HomeMy WebLinkAboutL_OperatingAgreementLLC_170510_v1OPERATING AGREEMENT
CEDAR RIDGE LLC
LIMITED LIABILITY COMPANY
This organization and operation Agreement (the "Agreement") is made and entered into
effective as of the date of filing of the Certificate of Formation April 11, 2017 by and
among the parties whose signature appear on the signature page here.
1. Formation q Conilm il: The parties who are parties to this agreement hereby
agree to form a limited liability company pursuant to the law of the State of
Washington. The limited liability company shall be Formed under the provision of
the Washington Limited Liability Company Act(the "Act") by filing of a
Certificate of Formation. The certificate of Formation shall contain those
provisions required by the Washington Secretary of state and the Act. and shall be
consistent in all respects with the terms of this Agreement. The name of the
company shall be CEDAR RIDGE LLC and be referred as the "Company".
2. Registered Office: Registc'recl ftgerrl and Place orl3rrsirre,ss.
2.1 Regislerecl Of�rce card Rei►itile! c'd Age'r7t. The Company's initial
registered agent and the address of its initial office in the State of
Washington are as follows:
Name
Address
SATWANT SINGH 24419 10511' Place SE
Kent. WA 98030
The registered office and registered agent may be changed by the
Company from time to time by filing an amendment to the Certificate of
Formation or filing such forms as required by the Washington Secretary of
State.
2.2 Place of Business. The principal place of business of the Company
shall be at Kent, Washington. The Company may locate its place of
business at any other place(s) as the Company may from time to time
deem advisable.
3. Term: The term of existence of the Company shall be indefinite or as long as
allowed by the laws of the State of Washington. effective from the date of filing
of the Certificate of Formation, unless the company is earlier dissolved in
accordance with the provisions of the Agreement, or unless continuation of the
Company is prior to the expiration of any term by the affirmative vote of the
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holders of a majority of the Percentage Interest (as defined below) in the
Company.
4. Specific Purpose: The specific purpose of the Company shall be to operate a
real estate holding and development company and to conduct all other business
activities incidental therto. The Company shall have no other purpose without the
affirmative vote of the holders of a majority of the Percentage interests in the
Company.
5. Percentage Interest, Cal ital Contribuliouy, Profits and Losses and Cash
distributions.
5.1 Percentage Interests. The parties of this Agreement (the "Members")
shall have initial percentage interest (the "percentage interests") in the
Company as set forth opposite each Member's name listed below.
Subsequent changes in the Members' Percentage Interests shall be
reflected in the Company's books and records and in an amendment to this
Agreement.
Name Percentage Int. Contributions
Satwant Singh 50% start up capital/real estate
Kuldip S Dhariwal 50% start up capitallreal estate
5.2 Initial CalMal Conn-ihutions. Upon execution of this Agreement, each
member shall contribute the property or other valuable consideration as set
forth next to the Members' Percentage Interest listed above.
5.3 Capital Accow?1s. Each member shall have a capital account on the
books of the Company ("Capital Account"). A Member's Capital Account
shall be increased by the Member's capital contributions to the Company
and the Member's share of net income of the Company and cash
distributions. Such capital accounts shall at all times be maintained in
compliance with the provisions.
5.4 Capital Contributions Afler Initial Capital Contributions. No
additional capital contributions shall be required of the Members without
the unanimous consent of the members.
5.5 Allocalioia uf'Prufits grid Lo.v.ves. Profits, losses and credits of the
Company resulting from operations shall be allocated among the Members
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in proportion to the Member's Percentage Interests.
5.6 Cash Dimi-ibutions,f-om Opc}ralions. Cash flow ofthe Company in
any period shall consist of the total cash receipts of the Company less all
cash disbursements and less reserve reasonably required for Company
business. Cash flow of tile company resulting from operations shall be
distributed periodically among the members in accordance with their
Percentage Interests.
5.71nlei•em of'Capital Conh'ibulions. No interest shall be paid on any
capital contributions or capital accounts of the Members.
6. _-lanagentenl, Intlemn!f callon and Acc'ounling Afallevv.
6.1 ,11anagentew hj' Hembel's. The Members hereby appoint Satwant
Singh OR Kuldip S Dhariwal as Managing Members, who shall have sole
managerial authority over the affairs of the Company. Said authority shall
include but not be limited to conveyance of real or personal property
owned by the Company, management of Company accounts. and
representation of the Company with regard to property development.
