WRBU Business Plan Draft sp 090417 · Annual operation (10% down time) 330 days Power produced...
Transcript of WRBU Business Plan Draft sp 090417 · Annual operation (10% down time) 330 days Power produced...
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APPENDICESAlldocumentsincludedhereintheappendixarealsoavailablefordownloadonlineathttps://portofskamania.org/wrbiomass/more-information/
A. Siteplanandsitemap
B. Picturesofgasifiersystem
C. Financialproforma
D. LLCOperatingAgreement
E. AdmissionsAgreement
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APPENDIXA:SITEMAP&SITEPLANTroutCreekFieldattheWindRiverBusinessPark
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APPENDIXB:PICTURESOFGASIFIERSYSTEMChiptecP-20gasifier/burnersystem
12,000
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APPENDIXC:FINANCIALPROFORMA
Wind River Biomass UtilityStabilized Year
Item Total
Revenue
Electricity
ORC power output 470 kWhDaily operation 24 hoursAnnual operation (10% down time) 330 daysPower produced 3,722,000 kWh per yearElectricity price $0.07 per kWh
Subtotal: 260,540$ 14%
Biochar
Biochar 0.15 tons per hourDaily operation 24 hoursAnnual operation 330 daysTon per year 1,188 tons per yearRetail biochar price 3,000$ per ton 0% of sales initiallyWholesale biochar price 600$ per ton 100% of sales
Subtotal: 712,800$ 39%
Heat
Heat produced 40,000 MMBtu per yearHeat price 11.00$ per MMBtu
Subtotal: 440,000$ 24%
FirewoodBundles (1 cubic foot) 128000 Bundles per year
2.75 $ per bundle Total $ 352,000$ Half cords on pallet 100 1/2 cords per year
125 $ per half cord Total $ 12,500$ Full cords 200 Cords per year
200 $ per cord Total $ 40,000$
Subtotal: 404,500$ 22%
Revenue, Total 1,817,840$
Proposed System Operating and Maintenance Cost
Biomass Cost
Wood use for boiler 10,000 BDTs per yearWood use for firewood 2,000 BDTs per yearWood cost 40$ per BDT
Subtotal: 480,000$
Electricity to Facility (Purchased)
Total electrical consumption 250,000 kWhTotal electrical use charge 0.08$ /kWhTotal electrical demand charge -$ per year
Subtotal: 20,000$
Fuel for Rolling Stock
Total propane fuel consumption 6 gal/hrFuel cost 2.00$ /galRolling stock operating time 8 hrs/day
Subtotal: 31,680$
New Biomass System Fuel Cost, Total 531,680$
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Ash Disposal
Ash container removal 50 intervalsLabor for ash container removal 200$ per intervalAsh disposal fee 200$ per interval
Subtotal: 20,000$
Weekly Maintenance
Weekly boiler checklist 40 weeksLabor cost 400$ per week
Subtotal: 16,000$
Monthly Maintenance
Monthly boiler checklist 12 monthsLabor cost 600$ per monthBoiler water treatment 200$ per month
Subtotal: 9,600$
Remote Monitoring
Remote Monitoring 12 months per yearStatic IP and Internet connection 60$ per month
Subtotal: 720$
Wood Fuel Handling & Delivery
Handling and transportation 12,000 tons per yearTons per delivery container 25 tons per loadFuel deliveries needed 480 loads per yearCost to weigh and unload container 50$ per load
Subtotal: 24,000.00$
Replacement Reserves
Annual repairs/reserves budget 2.0% of Project Cost
Subtotal: 62,740$
Maintenance Parts and Labor, Total 133,060$
Employee Wages
Employees 10 PeopleAnnual Salary 45,000$ per year (start up)
Subtotal: 450,000$
Administration
Legal 10,000$ per yearAccounting 5,000$ per yearInsurance 0.40% of Project Cost
Subtotal: 27,548$
Total Proposed Costs 1,142,288$
Gross Profit 675,552$
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APPENDIXD:LLCOPERATINGAGREEMENT
AMENDEDANDRESTATEDOPERATINGAGREEMENT
OF
WINDRIVERBIOMASSUTILITY,LLC
ThisAmendedandRestatedOperatingAgreementisenteredintoandshallbeeffectiveasofOctober6,2015,byandamongtheCompanyandthePersonsidentifiedasMembers,whoareinitiallyPaulSpencer,RobertSourek,TomLinde,andNormanWard.ThisAgreementamendsandrestatesinitsentiretyanyoperatingagreementpreviouslyadoptedbytheCompany.
ARTICLE1
DEFINITIONS
ThecapitalizedtermsusedinthisAgreementshallhavethemeaningsspecifiedintheattachedExhibit1unlessexpresslyprovidedotherwiseinthisAgreement.
ARTICLE2
ORGANIZATIONOFCOMPANY
2.1 Organization.ByexecutingandfilingtheArticlesonMay10,2012,PaulSpencer,asorganizer,createdtheCompanypursuanttotheAct.TheMembersherebyprovideforthemanagementoftheaffairsoftheCompany.
2.2 NatureofBusiness.Theprincipalpurposeofthebusinessisthedevelopment,manufacture,marketing,andsalesofwoody-biomass-basedthermalandelectricalpower,pluswood-basedbyproductsofthepower-generationprocess.TheCompanymayengageinanylawfulbusinesspermittedbytheActorthelawsofanyjurisdictioninwhichtheCompanymaydobusiness,providedsuchbusinessisincidentaltoorinfurtheranceoftheabovepurpose.TheCompanyshallhavetheauthoritytodoallthingsnecessaryorconvenienttoaccomplishitspurposeandoperateitsbusiness.
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2.3 DefectsastoFormalities.NofailuretoobserveformalitiesorrequirementsthattheyhaveestablishedfortheCompanyandthatarenotrequiredundertheActshallbegroundsforthirdpartiestoimposepersonalliabilityontheMembersfortheliabilitiesorobligationsoftheCompany.
2.4 NoPartnershipIntendedforNontaxPurposes.TheCompanywasformedundertheAct,andtheMembersexpresslydonotintendtoformapartnershipundereithertheWashingtonUniformPartnershipActortheWashingtonUniformLimitedPartnershipActoracorporationundertheWashingtonBusinessCorporationAct.TheMembersdonotintendtobepartnersonetoanother,orpartnersastoanythirdparty.TotheextentanyMemberorTransferee,bywordoraction,representstoanotherthattheMemberorTransfereeoranyotherMemberisapartnerorthattheCompanyisapartnership,thePersonmakingsuchwrongfulrepresentationshallbeliabletoanyPersonwhoincurspersonalliabilitybyreasonofsuchwrongfulrepresentation.
2.5 RightsofCreditorsandThirdParties.ThisAgreementisenteredintoamongtheCompanyandtheMembersfortheexclusivebenefitoftheCompany,itsMembers,andtheirsuccessorsandassigns.TheAgreementisexpresslynotintendedforthebenefitofanycreditoroftheCompanyoranyotherPerson.Exceptandonlytotheextentprovidedbyapplicablestatute,nosuchcreditororthirdpartyshallhaveanyrightsundertheAgreementoranyagreementbetweentheCompanyandanyMemberwithrespecttoanyContributionorotherwise.
2.6 TitletoProperty.AllCompanyPropertyshallbeownedbytheCompanyasanentityandnoMembershallhaveanyownershipinterestinsuchPropertyintheMember'sindividualname,andeachMember'sinterestintheCompanyshallbepersonalpropertyforallpurposes.ExceptasotherwiseprovidedinthisAgreement,theCompanyshallholdallCompanyPropertyinthenameoftheCompanyandnotinthenameornamesofanyMemberorMembers.
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2.7 PaymentsofIndividualObligations.TheCompany'screditandassetsshallbeusedsolelyforthebenefitoftheCompany,andnoassetoftheCompanyshallbeTransferredorencumberedfor,orinpaymentof,anyindividualobligationofanyMemberunlessotherwiseprovidedforherein.
ARTICLE3
MEMBERS
3.0 CurrentMembers.AsofthedatethisAgreementisadopted,theMembersandtheMembershipInterestUnitsofeach,areasfollows:
Member MembershipUnits______%Ownership________
PaulSpencer 19,000 25
RobertSourek 19,000 25
TomLinde 19,000 25
NormanWard 19,000 25
3.1 MembershipUnits.
(a) APersonbecomesaMemberuponagreeingtobecomeaMemberandcomplyingwiththetermsandconditionsoftheCompany'sthen-currentoperatingagreement,includingmakinganyContributionthePersonagreedtomakeinreturnforthePerson'sMembershipInterest,includingcashorservicesasdeterminedbytheCompany.TheforegoingprovisionsofthisSection3.1(a)shallnotaffecttheenforcementorcompromiseprovisionsrelatingtoContributionsasprovidedinArticle6.
(b) MembershipUnitsrelatingtoanyclassofMembershipInterestshallbeuncertificatedsecurities,andthetransferabilityofMembershipUnitsortheEconomicRightsorManagementRightsassociatedwiththeMembershipUnitsshallbesubjecttothelimitationsofthisAgreement.
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(c) MembershipUnitsmaybeheldinbeneficiaryformpursuanttotheUniformTODSecuritiesRegistrationActofanystate.
(d) IfanyMemberholdsaMembershipInterestinthecapacityofatrusteeofatrust,andthetrustisnotabusinesstrust,thegrantorofthetrust,orthegrantor'sspouse,istheprimarybeneficiaryofthetrustduringthelifeofthegrantorandthegrantorislivingatthetimethetrusteeofthetrustbecomesaMember,thefollowingrulesshallapply:
(1) Thedeathofthegrantor(oriftherearemultiplegrantors,thedeathofthelastofthegrantor)shallconstituteadeathoftheMemberforpurposesofthisAgreement;
(2) IfSection3.1(d)(1)isoperative,allreferencesinthisAgreementtothepersonalrepresentativeoftheestateofthedeceasedMembershallmean,withrespecttothetrust,thetrustee(orsuccessortrustee,ifapplicable)ofsuchtrust;and
(3) ItistheintentoftheMembersthatthetrustbetreatedinthesamemannerasanindividualMemberwithrespecttothoseprovisionsofthisAgreementthatareoperativeuponthedeathoftheMemberandtheapplicableprovisionsofthisAgreementshallbeconstruedaccordingly.
(e) MembershipUnitsorportionsthereofmaybeheldinanyformofco-ownershippermittedunderWashingtonlawprovidedthefollowingshallapply:
(1) Theco-ownersofanyinterestintheManagementRightsofaMembershipInterestshallsubmitthenameoftheco-ownerwhoshallbedesignated,ifacceptabletotheCompany,astheco-owner'srepresentative(the"DesignatedRepresentative")tovoteoractfororonbehalfofsuchco-ownersonanymatterrelatingtotheco-ownedinterest,toreceivenoticeonbehalfofallsuchco-ownersandexerciseanyotherManagementRightrelatingtosuchMembershipInterestandthesignatureorconsentofsuchPersonshallbesufficienttobindtheotherco-owners.TheDesignated
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Representativemaybechangedupontheagreementofalloftheco-ownersoftheinterestandtheconsentoftheCompany.
(2) AnyobligationsarisingoutoftheMembershipUnitsheldbyco-ownersshallbejointandseveralastotheco-ownersofsuchMembershipInterest.
(3) AnyCessationastoanyco-ownerofaMembershipInterestshallconstituteaCessationastotheMembershipInterestinwhichtheco-ownerheldaninterest.
(4) Exceptasotherwiseprovidedbycourtdecreeorsettlement,uponadissolutionofmarriageofco-owners,theinterestofsuchco-ownersshallbedividedequallybetweentheco-ownersandeachformerspouseshallbeaMemberorTransferee(asthecasemaybe)totheextentofone-halfofthepreviouslyco-ownedinterest,butsuchactionshallnotconstituteaTransferrequiringconsentorlimitingtherightsbeingdivided.
