CC - Authorized Agent OPERATING AGREEMENT
OF
SCS BRIGHTON LLC
THIS OPERATING AGREEMENT OF SCS BRIGHTON LLC ("Agreement') is
made effective as of the 13th day of December, 2012 ("Effective Date'), by and between SCS
INVESTMENTS LLC, an Idaho limited liability company ("SCS"), and BRIGHTON
INVESTMENTS, LLC, an Idaho limited liability company ("Brighton"), and each person who shall
hereafter be admitted to SCS BRIGHTON LLC, an Idaho limited liability company, as a member
(collectively the "Members" and individually a "Member");
WITNESSETH:
The Members desire to form a Limited Liability Company pursuant to, and in
accordance with, the laws of the State of Idaho, and, specifically Title 30, Chapter 6, Idaho
Code (hereafter "Act'). Accordingly, in consideration of the mutual agreements and covenants
contained in this Agreement, the undersigned Members agree and certify as follows:
ARTICLE 1. THE LIMITED LIABILITY COMPANY
Section 1.1 Formation. The Members hereby agree to form a Limited Liability
Company (hereafter "Company") pursuant to, and in accordance with, the Act, and the
provisions of this Agreement.
Section 1.2 Certificate of Organization. Concurrently with the execution of this
Agreement, the Members, Manager, and/or authorized agent shall execute the Certificate of
Organization for the Company (hereafter "Certificate") and, promptly thereafter, shall cause the
Certificate to be filed in the office of the Idaho Secretary of State, and shall execute such further
instruments and documents (including amendments to the Certificate) and take such further
actions as shall be necessary, required or appropriate to comply with the requirements of law in
all states and counties where the Company may conduct its business.
Section 1.3 Name. The name of the Company shall be: SCS Brighton LLC.
Section 1.4 Designated Office — Registered Agent. The location of the Company's
initial designated office in the State is 12601 W. Explorer Drive, Suite 200, Boise, Idaho 83713,
or at such other place in Boise, Idaho, as may be determined from time-to—time by the
Members. The name of the initial registered agent of the Company at such address is Amanda
K. Schaus.
Section 1.5 Events of Dissolution. The Company shall continue until December 31,
2032, unless sooner dissolved by:
(a) The written consent of all Members;
(b) The sale of all or substantially all of the assets of the Company;
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 1
(c) Any event which makes it unlawful for the business of the Company to be
carried on by the Members; or
(d) Any other event causing dissolution of a limited liability company under
the Act.
Section 1.6 Continuance of the Company. Management of the business and affairs
of the Company shall be vested in the Manager, in its capacity as Manager, who shall have the
right and authority to manage the affairs of the Company and to make all decisions with respect
to such management, unless otherwise provided herein.
Section 1.7 Character of Business. The business of the Company shall be to
transact any and all business related thereto permitted pursuant to the laws of the State of
Idaho.
Section 1.8 Principal Place of Business. The location of the principal place of
business of the Company shall be at 12601 W. Explorer Drive, Suite 200, Boise, Idaho 83713 or
at such other place in Boise, Idaho, as may be determined from time-to-time by the Members.
Section 1.9 Members. The name and place of residence of each Member are listed
on Exhibit A.
ARTICLE 2. DEFINITIONS
As used in this Agreement, the following terms shall have the definition provided:
Section 2.1 Agreement. As used herein, "Agreement" shall mean this Operating
Agreement of Solitude Building LLC, as it now exists or may hereafter be amended, modified or
supplemented.
Section 2.2 Capital Contribution. As used in this Agreement, "Capital Contribution"
shall mean the amount paid to the capital of the Company in cash or property contributed to the
Company by each Member, or sums paid by a Member for the conduct of the Company
business, from time to time.
Section 2.3 Company. As used in this Agreement, "Company" shall mean SCS
Brighton LLC, an Idaho limited liability company, created and existing by and under the
provisions of this Agreement and the Certificate of Organization filed with the Idaho Secretary of
State.
Section 2.4 Distributable Income. As used in this Agreement, "Distributable
Income" shall mean the Net Cash From Operations (hereafter defined) and Net Cash From
Sales or Refinancing (hereafter defined).
Section 2.5 Majority of Members. As used in this Agreement, "Majority of Members"
shall mean the Members holding more than fifty percent (50%) of the Sharing Percentages of
the Company exclusive of those Sharing Percentages not entitled to vote.
Section 2.6 Members. As used in this Agreement, "Members" shall mean the
Persons listed in Exhibit A, and any Person that is admitted as a new or additional Member after
the date of this Agreement.
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 2
Section 2.7 Net Cash From Operations. As used in this Agreement, "Net Cash From
Operations" shall mean the gross cash proceeds from Company operations less the portion
thereof used to pay, or establish reserves for the payment of, all Company expenses and
liabilities, debt payments, capital improvements, replacements, and contingencies all as
reasonably approved by a Majority of Members. "Net Cash From Operations" shall not be
reduced by depreciation, cost recovery deductions, or similar allowances, but shall be increased
by any reductions of reserves previously established.
Section 2.8 Net Cash From Sales or Refinancings. As used in this Agreement,
"Net Cash From Sales or Refinancings" shall mean the net cash proceeds from all sales and
other dispositions (other than in the ordinary course of business) and all refinancings of real
estate owned by the Company, less any portion thereof used to pay, or establish reserves for
the payment of, Company expenses and liabilities, debt payments, capital improvements,
replacements, and contingencies, all as determined by a Majority of Members. "Net Cash From
Sales and Refinancings" shall include all principal and interest payments with respect to any
note or other obligation received by the Company in connection with a sale and other disposition
of real estate owned by the Company.
Section 2.9 Person. Means any individual or entity, and the heirs, personal
representatives, administrators, legal representatives, successors, and assigns of such "Person"
where the context so admits.
Section 2.10 Sharing Percentage. As used in this Agreement, "Sharing Percentage"
shall mean the ratio at which each Member will share in the profits and losses, contributions,
distributions and allocations as provided on Exhibit A, as amended from time to time, except as
otherwise specifically provided in this Agreement.
ARTICLE 3. CAPITAL CONTRIBUTIONS
Section 3.1 Initial Capital. The initial capital of the Company shall be contributed by
the Members as shown on Exhibit A.
Section 3.2 Additional Capital Contributions. Except as set forth in this Subsection
3_2, no Member shall be permitted or required to make any additional capital contribution. If at
any time a Majority of Members determines that additional funds in excess of the initial capital
contributions are required by the Company to meet any of its current obligations, expenses,
costs, liabilities or expenditures, or for any other legitimate business purpose, the Majority of
Members may require the contribution of such additional funds to the Company in proportion to
the Members' Sharing Percentages, or the Majority of Members may elect to have the Company
borrow from the Members in proportion to the Members' Sharing Percentages, the amount of
such additional funds needed. The prior written approval shall set forth the amount of the
additional capital required, the purpose for which the additional capital is required and the date
upon which the Members should contribute. Any loans to the Company under this Subsection
3_2 shall be as provided in Section 3.4.
Section 3.3 Failure to Make Additional Contributions. If any Member fails to pay
its respective portion of any additional capital contribution on the date specified in the prior
written consent (hereafter, a "Non-Contributing Member'), the other Members may, in addition
to any other legal remedies available, elect to contribute additional funds in the amount unpaid
by the Non-Contributing Member (an "Over-Contribution") in proportion to the respective
Sharing Percentages of the Members making an Over-Contribution (the "Contributing
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 3
Members"), or as otherwise agreed in writing by such Contributing Members. The Contributing
Members shall, by the vote of the Contributing Members holding a majority of the Sharing
Percentages of the Contributing Members, elect one of the following options for treatment of the
Over-Contributions:
(a) Purchase Sharing Percentage of Non-Contributing Member. Those
Contributing Member(s) making an Over-Contribution on behalf of a Non-Contributing
Member may elect to purchase the Sharing Percentage of the Non-Contributing Member
for the Adjusted Book Value of the Sharing Percentage as determined in Section 9.21.
(b) Member Loan and Security Interest. The Contributing Member(s) may
elect to treat their Over-Contribution as a loan to the Non-Contributing Member. Such
loan shall be charged to the Non-Contributing Member and shall bear interest at an
annual rate equal to the published prime rate of Wells Fargo Bank of Idaho, Boise,
Idaho, as it exists from time-to-time, or a successor bank approved by a Majority of
Members if such bank no longer exists, plus three percent (3%), and shall be payable
from the next distributions payable by the Company to the Non-Contributing Member,
which distributions shall be paid by the Company directly to the Contributing Member
making the loan, provided that the full amount of such loan and interest accrued thereon
shall be due and payable one (1) year after the date of the loan. The Contributing
Member(s) making such a loan on behalf of a Non-Contributing Member shall have and
is hereby granted a security interest in and to the interest of the Non-Contributing
Member in the Company to secure all sums advanced and interest accrued thereon, all
in accordance with and subject to the provisions of the Uniform Commercial Code of the
State of Idaho; and the Contributing Member(s) shall be entitled to all of the rights and
remedies of a secured party in the event of a default by the Non-Contributing Member
including, but not limited to, the right and power to sell or offer for sale the interest of the
Non-Contributing Member in the Company as provided in the Uniform Commercial
Code, subject to the restrictions on transfer as set forth in Article 9, below. The Non-
Contributing Member shall execute all instruments and documents necessary to
evidence said loan and the agreement to repay the same and to acknowledge and
perfect the security interest herein created.