6.2 Limitation on Liability. Tile Members shall not be liable, responsible
or accountable in damage or otherwise to the Company or the other
Members for any acts of'omission by any Member performed in good faith
and in a manner reasonably believed by the Member to be within the scope
of the Member's authority and in the best interest of the Company,
provided that such act of omission did not constitute fraud, misconduct,
bad faith or gross negligence. Members shall be fully protected in relying
in good faith upon the records required to be maintained under this
agreement and upon such information, opinions, reports or statements by
any of its other Members, or agents, or by any other person, as to matters
the Member reasonably believes are within such other person's
professional or expert competence and who has been selected with
reasonable care by or on behalf'of the Company. including information,
liabilities, profits or losses of the Company or any other facts pertinent to
the existence and amount of assets from which distributions to Members
might properly be paid.
6.3 Inclemnificalion. The Company shall indemnify and hold harmless any
Member against any Iiability, loss, damage, cost of expenses incurred by
the Member on behalf of the Company or in furtherance of the Company's
interest without relieving any Member of liability for fraud misconduct,
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bad faith or gross negligence. I [owe%.er. no Member shall have any
personal liability for the satisfaction of any required indemnification of the
other Members.
Any indemnification required to be made by the Company shall be made
promptly following the fixing of the liability, loss, damage, costs or
expense incurred or suffered by a final judgment of any court, settlement.
agreement or otherwise. In addition. the Company may advance funds to a
Member claiming; indemnification under this section for legal expenses
and other costs incurred as a result of a legal action brought against the
Member if (i) the legal action relates to the performance of duties or
services by the Members on behalf of the Company, (ii) the legal action is
initiated by a party other than a Member. and (iii) the member undertakes
to repay the advanced funds to the Company if it is determined that the
Member is not entitled indemnification pursuant to the terms of this
Agreement.
6.4 Loans to Conapctn) Nothing in this agreement shall prevent any
Member from making; secured or unsecured loans to the company.
6.5Accountinzg Period The Company's accounting period shall be the
calendar year.
G.G. Recorelr Audits a►ul Relmr1s. The Company shall maintain records
and accounts of'all operation and expenditures of the Company. At a
minimum the Company shall keep at its principal place of business the
following records:
(a) A list setting forth the full name and last known mailing; address of
each current and past member.
(b) A copy of Certificate of formations and all amendments thereto;
(c) Copies of this Agreement and all amendments hereto;
(d) Copies of the Company's federal, state and local tax returns and
reports, if any, for three most recent years.
(c) Minutes of every meeting of the Members and any written consents
obtained from Members for actions taken by Members without a meeting;
and
(1) Copies of the Company's financial statements far the three most recent
years.
7. Transfers.
7.1 Zran.sfer Prohibhe(l. Without the prior affirmative vote of the holders
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of a majority of the Percentage Interests in the Company other than a
proposed transfer, no Member may directly or indirectly sell, transfer.
assign, pledge or otherwise encumber, voluntarily or involuntarily, all or
any part of the Member's interest in the Company. A transfer in violation
of this section shall be void and no force or effect.
7.2 Right of Fh-st Relkva . No member shall dispose of any portion of the
Member's interest in the Company to a third party without first making a
%vritten offer to sell that same interest to the other Members. The written
off shall be made to the other Members not less than thirty (30) days prior
to any proposed disposition of such interest and shall state the price and
terms of the proposed sale. and the name and address of both the offeror
and offeree. The written offer shall give the remaining; members as option
in accordance with the provisions of the following sections of this
Agreement.
7.3 Pr-iirrciry Uplioil tv Pin•chcrse. Within twenty (20) days of the receipt of
the written offer of the last remaining Members to receive such notice.
such remaining Member may exercise an option to purchase, on the same
terms and conditions as the proposed sale, that proportion of the
Percentage Interest proposed to be disposed of which equals the proportion
of the percentage interest owned by each such remaining Member at the
time of the Member's receipt of the written offer bears to the total
Percentage Interest then owned by all of the remaining Members. Notice
of acceptance of the offer and of exercise of the primary option shall be
given in person or mailed to the address of the selling Member prior to
midnight of the twentieth (20111) day.
7.411'cart-ercicise� v�'Ul�tiv�ls. If the remaining; Members do not purchase
all of the Percentage Interest offered in the written offer within the
required time, then the selling Member may sell all of the Percentage
Interest offered (but not a lesser amount) to the third party specified in the
written offer, but not for a price less than or terms different from those
made in the written offer to the remaining; Members provided the
affirmative vote of a majority ofthe Percentage Interests has been obtained
as required by Section 7.1 above. Any Percentage Interest not sold by the
selling Member to the third party specified within sixty (60) days after
making the written offer to the remaining Members shall again become
subject to the restrictions of this agreement as though it had never been
offered.
