therewith, execute and deliver instruments to hypothecate, encumber and grant security interests
in the assets of the Company to secure repayment of the sums borrowed;
5.2.11 To prepay, in whole or in part, refinance, amend, modify, or extend any
mortgages or deeds of trust which may affect any asset of the Company and in connection
therewith to execute for and on behalf of the Company any extensions, renewals or modifications
of such mortgages or deeds of trust;
5.2.12 To execute and deliver any and all agreements, instruments or other
documents as are necessary or desirable to carry out the intentions and purposes of the above
duties and powers; and
5.2.13 To do such other acts as the Managers may deem necessary or advisable,
or as may be incidental to or necessary for the conduct of the business of the Company;
Notwithstanding any other provision of this Section 5.2, a Manager shall not have the
authority, right or power to take any action described in Section 5.3 hereof unless such action is
approved by the Super Majority Vote of the Members or to take any other action that by the terms
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of this Agreement or any other agreement requires the approval of a specified percentage of the
Members unless such requisite approval is obtained, as applicable, and provided further that the
delegation of authority in this Section 5.2 may be revoked in whole or in part with respect to any
Successor Manager at any time or from time to time by the Members acting by Super Majority
Vote (but no such revocation shall affect the rights of a third party under a contract entered into
by the Company pursuant to such delegated authority prior to the revocation thereof).
5.3 Limitations on Powers of Managers. The enumeration of powers in this
Agreement shall not limit the general or implied powers of the Managers or any additional
powers provided by law. Notwithstanding the foregoing, Section 5.2, or any other provision
contained in this Agreement to the contrary, no act shall be taken, sum expended, decision made,
obligation incurred or power exercised by the Company, a Manager, a Successor Manager, any
employees or agents of the Company on behalf of the Company with respect to any of the
following, except with the approval of the Members (by meeting or written consent) by Super
Majority Vote:
5.3.1 The sale, lease, transfer, encumbrance or other disposition by the
Company of all or substantially all of its assets;
5.3.2 Any merger or consolidation involving the Company;
5.3.3 Any split, combination or reclassification of any Member's Units;
5.3.4 Except as may be provided for in this Agreement, the issuance by the
Company of any additional Interests or other equity interests (including any interests convertible
into equity interests) of the Company, or the admission of any Person as a Member of the
Company;
5.3.5 Any change of the Company's name or any amendment or restatement of
the Certificate of Formation or this Agreement, including, without limitation, any change in the
purposes of the Company; or
5.3.6 The purchase, lease, exchange or acquisition of any equity interest or
assets of any other Person, other than in the ordinary course of business.
5.4 Limitation on Member's Right to Bind Company. Unless expressly authorized to
do so by this Agreement or by the Managers in writing, no Member, employee, or other agent of the
Company shall have any power or authority to bind the Company in any way, to pledge its credit or
to render it liable for any purpose.
5.5 Compensation. The Managers shall not be entitled to compensation for services
rendered, but shall be entitled to reimbursement from the Company for reasonable out-of-pocket
expenses incurred in attending any meeting and in performing their obligations as Managers.
5.6 Resignation and Removal. Any Manager may resign at any time by giving notice
to the Company and the Members. Such resignation shall be made in writing and shall take effect
when the notice is delivered, unless the notice specifies a later effective date. The Members may
not remove an Initial Manager as a Manager. The Members by Super Majority Vote and at a
special meeting called expressly for that purpose, may remove from office, with or without cause,
any Successor Manager and elect his or her successor.
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5.7 Vacancies. Upon the resignation, death, bankruptcy, or adjudication of
incompetence of an Initial Manager, any remaining Initial Manager shall serve as sole Manager.
Upon the resignation, death, bankruptcy, or adjudication of incompetence of all Initial Managers,
a Successor Manager shall be appointed by the Super Majority Vote of the Members within sixty
(60) days of such event. In case of any vacancy in any Successor Manager, including a vacancy
resulting from an action described in Section 5.6 not otherwise filled by the Members pursuant to
Section 5.6, the Members shall fill the vacancy by a Super Majority Vote.
5.8 Meetings and Action by Written Consent. Meetings of the Managers may be held
either within or without the State of Washington at whatever place is specified in the call of the
meeting. In the absence of specific designation, the meetings shall be held at 3435 14`h Avenue
W. Vancouver, BC V6R 2W2. Any action that may be taken at a meeting of the Managers may
be taken without a meeting if consent in writing, setting forth the action to be taken, is signed by
all of the Managers.
5.9 Conference Telephone Meetings. Meetings of the Managers may be held by
means of conference telephone or similar communications equipment so long as all Persons
participating in the meeting can speak to and hear each other. Participation in a meeting by
means of conference telephone shall constitute presence in person at such meeting, except where
a Person participates in the meeting for the express purpose of objecting to the transaction of any
business thereat on the ground that the meeting is not lawfully called or convened.
5.10 Standard of Care; Liability. Each Manager shall discharge his or her duties as
Manager in good faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner he or she reasonably believes to be in the
best interests of the Company. The Managers shall not be liable for any monetary damages to the
Company for any breach of such duties except for receipt of a financial benefit to which the
Managers are not entitled or a knowing violation of the law.
Article 6
MEETING OF MEMBERS
6.1 Place of Meetings. Meetings of Members shall be held at such place within or
without the State of Washington as determined by the Managers, pursuant to proper notice.
6.2 Annual Meeting. An annual meeting of the Members of the Company shall be
held each year on the date and at the time each year as determined by the Managers, who may, in
their sole discretion, elect not to hold an annual meeting. The failure to hold an annual meeting at
the time stated herein does not affect the validity of any action taken by the Company.