(c) Adiustments to Sharing Percentages for Over-Contributions. The
Contributing Member(s) making an Over-Contribution may elect to adjust Sharing
Percentages by increasing the Sharing Percentage of such Contributing Member and
decreasing the respective Sharing Percentage of the Non-Contributing Member to reflect
the Over-Contribution as follows:
(i) The Sharing Percentage of each Contributing Member shall be
increased by Adjustment Percentage X, which shall be calculated
for each Contributing Member according to the following formula.
For purposes of this formula, "Total Capital Contributions of all
Members to Date" shall include the agreed value of the initial
capital contributions in addition to all other capital contributions
made to date.
Adjustment = Amount of Contributing Member's Over-Contribution
Percentage X Total Capital Contributions + Sum of all Contributing Members'
of all Members to Date Additional Capital Contributions
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 4
(ii) The respective Sharing Percentage of the Non-Contributing
Members shall be decreased (but not below zero) by each such
Members pro rata share (based on the total Sharing Percentages
of the Non-Contributing Members) of Adjustment Percentage X
calculated for each Contributing Member.
Section 3.4 Member Loans to Company. In lieu of or in addition to additional capital
contributions, and if unanimously agreed by the Members in a writing signed by all Members,
the Company may borrow all or a portion of its additional capital requirements from one (1) or
more of the Members. In the event a Member loans money to the Company, each such loan
shall be evidenced by a promissory note (hereafter ".Promissory Note") executed by the
Company in the Company name and delivered to the Member making the loan. The interest rate
shall be the published prime rate of Wells Fargo Bank of Idaho, Boise, Idaho, as it exists from
time-to-time, or a successor bank approved by a Majority of Members if such bank no longer
exists, plus one percent (1%), unless otherwise agreed by a Majority of Members and the
Member making the Loan. The other terms of each loan, including, but not limited to, the
annual interest to be paid, the time and manner of repayment and the maturity date of the loan,
shall be agreed by all Members. If approved by a Majority of Members, the repayment of the
loan made by a Member to the Company and represented by a Promissory Note, as required
herein, may be established, as a payment that is required to be made prior to the distribution of
any Company funds to the Members, and, if so approved, such shall be set forth in the
Promissory Note.
Section 3.5 Liability of Members. The liability of any Member to make a contribution
to the capital of the Company shall be limited to the amount of the total contribution to be made
pursuant to Sections 3.1 and 3_2 above. No Member shall have any further liability to contribute
money or property to the capital of the Company for, or in connection with, the liabilities of the
Company, and the Members shall not be personally liable for any liability or obligation of the
Company.
Section 3.6 Capital Accounts. A capital account ("Capital Account") shall be
maintained for each Member on the books of the Company determined from the inception of the
Company strictly in accordance with the rules set forth in Treasury Regulations, § 1.704-
1(b)(2)(iv).
Subject to the previous paragraph, "Capital Account" shall mean:
(a) The amount of money contributed by the Member to the Company,
increased by:
(i) The fair market value of property contributed by the Member to the
Company (net of liabilities secured by the property or to which the
property is subject); and
(ii) The Net Income allocated to the Member;
and decreased
(iii) The amount of money distributed to the Member;
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 5
(iv) The fair market value of property distributed to the Member by the
Company (net of liabilities secured by the property or to which the
property is subject);
(v) The Member's share of amounts paid or incurred by the Company
to Organize the Company or to promote the sale of (or to sell) an
interest in the Company (except to the extent properly amortized
for tax purposes); and
(vi) The Net Losses allocated to the Member.
(b) As used above, "income" refers to all items of income (including all items
of gain and including income exempt from tax) as properly determined for "book"
purposes, and "Loss" refers to all items of loss (including deductions) as properly
determined for "book" purposes. "Book" income and loss shall be determined based on
the value of the Company's assets as set forth on the books of the Company in
accordance with the principles of Treasury Regulations § 1.704-1(b)(2)(iv)(g). Otherwise
income and loss shall be determined strictly in accordance with federal income tax
principles (including rules governing depreciation and amortization), applied
hypothetically based on values of Company assets as set forth on the Company books.
(c) In the event that assets of the Company other than cash are distributed to
a Member in kind, the Capital Account of each Member shall be adjusted for the
hypothetical book gain or loss that would have been realized by the Company if the
distributed assets had been sold for their fair market value in a cash sale (in order to
reflect unrealized gain or loss).
(d) In the event of the liquidation of a Member's interest in the Company or of
the Company, the Capital Account of each Member shall be adjusted for the hypothetical
book gain or loss that would have been realized by the Company if all Company assets
had been sold for their fair market values in a cash sale (in order to reflect unrealized
gain or loss).
(e) The Capital Account of each Member shall also be adjusted upon the
constructive termination of the Company as provided under I.R.C. § 708 in accordance
with the method set forth in the immediately preceding paragraph (as required by
Treasury Regulations, § 1.074-1 (b)(2)(iv)(1).
As used herein "I.R.C." shall mean the Internal Revenue Code of 1986, as
amended, and any successor provisions.
Section 3.7 Minimum Gain. "Minimum Gain" with respect to any taxable year of the
Company shall mean the minimum gain of the Company determined strictly in accordance with
the principles of Treasury Regulations, § 1.704-(b)(4)(iv)(c),and including the amounts of
taxable income or gain that would be recognized on the Company asset(s).
For purposes of determining Minimum Gain, where the asset is subject to
multiple secured liabilities of unequal priority, the adjusted basis of the asset shall be allocated
among the secured liabilities in order of priority starting with the most senior secured liability.
Where two (2) or more secured liabilities are of equal priority, basis shall be allocated among
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 6
the equal priority secured liabilities pro-rata in accordance with the amount of each of the
secured liabilities.
For purposes of determining Minimum Gain, the book value of an asset shall be
substituted for its adjusted tax basis, if it differs from the book value, but other Minimum Gain
shall be determined in accordance with federal income tax principles.
Section 3.8 Net Income-Net Loss. "Net Income" and "Net Loss" shall mean the
taxable income or taxable loss (exclusive of Built-In Gain or Built-In Loss) of the Company for
each taxable year, as determined for federal income tax purposes in accordance with I.R.C. §
703(a), including all items of income, gain, loss or deduction required to be separately stated
pursuant to I.R.C. § 703(a)(1), other than any specific item of income, gain (exclusive of Built-In-
Gain), loss (exclusive of Built-In Loss), deduction or credit subject to special allocation under
this Agreement, with the following modifications:
(a) Net Loss shall not include Nonrecourse Deductions;
(b) Net Income shall be increased by any income exempt from federal
income tax;
(c) Net income shall be reduced by an I.R.C. § 705(a)(2)(b) expenditures or
expenditures treated as such pursuant to Treasury Regulations, 1.704-1 (b)(2)(iv)(h)(i);
and
(d) Depreciation, amortization and other cost recovery transactions shall be
determined based on book value instead of the amount determined in calculating taxable
income or loss. Any item of deduction, amortization or cost recovery specially allocated
to a Member and not included in Net Income or Net Loss shall be determined for Capital
Account purposes in a manner similar to this subsection.
Section 3.9 Nonrecourse Deductions. "Nonrecourse Deductions" shall mean the
amount of loss, deduction or I.R.C. § 705(a)(2)(b) expenditure (or item thereof) attributable to
Nonrecourse Liabilities, determined in accordance with Treasury Regulations, § 1.70-1
(b)(4)(iv).
Section 3.10 Nonrecourse Liabilities. "Nonrecourse Liabilities" shall mean the
liabilities of the Company which are treated as "nonrecourse liabilities" under Treasury
Regulations, § 1.704 (b)(4)(iv). Any liability of the Company guaranteed by a Member, or with
respect to which a Member has pledged personal assets, shall not be classified as Nonrecourse
Liability; provided, that such liabilities for basis purposes shall be allocated to the Members who
have directly or through their affiliates provided such guarantee.
Section 3.11 Maintenance of Capital Accounts. Notwithstanding anything to the
contrary in this Agreement, the Capital Accounts of the Members shall be maintained in
accordance with I.R.C. § 704 and Treasury Regulations, § 1.7041(b).
Section 3.12 Contributed Property. Notwithstanding any other provision of this
Agreement to the contrary, the Members shall cause depreciation and/or cost recovery
deductions by a Member to be allocated among the Members for income tax purposes in
accordance with I.R.C. § 704(c) and the regulations promulgated thereunder, to take into
account the variation, if any between the adjusted basis of such property in the hands of the
OPERATING AGREEMENT OF SCS BRIGHTON LLC -page 7
contributing Member on the date immediately preceding the date of such contribution and its
agreed value at the time of such contribution.
Section 3.13 Return of Capital Contribution. A Member shall not have the right to
demand the return of any capital contribution(s) made to the Company.
Section 3.14 Interest on Capital Account. No Member shall receive any interest,
salary or drawing with respect to a capital contribution or a Capital Account, or for services
rendered on behalf of the Company, except as otherwise specifically provided in this
Agreement, and, in particular, except as provided in Section 5.3, below.