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7.5 Ti-cw#&Y- Herber. Any individual or entity that is the permitted
recipient of a transfer described in this Section above shall, as a condition
to completion of the transfer agree to be bound by the terms and conditions
of the Agreement.
8. Rights wul Obligmions ref 11ember.
8.1 General Limitations of Liabilily. Each Member's personal liability
shall be strictly limited as set forth in this Agreement and the Act.
8.2 Liability Lhnilecl fur Cony)w?y Obligations. Except as othenvise
required by law. Members shall not be personally liable for any debts,
obligations, judgments or liabilities of the Company beyond their
respective capital contribution.
8.3 Inspection Revoi-cls. Upon reasonable request. each Member shall
have the right to inspect and copy at such Members' expense during
ordinary business hours, the records required to be maintained by the
Company pursuant to this Agreement or Act.
8.4. rbleeling of illembers.
8.4.1 Anne cil ;1-leetings. The company may, but is not obliged to hold an
annual meeting of the Members at such time as shall be determined by the
Members, for the purpose of the transaction of such business as may come
before the meeting.
8.4.2 Special r1}Ieelings. Special meeting of the Members, for any purpose
or purposes, may be called by the Manager or by Members holding at Ieast
ten percent (10%) of the Percentage Interests.
8.4.3 Place of 1feeling. The Members may designate any place either
within or outside the State of Washington, as the place of meeting for any
meeting of the Members. if no designation is made. or if a special meeting
is called, the place of meeting shall be the principal office of the Company.
8.4.4 Notice ofaleelingv. Written notice state the place, day and hour of
the meeting and in the case of special meeting, the purpose or purposes for
which the meeting is called shall be delivered not less than five(5) or more
than twenty(20) days before the date of the meeting, either personally or by
email, by or at the direction of (lie Members calling the meeting, to each
Member entitled to vote at such meeting.
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8.4.E Record Dale. For the purpose of determining Members entitled to
notice of or to vote at any meeting of Members or any adjournment
thereof, or Members entitled to receive payment of any distribution, the
date on which notice of the meeting is mailed or the date on which the
resolution declaring such distribution is adopted, as the case may be, shall
be the record date for such determination of Members. When a
determination of Members entitled to vote at any meeting of Members has
been made as provided in this Section. such determination shall apply to
any adjournment thereof.
8.4.6 Quorum. A majority of the Percentage Interests represented in
person or by proxy shall constitute a quorum at any meeting of Members.
In the absence of a quorum at any such meeting, a majority of the
Percentage Interests held by members so represented may adjourn the
meeting from time to time for a period not to exceed sixty (60) days
without further notice. However. if the adjournment is for more than sixty
(60) days, or if atter the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to
each Member of record entitled to vote at the meeting. At such adjourned
meeting at which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the meeting as
originally noticed. The Members present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal during such meeting of the Percentage Interests whose absence
would cause less than a quorum.
8.4.7 .1lanner• ofAcling. If a quorum is present. the affirmative role of
Members holding more than fifty (50%) percent of the Percentage Interests
represented at the meeting in person or by proxy shall be the act of the
Members, unless the vote of a greater or lesser percentage is required by
this Agreement or by law.
8.4.8 Action by Members u41how it Xfeelinq. Action required or permitted
to be taken at a meeting of Members may be taken without a meeting if the
action is evidence by one or more written consent consents describing the
action take, executed by the Members entitled to vote thereon and
delivered to the Company for inclusion in the Company's minutes. Such
action shall be deemed passed if it receives the affirmative consent of a
sufficient amount of the percentage interest necessary to take such action if
a meeting had actually been held. Action taken under this Section is
effective when sufficient Members entitled to vote thereon to pass the
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resolution(s) have signed such consent. unless such consent specifies a
different effective date. The record date for determining Members entitled
to take action without a meeting shall be the date the First Member signs
consent.
8.4.9 [1'rihrer ofAlolice. When any notice is required to be given to a
Member, a waiver thereof in writing signed by the Member entitled to
such notice, whether before. at or after the time stated therein, shall be
equivalent to the giving of such notice.