3.2MembershipClasses;MaximumUnits.TheCompanyshallissueonlyoneclassofMembershipUnitsfortheconsiderationagreeduponbyMembers.ThemaximumnumberofMembershipUnitstheCompanyisauthorizedtoissueis100,000.
3.3 AuthoritytoAct.NoMembershallhavethepowerorauthoritytobindtheCompanyunlesstheMemberhasbeenauthorizedtoactasanagentoftheCompanyinaccordancewiththisAgreement.
3.4 LimitationofLiability.EachMember'sliabilityshallbelimitedassetforthinthisAgreement,theAct,andotherapplicablelaw.ExceptasotherwiseprovidedbylawandthisAgreement,aMemberwillnotbepersonallyliable,merelyasaMember,foranydebtsorlossesoftheCompanybeyondtheMember'srespectiveContributionsandanyagreementtomakecontribution(s)oftheMemberunderArticle6tomakeContributions.
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3.5 Indemnification.TheCompanyshallindemnifyanyMemberforallcosts,losses,liabilities,anddamagespaidoraccruedbysuchMember,andadvanceexpensesincurredbytheMember,inconnectionwiththebusinessoftheCompany,aftertheEffectiveDate,tothefullestextentprovidedorallowedbythelawsofWashington;exceptthatthisprovisionshallnoteliminateorlimitaMember'sliabilityfor:
(a) AnybreachofaMember'sdutyofloyaltytotheCompanyoritsMembersasdescribedinthisAgreement;
(b) Actsoromissionsnotingoodfaithwhichinvolveintentionalmisconductoraknowingviolationoflaw;
(c) AnyunlawfuldistributionundertheAct;
(d) AnytransactionfromwhichtheMemberderivesanimproperpersonalbenefit;or
(e) AnyactiontakenbyaMemberwithoutauthorityaslimitedbySection3.3.
3.6 MemberManagementRights.AllMembersshallbeentitledtovoteonorconsenttoanymatterraisedby,orsubmittedto,avoteorfortheconsentoftheMembers,includingthosemattersreservedtotheMembersbytheAct,Articles,orthisAgreement.
(a) TheactionsdescribedintheattachedExhibit3.6(a)requiretheconsentofaMajorityoftheMembers;
(b) TheactionsdescribedintheattachedExhibit3.6(b)requiretheconsentofaSuperMajorityoftheMembers;and
(c) TheactionsdescribedintheattachedExhibit3.6(c)requiretheconsentofalloftheMembers.
3.7 ActionsofMembers.
(a) CallforMeetings.RegularmeetingsoftheMembersmaybescheduledandheldasdeemedappropriatebytheMembersprovidedreasonablenotice
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isprovidedtoallMembers.SuchregularmeetingsmayaddressanymatterthatmaycomebeforetheMembers.SpecialmeetingsoftheMembersmaybecalledbyanyMember.Businesstransactedatanyspecialmeetingneednotbeconfinedtothepurposesstatedinthenoticeofthespecialmeeting.
(b) PlaceofMeetings.TheMembersmaydesignateanyplace,withintheStevenson/Carsonarea,asthelocationforanymeetingoftheMembers.Ifnodesignationismade,orifaspecialmeetingbeotherwisecalled,theplaceofmeetingshallbetheprincipalofficeoftheCompanyinWashington.Notwithstandingtheforegoing,theMembersmayagreetoameetingatanyplace,eitherwithinoroutsideofWashington.
(c) NoticeofSpecialMeetings.ExceptasprovidedinSection3.7(d)below,writtennoticestatingtheplace,day,andhourofanyspecialmeetingandthepurposeorpurposesforwhichthemeetingiscalledshallbedeliverednotlessthansevennormorethan30daysbeforethedateofthemeetingbyoratthedirectionofthePersoncallingthemeeting,toeachMember.Asusedinthissection,writtennoticeincludesemailnotificationsdeliveredtoaMemberattheMember'semailaddressonfilewiththeCompany
(d) MeetingofAllMembers.IfalloftheMembersmeetandconsenttotheholdingofameetingatsuchtimeandplace,suchmeetingshallbevalidwithoutcallornotice,andlawfulactionmaybetaken.
(e) RecordDate.ForthepurposeofdeterminingtheMembersforanypurpose,thedateonwhichanyrequirednoticeisfirsttransmittedtoaMembershallbetherecorddateforsuchdeterminationoftheMembers.
(f) Quorum.Members,representedinpersonorbyproxy,withaggregateVotingRatiosinexcessof50%shallconstituteaquorumatanymeetingoftheMembers.Intheabsenceofaquorumatanysuchmeeting,theMemberssorepresentedmayadjournthemeetingfromtimetotimeforaperiodnottoexceed60dayswithoutfurthernotice.However,iftheadjournmentisformorethan60days,orifaftertheadjournmentanewrecorddateisfixedfortheadjournedmeeting,anoticeoftheadjournedmeetingshallbegiventoeachMemberofrecord.Atsuchadjournedmeetingatwhichaquorumshall
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bepresentorrepresented,anybusinessmaybetransactedwhichmighthavebeentransactedatthemeetingasoriginallynoticed.TheMemberspresentatadulyorganizedmeetingmaycontinuetotransactbusinessuntiladjournment,notwithstandingthedepartureduringsuchmeetingofMemberswhoseabsencewouldcauselessthanaquorumtoremain.IntheeventanactionrequirestheconsentoftheremainingMembersorsomeportionthereof,theforegoingquorumrulesofthisSection3.7(f)shallbeappliedbysubstituting"remainingMembers"for"Members"therein.
(g) MannerofActing.Ifaquorumispresent,aMajorityoftheMembersshallactfortheMembers,unlessthevoteofadifferentproportionornumberisotherwiserequiredbytheAct,theArticles,orthisAgreement.Unlessotherwiseexpresslyprovidedhereinorrequiredunderapplicablelaw,MemberswhohaveaninterestintheoutcomeofanyparticularmatteruponwhichtheMembersvoteorconsentmayvoteorconsentuponanysuchmatterandtheirvoteorconsent,asthecasemaybe,shallbecountedinthedeterminationofwhethertherequisitematterwasapprovedbytheMembers.IntheeventanactionrequirestheconsentoftheremainingMembersorsomeportionthereof,theforegoingrulesofthisSection3.7(g)shallbeappliedbysubstituting"remainingMembers"for"Members"therein.
(h) Proxies.AtallmeetingsoftheMembers,aMembermayvoteinpersonorbyaproxyexecutedinwritingbytheMemberorbyadulyauthorizedattorney-in-fact.SuchproxyshallbefiledwiththeCompanybeforeoratthetimeofthemeetingandmaybeofanydurationandscopeexceptthataMemberwhoshallappearinpersonatameetingshallvoidanyoutstandingproxyforsolongassuchMemberisinattendance.Aproxywithoutlimitscontainedthereinshallbedeemedtobeanunlimitedproxy.
(i) ActionbyMembersWithoutaMeeting.ActionrequiredorpermittedtobetakenatameetingofMembersmaybetakenwithoutameetingiftheactionisevidencedbyoneormorewrittenconsentsdescribingtheactiontaken,signedbyalloftheMembersanddeliveredtotheCompanyforinclusionintheminutesorforfilingwiththeCompanyrecords.ActiontakenunderthisSection3.7(i)iseffectivewhenthenecessaryMembershave
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signedtheconsent,unlesstheconsentspecifiesadifferenteffectivedate.TherecorddatefordeterminingMembersentitledtotakeactionwithoutameetingshallbethedatethefirstMembersignsawrittenconsent.Asusedinthissection,writtenconsentincludesemailcommunicationofaMemberifitunequivocallyindicatestheMember'sconsenttotheproposedaction.
(j) WaiverofNotice.WhenanynoticeisrequiredtobegiventoanyMember,awaiverthereofinwritingsignedbythePersonentitledtosuchnotice,whetherbefore,at,orafterthetimestatedtherein,shallbeequivalenttothegivingofsuchnotice.
(k) TelephonicorElectronicMeetings.Withrespecttoaparticularmeetingorgenerallywithrespecttofuturemeetings,anyorallMembersmayparticipateinthemeetingby,ormaypermittheconductofthemeetingthrough,useofanymeansofcommunicationbywhichallMembersparticipatingmaysimultaneouslyheareachother;suchasviaSkypeorGoToMeetingorothermeansoffacilitatingcommunication;providedthenoticeofsuchameetingshallstatethattheMembersmayparticipateinsuchafashionanddescribehowanyMembermaynotifytheCompanyoftheMember'sdesiretobeincludedinthemeeting.AMemberparticipatinginsuchameetingisdeemedtobepresentinpersonatsuchmeeting.
3.9 ReimbursementandCompensation.TheMembersshallbereimbursedbytheCompanyforreasonable,substantiated,out-of-pocketexpensesincurredbytheMembersinconnectionwiththeCompany'sbusiness,includingexpensesincurredintheCompany'sorganization.Inaddition,theMemberswhoperformservicestotheCompany,otherthanasaContribution,shallbeentitledtosuchcompensationandbenefits,ifany,assetfromtimetotimebytheMembers,andanysuchcompensationshallbetreatedasguaranteedpaymentsunderCodeSection707(c)orpaymentsmadetoanonpartnerunderCodeSection707(a),whicheverisappropriate.However,nothingcontainedhereinshallentitleaMembertocontinuedemploymentorcompensationforanyperiodoftimeandtheMembersmayrequestaMemberceaseperformingservicesanddiscontinuethepaymentofanycompensationtosuchMember.Suchactionshallnotbeabreachofany
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obligationofgoodfaithandfairdealingifitisdeterminedtobeinthebestinterestsoftheCompanyusingthesamestandardsaswouldbeusedinconnectionwiththeterminationofanatwillemployeewhowasnotaMember.
3.10 Books,Records,ReportsandInformation.EachMembershallhavetherighttoreceivethereportsandinformationrequiredtobeprovidedbythisAgreement.Uponreasonablerequest,eachMember,andtheMember'sagentandattorney,shallhavetheright,duringordinarybusinesshours,toinspectandcopy,attherequestingMember'sexpense,thebooksandrecordswhichtheCompanyisrequired,bytheActandthisAgreement,tokeep.
ARTICLE4
MANAGINGMEMBER
4.1 ManagingMember.NotwithstandingSection3,theMembersmayagreeamongthemselvesthat,exceptasotherwiseprovidedinthisAgreement,therighttomanagetheday-to-dayoperationsoftheCompanyrestsexclusivelyintheMemberorMembersselectedbytheMembersastheManagingMember.TheManagingMemberhasalltherightsandpowersthatmaybepossessedbyamanagerinalimitedliabilitycompanywithmanagerspursuanttotheAct,andsuchrightsandpowersasareotherwiseconferredbylaworarenecessary,advisable,orconvenienttothedischargeoftheManagingMember=sdutiesunderthisAgreementandtothemanagementofthebusinessandaffairsoftheCompany.IftheManagingMemberismorethanoneMember,alldecisionsmustbemadebyamajorityoftheManagingMembers.Withoutlimitingthegeneralityoftheforegoing,subjecttotherestrictionssetforthinthisAgreement,theManagingMemberhasthefollowingrightsandpowers(whichhe,she,ortheymayexerciseatthecost,expense,andriskoftheCompany):
(1) ToexpendthefundsoftheCompanyinfurtheranceoftheCompany=sbusiness;
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(2) ToperformallactsnecessarytofulfillthepurposesoftheCompany,includingengagingpersonstheManagingMemberdeemsadvisabletofulfillthosepurposes;and
(3) Toexecute,deliver,andperformonbehalfofandinthenameoftheCompany,withoutanyothersignature,agreementsanddocumentsdeemednecessaryordesirablebytheManagingMembertocarryoutthebusinessoftheCompany.