ARTICLE 4. PROFITS AND LOSSES
The net profits and losses of the Company shall be determined on an annual basis by
the application of generally accepted accounting practices as customarily and consistently
applied to businesses of the nature conducted by this Company. In determining the net profits
and losses of the Company, no effect shall be given to withdrawal of funds by the Members.
The Company's net income or net losses shall be allocated to the Members in accordance with
each Member's Sharing Percentage.
Provided, that if, pursuant to Section 5.3, below, the regular distributions to the Members
during a taxable year are disproportionate to the foregoing Sharing Percentages, the
Company's net income or net losses for that taxable year shall be allocated to the Members in
accordance with the actual percentage of the regular distributions made to each Member.
ARTICLE 5. DISTRIBUTIONS
Section 5.1 Distributions to Members. Distributions to the Members of Net Cash
From Operations shall be distributed in cash at such times as approved by a Majority of
Members. Distributions to the Members of Net Cash From Sales or Refinancings shall be
distributed in cash at such times as approved by a Majority of Members. No distribution shall be
made to or by a Member unless and only in accordance with the terms of this Agreement. All
distributions, from whatever source, shall be distributed to and among the Members in strict
accordance with this Agreement.
Section 5.2 Priority Distributions. The Net Cash From Operations and the Net
Cash From Sales and Refinancings shall be paid or distributed in the following priority, unless
such priority is otherwise waived or modified by unanimous written agreement of the Members:
(a) First, to a Member for reimbursement of any expenses of the Company
which are paid by such Member and which have not yet been reimbursed; and
(b) Second, to a Member who has made a loan to the Company, as provided
in Section 3.4, above, provided that the Promissory Note for such loan provides that the
repayment of the loan is a priority distribution to be paid by the Company.
The payments and/or distributions specified in subsection (a) and (b) of this Section shall
be priority distributions of Company cash and payment thereof shall be made, to the extent of
Company cash available in the order specified and shall have an absolute priority over other
distributions to any of the Members unless expressly provided to the contrary in this Agreement.
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 8
Section 5.3 Regular Distributions. After satisfaction by the Company of the priority
distributions described in subsections (a) and (b) of Section 5.2, above, all distributions of Net
Cash From Operations and Net Cash From Sales and refinancings ("Regular Distributions")
shall be distributed to the Members in proportion to their Sharing Percentages. In no case shall
a Regular Distribution be made to one (1) Member without a Regular Distribution being made to
the other Members.
ARTICLE 6. MANAGEMENT
Section 6.1 Management by Manager. As in the Certificate, the business, property
and affairs of the Company shall be managed and controlled by a Manager appointed or elected
pursuant to Section 6.7. The Manager shall have and exercise full, complete and exclusive
authority, power and discretion to manage and control the business, property and affairs of the
Company, to establish the policies, budgets and operating procedures regarding those matters,
to make all decisions regarding those matters and to perform any and all other acts or activities
customary or incident to the management of the Company's business, property and affairs,
consistent with this Agreement and any Company resolutions. All decisions made with respect
to the management and control of the Company as permitted in this Agreement shall be binding
on the Company and all Members.
Section 6.2 Acts Requiring Approval of Members. Notwithstanding the foregoing,
the Manager shall have no authority to bind the Company for any matters requiring the approval
of a Majority of Members as described herein, including the matters set forth below, without first
obtaining the approval of a Majority of Members (which approval may be documented by a
general Company resolution regarding authority). In all cases where approval of the Members
is required, the Manager must notify all Members and all Members must be given an opportunity
to either approve or disapprove of such matter:
(a) Sale, lease, exchange, mortgage, pledge, hypothecation or other transfer
or disposition of all or substantially all of the Company's assets;
(b) Merger of the Company with another entity;
(c) Incurring or refinancing of indebtedness by the Company;
(d) Execution, consent, approval, ratification or performance of a contract,
instrument or agreement which requires the payment or performance of services with a
value in excess of Twenty Thousand Dollars ($20,000); or
(e) The making and terms of any Member loans to the Company, as
described in Section 3.4.
Section 6.3 Acts Requiring Unanimous Consent of Members. Notwithstanding
Sections 6.1 and 6.2, the Manager shall have no authority to bind the Company as to the
following matters without first obtaining the unanimous approval of all of the Members:
(a) A change in the nature of the business of the Company as set forth herein
or in the Certificate;
(b) A transaction involving an actual or potential conflict of interest between a
Member or Manager and the Company;
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 9
(c) The admission of additional Members; or
(d) Any amendment to this Agreement that (i) changes the number of votes
or degree of consent required to approve or disapprove any matters that require vote or
consent; or (ii) changes the economic rights or benefits of the Members under the
distribution or allocation provisions herein, other than as set forth in Section 3.3.
Section 6.4 Manager's Standard of Care. A Manager owes to the Company and the
Members the fiduciary duties of loyalty and care as set forth below.
(a) Duty of Loyalty. A Manager's duty of loyalty to the Company and the
Members is limited to the following:
(i) to account to the Company and hold as trustee for it any property,
profit, or benefit derived by the Manager in the conduct and
winding up of the Company business or derived from a use by the
Manager of Company property; and
(ii) to refrain from dealing with the Company in the conduct or winding
up of the Company business as or on behalf of a parry having an
interest adverse to the Company.
(b) Duty of Care. A Manager's duty of care in the discharge of the Manager's
duties to the Company and its Members is limited to refraining from engaging in grossly
negligent or reckless conduct, intentional misconduct, or a knowing violation of law. In
discharging its duties, a Manager shall be fully protected in relying in good faith upon the
records required to be maintained under the Act and upon such information, opinions,
reports or statements by any other Manager, Member, agent, or other persons as to
matters the Manager 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, without limitation, information, opinions, reports or statements
as to the value and amount of the assets, 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.
Section 6.5 Transactions with the Company. Provided that the Manager complies
with this Section 6.5, a Manager does not violate a duty or obligation to the Company merely
because (i) the Manager's conduct furthers the Manager's own interest or the interest of any
particular Member; or (ii) the Manager or the Member with whom such Manager may be
affiliated engages in any transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with the Company; or (iii) a Manager
has a direct or indirect interest, or benefit, in a transaction with the Company. In the matters
stated above, the Manager shall disclose to the Members all material facts of the transaction
and the Manager's (or affiliate or principal's) interest, and shall obtain the written approval of a
Majority of the Members (with any Member benefitting from such transaction not entitled to
vote).
Section 6.6 Number and Qualifications of Manager. There shall be at least one
Manager of the Company. A Manager can be an individual or an entity and need not be a
Member of the Company. The initial Manager shall be BRIGHTON CORPORATION, an Idaho
corporation.
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 10
Section 6.7 Election of Manager. The Members, by a vote of the Majority of
Members, at a meeting called for that purpose, shall elect the Manager.
Section 6.8 Term of Manager. The Manager shall serve until replaced by the
Members, or until the earlier of such Manager's death, dissolution, resignation, or removal.
Section 6.9 Resignation. A Manager may resign at any time by delivering written
notice to the Members. The resignation is effective upon notice, unless the notice specifies a
later effective date. Once delivered, a notice of resignation is irrevocable unless revocation is
permitted by the members. The resignation of a Manager who is also a Member shall not affect
the Manager's rights as a member and shall not constitute a withdrawal of the Member.
Section 6.10 Removal of Manager. A Manager may be removed by vote of the
Majority of Members.
Section 6.11 Vacancy. Any vacancy occurring for any reason in the number of
Managers may be filled only through the election of a new Manager pursuant to Section 6.7.
Section 6.12 Compensation. The Manager may be entitled to receive compensation
for the provision of management services as may be approved by a vote of the Majority of
Members. The Manager may be reimbursed by the Company for reasonable out of pocket
expenses directly associated with the performance of services to the Company in that capacity.
Section 6.13 Management of Company and Property. It is understood that the
Manager hereunder is not required to be engaged in the day to day management of the affairs
of the Company. The Manager may contract with third parties for tax, accounting and/or legal
services required in managing the day to day affairs of the Company and with an outside
property management company for the customary property management and accounting
functions. The fees and costs of such outside third parties shall be on terms customary in the
city where the Company is located and shall be considered an operating expense of the
Company, as shall out-of-pocket costs and expenses of the Manager in managing the
Company.
Section 6.14 Outside Services. The Manager, affiliates of the Manager, the Members
or affiliates of the Members may also act independently to provide non-management
professional services to the Company, including, without limitation, real estate brokerage
services or property management services; provided, however, that the provision of such
services by the Manager, the Members or affiliates of the Manager or members is approved in
writing by all Members. In the event the Manager, the Members or affiliates of the Manager or
Members provide such non-management services to the Company, the Manager, the Members
or affiliates of the Manager or Members shall be reimbursed at the normal and customary
charges for the provision of such services.
Section 6.15 Employment of Affiliates. The Manager may retain, employ, sell or
lease to the Company, affiliates of the Manager, Members and/or the Company, provided that
such transaction be made on terms and conditions which are no less favorable to the Company
than if such transaction had been entered into with an independent third party, and provided
such employment is disclosed to the Members.
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 11
Section 6.16 Improvements. All contracts for construction and related guarantees
and warranties shall be entered into in the name of the Company and shall run to the benefit of
the Company, and not to any individual Member thereof.
