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Attachment 19 - Operating agreement for Los Gatos Senior HomesOPERATING AGREEMENT FOR LOS GATOS SENIOR HOMES LLC The undersigned, the sole member of the company, does hereby enter into this contract and operating agreement for operation of the above named limited liability company, hereinafter referred to as the "Company." Contract and Intent of the Parties This operating agreement ( "Agreement') is a contract between its parties (the member and the Company) and is enforceable against any party who violates its terms. All members must sign this operating agreement as a condition precedent of membership. It is the specific intent of the parties to this Agreement to form a limited liability company that is to be treated as a disregarded entity until additional members, if any, gain membership and then the intent is that the entity be classified as a partnership for federal income tax purposes. II Members Each member of this Company shall be a "Qualified Organization" which shall mean an organization that is exempt under Section 501(c)(3) of the Internal Revenue Code or under Section 23701(d )of the California Revenue and Taxation Code and that qualifies for exemption under Section 214 of the California Revenue and Taxation Code. Each "Qualifying Organization" shall have a valid, unrevoked letter from the Internal Revenue Service or the Franchise Tax Board, stating that it qualifies as an exempt organization under section 501(3) of the Internal Revenue Code or under section 23701(d) of the California Revenue and Taxation Code. Each member is prohibited from transferring, directly or indirectly, its member interest to any person or entity which is not a Qualified Organization. III Office The principal office of the Company in California is located at 1400 Parlanoor Avenue, Suite 190, San Jose, CA 95126. The Company may have such other offices, either within or without the state as the members may designate or as the business of the Company may require. The registered office of the Company as required by the Act to be maintained in the State of California may be, but need not be, identical with the principal office, if within the State of California, and may be changed from time to time by the members. 5N 025 Orl.U.g Agmc..t Los Gatos Scrior Hame, LLC ATTACHMENT 1 9 IV Purpose The Company is formed for the purpose of operating exclusively for one or more exempt purposes as specified in section 214 of the California Revenue and Taxation Code pursuant to the provisions of the California Revised Limited Liability Company Act, Corporations Code 17701.01 — 17713.13, as the same may be amended from time to time (the "Act") upon the terms and conditions contained in this Agreement. The rights and obligations of the members are as provided in the Act, except as provided herein. The Company is organized and operated exclusively to further the following specific charitable purposes of its members: (1) to provide housing for low income persons, where no adequate housing exists for such groups; and (2) to serve as a general partner in a limited partnership which owns and operates housing for the benefit of low income persons who are in need of affordable, decent, safe and sanitary housing and related services. V Duration of the Company The Company shall commence on the date of the filing of the articles of organization with the Office of the California Secretary of State and shall exist in perpetuity unless otherwise dissolved pursuant to the terms of this Agreement. VI Limitation of Company Activities Notwithstanding any other provision of this Agreement, the Company is organized and operated exclusively to further exempt purposes as specified in Section 214 of the California Revenue and Taxation Code. Any amendments to this Agreement and the articles of organization shall be consistent with the exempt purposes as specified in Section 214 of the California Revenue and Taxation Code. VII Dedication of Property All real and personal property owned by the Company shall be owned by and in the name of the Company and is irrevocably dedicated to one or more exempt purposes as set forth in Sections 214 or 214.01 of the California Revenue and Taxation Code. No member shall have any ownership interest in such property in its individual name or right. Each member's interest in the Company shall be personal property. 2 50M025 Operating Agraemen( Los r0os S,.m Homes LLC VIII Allocation of Profits and Losses The sole member has a 100% interest in capital, profits and losses. With only one member, the entity does not have standing for federal partnership tax treatment, but rather is treated as a disregarded entity. Therefore, the sole member treats the profits and losses for federal income tax purposes on the member's tax returns. Notwithstanding anything to the contrary, no distribution shall be made to any member which ceases to be a Qualified Organization. IX Capital Contributions The Company shall have a single member, Charities Housing Development Corporation of Santa Clara County, a California nonprofit public benefit corporation and Qualified Organization, which shall own 100% of the beneficial interest in the business and Company and shall make such capital contributions as it determines. X Rights and Duties of the Parties This entity is to be managed by the sole member. XI Costs and Expenses The member shall determine the compensation and expenses payable by the Company. The member may act in any capacity and serve with or without compensation. XII Indemnification The member may indemnify any member, manager, employee or agent against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him/her in connection with action, suit or proceeding, if the member determines that it acted in good faith in a manner reasonably believed to be in the best interest of the Company. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or on a plea of nolo contendere or its equivalent, will not in itself create a presumption that the person did or did not act in good faith and in a manner which he/she reasonably believed to be in the best interest of the Company and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. 504/025 operating Ag em t Los GM. Si., Homee UC MII Banking All funds of the Company shall be deposited in its name in such checking account or accounts as shall be designated by the member. All withdrawals therefrom are to be made upon written bank instruments which must be signed by member. XIV Books The Company books shall be maintained at the Company offices located at 1400 Parkmoor Avenue, Suite 190, San Jose, CA 95126, to be retained by the entity. The books shall be kept on a calendar year basis, and shall be closed and balanced at the end of each tax year. The Company hereby covenants and agrees to cause all known business transactions pertaining to the purpose of the Company, to be entered properly and completely into the books. The Company is to furnish copies of annual financial statements to the member to enable it to prepare its annual tax returns in a timely manner. XV Insurance During the course of the term for which this Company is formed, the Company shall carry liability insurance in such amounts as are deemed appropriate by the member. XVI Voluntary Termination If the Company is dissolved the member shall proceed with reasonable promptness to liquidate the Company. The assets of the Company shall be distributed in the following order: A. To pay or provide for the payment of all Company liabilities to creditors other than members, and liquidating expenses and obligations; and B. To an entity organized and operated exclusively for exempt purposes, as specified in Section 214 of the California Revenue and Taxation Code, and which has established tax - exempt status under Section 501(c)(3) of the Internal Revenue Code, or under Section 23701(d) of the California Revenue and Taxation Code. XVII Distributions Prior to dissolution and at least annually as income is received by the Company, its accounts determined and tax returns filed, the member shall determine funds available for distribution. Upon liquidation, a reasonable reserve as determined by the member in amount shall be established to cover follow -on or subsequent complaint and warranty construction requirements, if any. Liquidation of the Company need not be delayed provided that such 1l 504'025 Ope.Img Agr .w Los Gmos Seni. Homo LLC amounts are properly escrowed and arrangement made for performance of such services as may be required in the interest of the Company. Escrows, reserves or liquidating accounts may be established as escrows or otherwise, which activity need not unduly delay the termination of the Company for all other purposes. XVIII Foreign Qualification Management shall not permit the Company to engage in any business outside the State of California unless and until the Company has complied with the requirements necessary to qualify the Company as a foreign limited liability company in the jurisdiction in which the Company shall conduct business. XIX Merger Management shall not permit the Company to merge or combine with, or convert into an entity organized for the private gain of any person. 504,W5 Operating Agreement Lm Oame Senior Tim. LLC IN WITNESS WHEREOF, the sole member has executed this operating agreement effective as of J UL`i I to , 2014. Charities Housing Development Corporation of Santa Clara County, a California nonprofit li benefit corporation By. Name: DAN 1 FL. W L) Its: FX l UT1 V F_ PIP-64-fop- 504,025 Opuming Agmm mt Los Gmos Senior Homes LLC