6.3 Special Meetings. Meetings of the Members may be called for any proper
purpose or purposes by the Managers or by a Member or Members holding more than thirty
percent (30%) of the Percentage Interests.
6.4 Notice of Meetings. A notice of all meetings, stating the place, day and hour of
the meeting shall be given to each Member at his or her address shown on the records of the
Company at least five (5) days prior thereto by the mailing of written notice, or at least two (2)
days prior thereto by personal delivery of written notice or by telephonic or telegraphic notice, or
other electronic means of notice (and the method of notice need not be the same to each
Member). If notice is mailed, the notice shall be deemed effective when deposited in the United
States mail properly addressed with postage thereon prepaid. If sent by facsimile or other
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electronic means, such notice shall be deemed effective when the facsimile machine or other
electronic means prints or acknowledges that the transmission was successfully executed.
Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the
Members need be specified in the notice.
6.5 Waiver of Notice. Attendance of a Member at a meeting shall constitute a waiver
of notice of the meeting, except where such Member attends for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not lawfully called or
convened. Notification of a meeting may also be waived in writing. Attendance at a meeting is
not a waiver of any right to object to the consideration of the matters required to be included in
the notice of the meeting, but not so included, if the objection is expressly made at the meeting.
6.6 Voting. All Members shall be entitled to vote on any matter submitted to a vote
of the Members. Members may vote either in person or by proxy at any meeting. Each Member
shall be entitled to one vote for each Percentage Interest held by such Member. Fractional votes
shall be permitted. Unless otherwise specifically provided, the Majority Vote of the Members
shall be the act of the Members.
6.7 Action by Written Consent. Any action that may be taken at a meeting of the
Members may be taken without a meeting if a consent in writing, setting forth the action to be
taken, shall be signed and dated by Members holding the requisite Percentage Interests and such
consent shall have the same force and effect as a vote of the signing Members at a meeting duly
called and held pursuant to this Article 6.
6.8 Proxies. Members may vote at any meeting either in person or by proxy
executed in writing and delivered to another Member. No proxy shall be valid after eleven (1 1)
months from the date of its execution, unless otherwise provided in the proxy.
6.9 Conference Telephone Meetings. Meetings of the Members may be held by
means of conference telephone or similar communications equipment so long as all Persons
participating in the meeting can speak to and hear each other. Participation in a meeting by
means of conference telephone shall constitute presence in person at such meeting, except where
a Person participates in the meeting for the express purpose of objecting to the transaction of any
business thereat on the ground that the meeting is not lawfully called or convened.
6.10 Deadlock. A deadlock ("Deadlock") shall be deemed to exist if, with respect to any
issue concerning the Company's affairs or management, the votes for and against the issue are
evenly divided. If a Deadlock occurs and is not resolved, then any Member shall have an option to
sell his or her Interest to any other Member by complying with the following procedures:
6.10.1 Initial Offer to Sell. The Member who desires to initiate the sale
("Initiating Member") shall make a written offer (the "Deadlock Offer") to sell his or her entire
Interest (the "Initiating Member's Interest") to the other Members.
6.10.2 Terms of Deadlock Offer. The Deadlock Offer shall state the sales price,
the terms and all other significant details that shall pertain to the proposed sale and shall specify
payment in cash on closing.
6.10.3 Ninety(90) Day Option to Respond. Within ninety (90) days following
receipt of the Deadlock Offer, a Member (the "Responding Member") may elect to purchase the
Initiating Member's Interest for the price and on the terms specified in the Deadlock Offer. If
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there is more than one Responding Member electing to purchase, then each such Responding
Member's right and obligation to purchase shall be in the same proportion that his or her
Percentage Interest bears to the Percentage Interests held by all Responding Members. The
Responding Member(s) must purchase all of the Initiating Member's Interest and must close the
purchase within ninety (90) days following the date of the Deadlock Offer.
6.10.4 Obligation to Purchase on Expiration of Deadlock Offer. If the
Responding Member does not elect to purchase all of the Initiating Member's Interest within the
ninety (90) day period, within thirty (30) days after the expiration of such ninety (90) day period,
the Initiating Member shall be required to purchase, and the Responding Member shall be
required to sell, the Responding Member's Interest on the same terms and conditions as the
Deadlock Offer, pro -rated as appropriate based on the relevant Percentage Interests of the
Initiating and Responding Members' Interests.
6.10.5 Obligations. In the event of a sale and purchase of a Member's Interest
in the Company pursuant to this Section 5.12 (a "Sale"), then any indebtedness of the Company
held by the selling Member shall be sold by the selling Member and shall be purchased by the
purchasing Member at its face amount (plus any accrued but unpaid stated interest) for cash at the
time of the closing of the Sale.
6.10.6 Release of Guaranties. In conjunction with the closing of a Sale under
this Section 6.10, the purchasing Member shall obtain a release of all guaranties made by the
selling Member in favor of a third party. In the event that the purchasing Member cannot obtain
such a release, the purchasing Member shall indemnify and hold harmless the selling Member for
any loss, damage, or expense arising out of such guaranty.
6.10.7 Essential Provision. The Members agree that the provisions of this
Section 6.10 are essential to the Company and to each Member and to the extent that any
provision of this Agreement or of the then existing law is inconsistent with the provisions of this
Section 6.10, it is the intention of the Members that the provisions of this Section 6.10 shall
control.
