CS2 Operating Agreeement 2.27.14OPERATING AGREEMENT
CS2, LLC
AN JDA.Ho LmITED LIABILITY COMPANY
TABLE OF CONTENTS
* A * * * *
Ap,-ncu,, I ........
........ .......... - ............................... ..... -- ........ DEFINITIONS
WPM.........................................
.......... --- ...... --FORMATION
ARTWLE
............ NATURE- OF BUSFNIIESS
ARUCLE 4 .......................
RHAnS AIND EXTHES OF MEMBERS
ARwCLF5
AmicuM
.... CONTRIBUTIONS AND CAPITAL AccouNTS
ARTWLE7 ................
ANr)
ARTMES
...... -- .......... — ............... ..... ......... TAXES
........
-------------- ......... ............... .... TRAONFERS CWMEMBERSIPP f!NTT-,,R)-,S,rs
....... ............. ....... — ... .....T)ISSOCIATION OFA
.....................................
.......... .... Ar)ivw',STON ov, ADDI TIONAl. Mll-,MBEM
/URTTCLE
...... DISSOMMYNAND NVINIMNG UP
MI]CLIS 13 .
.. . ........... ............. .................. - A m J,,ti 3),1,1 T
ARTWLE
........ ...... PROW SIC
1
2
3
13
10
i
17
177
17
is
19
-H-
EI i AGREEMENT
This Operating Agreement of CS2, L.L.C., an Idaho limited liability company (the
"Company"), organized pursuant to the Idaho Limited liability Company Act (tie "Act")p is
e tered into and shall be effective as ofDecember 11, 2 1.2. by ALLIANCE MANAGEMENT
CONSULTANTS, LC- an Idaho linnited =ia-bility company, the persons e ecia.ting this Operating
Agreement, ent, and any parties j oi ni g this agreern ent in flae future, as l embers.
DFFINITIONS
For purposes of this Operating Agreement (as defined below), unless the context clearly
indicates otherwise, the following terms shall have the following meanings:
1A ARTICLES, '`he Articles of Organization of the Company as properly adopted a d
amended. from time to tithe by the Members and filed with the Secretary of tatc.
1.2 AsSIGNEE. A transferee of a Membership Interestwho has nGt beer, admitted. as a
bstituted '.k4ember and who is en ided to receive, to the extent assigned tlhe assignWs
Economic Rights,
Imp Y TAL ccouNI a `fbe account ainte i-Ped for a Member orAssignee
determined in accordance with Article 6.
1.4 CAPITALCON'rRIBU710N. Witl:i respect tr) each. Member. the amoani c cas k aid.
the fair market value of othcrr assets contributed by such .ember to the capital of the Company
(yet of liabilities secured by such contributed property that the Company is considered to assume
or take subject to under Code § 752).
1.5 Com. The internal Revenue Code of 1986, as amended or corresponding
provisions of subsequent superseding Federal revenue laws.
1.6 DISTRIBUTION, A transfer of property to a Member on account of a Membership
Interest as described in Article T
J-7 ECONOMEc RIGHTS. A Member ber orAssignee's share of the net profits, net lasses
or any other items allocable to any period, and including Distributions of Company property
pursuant to the Act, the Articles and this Operating agreement, but shall not include any
ember's Management Rights.
IDAHO CODF, Means the da to Code. -Mc ad n�B corresponding espoa in �,-,ro z isio is o
L9 MAJORITY O °'HE MEMBERS. Wknever an, Tnattfu, is required or allowed to be
approved by a. Majority ofthe Members or a Majority of the Re rnain'nu Member-, under the .act
or this Operating Agreement, such matter shall be considered approved or consented to upon the
receipt of the affirmative ative approval or consent of Members having Sharing Ratios in excess, of
one half (%) of the Sharing atios of all. of the Members entitled to vote on a particular matter.
Assignees, arid, in the case of approvals to withdrawal where copsent of the re ainflic, Members
is required, dissociating Members shall not be considered ember-, entitled to vote for the
purpose of det(�-rrpnlning a a oriv
L10 MANAGEMENT Ricirr'se l he raghi of a, T�,,4ember to participate ipat In the Ir'.=ana<fe s=-`acil
ofthe, Company 'r,`ds speci I 'ca ay providtd in Ste t1.( n 4,1 oftl1is Optr<:trrly Agreement and the Act.
including the rights to infOrinat`on. and to ('.€3nse t or approve actions of thye. Company,
1-11 Manager. age Marrag&. nicans a Person, whether or not a Tvi re" ber, who vested
with authority to ma-nage i:lle Corripany in. accordance with Arti€ le 5.