4.2 RestrictiononAuthorityofManagingMember.NotwithstandinganyotherprovisionofthisAgreement,withoutthepriorwrittenapprovalorconsentoftherequirednumberoftheMembers,theManagingMemberdoesnothaveanyauthoritytodoanyoftheactsreferencedinExhibits3.6(a),(b),and(c).
4.3 DutiesoftheManagingMember.TheManagingMembermusttakeallactionsthatmaybenecessaryorappropriateforthecontinuationoftheCompany’svalidexistenceasalimitedliabilitycompanyunderthelawsofWashingtonandofeachjurisdictioninwhichsuchexistenceisnecessaryforthecompanytoconductthebusinessinwhichitisengagedandfortheaccomplishmentoftheCompany’spurposes,includingthepreservationandoperationofCompanyassetsinaccordancewiththeprovisionsofthisAgreementandapplicablelawsandregulations.
4.4 LimitationonLiabilityofManagingMember. TheManagingMemberhasnoliabilitytotheCompanyortoanyotherMemberforanylosssufferedbytheCompanyoranyMemberthatarisesoutofanyactionorinactionoftheManagingMemberiftheManagingMember,ingoodfaith,determinedthatsuchcourseofconductwasinthebestinterestoftheCompanyandsuchcourseofconductdidnotconstitutegrossnegligenceorintentionallywrongfulmisconduct.
ARTICLE5
CONFLICTSOFINTERESTANDCONFIDENTIALINFORMATION
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5.1 DutyofLoyalty.EachMembershallbeentitledtoenterintotransactionsthatmaybeconsideredtobecompetitivewith,orabusinessopportunitythatmaybebeneficialto,theCompany,itbeingexpresslyunderstoodthatsomeoftheMembersmayenterintotransactionsthataresimilartothetransactionsintowhichtheCompanymayenterandtheCompanyandeachMemberwaivestherightorclaimtoparticipatetherein.
5.2 OtherSelfInterest.AMemberdoesnotviolateadutyorobligationtotheCompanymerelybecausetheconductfurtherstheinterestoftheMember.AMembermaylendmoneytoandtransactotherbusinesswiththeCompany.TherightsandobligationsofaMemberwholendsmoneytoortransactsbusinesswiththeCompanyarethesameasthoseofaPersonwhoisnotaMember,subjecttootherapplicablelaw.NotransactionwiththeCompanyshallbevoidablesolelybecauseaMemberhasadirectorindirectinterestinthetransactionifthetransactionisapprovedorratifiedasprovidedforherein.
5.3 ConfidentialInformation.TheMembersrecognizeandacknowledgethatasMemberstheywillhaveaccessto,beprovidedwith,and,insomecases,prepareandcreateConfidentialInformation.AMembershallnot,eitherwhileaMemberorsubsequenttoCessation,useordiscloseanyConfidentialInformation,eitherpersonallyorfortheuseofothers,otherthaninconnectionwiththeMember'sactivitiesonbehalfoftheCompany.NorshallaMemberdiscloseanyConfidentialInformationtoanyPersonwhoisnotaMember,notemployedbytheCompany,ornotauthorizedbytheCompanytoreceivesuchConfidentialInformation,withoutthepriorwrittenconsentoftheCompany.EachMembershallusereasonableandprudentcaretosafeguardandprotectandpreventtheunauthorizeduseanddisclosureofConfidentialInformation.TheobligationscontainedinthisSection5.3shallsurviveforaslongastheCompanyinitssolejudgmentconsiderssubjectinformationtobeConfidentialInformation.
ARTICLE6
CAPITALCONTRIBUTIONS
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6.1 Contributions.EachMembershallcontributeorhascontributedtheconsiderationdescribedforthatMemberinthisAgreementortheMember'sAdmissionAgreementatthetimeandonthetermsspecifiedtherein.IfnotimeforContributionisspecified,theContributionsshallbemadeupontheMember'ssigninganAdmissionAgreement.NointerestshallaccrueonanyContribution,andnoMembershallhavetherighttowithdraworberepaidanyContributionexceptasprovidedinthisAgreement.EachAdditionalMembershallmaketheContributiondescribedintheMember'sAdmissionAgreement.ThevalueoftheAdditionalMember'sContributionandthetimeformakingsuchcontributionshallbesetforthintheAdmissionAgreement.
6.2 AdditionalContributions.
(a) InadditiontotheinitialContributions,theCompanymaydeterminefromtimetotimethatAdditionalContributionsareneededtoenabletheCompanytoconductitsbusiness.Uponmakingsuchadetermination,theCompanyshallgivewrittennoticetoallMembersatleast30BusinessDayspriortothedateonwhichtheAdditionalContributionisdue.ThenoticeshallsetforththeamountoftheAdditionalContributionneeded,thepurposeforwhichtheAdditionalContributionisneeded,andthedatebywhichtheMembersshouldcontribute.
(b) EachMembershallbeentitledtocontributeaproportionateshareoftheAdditionalContribution.AMember'sproportionateshareshallbedeterminedonthebasisoftheMember'sMembershipUnits.NoMembershallbeobligatedtomaketheMember'sproportionateshareofAdditionalContributionsexceptasmayberequiredbylaw.IntheeventthatanyoneormoreMembersdonotmaketheirAdditionalContribution,theotherMembersshallbegiventheopportunitytomaketheAdditionalContributionsnototherwisemade.
6.3 ThirdParties.TheCompanyshallnotissue,sellorexchange,oragreetoissue,sellorexchange(i)anyMembershipInterest,(ii)anyoptions,warrantsofotherrightstosubscribefor,purchaseorotherwiseacquireanyMembershipInterests,(iii)anyprofitparticipationorothersimilareconomic
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rightoftheCompany,or(iv)anyothersecurityoftheCompanythatisconvertibleintoorexchangeableforanyMembershipInterestsoftheCompanyunless,ineachcase,theCompanyprovidesawrittennotice(the“ROFRNotice”)totheMembers(forpurposesofthisSection,eachan“ROFROfferee”)thatshall(A)statetheCompany’sintentiontosellanyofthesecuritiesdescribedin(i),(ii),(iii),and(iv)above,theamounttobeissued,soldorexchanged,thetermsofsuchsecurities,thepurchasepriceforthemembershipinterestandasummaryoftheothermaterialtermsoftheproposedIssuanceand(B)offer(an“ROFROffer”)toIssuetoeachROFROffereesuchROFROfferee’sPro-RataProportionofsuchsecurities(withrespecttoeachROFROfferee,the“OfferedSecurities”)uponthetermsandsubjecttotheconditionssetforthintheROFRNotice,whichROFROfferbyitstermsshallremainopenandirrevocableforaperiodof30daysfromthedateitisdeliveredbytheCompanytotheROFROfferees(and,totheextenttheROFROfferisacceptedduringsuch30dayperiod,untiltheclosingoftheIssuancecontemplatedbytheROFROffer).
(i) NoticeofanROFROfferee’sintentiontoacceptanROFROffer,inwholeorinpart,shallbeevidencedinwritingsignedbysuchpartyanddeliveredtotheCompanypriortotheendofthe30dayperiodofsuchROFROffer(each,an“ROFRNoticeofAcceptance”),settingforththeportionoftheOfferedSecuritiesthattheROFROffereeelectstopurchase.IntheeventthatanROFRNoticeofAcceptanceisnotgivenbyanyROFROffereeinrespectofalloftheOfferedSecurities,theotherROFROffereesshalleachhavetherightandoptionexercisableforaperiodof10dayscommencingupontheexpirationoftheROFROffertopurchasetheamountofremainingOfferedSecuritiesequaltoitsPro-RataProportionofsuchsecurities(treatingonlytheremainingROFROffereesasROFROffereesforthesepurposes)orsuchotheramountasmaybeagreeduponbysuchROFROfferees.IntheeventthattheROFROffereesdonotelecttopurchasealltheOfferedSecuritiesinaccordancewiththeforegoing,theCompanyshallhave60daysfollowingtheearlierof(A)deliveryoftheROFRNoticeofAcceptanceortheexpirationofthe10dayperiodreferredtoabove,asapplicable,or(B)the30dayperiod
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referredtoabove,ifnoROFRNoticeofAcceptanceisdelivered,toIssuealloranypartofsuchremainingOfferedSecuritiestoanyotherPerson(s),butonlyatapricenotlessthantheprice,andontermsnomorefavorabletothePerson(s)thantheterms,statedintheROFROfferNotice.IftheCompanydoesnotconsummatetheIssuanceofallorpartoftheremainingOfferedSecuritiestosuchotherPerson(s)withinsuch60dayperiod,therightprovidedhereundershallbedeemedtoberevivedandsuchsecuritiesshallnotbeofferedunlessfirstre-offeredtoeachROFROffereeinaccordancewiththisSection.
(ii) UpontheclosingoftheIssuancetosuchotherPerson(s)(the“OtherBuyers”)ofallorpartoftheremainingOfferedSecurities,eachROFROffereeshallpurchasefromtheCompany,andtheCompanyshallIssuetoeachsuchROFROfferee,theOfferedSecuritieswhichsuchROFROffereecommittedtopurchasepursuanttoSection6.3(b)(i),onthetermsspecifiedintheROFROffer.ThepurchasebyanROFROffereeofanyOfferedSecuritiesissubjectinallcasestotheexecutionanddeliverybytheCompanyandtheROFROffereeofapurchaseagreementrelatingtosuchOfferedSecuritiesinformandsubstancesimilarinallmaterialrespectstotheextentapplicabletothatexecutedanddeliveredbetweentheCompanyandtheOtherBuyers.
6.4 Loans.AnyMembermay,withtheapprovaloftheCompany,lendoradvancemoneytotheCompany.IfanyMembershallmakeanyloanorloanstotheCompanyoradvancemoneyonitsbehalf,theamountofanysuchloanoradvanceshallnotbetreatedasacontributiontothecapitaloftheCompanybutshallbeadebtduefromtheCompany.TheamountofanysuchloanoradvancebyalendingMembershallberepayableoutoftheCompany'scashandshallbearinterestattherateagreedbetweentheCompanyandthelendingMember.NoMembershallbeobligatedtomakeanyloanoradvancetotheCompany,exceptasprovidedherein.
ARTICLE7
PROFITSANDLOSSES
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7.1 IncomeandLossDetermination.TheCompany'staxableincomeorlossforeachfiscalyearwillbedeterminedasoftheendofthefiscalyearbytheCompany'saccountantsinaccordancewithfederalincometaxaccountingprinciples,consistentlyapplied,usingthatmethodofaccountingemployedinthefederalincometaxinformationalreturnfiledbytheCompanyforthatfiscalyear.
7.2 AllocationsofIncomeandLoss.Allitemsofincome,gain,loss,deduction,andcreditwillbeallocatedamongtheMembersproratainproportiontotheirrespectiveMembershipUnits.
7.3 NoRighttoDemandReturnofCapital.NoMemberhasanyrighttoanyreturnofcapitalorotherdistributionexceptasexpresslyprovidedinthisAgreement.NoMemberhasanydrawingaccountintheCompany.
ARTICLE8
DISTRIBUTIONS
8.1 Distributions.DistributionswillbemadetotheMembersproratainproportiontotheirrespectiveMembershipUnitsattimesandinamountsastheMembersmaydeemappropriateoradvisable;provided,however,thatnodistributionmaybemadetoanyMemberif,aftergivingeffecttothedistribution,inthejudgmentoftheMembers,either(1)theCompanywouldnotbeabletopayitsdebtsastheybecomedueintheordinarycourseofbusiness,or(2)thefairvalueofthetotalassetsoftheCompanywouldnotatleastequalitstotalliabilities.