Section 6.17 Other Activities. So long as the Manager complies with this Agreement,
the Manager may engage independently or with others in other business and investment
opportunities of every nature and description even if it conflicts with the business of the
Company, and shall have no obligation to account to the Company for such business or
investment opportunities. This Section does not change the Manager's duty to act in a manner
that the Manager reasonably believes to be in the best interest of the Company.
Section 6.18 Other Agents. The Manager may authorize any agent to enter into any
lawful contract or to otherwise act on behalf of the Company. Such authority shall be confined
to specific instances.
Section 6.19 Tax Matters. David W. Turnbull is hereby designated the "Tax Matters
Partner" of the Company within the meaning of Code Section 6231(a)(7), and shall have all the
authority granted a Tax Matters Partner by the Code and the Treasury Regulations promulgated
thereunder, provided that the Tax Matters Partner shall not have the authority, without first
obtaining the consent of all Members to do any of the following: (i) enter into a settlement
agreement with the Internal Revenue Service that purports to bind the Members; (ii) file a
petition as contemplated in Code Section 6226(a) or 6228; (iii) intervene in any action as
contemplated in Code Section 6226(b)(5); (iv) file any request contemplated in Code Section
6227(b); or (v) enter into any agreement extending the period of limitations as contemplated in
Code Section 6229(b)(1)(B). Except to the extent otherwise required by applicable law
(disregarding for this purpose any requirement that can be avoided through the filing of an
election or similar administrative procedure), the Tax Matters Partner shall cause the Company
to take the position that the Company is a "partnership" for federal, State, and local income tax
purposes and shall cause to be filed with the appropriate tax authorities any elections or other
documents necessary to give due legal effect to such position.
Section 6.20 Manager Indemnification and Limitation of Liability. The Company
shall indemnify its Manager to the fullest extent permissible under Idaho law, as the same exists
or may hereafter be amended, against all liability, loss and costs (including, without limitation,
attorney fees through all levels of action) incurred or suffered by such person by reason of or
arising from the fact that such person is or was a Manager of the Company, or is or was serving
at the request of the Company as a Manager, director, officer, partner, trustee, employee, or
agent of another foreign or domestic limited liability company, corporation, partnership, joint
venture, trust, benefit plan, or other enterprise. The Company may, by action of the Members,
provide indemnification to employees and agents of the Company who are not Managers.
However, the Manager shall not be indemnified from any liability for fraud, bad faith, willful
misconduct or gross negligence. The indemnification provided in this Section 6.20 shall not be
exclusive of any other rights to which any person may be entitled under any statute, bylaw,
agreement, resolution of members, contract, or otherwise. The Manager of the Company shall
not be liable to the Company or its members for monetary damages for conduct as the Manager
except to the extent that the Act, as it now exists or may hereafter be amended, prohibits
elimination or limitation of Manager liability. No repeal or amendment of this Section 16.20 or of
the Act shall adversely affect any right or protection of a Manager for actions or omissions prior
to the repeal or amendment.
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 12
Section 6.21 Member Time Devoted to Business. Each Member shall devote such
time to the business of the Company, as the Members, in their sole discretion, deem necessary
for the efficient operation of the business and investments of the Company. The Members shall,
at all times, be free to engage for their own account in all aspects of any business or investment
in which the Company is involved.
Section 6.22 Indemnification of Members. The Company shall indemnify, defend,
save and hold each Member, and the partners of each Member, and the separate property of
each, free and harmless from any loss, claim, damage or liability arising from or related to the
obligations of the Company, provided that the acts and conduct of the Member giving rise to the
loss claim, damage or liability for which indemnity is claimed is in accordance with, and not
beyond the authority of the Member, as provided in this Agreement.
Section 6.23 Deadlock of Members. In the event the Sharing Percentages of
Members entitled to approve, consent and/or vote on a matter described in this Agreement is
deadlocked, the Members agree to submit to mediation with a mutually agreed mediator located
in Boise, Idaho, to resolve such matter, with each Member paying its own attorneys' fees and
costs.
ARTICLE 7. COMPENSATION
Section 7.1 Members. If approved by a Majority of Members, any Member or
Manager rendering services to or on behalf of the Company, in addition to the services to be
provided as described in this Agreement, shall be paid compensation commensurate with the
value of such services and agreed by a Majority of Members, which compensation shall be
considered an expense of the Company and not a distribution of available funds pursuant to
Article 5, above.
Section 7.2 Reimbursement of Members. The Company shall reimburse the
Members for the actual direct out-of-pocket expenses incurred by them in the management of
the business, investments, property and assets of the Company. The Members shall request
any reimbursement within sixty (60) days of incurring such expense.
ARTICLE 8. ACCOUNTS
Section 8.1 Books. The Members shall maintain complete and accurate books of
account and records (hereafter"Books") of the business and investment affairs of the Company,
said Books to be kept and maintained at the principal place of business of the Company. The
Books shall be kept on such method of accounting, as the Members shall select and will be kept
and maintained by the Company. The fiscal and accounting year of the Company shall be the
calendar year.
Section 8.2 Members' Accounts. The Company shall maintain separate capital and
distribution accounts for each Member. Each Member's capital account shall consist of the
Member's initial capital contribution, increased by:
(a) Any additional capital contributions made by the Member; and
(b) Credit balances transferred from the Member's distribution account to the
Member's capital account;
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 13
and decreased by:
(c) Distributions to the Member in reduction of the capital of the Company
and
(d) The Member's share of Company's losses, if charged to the Members'
capital accounts.
With respect to the accounts to be maintained by the Company for each Member, the
Company shall:
(i) Maintain each capital account of the Members at all times in
proportion to such Member's Sharing Percentage;
(ii) Charge each distribution to a Member to such Member's
distribution account;
(iii) Charge the Company's losses to the Member's distribution
accounts, unless the Members determine to charge any such loss
to the Members' capital accounts; and
(iv) Credit the Company's net income to the Members' distribution
accounts.
The Company may, at any time, transfer to the Members' capital accounts all or any
portion of the credit balances in the Members' distribution accounts. Any amounts transferred
shall be in proportion to the Members' Sharing Percentages. A credit balance in a Member's
distribution account shall constitute a liability of the Company to that Member, but shall not
constitute a part of that Member's interest in the capital of the Company. A debit balance in a
Member's distribution Account, whether occasioned by distributions to that Member in excess of
such Member's share of the net income of the Company or by charging the Member for such
Member's share of the Company's losses, shall constitute an obligation of that Member to the
Company, but shall not reduce that Member's interest in the capital of the Company. The
payment of any amount owed to the Company shall be made at such time and in such manner
as the Members may determine.
Section 8.3 Transfers During the Year. Unless closing the Books is otherwise
elected by a Majority of Members, to avoid an interim closing of the Books of the Company, the
share of income and/or loss of a Member who transferred all or part of such Member's interest
in the Company during the calendar year, shall be determined by taking (a) such Member's
interest in the Company during the calendar year; (b) such Member's proportionate share of the
amount year; and (c) such Member's proportionate share of the amount of the income and/or
loss for the year. The Member's proportionate share shall be a proration based on the portion of
the calendar year that has elapsed prior to the transfer by such Member. The Members shall
allocate the balance of the income and/or loss attributable to the transferred interest to the
transferee of such interest.
Section 8.4 Liability for Income Tax. If the Company may be liable for the payment
of any tax as a result of a Member's failure to file a tax return or to pay a tax liability (hereafter
"Non-filing Member'), the Non-filing Member shall be personally liable to the Company for any
such tax, plus all penalties and interest levied, assessed or charged the Company by the taxing
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 14
entity. The Company may pay such liability out of funds in the Non-filing Member's Capital or
distribution accounts.
Section 8.5 Reports. The Company shall close the books of account promptly after
the close of each calendar year, and shall prepare and send to each Member a full tax return of
such Member's distributive share of the Company's income and/or loss for federal income tax
reporting purposes.
Section 8.6 Information Relatina to Company. Each Member or an authorized
representative of such Member shall have access to and may inspect and copy all books,
records and materials regarding the Company and/or its activities. The exercise of the
Member's rights contained in this Section shall be at the requesting Member's expenses, and
further, shall be performed at such time(s) and interval(s) as shall minimize the disruption of, the
inconvenience to, the business of the Company.
Section 8.7 Records at Principal Place of Business. The Members shall cause the
Company to keep at its principal place of business the following, which shall be available for
review by the Members at any reasonable time:
(a) A current and past list, in alphabetical order, of the full name and last
known mailing address of each Member;
(b) A copy of the stamped Certificate and all amendments to the Certificate,
together with copies of any executed powers of attorney pursuant to which any
amendments to the Certificate have been executed;
(c) Copies of the Company's federal, state and local income tax returns and
financial statements, if any, for the three (3) most recent years or as required by
applicable law, or, if those returns and statements were not prepared for any reason,
copies of the information and statements provided to, or which should have been
provided to, the Members to enable them to prepare their federal, state and local income
tax returns for the period;
(d) Copies of any effective written operating agreements, and all
amendments thereto, and copies of any written operating agreements no longer in
effect; and
(e) Other writings prepared pursuant to a requirement, if any, in this
Agreement, as amended from time-to-time.