12 MEMBER. initial Mlem er, Stibsdtuted Member or o dditionai Member and, unless
Elie context �-,pre,sshl indicates t0 the: conarary. Assignees as provided in Idaho Code § -5 3-640
and those persons wl ko have of ceased to be Members as provided in Idaho Code § 5 1-64 i .
9.13 r t ° ; 't e "l l e ri a its of a Member or, in rife case of an Assignee,
the r} htts of flne assignirig Mern.be,r in Distributions H €uidat%_Erya� rotherwise) � f
..
_� fir_ ..,�cli� a�E9L;fi�l4�r�.Y t`}_.
ffie t"roffiits, losses gains, deduction. arts credFlIs of the C ornpE:r ryr . a N/leiI":€ er` hip hltcrest includes
tie interest dhat can be as igrcd under l.dalao Code § 53-6 6 and charged under Idaho Code § 5 1m
€;_> 7
1.1Js,f`�s
till pernnanznty to rms,)Orary, proposed, or pr"p(-,,sed and ternporar R(E m&IacE.on s ofthe 1)partri'te t
of the Treasury under flne Code, as alter. I" egulaition—, may be ai-rendz--d or superseded Fromp t nt'- to
time.
1.15 SHAREW; RATIO. With respect to any Member- the percentage of ownership in
the Company as determinc d on the basis of the relative Capital Accounts of the Members as
maintained in accordance with Section 6.3.
.1.6SUBSTITUTE EMBER. An Assignee who has been admitted to all of the rights of
membership bership pursuant to this 1,Dperating Agrecinciat.
1.17 ` ` ANSFF. With respLc;t to any interest in the C"ornpany, a� a noun. any
voluntary or involuntary assignment, pledge, encurnbrance, sale or other transfer or disposition
of such interest; and, as c; verb, voluntarily or involuntarily to assign, pledge, encumber, sell or
otherwise transfer or dispose of such interest, however, in no event shall a withdrawal of a
Member be a Transfer.
ARTICLE 2
FORMATION
2A ORGANIZATION. ` h.e .Members hereby organize the Company as an Idaho
ir.ited liability company pursuant to the prov;si€ ns of the Act.
2.2 AGREEWNT. For and in consideratk�n ofthe mutual covenants berti.n contained
and for other good and. valuable eonsideration, the receipt and sufficiency of which is hereby
ackn !ledgcd, the %l:emfaers executing this Operating Agreement hereby agree to the terms and
conditions, oE t-his Operating Agreement, as it rrray fiYo r titne to trr -,e he amended according to, its
terms. it is the express iiAetrtion cif tyre Evlernbers that this Operating Agreem.entshall be the sole
source of a<gr€:eme nt. of the paf-tics, and,, except to the extent. 21 provis1ori o thi s Operating
Agreennent expressly irrcorrpora es federal irrconit- tax. Mes by reference to sections of the Cody
or Reo flations o is expressly Prohibited or in effect:ive under the Act. this Operatln�g Agreement
ent.
shall govern, even when inconsistent with, or different than., the provi.siotis of the Act or: any
other lave or rule; Provided., however, Tat. ter the extent no! izrco sistent with this Operating
Agreement, the: den-,b rs shall Dave the a t-hority to enter into a separate agreemeni which
governs the daily operational issues which rnay° arise with resper t to the �asiress of9ffte
2.3 7i F L The t` o aparry shall be dissoNed and its, affairs wound tip in. accordance
with the Act and this Operating greernenit on f ecein'berr -" .1, 2032.unless tlne terms: sprall. be
extended by anend.m nt to this Operating A reemeut and the Articles ofOrganization, or unless
the ompar-r shall be soon d-''ssolved and is affairs wound up M accordance with the act € r
,.71
kris Operating Aureement.
2.4 R1,.',G1S,vr.-aFo AGFNT AND (M l he registered agent for the serr,6ce of process
and the registered office shall be that person. and location reflected in the Articles as filed the
office c of the Secretary of State, A .M,� j irrty of th,- MOTinl;e rs llaay � from fib ae, to t1rrc, change the
rt-istered ato nt' or office through. ap�s r`oprr`tate l _ ngs Ertl, the Secretary of Sta te.
5 PRINCIPAL OFFICE. "i'h( Principal office of the Company shall. be located at 22
W. Bobwhite Court Bait€: 220 Boise, pdaho 83706.
ARTICLE
NATURE OF ]BUSINESS
The Company may engage in any lawful business pen-nitted by the act or the Taws of any
jurisdiction in -vvrich thL Company may do business. The Company shall have and exercise ail.
pourers necessary Gr convement to accomplish its purposes and operate its business as described
in this article 3.