Article 7
LIMITATION OF LIABILITY;
INDEPENDENT ACTIVITIES; INDEMNIFICATION
7.1 Limitation of Liability. Neither the Members nor the Managers of the Company
shall be liable, responsible or accountable in damages or otherwise to the Company or the
Members for any act or omission by any such Person performed in good faith pursuant to the
authority granted to such Person by this Agreement or in accordance with its provisions, and in a
manner reasonably believed by such Person to be within the scope of the authority granted to
such Person and in the best interest of the Company; provided, however, that such Person shall
retain liability for acts or omissions that involve gross negligence, intentional misconduct, a
knowing violation of the law, a violation of RCW 25.15.235 (in the case of Members only) or for
any transaction from which the Person will personally receive a benefit in money, property, or
services to which the Person is not legally entitled.
7.2 Limitations to Third Parties. The debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member or Manager of the Company shall be obligated
11
personally for any such debt, obligation or liability by reason of being the Member or Manager of
the Company.
7.3 Failure to Observe Formalities. A failure to observe any formalities or
requirements of this Agreement, the Certificate of Formation or the Act shall not be grounds for
imposing personal liability on the Members or Managers for liabilities of the Company.
7.4 Independent Activities. Any Member or Manager may engage in or possess an
interest in other business ventures t)f every nature and description, independently or with others,
including, without limitation, the ownership, financing, management, employment by, lending or
otherwise participating in businesses that are similar to the business of the Company, and neither
the Company nor the other Members shall have any right by virtue of this Agreement in and to
such independent ventures as to the income or profits therefrom and shall not be liable for a
breach of duty of loyalty or any other duty.
7.5 Indemnification
7.5.1 Indemnification. To the fullest extent permitted by applicable law, a
Member, a Manager and each director, officer, partner, employee or agent thereof ("Covered
Person") shall be entitled to indemnification from the Company from and against any judgments,
settlements, penalties, fines or expenses incurred in a proceeding to which such Covered Person is
a party because he or she is, or was, a Member or Manager or for any loss, damage, or claim
incurred by such Covered Person by reason of any act or omission performed or omitted by such
Covered Person in good faith on behalf of the Company and in a manner reasonably believed to
be within the scope of authority conferred on such Covered Person by this Agreement, except that
no Covered Person shall be entitled to be indemnified from or on account of acts or omissions of
the Covered Person finally adjudged to be gross negligence, intentional misconduct or a knowing
violation of the law, conduct of the Member or Manager adjudged to be in violation of RCW
25.15.235 or any transaction for with respect to which it is finally adjudged that such Covered
Person received a benefit in money, property, or services to which such Covered Person was not
legally entitled. Any indemnity under this Section 7.5.1 shall be provided out of and to the extent
of Company assets only, and no other Covered Person shall have any personal liability on account
thereof.
7.5.2 Notice. In the event that any claim, demand, action, suit or proceeding
shall be instituted or asserted or any loss, damage or claim shall arise in respect of which
indemnity may be sought by a Covered Person pursuant to Section 7.5.1, such Covered Person
shall promptly notify the Company thereof in writing. Failure to provide notice shall not affect
the Company's obligations hereunder except to the extent the Company is actually prejudiced
thereby.
7.5.3 Contest. The Company shall have the right, exercisable subject to the
approval of the disinterested Covered Persons, to participate in and control the defense of any
such claim, demand, action, suit or proceeding, and in connection therewith, to retain counsel
reasonably satisfactory to each Covered Person, at the Company's expense, to represent each
Covered Person and any others the Company may designate in such claim, demand, action, suit or
proceeding. The Company shall keep the Covered Person advised of the status of such claim,
demand, action, suit or proceeding and the defense thereof and shall consider in good faith
recommendations made by the Covered Person with respect thereto.
12
Article 8
ADMISSIONS AND TRANSFERS
8.1 Transfers Generally. No Person may Transfer all or any portion of or any
interest or rights in the Person's Interest except as provided in this Article 8. To be valid, any
Transfer (including without limitation any Transfer to a Family Member) of Interest must satisfy
the following conditions:
8.1.1 The Transfer must be in compliance with the terms of this Agreement;
8.1.2 The transferor must deliver to the Company written evidence of a valid
Transfer under the terms of this Agreement and a written agreement of the transferee (other than
an existing Member) to be bound by the terms of this Agreement and to the appointment of the
Managers as the transferee's attorneys -in -fact as set forth in Section 11.2 hereof; and
8.1.3 The Transfer must comply with applicable federal and state securities
laws.
8.2 Family Transfers. Any Member may at any time, and from time to time,
Transfer his or her Interest or any portion thereof to or for the benefit of any Family Member by
any means, including without limitation by gift, inheritance, bequest or devise, directly or to or
through any trust or other fiduciary method provided that the transferring Member receives no
consideration for said Transfer.
8.3 Other Transfers. If a Member or any other Person should desire to Transfer all
or any portion of his or her Interest (the "Offered Interest") to a transferee other than a Family
Member or to a Family Member for consideration, the Company shall have an option to purchase
the Offered Interest from the transferor. The transferor shall first give notice to the Company and
all Members of his or her proposed Transfer (the "Offer Notice"). The Offer Notice shall include:
(i) the transferee's identity; (2) a true and complete copy of the transferee's offer; and (iii) the
transferor's offer to sell the Offered Interest. The Company shall exercise its option by giving
written notice to the transferor within thirty (30) days after receipt of the Offer Notice. The
purchase price shall be the lesser of the price contained in the transferee's offer and the fair
market value of the Offered Interest determined as follows:
8.3.1 The Company's regular independent accounting firm shall determine the
book value of the Company and shall make the following adjustments to determine the fair
market value of the Units to be Transferred:
8.3.1.1 Real estate shall be appraised by independent professional
appraisers selected by the Managers. The book value of the real estate shall be adjusted to reflect
the current fair market value of the property after taking into account any federal, state or local
taxes which would be due if the property was sold and a gain realized. In determining the federal
income tax, the rate of tax used in the computation shall be the then applicable maximum
individual capital gains tax rate;
any contingent liability;
8.3.1.2 Any other assets shall be adjusted to fair market value;
8.3.1.3 Appropriate reserves shall be established by the accountants for
13
8.3.1.4 An appropriate discount for lack of marketability shall be made
from the value determined after the adjustments in book value have been made as provided in
Sections 8.3.1.1 through 8.3.1.3 above; and
8.3.1.5 A further appropriate discount for lack of control may be made
from the value determined after the adjustments in book value have been made as provided in
Sections 8.3.1.1 through 8.3.1.4 above.