ARTICLE9
ADDITIONALMEMBERS
9.1 Admission.PersonsmaybeaddedasAdditionalMembersupontermsandconditionsapprovedbytheMembers.Notwithstandingtheforegoing,aPersonshallnotbecomeanAdditionalMemberunlessanduntilsuchPerson
(a) BecomesapartytothisAgreementasaMemberbysigninganAdmissionAgreementandexecutessuchdocumentsandinstrumentsasthe
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MembersmayreasonablyrequestasmaybenecessaryorappropriatetoconfirmsuchPersonasaMemberintheCompanyandsuchPerson'sagreementtobeboundbythetermsandconditionshereof;
(b) ProvidestheCompanywithevidencesatisfactorytocounselfortheCompanythatsuchPersonhasmadeeachoftherepresentationsandundertakeneachofthewarrantiescontainedintheAdditionalMember'sAdmissionAgreement;and
(c) IfthePersonisnotanindividualoflegalmajority,thePersonprovidestheCompanywithevidencesatisfactorytocounselfortheCompanyoftheauthorityofthePersontobecomeaMemberandtobeboundbythetermsandconditionsofthisAgreement.
9.2 Accounting.NoAdditionalMembershallbeentitledtoanyretroactiveallocationoflosses,income,orexpensedeductionsincurredbytheCompany.TheMembersmayatthetimeanAdditionalMemberisadmitted,closetheCompanybooks(asthoughtheCompany'sFiscalYearhadended)ormakeprorataallocationsofloss,income,andexpensedeductionstotheAdditionalMemberforthatportionoftheCompany'sFiscalYearinwhichsuchMemberwasadmitted,inaccordancewiththeprovisionsofCodeSection706(d)andtheRegulationspromulgatedthereunder.
ARTICLE10
TRANSFERSOFUNITS
10.1 RestrictiononTransfers.ExceptasotherwisepermittedbythisAgreement,noMemberorTransfereeshallTransferalloranyportionofsuchPerson'sUnitsintheCompany.IntheeventthatanyMemberorTransfereepledgesorotherwiseencumbersanyofsuchPerson'sUnitsintheCompanyassecurityforthepaymentofadebt,anysuchpledgeorhypothecationshallnotconstituteaTransferbutshallonlybemade
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(a) PursuanttoapledgeorhypothecationagreementthatrequiresthepledgeeorsecuredpartytobeboundbyallofthetermsandconditionsofthisArticle10;and
(b) UpontheconsentoftheMembers.
ATransferofanownershipinterestinaMemberorTransfereethatisanEntityshallconstituteaTransferofsuchEntity'sUnitsintheCompany.
10.2 PermittedTransfers.SubjecttotheconditionsandrestrictionssetforthinSections10.3and10.5hereof,aMemberorTransfereemayatanytimeTransferalloranyportionofsuchPerson'sUnitsintheCompanyto
(a) AnyotherMember;
(b) Anymemberofthetransferor'sFamily;
(c) AnyAffiliateofthetransferor;
(d) AnypurchaseruponthelapseoftheoptionsundertherightoffirstrefusalcontainedinSection10.8;or
(e) AnytrusteeofatrustdescribedinSection3.1(d).
10.3 ConditionstoPermittedTransfers.ATransfershallnotbetreatedasaPermittedTransferunderSection10.2hereofunlessanduntilthefollowingconditionsaresatisfied:
(a) ExceptinthecaseofaTransferofaPerson'sUnitsintheCompanyatdeathorinvoluntarilybyoperationoflaw,thetransferorandTransfereeshallexecuteanddelivertotheCompanysuchdocumentsandinstrumentsofconveyanceasmaybenecessaryorappropriateintheopinionofcounseltotheCompanytoeffectsuchTransferandtoconfirmtheagreementoftheTransfereetobeboundbytheprovisionsofthisAgreement.InthecaseofaTransferofaPerson'sUnitsintheCompanyatdeathorinvoluntarilybyoperationoflaw,theTransfershallbeconfirmedbypresentationtotheCompanyoflegalevidenceofsuchTransfer,informandsubstancesatisfactorytocounseltotheCompany.Inallcases,theCompanyshallbe
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reimbursedbythetransferorand/orTransfereeforallcostsandexpensesthatitreasonablyincursinconnectionwithsuchTransfer.
(b) ExceptinthecaseofaTransferatdeathorinvoluntarilybyoperationoflaw,thetransferorshallfurnishtotheCompanyanopinionofcounsel,whichcounselandopinionshallbesatisfactorytotheCompany,thattheTransferwillnotcausetheCompanytoterminateforfederalincometaxpurposesorundertheActandthatsuchTransferwillnotcausetheapplicationoftherulesofCodeSections174(g)(1)(B)and174(h)(generallyreferredtoasthe"tax-exemptentityleasingrules")orsimilarrulestoapplytotheCompany,CompanyProperty,ortheMembers.
(c) ThetransferorandTransfereeshallfurnishtheCompanywiththeTransferee'staxpayeridentificationnumber,sufficientinformationtodeterminetheTransferee'sinitialtaxbasisintheinterestsintheCompanybeingTransferred,andanyotherinformationreasonablynecessarytopermittheCompanytofileallrequiredfederalandstatetaxreturnsandotherlegallyrequiredinformationstatementsorreturns.Withoutlimitingthegeneralityoftheforegoing,theCompanyshallnotberequiredtomakeanydistributionotherwiseprovidedforinthisAgreementwithrespecttoanyTransferuntilithasreceivedsuchinformation.
(d) ExceptinthecaseofaTransferofaPerson'sUnitsintheCompanyatdeathorinvoluntarilybyoperationoflaw,either
(1) SuchaPerson'sUnitsintheCompanyshallberegisteredundertheSecuritiesActof1933,asamended,andanyapplicablestatesecuritieslaws,or
(2) Thetransferorshallprovideanopinionofcounsel,whichopinionandcounselshallbesatisfactorytotheCompany,totheeffectthatsuchTransferisexemptfromallapplicableregistrationrequirementsandthatsuchTransferwillnotviolateanyapplicablelawsregulatingtheTransferofsecurities.
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(e) ExceptinthecaseofaTransferofaPerson'sUnitsintheCompanyatdeathorinvoluntarilybyoperationoflaw,thetransferorshallprovideanopinionofcounsel,whichopinionandcounselshallbereasonablysatisfactorytotheotherMembers,totheeffectthatsuchTransferwillnotcausetheCompanytobedeemedtobean"investmentcompany"undertheInvestmentCompanyActof1940.
10.4 ProhibitedTransfers.
(a) AnypurportedTransferofaPerson'sUnitsintheCompanythatisnotaPermittedTransfershallbenullandvoidandofnoforceoreffectwhatever;providedthat,iftheCompanyisrequiredtorecognizeaTransferthatisnotaPermittedTransfer(oriftheCompany,initssolediscretion,electstorecognizeaTransferthatisnotaPermittedTransfer),theinterestTransferredshallbestrictlylimitedtothetransferor'sEconomicRightswithrespecttotheTransferredUnits,withdistributionsfirstapplied(withoutlimitinganyotherlegalorequitablerightsoftheCompany)tosatisfyanydebts,obligations,orliabilitiesfordamagesthatthetransferororTransfereemayhavetotheCompany.
(b) InthecaseofaTransferorattemptedTransferofaPerson'sUnitsintheCompanythatisnotaPermittedTransfer,thepartiesengagingorattemptingtoengageinsuchTransfershallbeliableto,indemnify,andholdharmlesstheCompanyandtheotherMembersfromallcosts,liability,anddamagethatanyofsuchindemnifiedPersonsmayincur(includingincrementaltaxliabilityandlawyers'feesandexpenses)asaresultofsuchTransferorattemptedTransferandeffortstoenforcetheindemnitygrantedhereby.
10.5 RightsandObligationsArisingOutofTransfers.
(a) ATransfer(includingaPermittedTransfer)ofaPerson'sinterestintheCompanytoaPersonwhoisnotaMemberdoesnotitselfdissolvetheCompanyorentitletheTransfereetobecomeaMemberorexerciseany
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ManagementRights.IntheeventaPersonwhoisnotaMemberacquiresaPerson'sUnitsintheCompanybutisnotadmittedasaSubstituteMemberpursuanttoSection10.6hereof,thePersonshallbeentitledonlytotheEconomicRightswithrespecttosuchinterests,shallhavenorighttoanyinformationoraccountingoftheaffairsoftheCompany,andshallnotbeentitledtoinspectthebooksorrecordsoftheCompany.
(b) ATransfer(includingaPermittedTransfer)ofaMember'sinterestintheCompanytoaPersonwhoisnotaMembershallcausetheMembertoceasetobeaMemberinconnectionwiththeassignedinterestandceasetohavethepowertoexerciseanyManagementRightsassociatedwiththeassignedinterest,andtheTransfereehasnoliabilityasaMembersolelyasaresultoftheassignment.APersonwhoassignsaninterestintheCompanyisnotreleasedfromanyliabilitytotheCompanysolelyasaresultoftheassignmentofsuchEconomicRights.
(c) AnassignmentofaninterestintheCompanybyaMember(the"AssigningMember")toanyotherMember(the"AcquiringMember")shallcausetheAcquiringMember'sMembershipInteresttoincreasetotheextentofsuchassignedinterest(includingbothEconomicRightsandManagementRights)andtheAssigningMember'sMembershipInteresttodecreasetotheextentofthesuchassignedinterest.IfaMemberacquiresaninterestintheCompanyfromaTransferee,theMembershallacquireboththeEconomicRightswithrespecttosuchinterestandtheManagementRightswithrespecttosuchinterest,andtheManagementRightsoftheMemberfromwhomtheTransferee'sinterestwasobtainedshalldecreaseaccordingly.IfallofanAssigningMember'sUnitsintheCompanyareassignedtooneormoreAcquiringMembers,suchassignmentshallconstituteaCessationoftheAssigningMembersubjecttoArticle11hereof.TheAssigningMembershallnotbereleasedfromliabilitiestotheCompany,includingContributionobligations,butnotwithstandingthistheAcquiringMembershallbeliableforanyobligationtomakeContributionswithrespecttotheinterestintheCompanythattheAcquiringMembersoacquires.
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(d) IntheeventacourtofcompetentjurisdictionchargesaMembershipInterestwiththepaymentofanunsatisfiedamountofajudgmentwithinterest,totheextentsochargedthejudgmentcreditorshallbetreatedasaTransferee.
10.6 AcceptanceofTransfereeasSubstituteMember.
(a) SubjecttotheotherprovisionsofthisArticle10,aTransfereemaybeadmittedtotheCompanyasaSubstituteMember,withalloftheManagementRightsofaMember,totheextentTransferred,onlyuponsatisfactionofalloftheconditionssetforthbelowinthisSection10.6(a).
(1) TheMembersconsenttosuchadmission,whichconsentmaybegivenorwithheldinthesoleandabsolutediscretionoftheMembers,exceptthatintheeventofaPermittedTransfer,suchconsentshallbeassumed.
(2) InthecaseofaTransfer,otherthanaPermittedTransfer,alloftheotherMembersconsenttosuchadmission.
(3) TheTransfereeshallbecomeapartytothisAgreementasaMemberbyexecutingsuchdocumentsandinstrumentsastheMembersmayreasonablyrequestasmaybenecessaryorappropriatetoconfirmsuchTransfereeasaMemberintheCompanyandsuchTransferee'sagreementtobeboundbythetermsandconditionshereof.
(4) TheTransfereeshallpayorreimbursetheCompanyforallreasonablelegal,filing,andpublicationcoststhattheCompanyincursinconnectionwiththeadmissionoftheTransfereeasaMemberwithrespecttotheTransferredUnits.
(5) TheTransfereeshallprovidetheCompanywithevidencesatisfactorytocounselfortheCompanythatsuchTransfereehasmadeeachoftherepresentationsandundertakeneachofthewarrantiescontainedinthedocumentsandinstrumentsreferredtoinSection10.6(a)(3)above.