° ICL
4.1 MANAGEMEN-i, RiGirrs. All Members (ether ihan Assignees) whe have not
dissociated shall be entitled to vote on airy matter submitted to a vote of the Members.
Notwithstanding the fore oincy. the following actions shall require the consent of a Majority of
the Members:
a The sale, e chars e or disposition ofall; or suhstantially all, €3ftbe assets
cif the Comrjafl�v M and
(b) he compensation of ffic a<geDts of the Company.
The fol.l€ win actions shall re(,luire the consent of all of the Members:
t� l nv amen ,_E .ment to ts Operating Agreement-
(d) Granting ifanageTn er. t..l ights to Assignees -
The co'nitinuation of the Company on or before the ninetieth (9()tb..) dair
after a Dissolution Event (as defined in Section € 2.1).,
. `' J' i l' e authorizalion of a Mumber [ ; do anv ac on behalf ofthe � :ompaE' v
(`s l l e di<,sol Wzti€ n of' thi c Co par y a,s provided for in. tl e Act,
41 .._._,JA.t.Y��.`.;EMBERSTHIR.PARTIES.
../.person,who isaMemberf the
Cornp4nf°` not'ia le, 94P.vv by reason or yeinFa Xel Ser, under a ;=nigmest, decree or orderof
a Court- or in a %f2tcraner,li'O a debt. oifi
gCtic.m3r ktCb.ily.IfLIYe C�a c.y, Nhegh.eR
E rr.s i- in c ntrasct, tort o, of erwis� Off` ._� � he, acts or o iSS-0. ns : f any c�tl�cr fit{ r��ber. a��.t�t car
cmpb ee of the Co pan-y. hn addition, a Member is nota proper pay "t'v' to a prC`ccced.ino bpi or
against the Company solely by reason of being a Member.
4.3 LIABILITY OF MEMBERS TOTHE COMPANY AND OTHER MEMBERS. A Member
shall not be liable, responsible or accountable in damages ®r otherwise to the Company or icy the
Members of the Company for any action taken or failure to act on behalf of the Company unless
the act or omission n constitutes tyross negligence or willful misconduct.
4.4 INDEMNIMCATIONs. The, Company shall indemnify the Members and Rgents for
all costs, losses, liabilities and damages paid or accrued by such Nleniber or agent in connection.
with the business of the Company, to the fullest extentprovided or allowed by the laws of the
State. Furthermore, the Company shall indernnify Members for judgments, settlements,
penalties, fines or expenses incurred in a proceeding to which a person is a party because the
person is or was a Member.
4.5 RFTRFESFN'TA'rIONS AND WARRAYFIES, Eachkiember� and in the case oFan
oraaniza Lion- the person's' cxecuting this Operating Agrtenieflt on behalf 'o-Il'the organizatioj.-�..
hereby represents and warrants to Me Company aind each. other Meniber that. (a.) i Fthat Member
is an organization, that it is duly organized, validly existing, an.d in good standing under the lav;
of its state of organization and that it has full organizational power to execute and agree to this
Operating Agreement and to perforn-i its obligations hereunder- (b) fat the Member is acquiring
its interest in the Company for the MernbeCs own account as an investment and. without an intent
to distribute the interest (c) tht IINIernber acknowledges that the interests hDve not been registered.
under the Securities Act of 19331 or any state securities laws., and may not be resold or transfierred
by the _iv iember ivithouf appropriate m-Fistration or the availability of an exemption. flrom such.
.q-equ-
irennents,
46 CONFI.K.,TS OF INTEREST.
(a) A. Men-iber shall be entitled to enter ipto transactions that Tnay be
considered to be competitive or a businelss opportunity that nnav ba berieficial to, the
Company, It being ex -or ssly undcrslood that some of the Members may enter into
transactions that are sirrd Iar to flne transactions into ,Alhich. the Company. m-ay enter.
I
Notwithstanding the Foregoing. each Member shall acconint to the Con-ipany err hold as
trustee for it any property, profit, or benefit derived b-", the Membeff w-a-hout ffie consent
of a Ma f dhe oth Mern nnected witthe h conduct
jority o er bers., from,� (i) any transact' on con
or winding up offfile Con-,pany- or 'H) any use by the Member of Company piciperty
includino, but not Ihnnited to. confidential or nropnetary uiifoi-matio n of th£ Connpany or
other noatters entrusted to the Pei -son as 'a result Cif ."his status as Men-,ber.