8.3.2 The purch«se price shall at the Company's option be paid in a lump sum
or in ten (10) equal annual installments with the first installment due ninety (90) days after the
Company has given notice of the exercise of its option. Interest will be at the Applicable Federal
Rate for a long term loan effective as of the date of the Transfer. The Company may accelerate
any or all payments without incurring a prepayment penalty. Unless the parties agree otherwise,
all payments shall be made in cash.
8.3.3 In the event the Company elects not to exercise its option, any Member
shall have the option to purchase the Offered Interest at the price and on the terms stated in this
Article 8 for a period of forty-five (45) days following the receipt of the Offer Notice (the "Offer
Period'). If more than one Member desires to purchase the Offered Interest, in the absence of an
agreement between or among them, each purchasing Member shall purchase the Units in the
proportion that his or her Units bear to the total Units of all of the Members who desire to
exercise the option.
8.3.4 In the event neither the Company nor the Members elect to purchase the
Offered Interest, the Member desiring to Transfer the Offered Interest may do so at any time
within sixty (60) days after the last day of the Offer Period, provided that such Transfer shall be
made on terms no more favorable to the transferee than the terms contained in the transferee's
offer and provided further that any transferee shall acquire the Interest subject to the restrictions
on further Transfer set forth in this Agreement. If the Offered Interest is not Transferred in
accordance with the terms of the preceding sentence, the Offered Interest shall again become
subject to all of the conditions and restrictions of this Article 8.
8.4 Reasonableness of Restrictions. Each Member hereby acknowledges the
reasonableness of the prohibition in this Article 8 in view of the purposes of the Company and the
relationship of the Members. The Transfer of any Interest or portion thereof in violation of the
prohibition contained in this Article 8 shall be deemed invalid, null and void, and of no force or
effect. Any Person to whom an Interest or portion thereof is attempted to be Transferred in
violation of this Article 8 shall not be entitled to become a Member, to vote on matters coming
before the Members, participate in the management of the Company, act as an agent of the
Company, receive distributions from the Company, or have any other rights in or with respect to
the Units. The transferee shall not be admitted as a Member unless the Members unanimously
consent.
8.5 Withdrawal. A Member may not withdraw from the Company prior to the time
for the dissolution and commencement of winding up of the Company without the unanimous
written consent of all of the Members.
14
Article 9
DISSOLUTION AND LIQUIDATION
9.1 Events of Dissolution. The Company shall be dissolved upon the happening of
any of the following events:
9.1.1 upon the unanimous written agreement of the Members; or
9.1.2 the happening of any other event that makes it unlawful, impossible or
impractical to carry on the business of the Company.
9.2 Right to Continue. The death, retirement, resignation, expulsion, adjudication of
incapacity, bankruptcy of a Member or the occurrence of any other event which otherwise
terminates the continued membership of a Member in the Company under RCW 25.15.130 shall
not result in the dissolution of the Company.
9.3 Procedure for Winding Up and Dissolution. If the Company is dissolved, the
Managers shall wind up its affairs. On winding up of the Company, the assets of the Company
shall be distributed, first, to creditors of the Company, including Members and Managers who are
creditors, in satisfaction of the liabilities of the Company, and then, amounts in excess of any
reserves deemed reasonably necessary by the Managers to pay all of the Company's claims and
obligations shall be distributed to the Members in accordance with the balances in their respective
Capital Accounts. This Agreement shall remain in full force and effect during the period of
winding up.
9.4 Allocation of Profit and Loss in Liquidation. The allocation of Profit, Loss and
other tax items or attributes following an dissolution event, including gain or loss from capital
events occurring during the course of winding up, shall be determined in accordance with the
provisions of Article 4 and shall be credited or charged to the Capital Accounts of the Members in
the same manner as such Article 4 would require in the absence of dissolution and winding up.
9.5 No Obligation to Restore Negative Capital Account Balance on Liquidation.
Notwithstanding anything to the contrary in this Agreement, upon a liquidation within the
meaning of Regulation Section 1.704-1(b)(2)(ii)(g), if any Member has a negative Capital
Account balance (after giving effect to all contributions, distributions, allocations and other
Capital Account adjustments for all taxable years, including the year during which such
liquidation occurs), such Member shall have no obligation to make any Capital Contribution to
the Company, and the negative balance of such Member's Capital Account shall not be
considered a debt owed by such Member to the Company or to any other Person for any purpose
whatsoever.
9.6 Return of Contribution Nonrecourse to Other Members. Except as provided by
law or as expressly provided in this Agreement, upon dissolution each Member shall look solely
to the Company properties for the return of its Capital Contribution. If the property remaining
after the payment or discharge of liabilities of the Company is insufficient to return the Capital
Contributions of the Members, no Member shall have recourse against any other Member.
9.7 Termination. The Managers shall comply with any requirements of applicable
law pertaining to the winding up of the affairs of the Company and the final distribution of its
assets. Upon completion of the winding up, liquidation and distribution of the assets upon filing
a Certificate of Cancellation pursuant to the Act, the Company shall be deemed terminated.