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(6) IftheTransfereeisnotanindividualoflegalmajority,theTransfereeshallprovidetheCompanywithevidencesatisfactorytocounselfortheCompanyoftheauthorityoftheTransfereetobecomeaMemberandtobeboundbythetermsandconditionsofthisAgreement.
(b) ATransfereewhobecomesaSubstituteMemberhas,totheextentoftheUnitsassigned,therightsandpowersandissubjecttotherestrictionsandliabilitiesofaMemberundertheAct,theArticles,andthisAgreement,and,totheextentoftheUnitsassigned,isalsoliableforanyobligationsofthetransferortomakeContributions,butisnotobligatedforliabilitiesreasonablyunknowntotheTransfereeatthetimetheTransfereebecomesaMember.
(c) NeithertheMembermakingaTransfernoranysubsequenttransferorisreleasedfromanyliabilitytotheCompanybyvirtueofsuchTransferoradmission,eveniftheTransfereebecomesaSubstituteMemberandeveniftheMemberwhoseMembershipInterestisbeingTransferredceasestobeaMemberbyvirtueofsuchact.AMemberceasestobeaMemberwhenoneormoreTransfereesbecomeSubstituteMemberswithrespecttotheMember'sentireMembershipInterest.
10.7 RightofFirstOption.EachyeartheMembersshalldetermineavaluefortheCompany.AtanytimeafteraMembergivesanoticeunderSection10.8or10.9ofthisAgreement,oruponthedeathofaMember,anyMembermaypurchasetheMembershipInterestoftheMemberwhogavenoticeorthedeceasedMemberasfollows:
(a) TheMemberdesiringtopurchaseanotherMember’sMembershipInterestfirstmustprovidewrittennotice(the"Notice")totheotherMembers.
(b) Foraperiodof30daysafterreceiptoftheNotice,thePurchasingMemberhastheright,butnottheobligation,toacquireall,butnotlessthanall,oftheMembershipInterest.ThepriceoftheMembershipInterestshallbedeterminedinrelationtothelastvaluationoftheCompanyapprovedbytheMembers(withtheinitialagreed-uponvaluesetforthinExhibit10.7,
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attachedheretoandbythisreferenceincorporatedhere).IftheMembershavenotagreedonavaluefortheCompanywithin18monthsbeforetheoccurrenceoftheeventgivingrisetothepurchaseandsaleofMembershipInterest(“TransferEvent”),thepurchasepricefortheMembershipInterestshallbedeterminedbymutualagreementofthesellingMember(orhisorherSuccessor)(the“Seller”),andthepurchasingMembersand/orCompany(the“Purchaser”),butiftheSellerandPurchasersareunabletoagreeonavaluepersharewithin30daysafteroccurrenceoftheTransferEvent,thevalueoftheMembershipInterestshallbedeterminedbytheSellerandPurchasersjointlyappointinganappraiserqualifiedinthevaluationofcloselyheldbusinesses.TheappraisershalldeterminethefairvalueoftheCompanyasagoingconcern.IfthePurchaserandSellerareunabletoagreeonanappraiser,eachshallselectaqualifiedappraiser,andtheopinionofthetwoappraisersshallbedeterminativeoffairvalueoftheCompany.Ifthetwoappraisersareunabletoagreeonthevalueofthecompany,theyshallappointathirdappraiser,andtheopinionofthethirdappraisershallbedeterminativeofthevalueoftheCompany.
(c) ExceptasotherwiseprovidedinthisAgreement,thepurchasepricefortheInterestshallbepaidbycertifiedorcashier’scheck,attheclosing,attheoptionofthePurchaser(s).Alloranypartoftheunpaidbalanceofthepurchasepricemaybeprepaidwithoutpenaltyatanytime.
(d) ThedeferredportionofthepurchasepriceforanyInterestpurchasedunderthisAgreementshallberepresentedbyapromissorynoteexecutedbythePurchasers.Eachmakershallagreetopaythemaker’spro-rataportionofeachinstallmentofprincipalandinterestasitbecomesdue.Thenoteshallprovidethat,incaseofdefault,attheelectionoftheholder,theentiresumofprincipalandinterestwillimmediatelybedueandpayable,andthatthemakershallpayreasonableattorneyfeestotheholderintheeventofdefault.ThenoteshallbesecuredbyapledgeofalltheInterestbeingpurchasedbythetransactiontowhichthenoterelates.Thepledgeagreementshallcontainsuchothertermsandprovisionsasmaybecustomaryandreasonable.Aslongasnodefaultoccursinpaymentsonthenote,any
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PurchasershallbeentitledtovotethepledgedInterest.ThePurchasershallexpresslywaivedemand,noticeofdefault,andnoticeofsale,andshallconsenttopublicorprivatesaleoftheInterestintheeventofdefault,andtheSellershallhavetherighttopurchaseatthesale.
(e) ClosingofthesaleoftheInterestwilloccurasstatedintheOffer;provided,however,thattheclosingwillnotbemorethan45daysafterexpirationofthe30-daynoticeperiod.IntheeventthatthesaleoftheInterestdoesnotcloseforanyreasonattributabletothePurchasingMemberaftergivingaNoticeunderthissection,thenthePurchasingMemberwillhavenofurtherrighttoafirstoptionunderthisSection10.7.
10.8 RightofFirstRefusal.NotwithstandingSection10.1,aMembermaytransferalloranypartoftheMember’sinterestintheCompany(the“Interest”)asfollows:
10.8.1TheMemberdesiringtotransferhisorherInterestfirstmustprovidewrittennotice(the“Notice”)totheotherMembers,specifyingthepriceandtermsonwhichtheMemberispreparedtoselltheInterest(the“Offer”).
10.8.2Foraperiodof30daysafterreceiptoftheNotice,theMembershavetheright,butnottheobligation,toacquireall,butnotlessthanall,oftheInterestatthepriceandunderthetermsspecifiedintheOffer.IftheotherMembersdesiringtoacquiretheInterestcannotagreeamongthemselvesontheallocationoftheInterestamongthem,theallocationwillbeproportionaltotheMembershipUnitsofthoseMembersdesiringtoacquiretheInterest.
10.8.3ClosingofthesaleoftheInterestwilloccurasstatedintheOffer;provided,however,thattheclosingwillnotbemorethan45daysafterexpirationofthe30-daynoticeperiod.
10.8.4IftheotherMembersfailorrefusetonotifythetransferringMemberoftheirdesiretoacquirealloftheInterestproposedtobetransferredwithinthe30-dayperiodfollowingreceiptoftheNotice,thentheMemberswillbedeemedtohavewaivedtheirrighttoacquiretheInterestonthetermsdescribedintheOffer,andthetransferringMembermaysellandconveythe
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InterestconsistentwiththeOffertoanyotherpersonorentity;provided,however,thatnotwithstandinganythinginSection7.2tothecontrary,shouldthesaletoathirdpersonbeatapriceorontermsthataremorefavorabletothepurchaserthanstatedintheOffer,thenthetransferringMembermustre-offerthesaleoftheInteresttotheremainingMembersatthatotherpriceorotherterms;provided,further,thatifthesaletoathirdpersonisnotclosedwithinsixmonthsaftertheexpirationofthe30-dayperioddescribedabove,thentheprovisionsofSection7.2willagainapplytotheInterestproposedtobesoldorconveyed.
10.9 DeadlockOption.IntheeventofaDeadlockthefollowingprocedureshallapply:
(a) Trigger.AnyMembermaysubmit,inwriting,theMember'sbonafideoffertopurchasealloftheotherMember'sMembershipUnitsfortheamountsetforthinSection10.7;
(b) BidandOptions.ThenonofferingMembershallsubmitsuchMember'sresponse,inwriting,totheofferingMemberwithin30daysofreceivingsuchoffer.Theresponseshallconsistofoneofthefollowingtwooptions:
(1) ThatthenonofferingMemberacceptstheoffertosellthenonofferingMember'sMembershipUnits;inthisevent,theofferingMembershallpurchase,andthenonofferingMembershallsell,alltheMembershipUnitsownedbythenonofferingMemberfortheamountsetforthinSection10.7;or
(2) ThatthenonofferingMemberrejectstheoffertoselltheMember'sMembershipInterest;inthisevent,thenonofferingMembershallpurchase,andtheofferingMembershallsell,alloftheofferingMember'sMembershipUnitsfortheamountsetforthinSection10.7.
(c) PurchaseTerms.Thepurchasepriceshallbepaidincashwithin45daysafterthedatethenonofferingMember'sresponseisgiven.IntheeventthatthepurchasingMemberfailstopaythepurchasepricewithinthe45-day
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periodsetforthherein,theotherMembershallbeentitledtospecificperformanceoftheprovisionsofthisSection10.9.
(d) EffectofPurchase.Followingpaymentofthepurchaseprice,thesellingMembershallceasetobeaMemberwithitsattendantrightsandliabilities.UponthetenderofthepurchasepriceoftheMembershipInterest,thesellingMembershallexecuteanddeposittheproperlyendorseddocument,instrument,orcertificateevidencingtheMembershipUnitswiththeCompany.Intheeventsuchdocumentorinstrumentisnotdepositedwithinthistime,theMembersmaycanceltheMembershipInterestonthebooksandrecordsoftheCompanyortransferittothepurchasingMember.Allcostsandexpenses(includingattorneyfees)incurredbyCompanyorthepurchasingMembertoenforcecompliancewiththetermsofthisSection10.9shallbepaidbythesellingMember.
10.10DistributionsandAllocationsre:Transfers.IfanyPerson'sinterestintheCompanyisTransferredduringanyFiscalYearincompliancewiththeprovisionsofthisArticle10,Profits,Losses,eachitemthereof,andallotheritemsattributabletosuchinterestforsuchFiscalYearshallbedividedandallocatedbetweenthetransferorandtheTransfereebytakingintoaccounttheirvaryingUnitsduringsuchFiscalYearinaccordancewithCodeSection706(d),usinganyconventionspermittedbylawandselectedbytheMembers.AlldistributionsonorbeforethedateofsuchTransfershallbemadetothetransferor,andalldistributionsthereaftershallbemadetotheTransferee.Solelyforpurposesofmakingsuchallocationsanddistributions,theCompanyshallrecognizesuchTransfernotlaterthantheendofthecalendarmonthduringwhichitisgivennoticeofsuchTransfer,providedthat,iftheCompanyisgivennoticeofaTransferatleasttenBusinessDayspriortotheTransfer,theCompanyshallrecognizesuchTransferasthedateofsuchTransfer,andprovidedfurtherthat,iftheCompanydoesnotreceiveanoticestatingthedatesuchinterestwasTransferredandsuchotherinformationastheMembersmayreasonablyrequirewithin30daysaftertheendoftheFiscalYearduringwhichtheTransferoccurs,thenallsuchitemsshallbeallocated,andalldistributionsshallbemade,tothePersonwho,
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accordingtothebooksandrecordsoftheCompany,wastheowneroftheinterestonthelastdayoftheFiscalYearduringwhichtheTransferoccurs.NeithertheCompanynortheMembersshallincuranyliabilityformakingallocationsanddistributionsinaccordancewiththeprovisionsofthisSection10.10,whetherornottheMembersortheCompanyhaveknowledgeofanyTransferofownershipofanyinterest.
ARTICLE11
CESSATIONOFAMEMBER
11.1 Cessation.APersonshallceasetobeaMemberuponthehappeningofanyofthefollowingeventswithregardtosuchMember:
(a) ThewithdrawaloftheMemberpursuanttoSection11.2;
(b) TheexpulsionoftheMemberpursuanttoSection11.3;
(c) TheBankruptcyoftheMemberfiledaftertheeffectivedateofthisAgreement;
(d) InthecaseofaMemberwhoisanaturalperson,thedeathoftheMemberortheentryofanorderbyacourtofcompetentjurisdictionadjudicatingtheMemberincompetenttomanagetheMember'spersonorestate;
(e) InthecaseofaMemberwhoisactingasaMemberbyvirtueofbeingtrusteeofatrust,theterminationofthetrust(butnotmerelythesubstitutionofanewtrustee);
(f) InthecaseofaMemberthatisaseparateEntityotherthanacorporation,thedissolutionandcommencementofwindingupoftheseparateEntity;
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(g) InthecaseofaMemberthatisacorporation,thefilingofarticlesofdissolutionoritsequivalentforthecorporationortherevocationofitscharter;
(h) Inthecaseofanestate,thedistributionbythefiduciaryoftheestate'sentireinterestintheCompany;or
(i) TransferofaMember'sentireMembershipInteresttooneormoreMembersortooneormoreTransfereestogetherwiththeacceptanceoftheTransfereesasSubstituteMembers.