ARTICLE 9. TRANSFERS
Section 9.1 Restriction on Transfer or Encumbrance of Interest. A Member shall
not have the right to dispose of, transfer, encumber, pledge or assign (hereafter "transfer or
encumber") all or any portion of such Member's interest in the Company, except in strict
compliance with the provisions of this Article 9. Any transfer or encumbrance by a Member of
all or any portion of such Member's interest in the Company shall be made only with the prior
written consent of all of the Members, and, further, only after such Member's interest in the
Company, or such portion thereof sought to be transferred or encumbered, is first offered for
sale to the Company, the other Member(s) or its (their) nominee in the manner hereafter
provided. Any purported transfer or encumbrance of a Member's interest, or portion thereof, in
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 15
breach or violation of the terms of this Agreement shall be void and the Company shall not
recognize or give any effect to such transaction. As a condition to the granting of such consent
to the transfer or encumbrance of all or a portion of a Member's interest in the Company as
security for a loan, the other Member(s) shall have the right to require that the lender making the
loan to the Member expressly agree in writing to all or any of the following terms:
(a) The Company and the other Member(s) shall have the right to redeem the
interest in the Company from the encumbrance upon the default of the Member for a
purchase price which is the lesser of (i) the then unpaid principal balance of the
promissory note, plus interest accrued but unpaid, or (ii) the Adjusted Book Value of the
interest determined in accordance with Section 9.21, below, said redemption to be
otherwise upon the terms set forth in Section 9.6, below;
(b) The Company and the other Member(s) shall be given a notice of default
by the lender and an opportunity to exercise its right of redemption prior to the time the
interest is transferred to the lender holding the promissory note; and
(c) Neither the promissory note for such loan, nor the interest in the
Company given as security for said promissory note, may be transferred, assigned,
hypothecated or pledged to a third party unless the third party agrees in a writing
delivered to the Company and the other Member(s) to the terms set forth in subsections
(a) and (b), above.
As used in this Agreement, "transferee" shall mean any person or legal entity receiving
any interest in the Company, whether such interest is all or part of a Member interest
and/or an encumbrance on such Member interest, and however such interest is defined
herein.
Section 9.2 Requirement of Offer. In the event a Member ("Offering Member")
desires to transfer or encumber all or any portion of such Member's interest in the Company
owned by the Offering Member (hereafter "Target Interest'), the Offering Member shall first
make an offer to the Company and to the other Member(s) ("Remaining Member(s)"), which
offer shall consist of an offer to sell the Target Interest, to which shall be attached a statement of
intention to transfer or encumber, as the case may be, the name and address of the prospective
transferee, the percentage of the Offering Member's interest involved in the proposed transfer or
encumbrance, price for such Target Interest, and the other terms of said transfer or
encumbrances.
Section 9.3 Acceptance of Offer. Within thirty (30) days after the receipt of such
offer, the Remaining Member(s) may, within forty-five (45) days after receipt of such offer, at its
(their) option, purchase all, but not less than all, of the Target Interest. If there is more than one
(1) Remaining Member, each of the Remaining Members shall have the right to purchase such
Remaining Member's proportionate percentage of the Target Interest. The term "proportionate
percentage" shall mean than percentage of the Target Interest determined by dividing the
Sharing Percentage of the Remaining Member by the cumulative Sharing Percentage of all of
the Remaining Members. If any of the Target Interest is not purchased by the Remaining
Member first entitled thereto, the term "proportionate percentage" shall include that percentage
of the Target Interest not purchased by the Remaining Member first entitled thereto determined
by dividing the Sharing Percentage of the Remaining Member by the cumulative Sharing
Percentages of all Remaining Members other than the Remaining Member first entitled to
purchase.
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 16
If the offer is not accepted by the Remaining Member(s) within the time above specified,
the Remaining Member(s) may, by a vote of the Remaining Member(s) with Sharing
Percentages constituting more than fifty percent (50%) of the total of the Sharing Percentages,
designate a nominee to purchase all, but not less than all, of the Target Interest. In that event,
said nominee shall have the right to purchase the Target Interest for a period of fifteen (15) days
following the end of the period allowed to the Remaining Member(s) to purchase the Target
Interest.
Section 9.4 Notice of Exercise. The Remaining Member(s) shall exercise its (their)
option(s) to purchase by giving written notice thereof to the Offering Member and to the
Company. The approved nominee shall exercise his/her/its option to purchase by giving written
notice thereof to the Offering Member, to the Company and to the Remaining Member(s). The
written notice given pursuant hereto shall specify a date for the closing of the purchase which
shall be not more than ten (10) days after the date of the giving of the written notice. The
purchase price to be paid and the terms of the sale shall be as set forth below.
Section 9.5 Purchase Price and Terms — Transfer. The purchase price and the
terms of purchase with respect to the Target Interest shall be the same as set forth in the offer
received by the Offering Member desiring to transfer all or a portion of such Member's interest in
the Company. As used herein, "offer received" shall mean a bona fide written offer from a third
party which the Offering Member desires to accept.
Section 9.6 Purchase Price and Terms — Encumbrance. If the right to purchase
arises because of the desire of an Offering Member to encumber all or any portion of such
Member's interest in the Company, the purchase price to be paid by the Remaining Member(s)
or its (their) nominee, as the case may be, shall be the lesser of (i) the amount of the loan for
which the Target Interest is to be given as security, or (ii) the Adjusted Book Value of the Target
Interest, as determined in accordance with Section 9.21, below. The full purchase price for the
Target Interest shall be paid at the date of the closing. As used herein, "loan" shall mean a
bona fide loan by an institutional lender as evidenced by a written loan commitment signed by
such lender.
Section 9.7 Encumbrance Upon Sale of Interest. If, after full compliance with the
provisions of this Agreement, a Member sells all or any portion of the interest in the Company
owned by such Member to a third party and to secure any portion of the price to be paid
therefore, the selling Member is granted an encumbrance against the interest sold and
transferred, said encumbrance shall be exempt from the restrictions on encumbrance provided
above. PROVIDED, HOWEVER, the promissory note given by the purchaser and secured by
an encumbrance against the interest shall expressly provide on its face that neither the
promissory note, or any portion thereof, nor the security for the promissory note may be
transferred, assigned, hypothecated or pledged to a third party unless the third party agrees in a
writing delivered to the Company and the other Members that the Company and the other
Members shall have the right to redeem the interest from the encumbrance upon the default of
the purchaser upon the terms set forth in subsection (a) of Section 9.1, above, and that the
Company and the other Members shall be entitled to a notice of default and an opportunity to
exercise their right of redemption prior to the time the interest is transferred to the third party
holding the Note.
Section 9.8 Closing of Purchase. At the closing of the purchase, the Offering
Member selling such Member's interest in the Company shall deliver to the purchaser, in
exchange for payment, an assignment of the Target Interest being sold, properly and duly
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 17
executed and acknowledged by the Offering Member, and if the Target Interest represents all of
the interest in the Company owned by the Offering Member, such Offering Member shall, at the
closing, deliver, or cause to be delivered, to the Company such Member's resignation if such
Member is then an employee of the Company.
Section 9.9 Right to Transfer or Encumber. If the offer to sell the Target Interest is
not accepted by the Remaining Member(s) or their nominee, the Offering Member may make a
bona fide transfer or encumbrance to the prospective purchaser or lienor named in the
statement attached to the offer, such sale or encumbrance to be made only in strict accordance
with the terms therein stated. However, if the Offering Member shall fail to make such transfer
or encumbrance within thirty (30) days following the expiration of the time hereinabove provided
for the exercise of the option to purchase by the nominee of the Remaining Member(s), or, if the
Remaining Member(s) do not name such a nominee, then within thirty (30) days following the
expiration of the time hereinabove provided for the exercise of the option to purchase by the
Remaining Member(s), such interest shall again become subject to all of the restrictions of this
Agreement. Following such permitted transfer or encumbrance, the Target Interest so
transferred or encumbered shall, in the hands of the transferee or lienor, be and remain subject
to the terms and restrictions contained in this Agreement.
Section 9.10 Exemptions From Restrictions. It is agreed that the following transfers
are expressly exempt from the transfer restrictions contained in this Article 9:
(a) Interests owned by the Members may be transferred among them without
regard to the restrictions contained in this Agreement. Provided, however, that all of
said interest so transferred between the Members shall, in the hands of the transferee
Member, be and remain subject to all of the terms and restrictions contained in this
Agreement;
(b) Any transfer by a Member for bona fide estate planning purposes and any
bona fide transfer by a Member of an interest in the Company to members of the
Member's immediate family shall be expressly exempt from the restrictions contained in
this Agreement. As used in this Section, "immediate family" shall mean spouses,
children and grandchildren of a Member (or the spouses, children and/or grandchildren
of a principal in a Member);
(c) An interest in the Company owned by a corporation, partnership or other
legal entity (hereafter "Corporate Member") may be transferred, in whole or in part, by
the Corporate Member to its shareholders, partners or other owners of the Corporate
Member; and
(d) An interest in the Company owned by a Member may be transferred, in
whole or in part, by the Member to a corporation or other entity, including a trust
(hereafter in this subparagraph "Transferee") of which the transferring Member owns or
controls, at the time of the transfer and thereafter, at least twenty-five percent (25%), or
to any shareholder, partner or other owner who owns at least twenty-five percent (25%)
of such Transferee.