15
Article 10
BOOKS, RECORDS, AND ACCOUNTING
10.1 Bank and Brokerage Accounts. All funds of the Company shall be deposited in a
bank account or brokerage accounts opened in the Company's name. The Managers shall
determine the institution or institutions at which the accounts will be opened and maintained, the
types of accounts, and the Persons who will have authority with respect to the accounts and the
funds therein.
10.2 Books and Records.
10.2.1 The Managers shall keep or cause to be kept complete and accurate
books and records of the Company and supporting documentation of the transactions with respect
to the conduct of the Company's business. The records shall include, but not be limited to, those
listed in RCW 25.15.135, including complete and accurate information regarding the state of the
business and financial condition of the Company, a copy of the Certificate of Formation and this
Agreement, all amendments thereto and any prior agreements no longer in effect, a current and a
past list of the names and last known mailing addresses of all Members and Managers, and the
Company's federal, state, and local tax returns and reports, if any, for the three (3) most recent
years. In addition, unless contained in the Certificate of Formation, the records shall include a
written statement of (i) the amount of cash and a description of the agreed value of the other
property or services contributed by each Member; (ii) times at which or events on the happening
of which any additional contributions agreed to be made by each Member are to be made; and
(iii) any right of a Member to receive distributions which include a return of all or any part of the
Member's contribution.
10.2.2 The books and records shall be maintained in accordance with sound
accounting practices consistently applied and shall be available at the Company's principal office
for examination by any Member or the Member's duly authorized representative at any and all
reasonable times during normal business hours.
10.2.3 Each Member shall reimburse the Company for all costs and expenses
incurred by the Company in connection with the Member's inspection and copying of the
Company's books and records.
10.3 Annual Accounting Period. The annual accounting period of the Company shall
be its Fiscal Year.
10.4 Reports.
10.4.1 Annual Report. The Managers shall file an annual report as required by
the Secretary of State of the State of Washington.
10.4.2 Reports to Members. At least fifteen (15) days prior to the due date of
the Members' federal income tax returns, the Managers shall deliver to the Members (and any
unadmitted assignee), that tax information concerning the Company necessary for preparing the
Member's income tax returns for that year.
16
10.5 Tax Matters Member. Xu Zhang & Yanbin Han shall be the Company's tax
matters partner ("Tax Matters Member"). The Tax Matters Member shall have all powers and
responsibilities provided in Sections 6221 to 6233 of the Code. The Tax Matters Member shall
keep all Members informed of all notices from government taxing authorities that may come to
the attention of the Tax Matters Member. The Company shall pay and be responsible for all
reasonable third -party costs and expenses incurred by the Tax Matters Member in performing
those duties. A Member shall be responsible for any costs incurred by the Member with respect
to any tax audit or tax -related administrative or judicial proceeding against any Member, even
though it relates to the Company. The Tax Matters Member shall not compromise any dispute
with the Internal Revenue Service without the approval of the Members by Super Majority Vote.
10.6 Tax Elections. The Managers shall have the authority to make all Company
elections permitted under the Code, including, without limitation, elections of methods of
depreciation and elections under Section 754 of the Code. The decision to make or not make an
election shall be at the Managers' sole and absolute discretion.
10.7 Title to Company Property.
10.7.1 Except as provided in Section 10.7.2, all real and personal property
acquired by the Company shall be acquired and held by the Company in its name.
10.7.2 The Managers may direct that legal title to all or any portion of the
Company's property be acquired or held in a name other than the Company's name. Without
limiting the foregoing, the Managers may cause title to be acquired and held in its name or in the
names of trustees, nominees, or straw parties for the Company. It is expressly understood and
agreed that the manner of holding title to the Company's property (or any part thereof) is solely
for the convenience of the Company and all of that property shall be treated as Company
property.
Article 11
AMENDMENTS; GENERAL PROVISIONS
11.1 Assurances. Each Member shall execute all certificates and other documents and
shall do all such filing, recording, publishing, and other acts as the Managers deems appropriate
to comply with the requirements of law for the formation and operation of the Company and to
comply with any laws, rules, and regulations relating to the acquisition, operation, or holding of
the property of the Company.
11.2 Power of Attorney. Each of the Members signatory hereto irrevocably constitutes
and appoints Stephen W. Jermyn as his or her true and lawful attorney-in-fact in his or her name,
place and stead to make, execute, acknowledge and file (a) any instrument that may be required
by the Company under the laws of the State of Washington or which the Managers may deem
advisable to file; (b) any and all amendments or modifications of the instruments described in the
preceding subdivision (a), subject to applicable law; and (c) all documents which may be required
to effectuate the dissolution and termination of the Company, it being expressly understood and
intended by each of the Members that the foregoing power of attorney is coupled with an interest.
11.3 Notifications. Any notice, demand, consent, election, offer, approval, request, or
other communication (collectively a "Notice") required or permitted under this Agreement must
be in writing and either delivered personally or sent by certified or registered mail, postage
prepaid, return receipt requested. Any Notice to be given hereunder by the Company shall be
given by the Managers. A Notice must be addressed to any Member at the Member's last known
17
address on the records of the Company. A Notice to the Company must be addressed to the
Company's principal office. A Notice delivered personally will be deemed given only when
acknowledged in writing by the person to whom it is delivered. A Notice that is sent by mail will
be deemed given three (3) business days after it is mailed. Any party may designate, by Notice to
all of the others, substitute addresses or addressees for Notices; thereafter, Notices are to be
directed to those substitute addresses or addressees.