11.2 Withdrawal.AMembermaynotvoluntarilywithdrawfromtheCompany.AnyattemptedwithdrawalshallbeamaterialbreachofthisAgreement,unlesssuchwithdrawaliswiththeconsentoftheMembers,andshallresultintheMemberbeingdeemedaTransferee.
11.3 Expulsion.AMembermaybeexpelledfromtheCompanyuponadeterminationbytheMembersthattheMemberhasbeenguiltyofwrongfulconductthatadverselyandmateriallyaffectsthebusinessoraffairsoftheCompany,orhaswillfullyandpersistentlycommittedamaterialbreachoftheArticlesorthisAgreement,orotherwisebreachedadutyowedtotheCompanyortheotherMembers,totheextentthatitisnotreasonablypracticabletocarryonthebusinessoraffairsoftheCompanywiththeMember.AnexpelledMembershallbetreatedashavingwithdrawnfromtheCompanyonthedateoftheexpulsiondeterminationandwithdrawninbreachofthisAgreement.
11.4 RightsuponCessation.IntheeventthatanyPersonceasestobeaMemberforanyreasonotherthanthatsetforthinSection11.1(i),thefollowingshallapply:
(a) ThePersonshallbetreatedasaTransfereefromthedateofCessationuntilsuchtimeasthePersonhasreceivedalldistributionstowhichthePersonisormaybedueunderthisAgreement;provided,however,that,iftheCessationiscausedbythedeathofthePersonortheentryofanorderbyacourtofcompetentjurisdictionadjudicatingthePersonincompetentto
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managethePerson'spersonorestate,thePerson'spersonalrepresentative,guardian,conservator,orotherlegalrepresentativemayexercisetherightsthePersonhadasaMemberforthepurposeofsettlingthePerson'sestateoradministeringthePerson'sproperty,includingtherighttomakePermittedTransfers.(ForpurposesofPermittedTransfers,thetransferorshallbedeemedtobethePersonandnotsuchPerson'slegalrepresentative.)
(b) IftheCessationisaDissolutionEventandthebusinessandaffairsoftheCompanyarewoundupunderArticle12,thePersonshallbeentitledtoparticipateinthewindingupoftheCompanytothesameextentasanyMemberexceptthatanydistributionstowhichthePersonwouldhavebeenentitledshallbereducedbythedamagessustainedbytheCompanyasaresultoftheDissolutionandwindingup.
ARTICLE12
DISSOLUTIONANDWINDINGUP
12.1 CovenantNottoCauseDissolution.ExceptasotherwisepermittedbythisAgreement,eachMemberherebycovenantsandagreesnottotakeanyvoluntaryactionthatwouldcausetheCompanytodissolveandnotwithstandinganyprovisionoftheAct,theCompanyshallnotdissolvepriortotheoccurrenceofaDissolutionEvent.
12.2 DissolutionEvents.TheCompanyshalldissolveandcommencewindingupandliquidatinguponthefirsttooccurofanyofthefollowingDissolutionEvents:
(a) ThesaleofallorsubstantiallyalloftheProperty;
(b) ThevoteoftheMemberstodissolve,windup,andliquidatetheCompany;
(c) Thehappeningofanyothereventthatmakesitunlawful,impossible,orimpracticaltocarryonthebusinessoftheCompany;or
(d) ADeadlockoftheMembers.
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NotwithstandinganythingintheActtothecontraryandexceptfortheeventswhichmaycausejudicialandadministrativedissolution,theforegoingeventsaretheexclusiveeventswhichmaycausetheCompanytodissolve.
12.3 WindingUp.UpontheoccurrenceofaDissolutionEvent,theCompanyshallcontinuesolelyforthepurposesofwindingupitsaffairsinanorderlymanner,liquidatingitsassets,andsatisfyingtheclaimsofitscreditorsandMembers,andnoMembershalltakeanyactionthatisinconsistentwith,ornotnecessarytoorappropriatefor,thewindingupoftheCompany'sbusinessandaffairs.Totheextentnotinconsistentwiththeforegoing,allobligationsinthisAgreementshallcontinueinfullforceandeffectuntilsuchtimeastheCompanyPropertyhasbeendistributedpursuanttothisSection12.3.TheMembersshallberesponsibleforoverseeingthewindingupanddissolutionoftheCompany,shalltakefullaccountoftheCompany'sliabilitiesandProperty,shallcausetheCompanyPropertytobeliquidatedaspromptlyasisconsistentwithobtainingthefairvaluethereof,andshallcausetheproceedstherefrom,totheextentsufficienttherefor,tobeappliedanddistributedinthefollowingorder:
(a) First,tothepaymentanddischargeofalloftheCompany'sdebtsandliabilitiestocreditorsotherthanMembers;
(b) Second,tothepaymentanddischargeofalloftheCompany’sdebtsandliabilitiestoMembercreditors;and
(c) Thebalance,ifany,totheholdersoftheMembershipUnitsinaccordancewiththeirCapitalAccountsattributablethereto,aftergivingeffecttoallContributions,distributionsandallocationsforallperiods.
12.4 RightsofMembers.ExceptasotherwiseprovidedinthisAgreement,
(a) EachMembershalllooksolelytotheassetsoftheCompanyforthereturnofContributionsandshallhavenorightorpowertodemandorreceivepropertyotherthancashfromtheCompany,and
(b) NoMembershallhavepriorityoveranyotherMemberastothereturnofContributions,distributions,orallocations.
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12.5 NoticeofDissolution.IntheeventaDissolutionEventoccursoraneventoccursthatwouldresultinadissolutionoftheCompany,theMembersshall,within30daysthereafter,providewrittennoticethereoftoeachoftheMembersandtoallotherpartieswithwhomtheCompanyregularlyconductsbusiness(asdeterminedinthediscretionoftheMembers)andshallpublishnoticethereofinanewspaperofgeneralcirculationineachplaceinwhichtheCompanyregularlyconductsbusiness(asdeterminedinthediscretionoftheMembers).
ARTICLE13
TAXES
13.1 Elections.TheMembersmaymakeanytaxelectionsfortheCompanyallowedundertheCodeorthetaxlawsofanystateorotherjurisdictionhavingtaxingjurisdictionovertheCompany,includingelections:
(a) ToadjustthebasisofCompanyPropertypursuanttoCodeSections754,734(b),and743(b),orcomparableprovisionsofstateorlocallaw,inconnectionwithtransfersofinterestsintheCompanyandCompanydistributions;
(b) WiththeconsentoftheMembers,toextendthestatuteoflimitationsforassessmentoftaxdeficienciesagainstMemberswithrespecttoadjustmentstotheCompany'sfederal,state,orlocaltaxreturns;and
(c) TotheextentprovidedinCodeSections6221through6231,torepresenttheCompanyortheMembersbeforetaxingauthoritiesorcourtsofcompetentjurisdictionintaxmattersaffectingtheCompanyortheMembersintheircapacitiesasMembers,andtofileanytaxreturnsandtoexecuteanyagreementsorotherdocumentsrelatingtooraffectingsuchtaxmatters,includingagreementsorotherdocumentsthatbindtheMemberswith
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respecttosuchtaxmattersorotherwiseaffecttherightsoftheCompanyandtheMembers.
13.2 TaxesofTaxingJurisdictions.Totheextentthatthelawsofanytaxingjurisdictionrequire,eachMemberrequestedtodosobytheMemberswillsubmitanagreementindicatingthattheMemberwillmaketimelyincometaxpaymentstothetaxingjurisdictionandthattheMemberacceptspersonaljurisdictionofthetaxingjurisdictionwithregardtothecollectionofincometaxesattributabletotheMember'sincome,andinterestandpenaltiesassessedonsuchincome.IftheMemberfailstoprovidesuchagreement,theCompanymaywithholdandpayovertosuchtaxingjurisdictiontheamountoftax,penalty,andinterestdeterminedunderthelawsofthetaxingjurisdictionwithrespecttosuchincome.AnysuchpaymentswithrespecttotheincomeofaMembershallbetreatedasadistributionforpurposesofArticle8.TheMembersmay,wherepermittedbytherulesofanytaxingjurisdiction,fileacomposite,combined,oraggregatetaxreturnreflectingtheincomeoftheCompanyandpaythetax,interest,andpenaltiesofsomeoralloftheMembersonsuchincometothetaxingjurisdiction,inwhichcasetheCompanyshallinformtheMembersoftheamountofsuchtaxinterestandpenaltiessopaid.
ARTICLE14
BOOKS,RECORDSANDACCOUNTINGS
14.1 BooksandRecords.AttheexpenseoftheCompany,theMembersshallmaintainrecordsandaccountsofalloperationsandexpendituresoftheCompany.Ataminimum,theCompanyshallkeepatitsprincipalplaceofbusinessthefollowingrecords:
(a) Acurrentlistofthefullnameandlastknownbusiness,residence,ormailingaddressofeachMember,bothpastandpresent;
(b) AcopyoftheArticlesandallamendmentsthereto,togetherwithexecutedcopiesofanypowersofattorneypursuanttowhichanyamendmenthasbeenexecuted;
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(c) CopiesoftheCompany'sfederal,state,andlocalincometaxreturnsandreports,ifany,forthethreemostrecentyears;
(d) CopiesoftheCompany'scurrentlyeffectivewrittenoperatingagreementandallamendmentsthereto,copiesofanywritingspermittedorrequiredundertheAct,andcopiesofanyfinancialstatementsoftheCompanyforthethreemostrecentyears;
(e) MinutesofeverymeetingoftheMembersandanywrittenconsentsobtainedfromtheMembersforactionstakenwithoutameeting;and
(f) AstatementpreparedandcertifiedasaccuratebytheMemberswhichdescribestheamountofcashandadescriptionandstatementoftheagreedvalueofotherPropertyorconsiderationcontributedbyeachMemberandwhicheachMemberhasagreedtocontributeinthefuture,thetimesatwhichoreventsontheoccurrenceofwhichanyadditionalContributionsagreedtobemadebyeachMemberaretobemade,and,ifagreedupon,thetimeatwhichortheeventsontheoccurrenceofwhichtheCompanyisdissolvedanditsaffairswoundup.
ARTICLE15
AMENDMENT
15.1 Generally.ThisAgreementmaybeamended,restated,ormodifiedfromtimetotimeonlybyawritteninstrumentadoptedbytheMembers.NoMembershallhaveanyvestedrightsinthisAgreementwhichmaynotbemodifiedthroughanamendmenttothisAgreement.
ARTICLE16
MISCELLANEOUS
16.1 ApplicationofWashingtonLaw.ThisAgreementshallbegovernedexclusivelybyitstermsandbythelawsofWashington.
16.2 Construction.TheMembershaveeachparticipatedjointlyinthenegotiationanddraftingofthisAgreement.Ifanambiguityorquestionofintentorinterpretationarises,thisAgreementshallbeconstruedasif
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draftedjointlybyalloftheparties,andnopresumptionorburdenofproofshallarisefavoringordisfavoringanypartybyvirtueoftheauthorshipofanyoftheprovisionsofthisAgreement.Anyreferencetoanyfederal,state,local,orforeignstatuteorlawshallbedeemedalsotorefertoallrulesandregulationspromulgatedthereunder,unlessthecontextrequiresotherwise.Thewords"including"or"include"shallmeanincludingwithoutlimitation.WheneverthesingularnumberisusedinthisAgreementandwhenrequiredbythecontext,thesameshallincludethepluralandviceversa,andthemasculinegendershallincludethefeminineandneutergendersandviceversa.