All transferees of exempt transfers pursuant to this Section 9.10 shall have only the
rights of assignees of such Member's interest pursuant to Section 9.23, unless such
transferee is otherwise admitted as a Member of the Company pursuant to Section 9.1
and 9.23. In the event a transferee is a trust, the trust shall have a designated
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 18
representative for matters with the Company, which designated representative must be
approved by a Majority of the Members.
Section 9.11 Option to Purchase Upon Death. Upon the death of an individual
Member, or the principal of a Member (hereafter referred to as the "Decedent'), the Company
shall have the option to purchase all of the interest in the Company owned by the Decedent and
the interest in the Company previously transferred by the Decedent pursuant to Section 9.10(b)
of this Article 9, above (which owned and previously transferred interests are hereafter
collectively called "Decedent's Interest'). The option to purchase herein described shall not
arise in the event of the death of the first spouse of a husband and wife who comprise a
Member, provided that the surviving spouse becomes the owner of the whole of the interest in
the Company owned by said husband and wife Member. If, upon the death of the first spouse
of a husband and wife Member, all or any portion of the deceased spouse's interest in the
Company is bequeathed to a person other than such deceased spouse's surviving spouse, then
the option to purchase herein described shall arise as to the whole of the interest in the
Company owned by the husband and wife Member.
Section 9.12 Exercise of Option to Purchase. The option of the Company to
purchase the Decedent's interest shall be exercised by the Company within ninety (90) days
after the date of the Decedent's death. The exercise of the option by the Company shall be
evidenced by the delivery to the Decedent's personal representative of a written notice of
election within the time herein provided. If the Company shall exercise the option to purchase
the Decedent's Interest, the Company shall purchase from the Decedent's personal
representative or transferee, as the case may be, and the Decedent's personal representative
or transferee shall sell and transfer to the Company, all of the Decedent's Interest at the price
set forth in Section 9.14 of this Article 9, below.
Section 9.13 Closing. The closing of the purchase and sale of a Decedent's Interest
shall take place at the office of the Company at a date and time designated by the Company
which shall not be less than thirty (30) nor more than ninety (90) days following the date of the
qualification of the personal representative for the estate of the Decedent.
Section 9.14 Purchase Price. The purchase price for the Decedent's Interest shall be
equal to the Adjusted Book Value of such interest determined in accordance with Section 9.21,
below. In lieu thereof, the Members may, but are not required to, agree in writing on the price to
be paid for the interest of the Company upon the death of a Member, which agreement if made
prior to the death of a Member, shall be the purchase price to be paid therefore, provided that
not more than one (1) year has elapsed since the date of such agreement or other written
memorandum signed by the Members agreeing to extend the period such price shall be binding.
Section 9.15 Insurance. If the Company shall receive any proceeds of any policy of
insurance on the life of the Decedent such proceeds shall be paid by the Company to the
Decedent's personal representative (or transferee) to the extent of the purchase price of the
Decedent's Interest, such payment to be deemed made on account of such purchase price.
Payment thereof may be deferred until the closing of the purchase and sale.
Section 9.16 Balance of Purchase Price. The balance of the purchase price for the
Decedent's Interest remaining after credit for insurance proceeds, if any, together with interest
as hereafter provided shall be payable as follows:
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 19
(a) If the balance of the total purchase price to be paid by the Company is
$100,000.00 or less, it shall be paid in full at the closing; and
(b) If the balance of the total purchase price to be paid by the Company is
more than $100,000.00, the Company shall have the option to pay in full or of payment
of twenty percent (20%) shall be paid at closing, with the balance to be paid in annual
principal payments of twenty percent (20%) of the purchase price for the following four
(4) years, plus accrued interest on the unpaid principal balance at the rate of the
published prime rate of Wells Fargo Bank of Idaho, Boise, Idaho, as it exists from time-
to-time, or a successor bank approved by a Majority of Members if such bank no longer
exists, plus one percent (1%) per annum, such annual payments to commence one (1)
year after the date of the closing of the purchase, and to be paid in full after such five (5)
years, unless a different payment option is agreed upon by a Majority of Members; and
(c) The balance of the purchase price which is deferred after the closing of
the purchase and sale shall be represented by an unsecured promissory note (hereafter
"Promissory Note") of the Company delivered to the personal representative. Such
Promissory Note shall also provide that the Company shall have the privilege of
prepaying all or any part of the Promissory Note at any time with interest to date of
prepayment without penalty and that a default in the payment of the Promissory Note
shall entitle the holder thereof, at the holder's option, to accelerate the payment of the
remaining principal balance. The Promissory Note shall be personally guaranteed by
the surviving Members but each guaranty shall be limited to each surviving Member's
proportionate percentage (as defined in Section 9.3, above) of the Note.
Section 9.17 Restrictions After Purchase. If the Company purchases any interest
pursuant to the terms of this Agreement and, in connection therewith, delivers an unsecured
Promissory Note for all or a portion of the purchase price, until such time as the Promissory
Note is paid in full the Company shall not: reorganize its capital structure; merge or consolidate
with any other entity or sell any of its assets except in the regular course of its business; or
increase the salary of any executive employee of the Company by an amount in excess of
twenty percent (20%) above that paid during the twelve (12) month period immediately
preceding the date of the increase. So long as any part of such Promissory Note shall remain
unpaid, the holder of that Note shall have the right to examine the books and records of the
Company from time to time and receive copies of all accounting reports and tax returns
prepared for or on behalf of the Company. If the Company breaches any of its obligations under
this Section, the holder of the Promissory Note, in addition to any other remedies available, may
elect to declare the entire unpaid principal balance of the Note, together with interest accrued
thereon, immediately due and payable.
Section 9.18 Post-Death Salary Compensation. On the death of a Member, if there
exists any executory written employment agreement between the deceased Member and the
Company, which employment agreement has an unexpired term, the Company shall continue
the Decedent's salary in accordance with the employment agreement for the remaining
unexpired term. All payments paid by the Company pursuant to such employment agreement
shall be paid to the deceased Member's surviving spouse, if he/she leaves one surviving from
whom he/she was not legally separated at the time of his/her death. However, if his/her
surviving spouse has predeceased him/her or was legally separated from him/her, or having
survived dies prior to the expiration of the employment agreement, then said payments shall be
paid to his/her surviving issue in equal shares. If the deceased Member leaves neither a
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 20
surviving spouse entitled to payment hereunder nor surviving issue, then the payments due
pursuant to an employment agreement shall be paid to the estate of the deceased Member.
Section 9.19 Incompetence of Member. If an individual Member shall be adjudicated
to be incompetent in an appropriate judicial proceeding, such occurrence shall be regarded, for
the purposes of this Agreement, the same as the death of said incompetent Member, and the
Company shall have the option to purchase the interest in the Company owned by the
incompetent Member. In such event, the amount of the purchase price, the method of payment
and the other rights and obligations of the parties to this Agreement and the guardian,
conservator, committee or personal representative of the incompetent Member shall be as
stated in this Article 9 with respect to the sale and purchase of a Decedent's Interest except that
wherever appearing in this Article 9, the word "Decedent' shall be replaced by "Incompetent
Member;" the words "Decedent's personal representative" shall be replaced by "Incompetent
Member's legal representative;" the words "date of death of Decedent' shall be replaced by
"date of adjudication of incompetence of the Incompetent Member."
Section 9.20 Bankruptcy of a Member. If a Member files a voluntary petition in
bankruptcy, is adjudicated a bankrupt, becomes insolvent, makes an assignment for the benefit
of creditors, or applies for or consents to the appointment of a receiver or trustee with respect to
any substantial part of such Member's assets, or if a receiver of trustee is appointed or an
attachment or execution levied with respect to any substantial part of a Member's assets and
the appointment is not vacated or the attachment or execution is not released within thirty (30)
days, or if a charging order is issued against a Member's interest in the Company and is not
released or satisfied within thirty (30) days, such occurrence shall be regarded, for the purposes
of this Agreement, as an event of dissociation of a Member (hereafter "Bankrupt Member")
under the Act, provided, that such shall not, if so elected by the Majority of the Members,
excluding the interest of the Bankrupt Member, constitute an event of dissolution, but, instead,
the Company shall have the option to purchase the interest in the Company owned by the
Bankrupt Member, which option may be exercised by the Company within ninety (90) days after
the date of the occurrence which gives rise to such option. The exercise of the option by the
Company shall be evidenced by the delivery to the Bankrupt Member a written notice of election
within the time herein provided, and the closing of the purchase shall be conducted within thirty
(30) days after the written notice exercising the option is so delivered. If the Company elects to
purchase the interest of the Bankrupt Member, the purchase price for a Bankrupt Member's
interest in the Company shall be an amount, which is equal to the appraised value of the
Bankrupt Member's interest in the Company, as determined by an appraisal in accordance with
Section 9.22, below. The purchase price for the Bankrupt Member's interest in the Company, if
purchased by the Company, shall be paid in full at the date of the closing.