11.4 Specific Performance. The parties recognize that irreparable injury will result
from a breach of any provision of this Agreement and that money damages will be inadequate to
remedy the injury fully. Accordingly, in the event of a breach or threatened breach of one or
more of the provisions of this Agreement, any party who may be injured (in addition to any other
remedies which may be available to that party) shall be entitled to one or more preliminary or
permanent orders (i) restraining and enjoining any act that would constitute a breach or
(ii) compelling the performance of any obligation that, if not performed, would constitute a
breach.
11.5 Amendment.
11.5.1 This Agreement may be amended by a Super Majority Vote of the
Members, provided however that no amendment that materially reduces the distributions which may
be made to a Member or an unadmitted assignee (or changes the Profit or Loss allocation to such
Member or unadmitted assignee) may be made without such Member's consent. No provision of
this Agreement requiring that any action be taken only upon approval by a unanimous vote of the
Members may be modified, amended or repealed unless such modification, amendment or repeal
is approved by a unanimous vote of the Members.
11.5.2 The Managers are hereby authorized and empowered, without further
vote or action of the Members, to amend this Agreement as necessary to comply with finally
promulgated successor rules to Proposed Treasury Regulation Section 1.83-3(1) and IRS Notice
2005-43, in order to provide for any election required thereunder and the ability to maintain or
revoke the same, and shall have the authority to execute any such amendment by and on behalf of
each Member. The Members hereby agree to take whatever action is reasonably required by the
Managers in this regard.
11.6 Complete Agreement. This Agreement constitutes the complete and exclusive
statement of the agreement among the Members. It supersedes all prior written and oral
statements, including any prior representation, statement, condition, or warranty.
11.7 Applicable Law. All questions concerning the construction, validity, and
interpretation of this Agreement and the performance of the obligations imposed by this
Agreement shall be governed by the internal law, not the law of conflicts, of the State of
Washington.
11.8 Section Titles. The headings herein are inserted as a matter of convenience only
and do not define, limit, or describe the scope of this Agreement or the intent of the provisions
hereof.
11.9 Successors and Assigns. This Agreement is binding upon, and inures to the
benefit of, the parties hereto and their respective heirs, executors, administrators, personal and
legal representatives, successors, and permitted assigns.
18
1 1.10 Resolution of Disputes.
11.10.1 Mediation/Arbitration. In the event of any dispute arising under or
relating to this Agreement, the parties hereby agree to mediate any such dispute before a mediator
from Judicial Dispute Resolution, LLC or Judicial Arbitration and Mediation Services in Seattle,
Washington. If the dispute is not resolved within sixty (60) days from the request for mediation,
such dispute shall be submitted to arbitration under the Commercial Arbitration Rules before an
arbitrator appointed by the American Arbitration Association in Seattle, Washington.
IL 10.2 Jurisdiction and Venue. Any mediation, arbitration or lawsuit involving
any dispute or matter arising under this Agreement may only be brought before the appropriate
tribunal or court in Seattle, Washington. All Members hereby consent to the exercise of personal
jurisdiction by any such tribunal or court with respect to any such proceeding.
11.11 Terms. Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular, and plural, as the identity of the Person may in the context require.
11.12 Separability of Provisions. Each provision of this Agreement shall be considered
separable; and if, for any reason, any provision or provisions herein are determined to be invalid
and contrary to any existing or future law, such invalidity shall not impair the operation of or
affect those portions of this Agreement which are valid.
IL 13 Investment Representations. The Interests in the Company have not been
registered under the Securities Act of 1933 or any state securities laws (collectively, the
"Securities Acts") because the Company is issuing Interests in reliance upon the exemptions from
registration requirements of the Securities Acts, and the Company is relying upon the fact that the
Interests are to be held by each Member for investment. Accordingly, each Member hereby
confirms the following representations:
(a) Interests have been acquired for such Member's own account, for
investment and not with a view to the resale or distribution thereof and may not be offered or sold
to anyone unless there is an effective registration or other qualification relating thereto under all
applicable Securities Acts or unless such Member delivers to the Company an opinion of counsel,
satisfactory to the Company, that such registration or other qualification is not required;
(b) The Member understands that the Company is under no obligation to
register the Interests or to assist any Member in complying with any exemption from registration
under the Securities Acts;
(c) The Member is experienced in evaluating and investing in companies
such as the Company. The Member is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Interests;
(d) The Member understands that: (i) the Company is a newly formed
limited liability company with no prior operating history, revenues or earnings; (ii) there can be
no assurance as to the amount, if any, of revenues or profits that the Company may generate; (iii)
an investment in the Interest is highly speculative; (iv) investors must accept the risk of
potentially losing their entire investment in the Company; (v) the Company has only very limited
amounts of cash and may be required to obtain additional cash in order to finance its operations;
19
and (vi) there can be no assurance that the Company will be able to obtain additional capital on
acceptable terms or at all; and
(e) The Member acknowledges that the Company has not made any
representation or warranty, either express or implied, to Member regarding the Company, the
Interest or the investment in the Interests.
11.14 Counterparts. This Agreement may be executed simultaneously in two (2) or
more counterparts, each of which shall be deemed an original and all of which, when taken
together, constitute one and the same document. The signature of any party to any counterpart
shall be deemed a signature to, and may be appended to, any other counterpart.
11.15 Consents. Unless otherwise explicitly provided for herein, any and all consents,
agreements or approvals provided for or permitted by this Agreement shall be in writing and a
signed copy thereof shall be filed and kept with the books of the Company.
11.16 Legends. If certificates for any Unit or Units are issued, each such certificate
shall bear such legends as may be required by applicable federal and state laws, or as may be
deemed necessary or appropriate by the Managers to reflect restrictions upon Transfer
contemplated herein.