16.3 Counterparts.ThisAgreementmaybeexecutedincounterparts,eachofwhichshallbedeemedanoriginalbutallofwhichshallconstituteoneandthesameinstrument.
16.4 ExecutionofAdditionalInstruments.EachMemberagreestoexecutesuchotherandfurtherstatementsofinterestandholdings,designations,powersofattorneyandotherinstrumentsnecessarytocomplywithanylaws,rulesorregulations.
16.5 Headings.TheheadingsinthisAgreementareinsertedforconvenienceonlyandareinnowayintendedtodescribe,interpret,define,orlimitthescope,extent,orintentofthisAgreement.
16.6 Heirs,Successors,andAssigns.Eachandallofthecovenants,terms,provisions,andagreementshereincontainedshallbebindinguponandinuretothebenefitofthepartiesheretoand,totheextentpermittedbythisAgreement,theirheirs,representatives,successors,andassigns.
16.7 Notices.Anynotice,demand,orcommunicationrequiredorpermittedtobegivenbyanyprovisionofthisAgreementshallbedeemedtohavebeensufficientlygivenorservedforallpurposesifdeliveredpersonallytothePersonortoanexecutiveofficerofthePersontowhomthesameisdirectedor,ifsentbyregisteredorcertifiedmail,postageandchargesprepaid,
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addressedtothePerson'sand/orCompany'saddress,asappropriate,whichissetforthinthisAgreement.Noticesorothercommunicationsmayalsobegivenbyfacsimileorelectronicmail,providedthatthePersontobegivennoticebysuchmeanshasprovidedtheCompanythePerson'sfacsimilenumberorelectronicmailaddress,asthecasemaybe.Exceptasotherwiseprovidedherein,anysuchnoticeshallbedeemedtobegivenontheearliestof(a)thedateofpersonaldelivery,(b)threeBusinessDaysafterthedateonwhichthesamewasdepositedinaregularlymaintainedreceptacleforthedepositofUnitedStatesmail,addressedandsentasaforesaid,(c)thedateofreceiptofconfirmationoftransmissionbyfacsimile,or(d)thedateofdeliveryofelectronicmailtotherecipient'sinternetserviceproviderwithoutnoticeoffailureintransmission.Theaddresstowhichnoticesorothercommunicationsshallbemailedandaparty'sfacsimilenumberorelectronicmailaddressmaybechangedbyapartyfromtimetotimebygiving10dayspriorwrittennoticethereoftotheCompany.
16.8 RightsandRemediesCumulative.TherightsandremediesprovidedbythisAgreementarecumulative,andtheuseofanyonerightorremedybyanypartyshallnotprecludeorwaivetherighttouseanyorallotherremedies.Saidrightsandremediesaregiveninadditiontoanyotherrightsthepartiesmayhavebylaw,statute,ordinance,orotherwise.
16.9 Severability.IfanyprovisionofthisAgreementshallbeinvalid,illegal,orunenforceabletoanyextent,theprovisionshallbeconstruedsoastobeenforceabletothefullestextentpossible,andtheremainderofthisAgreementshallnotbeaffectedandshallbeenforceable.
16.10Waivers.ThefailureofanypartytoseekredressforviolationofortoinsistuponthestrictperformanceofanycovenantorconditionofthisAgreementshallnotconstituteawaiverofsuchprovision,andnowaiverofanyprovisionshallbedeemed,orconstitute,awaiverofanyotherprovision,whetherornotsimilar,norconstituteacontinuingwaiverunlessitisexpresslystatedsoinwriting.
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16.11Arbitration.IfanycontroversyorclaimarisingoutofthisAgreementortheparties'relationshipcannotbesettled,thecontroversyorclaimshallbesettledbyarbitration.Thepartiesshallsubmitanydisputetoasinglearbitratorfordecision.ThearbitrationshallbeconductedprocedurallyinaccordancewithRCWChapter7.04A.Judgmentontheawardmaybeenteredinanycourthavingjurisdiction.Nothingherein,however,shallpreventaMemberortheCompanyfromresorttoacourtofcompetentjurisdictioninthoseinstanceswhereinjunctivereliefmaybeappropriateorforpurposesofexpellingaMember.
16.12EntireAgreement.ThisAgreementandanyotherdocumenttobefurnishedpursuanttotheprovisionshereofembodytheentireagreementandunderstandingofthepartiesheretoastothesubjectmattercontainedherein.Therearenorestrictions,promises,representations,warranties,covenants,orundertakingsotherthanthoseexpresslysetforth.
[TOVIEWEXHIBITS,VIEWFULLDOCUMENTONLINEAT:https://portofskamania.org/wrbiomass/more-information/]
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APPENDIXE:ADMISSIONSAGREEMENT
ThisAdmissionAgreement(“Agreement”)ismadeasof_________________,20___,byandbetweenWindRiverBiomassUtility,LLC,aWashingtonlimitedliabilitycompany(theCompany),and_____________(thePurchaser).CertaincapitalizedtermsusedhereinandnotdefinedinthisAgreementshallhavethemeaningsascribedtothemintheOperatingAgreementoftheCompany,byandamongtheCompanyandthemembersidentifiedtherein,asamendedfromtimetotime(the“OperatingAgreement”).
1.Contribution;IssuanceofMembershipInterests.
(a)PurchaserInitialContribution.UponthetermsandconditionssetforthinthisAgreement,asaninitialcapitalcontribution,thePurchaserherebyagreestocontribute$________totheCompany,due________,20____.
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(b)IssuanceofMembershipUnits.InconsiderationforthePurchasersInitialContributionandthePurchaserswillingnesstoenterintotheOperatingAgreement,uponthetermsandsubjecttotheconditionssetforthinthisAgreement,theCompanyshallissuetothePurchaser,uponreceiptofeachcontributioninstallment,anamountofMembershipUnitsequaltoa____%VotingRatio.
2.RepresentationsofthePurchaser.InconnectionwiththeInitialContributionandissuanceoftheUnits,thePurchaserherebyrepresentsandwarrantstotheCompanyasfollows:
(a)ThePurchaserunderstandsthat(i)theUnitshavenotbeenregisteredundertheSecuritiesAct,norqualifiedunderthesecuritieslawsofanyotherjurisdiction,(ii)theUnitscannotberesoldunlesstheyaresubsequentlyregisteredundertheSecuritiesActandqualifiedunderapplicablestatesecuritieslaws,unlesstheCompanydeterminesthatexemptionsfromsuchregistrationandqualificationrequirementsareavailable,and(iii)exceptasotherwisesetforthintheOperatingAgreement,thePurchaserhasnorighttorequiresuchregistrationorqualification;
(b)TheUnitstobeacquiredbythePurchaserpursuanttothisAgreementwillbeacquiredforsuchPurchaser’sownaccountandnotwithaviewto,orintentionof,distributionthereofinviolationoftheSecuritiesAct,oranyapplicablestatesecuritieslaws,andtheUnitswillnotbedisposedofincontraventionoftheSecuritiesActoranyapplicablestatesecuritieslaws;
(c)ThePurchasereither(i)hasapreexistingpersonalorbusinessrelationshipwiththeCompanyoritsprincipalsor(ii)hassubstantialknowledgeandexperienceinfinancialandbusinessmatters,hasspecificexperiencemakinginvestmentdecisionsofasimilarnature,andiscapable,withouttheuseofafinancialadvisor,ofutilizingandanalyzingtheinformationmadeavailableinconnectionwiththeacquisitionoftheUnitsandofevaluatingthemeritsandrisksofaninvestmentintheUnitsandprotectingthePurchasersowninterestsinconnectionwiththistransaction.ThePurchaserwillprovidetheCompany,uponrequest,withsuchinformationconcerninganypriorinvestmentexperience,businessorprofessionalexperienceandotherinformationastheCompanymayreasonablyrequesttofurtherevaluatetheforegoingrepresentations;
(d)ThePurchaserhascarefullyreviewedandunderstandstherisksof,andother
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considerationsrelatingto,aninvestmentintheUnits;
(e)ThePurchaserisabletobeartheeconomicriskofsuchPurchaser’sinvestmentintheUnitsforanindefiniteperiodoftimebecausetheUnitshavenotbeenregisteredundertheSecuritiesActand,therefore,cannotbesoldunlesssubsequentlyregisteredundertheSecuritiesActoranexemptionfromsuchregistrationisavailableandaresubjecttoadditionalrestrictionsasprovidedherein;
(f)ThePurchaserhashadanopportunitytoaskquestionsandreceiveanswersconcerningthetermsandconditionsoftheofferingoftheUnitsandhashadfullaccesstosuchotherinformationconcerningtheCompanyasthePurchaserhasrequested.Withoutlimitingthegeneralityoftheforegoing,thePurchaserhasbeenprovidedwithcopiesoftheOperatingAgreementandhashadanopportunitytoreviewandaskquestionsandreceivesatisfactoryanswersconcerningthetermsandconditionsofsuchOperatingAgreement;
(g)ThePurchaserisaresidentanddomiciliaryofthestateorotherjurisdictionhereinaftersetforthoppositethePurchaserssignatureandthePurchaserhasnopresentintentionofbecomingaresidentofanyotherstateorjurisdiction.IfthePurchaserisaresidentanddomiciliaryofastatethatrequirestheCompanytoascertaincertainotherinformationregardingthePurchaser,theCompanymayattachapagetothisAgreementcontainingadditionalrepresentationsrequiredbysuchstatetobemadebythePurchaserinconnectionwiththePurchasersinvestmentintheUnits,andbysigningthisAgreement,thePurchasershallbedeemedtohavemadesuchadditionalrepresentationstotheCompany;and
(h)ThePurchaserhasnotreceivedandisnotrelyinguponanywrittenliteratureotherthantheOperatingAgreement,andhasnotreceivedandisnotrelyinguponanyoralrepresentationswhichareinanymannerinconsistentwiththewritteninformationcontainedtherein.
3.RepresentationsoftheCompany.InconnectionwiththeInitialContributionandissuanceoftheUnits,theCompanyherebyrepresentsandwarrantstothePurchaserasfollows:
(a)Organization,GoodStandingandQualification.TheCompanyisalimitedliabilitycompanydulyformed,validlyexistingandingoodstandingunderthelaws
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oftheStateofWashingtonandhasallrequisitepowerandauthoritytocarryonitsbusinessasnowconductedandasproposedtobeconducted.TheCompanyhasallrequisitepowerandauthoritytoenterintothisAgreement,toissuetheUnitshereunderandtocarryoutandperformitsobligationsunderthetermsofthisAgreement.TheCompanyisdulyqualifiedtotransactbusinessandisingoodstandingineachjurisdictioninwhichthefailuresotoqualifywouldhaveamaterialadverseeffectonitsbusiness,properties,operations,assets,orcondition(financiallyorotherwise),aspresentlyconducted.
(b)Subsidiaries.TheCompanydoesnotpresentlyownorcontrol,directlyorindirectly,anyinterestinanyothercorporation,association,orotherbusinessentity.TheCompanyisnotaparticipantinanyjointventure,partnershiporsimilararrangement.