Section 9.21 Adjusted Book Value. As used in this Agreement, the term "Adjusted
Book Value" shall mean the value of the Company, and/or the value of a Sharing Percentage,
as applicable determined by an independent certified public accounting firm agreed upon by a
Majority of Members. If an appraisal is required of any property of the Company, the appraisal
shall be obtained as provided in Section 9.22, below. The determination made by said
accountant (and appraiser) shall be binding and conclusive upon the Members and the
Company. Determination of the book value shall be made in accordance with generally
accepted accounting practices, consistently applied, and the following shall be observed:
(a) The determination shall be made as of the last day of the preceding
calendar month;
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 21
(b) No allowance of any kind shall be made for goodwill or any similar
intangible asset of the Company;
(c) Inventory of merchandise, supplies and other non-depreciable personal
property shall be valued at cost or replacement cost, whichever is lower;
(d) Machinery, fixtures and equipment shall be valued at the depreciated
value appearing on the books of the Company;
(e) Buildings and land shall be valued at fair market value;
(f) Stocks, bonds, partnership interests and other similar investments shall
be valued at the most recently quoted sales or trading price, if a market exists therefore,
or if not, then the value shall be equal to the most recent past sale not later than one (1)
year prior to valuation. In the absence of a market or sale, stock shall be valued at its
recorded book value, a bond shall be valued at its face value plus accrued interest and a
partnership interest shall be valued at an amount determined by a majority of the general
partners of said partnership;
(g) Trademarks, trade names, patents and other intangibles having
commercial value shall be considered in arriving at a valuation figure;
(h) Past, present and prospective earnings, including the existing and
prospective economic condition of the industry shall be considered in arriving at the
valuation figure;
(i) All debts of the Company shall be deducted at their face value, including
any interest accrued but unpaid;
Q) All unpaid but accrued federal, state and local taxes, including but not
limited to sales, payroll, unemployment insurance, excise, franchise and income shall be
deducted as liabilities;
(k) Contingent liability items shall be specifically deducted from the valuation
figure but only if such item may, in the accountant's or appraiser's opinion, become an
actual obligation of the Company and then only in the amount the accountant or
appraiser determines to be reasonable; and
(1) In any case where the fair market value of the property is to be used in
the valuation, consideration shall be given to the federal and state income tax liability on
the difference between the recorded book value and the fair market value to be
established and the costs of sale such as, but not limited to, normal real estate
commissions and closing costs.
Section 9.22 Appraisal. If an appraisal of any of the Company property is required
under this Agreement, the following procedure shall be followed:
(a) Within thirty (30) days after the event requiring an appraisal, the
Remaining Members and the Offering Member, or the Company and the Decedent's
personal representative, as the case may be, shall either (i) jointly appoint an appraiser
for this purpose, or (ii) failing this joint action, each shall separately designate an
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 22
appraiser and within ten (10) days after their appointment the two (2) designated
appraisers shall jointly designate a third appraiser. The failure of a party to appoint an
appraiser within the time allowed shall be deemed equivalent to appointing the appraiser
appointed by the other party. No person shall be appointed or designated an appraiser
unless such person is a member in good standing of the American Institute of Real
Estate Appraisers and has the designation "M.A.I." or is a member of another recognized
organization of appraisers and has a designation substantially equivalent to "M.A.I."
(b) Within thirty (30) days after the appointment of all appraisers a majority of
the appraisers concur on the value of the property being appraised, the appraisal shall
be binding and conclusive. If a majority of the appraisers do not concur within that
period, the determination of the appraiser whose appraisal is neither highest nor lowest
shall be binding and conclusive. The parties shall share the appraisal expenses equally.
Section 9.23 Substitution of Transferee as Member. Provided that a transferee has
been admitted as a Member of the Company by unanimous agreement of the existing Members
in writing pursuant to Section 9.11 as express conditions to the admission of such transferee as
a Member of the Company, such transferee shall:
(a) Agree in writing to be bound by all of the terms of this Agreement;
(b) Execute and deliver such documents and instruments, in such from and
substance satisfactory to the Members, as the Members deem necessary, required or
convenient to cause the transferee to become a substitute Member; and
(c) If required by the Members, such transferee personally guarantees in
writing any unpaid debt or other outstanding obligation of the Company that had been
guaranteed by the Member, or its principals; and
(d) Shall pay all reasonable expenses in connection with the transferee's
admission as a Member of the Company, including, but not limited to, the cost of
preparation and filing of any amendment of this Agreement or the Certificate of
Organization of the Company, which amendment is necessary, required or convenient in
connection with such substitution.
In the event the required unanimous consent of the Members to the transfer of a
Member's interest in the Company, as required in Section 9.1, above, is not granted, the
transferee shall have no right to participate in the management of the business and affairs of the
Company. The transferee shall be entitled only to receive, to the extent transferred, the share
of distributions of available cash and liquidation proceeds and the return of contribution to which
the transferring Member would otherwise be entitled, and shall receive the allocation of the
Company's net income or net loss that otherwise would be allocated to the transferring Member.
Such transferee shall have no right to participate in the management of the business and affairs
of the Company, or any other rights of a Member in this Agreement whatsoever, including, but
not limited to, any right to a review of any of the Company's books and/or records.
Section 9.24 Effect of Transfer of Member's Interest. A Member shall cease to be a
member upon a transfer of a Member's interest pursuant to this Article 9, unless the transfer is
an encumbrance for security permitted by this Agreement, regardless whether or not such
transferee is admitted as a Member pursuant to Section 9.23, above. The former Member shall
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 23
have no rights as a Member in the Company after such transfer, regardless of whether as a part
of such transfer Members are making payments to the former Member after such transfer.
ARTICLE 10. DISSOLUTION AND LIQUIDATION
Section 10.1 Dissolution. The Company may be dissolved at any time upon written
approval of a Majority of Members.
Section 10.2 Liquidation of Assets. Promptly following the effective date of
dissolution of the Company, the Members or a committee of the Members designated for that
purposed, shall be empowered to liquidate and wind up the affairs and all business transaction
of the Company. For that purpose, the Members shall serve without compensation but may
employ such agents or assistants, as they deem desirable to effect the liquidation and winding
up of the Company.
Section 10.3 Distribution of Proceeds. Following liquidation of the property and
assets of the Company and after payment of expenses incurred in connection with such
liquidation, the proceeds remaining shall be applied in the following order:
(a) To the payment of the debts and liabilities of the Company owing to the
creditors other than Members. If any Member lends money to the Company for payment
of its operational costs and expenses, which loan(s) is represented by a promissory note
executed by the Company, for the purposes of liquidation, such note(s) shall be deemed
debts and liabilities of the Company payable under this subsection (a).
(b) To the payment of unmatured installments yet to be paid on a promissory
note given to a Member whose interest in the Company was purchased by the Company
pursuant to this Agreement.
(c) To the payment of debts and liabilities owing to Members other than (i) for
capital contributions by Members and (ii) each Member's share of net profits.
(d) Any funds, proceeds or assets thereafter remaining shall be distributed to
the Members based upon each Member's Sharing Percentage.
Section 10.4 Cancellation of Certificate. Upon the completion of the liquidation and
distribution of the property and assets of the Company, the Company shall be terminated and
the Members shall cause the Company to execute Articles of Dissolution and take such other
actions as may be necessary to terminate the Company.
ARTICLE 11. DISPUTE RESOLUTION
Section 11.1 Dispute Resolution Procedure. It is intended that all disputes or other
matters in question arising out of or relating to the interpretation, application, performance or
breach of any term, covenant or condition of this Agreement (hereafter "Dispute") shall be
resolved and settled through reasonable, business-like dispute resolution procedures, without
resort to litigation. Accordingly, any Dispute, which arises between the Members, shall be
resolved in accordance with this Article 11.
Section 11.2 Special Meeting. As a first step, a Member may call a special meeting for
the resolution of a Dispute. The meeting shall be held within five (5) business days after delivery
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 24
of a written request for a meeting from the Member calling the meeting to all Members
specifying the nature of the Dispute to be resolved. The meeting shall be attended by at least
one (1) representative of each of the Members and such other participants as the Members
deem required for a full discussion and resolution of the Dispute. Such representative must
have the requisite authority to resolve the Dispute on terms binding upon the party represented.
Section 11.3 Mediation. If the Dispute has not been resolved within five (5) business
days after the conclusion of the special meeting held pursuant to Section 11.2 above, a Member
may, at such Member's election, initiate mediation by delivering a written notice to all other
Members. All Members shall attend and participate in the mediation, which shall be non-binding
and without prejudice to any other rights or remedies, which any party may have. Unless all
Members agree otherwise, the mediation proceeding shall be conducted by an independent
mediator having offices in Boise, Idaho, agreed upon by all parties, in accordance with the
American Associates Commercial Mediation and Arbitration Rules of the American Arbitration
Association then in effect, as modified by this Section 11.3. Such mediation proceedings shall
commence within thirty (30) days after the written notice of the initiation of mediation is delivered
to the Members. All Members shall share the costs for the services and expenses of the
mediator equally.
Any voluntary settlement reached as a result of the mediation proceeding shall be
reduced to writing and signed by all Members. Each Member agrees not to commence legal
action against the other Member(s) or the Company in connection with the Dispute until it
becomes reasonably certain that the attempt to resolve the Dispute by mediation will not be
successful.
Section 11.4 Confidentiality and Privilege. All proceedings under Sections 11.2 and
11.3 above shall be subject to Rule 12 (Confidentiality) of the American Associations
Construction Industry Mediation Rules, the Idaho Rules of Civil Procedure and the Idaho Rules
of Evidence regarding confidentiality and privilege.