20
LIMITED LIABILITY COMPANY AGREEMENT
OF
Wei Lai Development LLC
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.
COMPANY
Wei Lai Development LLC
By
Xu Zhang, Manager
By l
Yanbin Han, Mang r
MEMBER(S)
By
Xu Zhang
By
Yanbin Han
e
y
Huaip Han
21
CONSENT TO SERVE: AS REGISTERED AGENT
Aimei Xi of Genesis law Firm. PLLC ('`(;emesis") hereby consents to serve as
Registered Agent in the State of' Washington for Wei Lai Development LI.C. Aimei Xi
understands that as agent for the limited liability conipan\ named abo\e. it will be her
responsibility to receive service of* process in its name: to fiomard mail to the limited liability
company: and immediately to notify the Office of the Secretary of State in the event of his
resignation. or am, changes in the registered office ofthe limited liability company for which Wei
Lai Development LLC is agent.
GENESIS LAW MRM. PLLC
12/01/201 3 13y _ . _ ���' �-�1
Aimei Xi
I?I
LIMITED LIABILITY COMPANY AGREEMENT
OF WEI LAI DEVELOPMENT LLC
Member/Address
Yanbin Han
15 Hengsan Rd. Xiangfang
District, Wanda Apartment, B2-
2301 Harbin, Heilingjiang
province, China 150001
Xu Zhang
15 Hengsan Rd. Xiangfang
District, Wanda Apartment, B2-
2301 Harbin, Heilingjiang
province, China 150001
Huaiyi Han
406-33538 Marshall Rd.
Abbotsford BC Canada,V2S OC7
TOTAL CAPITAL
EXHIBIT A
MEMBERS
Capital Percentage Interest
Account
Balance
$389,000 38.9%
$350,000
$261,000
$1,000,000
35%
26.1%
1001%
Units
39
35
26
23
LIMITED LIABILITY COMPANY AGREEMENT
OF
WEI LAI DEVELOPMENT LLC
ANNEX I
"Act" means the Washington Limited Liability Company Act, as provided in Chapter
25.15 RCW, as amended from time to time.
"Adjusted Capital Account Deficit " means, with respect to any Member, the deficit
balance, if any, in the Member's Capital Account as of the end of the relevant Allocation Period,
after giving effect to the following adjustments:
(i) The Capital Account shall be credited with the amounts which the Member is
deemed obligated to restore pursuant to Regulation Sections 1.704-2(g)(1) and (i)(5) (i.e., the
Member's share of Minimum Gain and Member Minimum Gain); and
(ii) The Capital Account shall be debited with the items described in Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
"Agreement " means this Agreement, as amended from time to time.
"Allocation Period' means (i) the period beginning on the date hereof and ending
December 31, 2006, (ii) any subsequent Fiscal Year, or (iii) any portion of a period described in
clause (i) or (ii) for which the Company is required to allocate Profit, Loss and other items of
Company income, gain, loss or deduction pursuant to Article 4 of this Agreement.
"Applicable Federal Rate " shall have the meaning given in Code Section 1274.
"Available Cash" means all cash funds derived from operations of the Company
(including interest received on reserves), without reduction for any noncash charges, but less cash
funds used to pay current operating expenses and to pay or establish reasonable reserves for
future expenses, debt payments, capital improvements, and replacements as determined by the
Managers.
24
"Capital Account " means the account to be maintained by the Company for each
Member in accordance with the following provisions:
(i) A Member's Capital Account shall be credited with the Member's Capital
Contributions, the amount of any Company liabilities assumed by the Member (other than
liabilities secured by Company property distributed to the Member), the Member's allocable
share of Profit, and any item in the nature of income or gain specially allocated to the Member
pursuant to the provisions of Article 4 (other than Section 4.4.2); and
(ii) A Member's Capital Account shall be debited with the amount of money and the
fair market value of any Company property distributed to the Member (net of liabilities secured
by such distributed property that such Member is considered to assume or take subject to under
Section 752 of the Code), the amount of the Member's individual liabilities that are assumed by
the Company (other than liabilities that reduce the amount of any Capital Contribution made by
such Member), the Member's allocable share of Loss, and any item in the nature of expenses or
losses specially allocated to the Member pursuant to the provisions of Article 4 (other than
Section 4.4.2).
If any Interest is Transferred pursuant to the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent the Capital Account is attributable
to the Transferred Interest. If the Gross Asset Value of Company property is adjusted as provided
herein, the Capital Account of each Member shall be adjusted to reflect the aggregate adjustment
in the same manner as if the Company had recognized gain or loss equal to the amount of such
aggregate adjustment. It is intended that the Capital Accounts of all Members shall be maintained
in compliance with the provisions of Section 1.704-1(b) of the Regulations, and all provisions of
this Agreement relating to the maintenance of Capital Accounts shall be interpreted and applied
in a manner consistent with that Regulation.
"Capital Contribution " means the total amount of cash and the Gross Asset Value of any
other assets contributed (or deemed contributed under Regulation Section 1.704-1(b)(2)(iv)(d)) to the
Company by a Member, net of liabilities assumed by the Company or to which the assets are subject.
"Code" means the Internal Revenue Code of 1986, as amended, or any corresponding
provision of any succeeding law.
"Company" means Wei Lai Development LLC.
"Covered Person " has the meaning set forth in Section 7.5.1.
"Deadlock" has the meaning set forth in Section 6.10.
"Deadlock Offer" has the mneaning set forth in Section 6.10.1.
"Family Member" shall mean Xu Zhang, Yanbin Han, and Huaiyi Han and his/her/their
lineal descendants including (1) any child who is adopted during such child's minority and (2) the
trustees of any trust established by a Member for the benefit of a Family Member or such
Member's spouse or lineal descendant, provided (a) that the trustees agree to be bound by the
terms of this Agreement, and (b) upon termination of the trust, any Units held by the trustees shall
be distributed to a Family Member.