(c)Authorization.AllactiononthepartoftheCompany,itsofficers,andMembersnecessaryfortheauthorization,executionanddeliveryofthisAgreement,theperformanceofallobligationsoftheCompanyhereunderandtheauthorizationandissuanceoftheUnitshasbeentaken.Withoutlimitingthegeneralityoftheimmediatelyprecedingsentence,theexecutionanddeliveryofthisAgreement,theperformanceofallobligationsoftheCompanyhereunderandtheauthorizationandissuanceoftheUnitshave,afterfulldisclosureofthematerialfactsofsuchtransactions,beenapprovedbytheMembers,whodetermined,ingoodfaith,thatthetransactionscontemplatedbythisAgreementarefair,justandreasonabletotheCompany.ThisAgreement,whenexecutedanddelivered,willconstitute,andis,avalidandlegallybindingobligationoftheCompany,enforceableinaccordancewithitsterms,except(i)aslimitedbyapplicablebankruptcy,insolvency,reorganization,moratoriumorotherlawsofgeneralapplicationaffectingenforcementofcreditorsrights;(ii)aslimitedbygeneralprinciplesofequitythatrestricttheavailabilityofequitableremedies;and(iii)totheextentthattheenforceabilityofanyindemnificationprovisions,ifapplicable,ofthisAgreementmaybelimitedbyapplicablelaws.
(d)GovernmentalConsents.Noconsent,approval,orderorauthorizationof,orregistration,qualification,designation,declarationorfilingwith,anyfederal,stateorlocalgovernmentalauthorityonthepartoftheCompanyisrequiredinconnectionwiththeconsummationofthetransactionscontemplatedbythisAgreement.TheCompanycurrentlyholds,orisintheprocessofapplyingforand
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expectstoreceive,alllicenses,permits,franchises,registrationsandqualificationswhichmayberequiredtoconductitsbusiness,andallsuchlicenses,permits,franchises,registrationsandqualificationsarevalidandinfullforceandeffect,exceptaswouldnot,individuallyorintheaggregate,haveamaterialadverseeffectontheCompany’sbusiness,properties,operations,assetsorcondition(financialorotherwise).
(e)Litigation.Thereisnoaction,suit,proceedingorinvestigationpendingorcurrentlythreatenedagainsttheCompanythatquestionsthevalidityofthisAgreementortherightoftheCompanytoenterintoit,ortoconsummatethetransactionscontemplatedhereby,orthatmightresult,eitherindividuallyorintheaggregate,inanymaterialadversechangesinthebusiness,properties,operation,assets,conditionoraffairsoftheCompany,financiallyorotherwise,oranychangeinthecurrentequityownershipoftheCompany,noristheCompanyawarethatthereisanybasisfortheforegoing.Thereisnoaction,suit,proceedingorinvestigationbytheCompanycurrentlypendingorwhichtheCompanyintendstoinitiate.
4.AcknowledgmentsandAgreements.
(a)ThePurchaseracknowledgesandagreesthat:(i)theCompanyisenteringintothisAgreementinrelianceuponthePurchaser’srepresentationsandwarrantiesherein;and(ii)allinformationwhichthePurchaserhasprovidedtotheCompanyconcerningthePurchaserincluding,withoutlimitation,thePurchasersfinancialpositionandknowledgeofandexperiencewithfinancialandbusinessmattersiscorrectandcompleteasofthedateofthisAgreement,andifthereshouldbeanymaterialchangeinsuchinformationpriortotheclosingofthisoffering,thePurchaserwillimmediatelyprovidetheCompanywithsuchinformation.
(b)TheCompanyacknowledgesandagreesthat:(i)thePurchaserisenteringintothisAgreementinrelianceupontheCompany’srepresentationsandwarrantiesherein;and(ii)allinformationwhichtheCompanyhasprovidedtothePurchaserconcerningtheCompanyincluding,withoutlimitation,theCompany’sfinancialposition,businessandothermattersiscorrectandcompleteasofthedateofthisAgreement,andifthereshouldbeanymaterialchangeinsuchinformationpriortotheclosingofthisoffering,theCompanywillimmediatelyprovidethePurchaserwithsuchinformation.
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(c)TheCompanyandthePurchaseracknowledgeandagreethatthisAgreementhasbeenexecutedanddelivered,andtheUnitshavebeenissuedhereunder,inconnectionwithandasapartofthePurchaserswillingnesstoenterintotheOperatingAgreement.
5.AgreementtotheOperatingAgreement.ThePurchaseracknowledgesandagreesthattheUnitsarebeingissuedpursuantto,andaresubjectinallrespectsto,thisAgreementandtheOperatingAgreement,thetermsandconditionsofwhichareincorporatedhereinasifsetforthfullyherein.ThePurchaseracknowledgesandagreestoallthetermsandconditionsofthisAgreementandtheOperatingAgreement,includingtheco-salerights,rightoffirstoption,rightsoffirstrefusal,restrictionsontransferandanyotherprovisionswhichmaybesetforthintheOperatingAgreement.ThePurchaserisawarethatthePurchaserhasnorighttorequireregistrationoftheUnitsandmustbeartheeconomicriskofanilliquidinvestment.ThePurchaserisalsoawareofandfamiliarwiththeprovisionsoftheOperatingAgreementrelatingtothemanagementoftheCompanyandtheprovisionsregardingtheselectionofmembersasaManagingMembers.
6.TransferRestrictions.ThePurchasershallholdtheUnitssubjecttothetransferrestrictionscontainedinArticle10oftheOperatingAgreementandthetermsofthisAgreement.
7.SecuritiesLawRestrictionsandOtherRestrictionsonTransferofMembershipUnits.
(a)ThePurchaserisadvisedthatfederalandstatesecuritieslawsgovernandrestrictthePurchaser’srighttooffer,sellorotherwisedisposeoftheUnitsunlessthePurchaser’soffer,saleorotherdispositionthereofisregisteredundertheSecuritiesActandstatesecuritieslaws,orintheopinionoftheCompany’scounsel,suchoffer,saleorotherdispositionisexemptfromregistrationorqualificationthereunder.ThePurchaseragreesthatthePurchaserwillnotoffer,sellorotherwisedisposeoftheUnitsinanymannerwhichwould:(i)requiretheCompanytofileanyregistrationstatementwiththeSecuritiesandExchangeCommission(oranysimilarfilingunderstatelaw)ortoamendorsupplementanysuchfilingor(ii)violateorcausetheCompanytoviolatetheSecuritiesAct,therulesandregulationspromulgatedthereunderoranyotherstateorfederallaw.ThecertificatesfortheUnits,ifany,willbearthelegendsrequiredbysubparagraph
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(b)below.
(b)Thecertificate,ifany,representingtheUnitswillbearthefollowinglegendandsuchotherlegendsastheCompanydeemsnecessaryordesirableinconnectionwiththeSecuritiesActorotherrules,regulationsorlaws:
THEUNITSREPRESENTEDBYTHISCERTIFICATEHAVENOTBEENREGISTEREDUNDERTHESECURITIESACTOF1933,ASAMENDED.UNITSMAYNOTBESOLD,TRANSFERRED,ASSIGNED,PLEDGED,HYPOTHECATEDOROTHERWISEDISPOSEDOFINTHEABSENCEOFREGISTRATIONUNDERSAIDACTANDTHERULESANDREGULATIONSTHEREUNDERANDALLAPPLICABLESTATESECURITIESORABLUESKYLAWSORANEXEMPTIONTHEREFROMUNDERSAIDACTANDALLAPPLICABLESTATESECURITIESORABLUESKYLAWSORANOPINIONOFCOUNSELREASONABLYSATISFACTORYTOTHECOMPANYISOBTAINEDTOTHEEFFECTTHATSUCHREGISTRATIONISNOTREQUIREDUNDERSAIDACTANDALLAPPLICABLESTATESECURITIESORABLUESKYLAWS.
(c)Notwithstandinganyotherprovisioncontainedherein,theCompanymayrefusetoregisteranytransferoftheUnitsiftheregistrationofsuchtransferwouldrequiretheCompanytoregisteranyotherclassofmembershipinterestwiththeSecuritiesandExchangeCommissionundertheSecuritiesExchangeActof1934,asamended(exceptinconnectionwithaneffectiveregistrationstatementundertheSecuritiesAct).
8.Notices.Allnotices,requests,consentsandothercommunicationsrequiredorpermittedhereundershallbeinwritingandshallbedeemedtohavebeendulygivenandmadeandservedeitherbypersonaldeliverytothepersonforwhomitisintendedorifdeposited,postageprepaid,registeredorcertifiedmail,returnreceiptrequested,intheUnitedStatesmail:
IftotheCompany:
WindRiverBiomassUtility,LLCPOBox658Stevenson,WA98648
IftothePurchaser,addressedtothePurchaserattheaddressshownintherecordsoftheCompany,oratsuchotheraddressasthePurchasermayspecifybywrittennoticetotheCompany.
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9.Miscellaneous.
(a)UponitsacceptancebytheCompany,thisAgreementshallbebindinguponandinuretothebenefitoftheCompanyanditssuccessorsandassignsandthePurchaserandthePurchaser’srespectiveexecutorsoradministrators,personalrepresentatives,heirs,legateesanddistributees.
(b)ThisAgreementshallbegovernedbyandconstruedinaccordancewiththelocallaw,andnotthelawofconflicts,oftheStateofWashington.
(c)InanyconflictbetweenthetermsandprovisionsofthisAgreementandthetermsandprovisionsoftheOperatingAgreement,thetermsandprovisionsoftheOperatingAgreementshallgovern.
(d)Nocourseofdealingoranydelayorfailuretoexerciseanyright,powerorremedyhereunderonthepartyofanypartyheretoshalloperateasawaiveroforotherwiseprejudicesuchparty’srights,powersorremedies.
(e)ThisAgreementmaybeexecutedincounterparts,eachofwhichshallbedeemedanoriginalbutallofwhichshallconstituteoneandthesameinstrument.
(f)NotwithstandinganythinginthisAgreement,theCompanyshallnotbeobligatedtoissueorsellanyUnitstoanyPersonif,inthejudgmentoftheCompany’scounsel,suchissuanceorsalemayviolatefederalorapplicablestatesecuritieslawsorregulationsormayrequiretheCompanytoregisterorqualifyanysuchUnitsunderanyfederalorstatesecuritieslaws,orrequiretheCompanyoranyofitsagentsorrepresentativestoregisterorqualifywithanygovernmentalagencyororganization,pursuanttosuchlawsorregulations.
11.CertificationastoTaxpayerIdentificationNumberandBackupWithholdingandNon-ForeignStatus-SubstituteFormW-9;SocialSecurityorTaxIDNumber.Underpenaltiesofperjury,thePurchasercertifiesbythePurchaser’ssignaturebelowthat(a)thenumbershownonthisformisthePurchaser’scorrecttaxpayeridentificationnumber;and(b)thePurchaserisnotsubjecttobackupwithholdingbecause(i)thePurchaserisexemptfrombackupwithholding,(ii)thePurchaserhasnotbeennotifiedthatthePurchaserissubjecttobackupwithholdingasaresultofafailuretoreportallinterestordividends,or(iii)theInternalRevenueServicehasnotifiedthePurchaserthatthePurchaserisnolongersubjecttobackup
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withholding.
IFTHEPURCHASERHASBEENNOTIFIEDBYTHEIRSTHATTHEPURCHASERISPRESENTLYSUBJECTTOBACKUPWITHHOLDING,STRIKEOUTTHELANGUAGEUNDER(b)ABOVEBEFORESIGNING.
[SIGNATUREPAGEFOLLOWS]
INWITNESSWHEREOF,thepartiesheretohaveexecutedthisAgreementasofthedayandyearfirstwrittenabove.
COMPANY:
WindRiverBiomassUtility,LLC,aWashingtonlimitedliabilitycompany
By:__________________________________Name:______________________________________
Title:___________________________________________________
PURCHASER:
__________________________________________________(Printedname)
__________________________________________________SocialSecurityorTaxID#
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__________________________________________________ResidenceStreetAddress
__________________________________________________CityandStateZip
__________________________________________________ResidenceTelephone
__________________________________________________BusinessName
__________________________________________________BusinessAddress
__________________________________________________CityandStateZip
__________________________________________________BusinessTelephone
MailCorrespondenceto:□Residence□Business