Section 11.5 Other Remedies. All applicable statutes of limitation, repose and similar
rules of law regarding the time for giving notice, filing and appealing claims, and commencing
legal proceedings shall be tolled during the period that the dispute resolution procedures
described in this Article 11 are in progress. Except as provided in the immediately preceding
sentence, this dispute resolution procedure shall not in any way affect any statutes of limitation
relating to any claim, dispute or other matter or questions arising out of or relating to this
Declaration of the breach hereof.
ARTICLE 12. MISCELLANEOUS
Section 12.1 Bank Accounts. The Company shall maintain one (1) or more bank
accounts for Company purposes. Funds may be withdrawn from a Company account through
bank check or draft executed by any person or persons, including Members, designated by an
appropriate resolution approved by a Majority of Members.
Section 12.2 Restriction. No Member shall become a surety, guarantor or
accommodation party as a Member or in any manner as would impose an obligation thereunder
upon the Company or the Remaining Members.
Section 12.3 Right of Contribution. If any obligation of the Company is personally
guaranteed by all or any of the Members, the terms of said guaranty notwithstanding, the
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 25
Members agree that their separate or individual liability therefore shall be in proportion to their
respective Sharing Percentages. In the event that a Member is required to perform more than
such Member's proportionate share of said guaranteed obligation, each other Member shall be
obligated to contribute such other Member's proportionate share either in payment or
performance of the obligation, debt or reimbursement of the Member to the end that each
Member shall be obligated for and shall pay or perform his/her/its proportionate share of the
Company obligation.
Section 12.4 Assignment of Interest to a Corporation or Other Entity. If after
complying with the terms of this Agreement, any Member assigns his/her/its interest in the
Company to a corporation or other legal entity for which the owners are not personally liable for
the debts and obligations, such assignment shall not be effective, and need not be recognized
by the Company or the other Members unless each shareholder of the corporate transferee, or
each owner of such other legal entity transferee, of the interest in the Company personally
guarantees in writing the obligations of that corporate or other legal entity Member under this
Agreement.
Section 12.5 Succession. The obligations of the Members contained in this
Agreement shall inure to and shall be binding upon the Members and their respective heirs,
personal representatives, successors and assigns.
Section 12.6 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the matters contained herein and no other agreement,
statement or promise made by any party thereto which is not contained herein shall be binding
or enforceable.
Section 12.7 Modification. Except as provided in Section 6.3, the Members may
amend or repeal the provisions of this Agreement with the approval of the Members holding
seventy-five percent (75%) or more of the Sharing Percentages at a meeting of Members called
for that purpose, which amendment shall be set forth in writing. This Agreement may not be
amended or repealed by oral or implied agreement or course of conduct of the Members. The
Manager may not amend or repeal the provisions of this Agreement except that the Manager
may amend the Agreement to reflect adjustments to the Members' Sharing Percentages or the
admission of new Members.
Section 12.8 Severability. If any provision of this Agreement is held to be invalid,
illegal, unconscionable or unenforceable in any respect, such shall not affect any other
provisions hereof and this Agreement shall be construed as if such invalid, illegal,
unconscionable or unenforceable provision had never been included herein, all other terms and
provisions remaining effective and in force to the fullest extent permitted by law.
Section 12.9 Notice. Any notice required to be given under this Agreement shall be
deemed given if personally delivered or when deposited with the United States postal service,
registered or certified mail, postage prepaid, return receipt requested and addressed as follows:
Company: SCS Brighton LLC
12601 W. Explorer Drive, Suite 200
Boise, Idaho 83713
A copy of any notice given to the Company by a Member shall be given to each other
Member(s) in the manner required by this Section.
OPERATING AGREEMENT OF SCS BRIGHTON LLC- page 26
A party may change its address by delivery of a notice thereof to the Company and the
other Member(s) in the manner required by this Section.
Section 12.10Construction. All parties hereto have either (i) been represented by
separate legal counsel, or (ii) have had the opportunity to be so represented. Thus, in all cases,
the language herein shall be construed simply and in accordance with its fair meaning and not
strictly for or against a party, regardless of which party prepared or caused the preparation of
this Agreement.
Section 12.11 Performance. The parties hereto declare, acknowledge and agree that it
will be impossible to measure in money the damages, which will accrue to the Company and the
Members by reason of a failure to perform all of the obligations contained in this Agreement.
Therefore, if any party shall institute any action or proceeding to enforce the provisions hereof,
any person shall institute any action or proceeding to enforce the provisions hereof, any person
(including the Company or the personal representative of a Decedent) against whom such
action or proceeding is brought, hereby waives the claim or defense that such party has an
adequate remedy at law and such person(s) shall not urge in any such action or proceeding the
claim or demand that such remedy at law exists, it being agreed that the obligations contained
in this Agreement may be specifically enforced.
Section 12.12 Further Instruments. Whenever an interest in the Company is sold and
purchased pursuant to the terms of this Agreement, the Company and each Member, including
the personal representative of any Decedent and all other parties involved, shall do all things
and deliver all instruments and document as may be necessary to consummate said sale and
purchase.
Section 12.13Attorneys' Fees. In the event that any action, including arbitration, is
brought by a party to interpret or enforce this Agreement, the prevailing party in such action
shall be awarded all costs and expenses, including reasonable attorneys', accountants' and
appraisers' fees, incurred by the prevailing party, including the same with respect to an appeal,
and such may be included in any judgment entered.
Section 12.14Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Idaho.
Section 12.15 Headings. Titles and headings of the Articles and Sections of this
Agreement are for the convenience of reference only and do not form or comprise a part of this
Agreement and shall not, in any way, affect the interpretation of this Agreement.
Section 12.16 Waiver The waiver of any breach of any term or covenant contained in
this Agreement shall not be deemed a waiver of any other or subsequent breach whether of like
or different nature.
Section 12.17 Number and Gender. The use of the singular herein shall include the
plural and the use of the plural shall include the singular, and the masculine pronoun shall
include the feminine or shall be construed to refer to a corporation, partnership or other entity,
all as the context shall require under the circumstances.
Section 12.18Time is of the Essence. Time is of the essence of all matters and
agreements set forth in this Agreement.
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 27
Section 12.19Counterparts. This Agreement may be executed in several
counterparts, each of which so executed shall be deemed to be an original and such
counterparts shall, together constitute and be one (1) and the same instrument.
ARTICLE 13. MEMBER MEETINGS
Section 13.1 Meetings. A meeting of members shall be held if called by the Manager
or by Members holding at least twenty-five percent (25%) of the Sharing Percentages who sign,
date and deliver to the Company's principal office a written request for the meeting which
describes the purpose or purposes for which said meeting is to be held; provided, however, no
single Member may call more than one (1) meeting every three (3) months.
Section 13.2 Notice of Meeting. Notice of the date, time, and place of any meeting of
Members shall be given to each Member not more than thirty (30) days nor less than ten (10)
days before the meeting date. The notice must also include a description of the purpose or
purposes for which the meeting is called.
Section 13.3 Record Date. The Members entitled to notice of and to vote at a meeting
of the Members, and their respective Sharing Percentages, shall be determined as of the record
date for the meeting. The record date shall be the date on which notice of the meeting was first
mailed or otherwise delivered.
Section 13.4 Quorum. At all meetings of Members, the presence, in person or by
proxy, of Members holding a majority of the Sharing Percentages shall constitute a quorum.
Section 13.5 Proxies. A Member may vote (or execute a written consent) by proxy
given to any other Member. Any such proxy must be in writing and must identify the specific
meeting or matter to which the proxy applies or state that it applies to all matters (subject to
specified reservations, if any) coming before the Company for approval under any provision of
this Agreement prior to a specified date (which shall not be later than the first anniversary of the
date on which such proxy is given). Any such proxy shall be revocable at any time and shall not
be effective at any meeting at which the member giving such proxy is in attendance.
ARTICLE 14. ACTIONS WITHOUT NOTICE, WITHOUT MEETING, OR BY
TELEPHONE
Section 14.1 Meeting of all Members. Notwithstanding any other provision of this
Agreement, if all the members hold a meeting at any time and place, such meeting shall be valid
without call or notice and any lawful action taken at such meeting shall be the action of the
Members.
Section 14.2 Action Without Meeting. Any action required or permitted to be taken
by the Members at a meeting may be taken without a meeting if all the Members sign a written
consent describing the action taken. Such consent shall be included in the minutes or filed with
the Company's records.
Section 14.3 Meetings by Telephone. Meetings of the Members may be held by
conference telephone or by any other means of communication by which all participants can
hear each other simultaneously during the meeting, and such participation shall constitute
presence in person at the meeting.
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 28
IN WITNESS WHEREOF the parties have hereunto executed this Agreement as
of the Effective Date.
MEMBERS:
SCS:
SCS INVESTMENTS, LLC,
an Idaho limited liability company
By:
e C. Smith,
BRIGHTON:
BRIGHTON INVESTMENTS, LLC,
an Idaho ' ited liability company
By:
David W. Turnbull, Managing Member
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 29
EXHIBIT A
Members
Member Name and Address Initial Contribution Sharing Percentage
SCS Investments, LLC $1,000.00 50%
855 Broad Street, Suite 300
Boise, Idaho 83702
Brighton Investments, LLC $1,000.00 50%
12601 W. Explorer Drive
Suite 200
Boise, Idaho 83713
OPERATING AGREEMENT OF SCS BRIGHTON LLC-page 30