9. Dissolution ulul Termination.
9.1 Dissolution. The Company shall be dissolved upon the occurrence of
any of the following events:
(a) Agreement of the Members holding a majority of the Percentage
Interests in the Company;
(b) Sale or disposition of all Company assets;
(c) The death, insanity. bankruptcy, retirement, resignation or expulsion of
any Member, unless the Company is continued by the affirmative vote of
the holders of a majority of the remaining Percentage Interests in the
Company EXCEPT that in the event of the death of any Member, the
surviving Member(s) shall have the option to purchase the deceased
Member(s) Percentage of Interest in the Company at a price to be
determined by a qualified business appraiser jointly selected by the
surviving Member(s) and the deceased Member's heirs or executor; or
(d) The expiration of the term of the Company unless contained as set
forth in Section 3 above.
9.2 Disti-ibution of Cush Upon Tei-mination. Upon the dissolution of the
Company pursuant to Section 9. 1. the Company affairs shall be wound up
as, expeditiously possible, the assets sold, and the Company terminated.
However upon a majority vote of the Percentage Interests, some or all of
the Company's assets shall be distributed to the Members pro -rata with the
Member's capital accounts until such accounts are reduced to zero, and
thereafter in accordance with the Member's Percentage Interests.
9.3 Gain or• Loss. Any gain or loss on the disposition of Company
properties in the process of liquidation shall be credited or charged to the
Members in proportion to their Percentage Interest provided however that
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gain or loss with respect to property contributed to the Company by a
Member shall be shared among the Members so as to take account of any
variation between the basis of the property so contributed and its fair
market value at the time of contribution, in accordance with any applicable
United States tax laws and regulations. Any property distributed in kind in
the liquidation shall be valued and treated as though it were sold the cash
proceeds distributed. The difference between the value of property.
9.4 Companjy Assets Sola Source. The members shall look solely to the
Company's assets for the payment of any debts or liabilities owned by the
Company to the Members and for the return of the capital contributions
and liquidations amounts. If the Company property remaining after the
payment or discharge of all its debts and liabilities to persons other than
Members is insufficient to return to Members capital contributions. they
shall have no recourse therefore against the Company or any other
Members, except to the extent that such other Members have outstanding
debts or obligations owing to the Company.
10. Conflicts of Interests. Each member understands that the other Members may
engage in other business activities which may compete directly or indirectly with
the Company. Each Member hereby consents to such other business activities and
agrees that no Member shall acquire any interest therein by virtue of this
Company.
11. Notices. Any Notices required or permitted under this Agreement shall be
delivered to the most recent address set forth in the books and records of the
Company. Except as otherwise provided herein, any such notice shall be deemed
to be given when personally delivered or, if mailed, three (3) business days after
the date of mailing.
12. tlmenchnents. This Agreement may be amended by a vote ofthe majority of
percentage Interests, provided that in no event may an amendment affect
allocation or profits or losses, the distribution of cash flow, the capital account or
right on dissolution of a Member, or materially alter the economic benefits of this
Agreement to a Member, except upon the unanimous written agreement of all the
Members.
13. lVitivers. The failure of any party hereto to insist upon strict performance of
any of the covenants and agreements herein contained, or to exercise any option or
right herein conferred, in any one or more instances shall not be construed to be a
waiver or relinquishment of performance of any covenants or agreement, or of any
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such option or right, but the same shall be and remain in full force and effect.
14. Partition. While the Company remains in effect or is continued, each Member
agrees and waives its rights to have any Company property partitioned, or to file a
complaint or to institute any suit, action or proceeding at law or in equity to have
any Company property partitioned, and each Member, on behalf of itself, its
successor and its assigns hereby waives any such right.
15. Righis and Remedies Cumulative. -file rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy shall not
preclude or waive the right to use any or all other remedies. These rights and
remedies are given, in addition to any other right the parties may have by law.
statute, ordinance or otherwise.
16. &verubilit}F. if any provision of this Agreement or the application thereof to
any person or circumstances shall be invalid, illegal or unenforceable to any
extent, the remainder of this Agreement and the application thereof shall not be
affected and shall be enforceable to the fullest extent permitted by law.
17. !lairs, .Successors unul Assigns. Each of the covenants, terms, provisions and
agreements herein contained shall be binding upon and inure to the benefit of the
parties hereto and to the extent permitted by this Agreement, their respective
heirs, legal representatives, successors and assignees.
18. Cretlirors None of the provisions of this Agreement shall be deemed or
construed to be for the benefit of or enforceable by any creditors of the Company.
19. Governing Law. This agreement shall be governed by the internal laws of'the
State of Washington. Venue for any action thereunder shall be in King County,
Washington.
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IN WCENESS WHEREOF. this Agreement has been signed by the undersigned
members effective as of the date the Certificate of Formation is filed with the Secretary of
State of the State of Washington.
"�/ r
SA ANT SINGH
KULDIP S 6HARIWAL
DATE
DATE
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