"Fiscal Year" means the calendar year.
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"Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal
income tax purposes, with the following adjustments:
(i) The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the fair market value of the asset, as determined by the contributing Member and
the Company; and
(ii) The Gross Asset Value of all Company assets shall be adjusted to equal
their respective fair market values, as determined by the Members, immediately prior to the
following times: (a) the acquisition of an additional interest in the Company by any new or
existing Member in exchange for more than a de minimis Capital Contribution, except as
otherwise provided in this Agreement; (b) the distribution by the Company to a Member of more
than a de minimis amount of Company assets as consideration for an interest in the Company;
(c) the liquidation of the Company within the meaning of Regulation Section 1.704- 1 (b)(2)(ii)(g);
and (d) the date the Company grants an Interest in the Company, other than a de minimis interest,
as consideration for the provision of services to or for the benefit of the Company by an existing
Member or a new Member.
All such adjustments shall be made in accordance with the rules set forth in Regulation
Section 1.704-1(b)(2)(iv)(f). Notwithstanding the foregoing, adjustments pursuant to clauses (a),
(b), (c) and (d) above shall be made only if the Managers reasonably determine that such
adjustments are necessary or appropriate to reflect the relative economic interests of the
Members. The Gross Asset Value of any Company asset distributed to any Member shall be
adjusted immediately prior to such distribution to equal its fair market value (if not adjusted
pursuant to clause (b) above). Depreciation shall be calculated by reference to Gross Asset
Value, instead of tax basis, if Gross Asset Value differs from tax basis.
"Initial Manager" means the Person or Persons designated as such in Section 5.1.
"Initiating Member" has the meaning set forth in Section 6.10.1.
"Initiating Member's Interest " has the meaning set forth in Section 6.10.1.
"Interest" means the ownership interest of a Member in the Company (which shall be
considered personal property for all purposes), consisting of (i) such Member's Percentage
Interest in Profit, Loss, allocations, and distributions, (ii) such Member's right to vote or grant or
withhold consents with respect to Company matters as provided herein or under the Act, and (iii)
such Member's other rights and privileges as herein provided.
"Majority Vote " means with respect to actions taken by Members, the affirmative vote in
consent of Members more than 50% of the Percentage Interests.
"Manager " means the Person designated as such in or pursuant to Section 5.1.
"Member" means each Person, except the Company, signing this Agreement and any
Person who subsequently is admitted as a member of the Company.
"Member Minimum Gain" has the meaning and shall be determined as set forth in
Regulation Section 1.704-2(i) for "partner nonrecourse debt minimum gain."
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"Member Nonrecourse Deductions " has the meaning and shall be determined as set forth
in Regulation Section 1.704-2(i) for "partner nonrecourse deductions."
"Minimum Gain " has the meaning and shall be determined as set forth in Regulation.
Sections 1.704-2(b)(2) and 1.704-2(d) for "partnership minimum gain."
"Negative Capital Account" means a Capital Account with a balance of less than zero.
"Nonrecourse Deductions " has the meaning set forth in Regulation Section
1.704-2(b)(1).
"Notice" has the meaning set forth in Section 11.3.
"Offer Notice " has the meaning set forth in Section 8.3.
"Offered Interest " has the meaning set forth in Section 8.3.
"Offer Period" has the meaning set forth in Section 8.3.3.
"Percentage Interest " means the percent derived by dividing the number of Units held by a
Member by the total number of Units held by all Members.
"Person " means and includes an individual, corporation, partnership, association, limited
liability company, trust, estate, or other entity.
"Profit " and "Loss " means, for each Allocation Period of the Company (or other period
for which Profit or Loss must be computed), the Company's taxable income or loss determined in
accordance with Section 703(a) of the Code, with the following adjustments:
(i) All items of income, gain, loss, deduction, or credit required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be taken into account; and
(ii) Any tax-exempt income of the Company, not otherwise taken into account in
computing Profit or Loss, shall be included; and
(iii) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code
(or treated as such pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken
into account in computing Profit or Loss, shall be subtracted; and
(iv) Gain or loss resulting from any taxable disposition of Company property shall be
computed by reference to the Gross Asset Value of the property disposed of, notwithstanding the
fact that the Gross Asset Value differs from the adjusted basis of the property for federal income
tax purposes; and
(v) In lieu of the depreciation, amortization, or cost recovery deductions allowable in
computing taxable income or loss, there shall be taken into account the depreciation or
amortization computed for book purposes; and
(vi) Notwithstanding any other provision of this definition, any items which are
specially allocated pursuant to Section 4.3 hereof shall not be taken into account.
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"Regulations " mean the income tax regulations, including any temporary regulations,
from time to time promulgated under the Code.
"Regulatory Allocation " has the meaning set forth in Section 4.3.5.
"Responding Member" has the meaning set forth in Section 6.10.3.
"Sale" has the meaning set forth in Section 6.10.5.
"Successor Manager" has she meaning set forth in Section 5.1.
"Super Majority Vote " means with respect to actions taken by Members, the affirmative
vote in consent of Members holding 75% of the Percentage Interests.
"Tax Matters Member" has the meaning as set forth in Section 10.5.
"Transfer" means any change in legal or beneficial ownership, whether voluntary or
involuntary, including without limitation, sale, hypothecation, pledge, assignment, attachment,
gift, bequest, devise, or agreement as to status of property (e.g., community property agreement).
"Unit" means a unit of Interest in the Profits and Losses, and the distributions, of the
Company.
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