A Member dotes not violate- a duty or obli�-,ation to tht Companv mere . iv
bccaust-I the Ndernbcr�-, conduct fUrthers the Member's own iTnterest. A M-enaber may I'-nid
T.noney I.o and transact bfasincss with the Comnan.v- The righn7, and ob.h,at ,(.-,ns of a
Member who ]ends rnoney to or oransacts busipes,,, -with khe Company are thhesam.e,:is
those oFa person who is not a. Mcmbe-, sut�ject to other apPficabic law. No -,ransaction
with the Company shall be voidabfie solely because a Member has a alrect or ndirect
Interest in flict transactionif either (i) the trarisaction is rair to the Company or (ii) a
Mqjority oEthe disinterested Members knowing the materiaj facts ol."die transaction a,-,.d
the Member"s interestauthorize., approve, orratify the transaction.
ARTICLE5
MANAGEMENT
5®1 Representative Management. The Company will be managed lay one or 11-1.0re
Managers. The Company's initial Managers shall be Alliance Management Consultants, LI-C.
5a2 T-Nme Devoted to Business. The Managers shall devote such amount of till -le to
the Company's activities as is reasonably necessary to discharge their responsibilities,
5.3 Powers and Authority. The Manager-, are entitled and empowered to exercise
all powers conferred by this 1greernent, by the Act, and by law,
OPFRATINc, AcREEMENT- P.5
A Required Member ApprovaL he :Approval by the N ,4enfl er of any act or...
decision made hereunder Is required only to the extent specs rcall.y provided for irf thii
Agreement (-),- the Act.
s5 Fiduciary Daties.
(a) Standard of Care. The Managers shall not he liable to the Company y or
any Member for an act or omission. done in. good faith to prom ote the Company's lest
interests, unless the act or omission constitutes gross negligence, intentional misconduct
or a knowing violation of law,
(b" Cor pet;rkdg AL�i.viti.e4>. The Matiagers rnay rats—i6pate in. an-y other
b st-ness or activity without accounting to the Company or the other Mcn�bcrs.
5�6 Indemnification of Managers; ers; s ra ce, Tihe Company sh.al.l indern.nify the
Managers to he fullest exteni G,-,ermittcd by the Act :for afl expenses. losses, Liabilities and
damages Oic Manaaers acts afll�' Ltd reasonably F curs n connection with. the do' nse.. settlement,
or adjudication of any claims or action, arising 4g art of or relating to the conduct of Ilse CornpanVs
acti'vities, except u,s claim. or action vein respect for which any such Mariager 3s agjudged to be
liable for breach of a fiduciary duty owed to the Company or the Members under the Act or this
Agreement, The Company may purchase; liability insurance to fund this indemnification
obligation to they fullest extent perratted by the act.
7 Compensation and .Reimbursement,
(a) C,O'ar pF sat 3rB.The (,ompanv shall comnensr".te the Tana$ ers for services
rendered to or on behalf 04, t11;e ("o.m. any on the terms, established from, tine ttime by
WTT11cr, agreements approved 13'a;;. the Managers and the affinnati've vote of Mcta*cCs
whose aggregate rehative Voting ci-cc1€iage Is not less, than 67% of th 'CGW� outsie'?'@ding.
(1 ) Reimbursement. bursement. Elsa; C opm. parry vll1. re l��rrse the � a aE�� �,: f'o il.l
expenses lricurred on the Company y s behalf in t or ee.te. n <xth _hic conduct ot its
business.
5.8 Tenure.
(a) Terra.. Each Manager will sere: until the earlier € f- (1) the ManageCs
resignation; (2) the Manager's Bankruptcy; or (3) the anager"s dissolution provided
that with respect to are administrative dissolution, such dissolution is coupled with the
lapse of any period allowed for reinstatement. Any successor Massager or Managers will
ser.%e until the earlier of- (1) the ]' anager"s resignation; (2) the Manager's Bankruptcy;
(3) as t€3 a Massager who is a natural person, the Mana er "s death or adjudication of
incapacity; and () as to a Manager that is are Entity, such tanager's dissolution provided
that with respect to an administrative istrative dissolution, such dissolution is coupled with the
lapse of any period allowed. for reinstatement,
OPERATING A(3RF.FMF. ;"F - P.6
ff RerYioyai. ,4Aember;s fads'€:`s' remove a Manager a! any fitn 'vit i € r wit you
cause porgy the affiri iadve vote of Members 1��-basc aggregate rclati vc: Voting Percentage
is not less than C6-6 % €�f:'the total outstanding.
(c) Vacancy. if the Manager for any reason ceases to act, the Member..-, will
promptly elect a successor, to serge until a successor is elected and qualified.
T ICLF6
CAPITAL CONTRIBUTIONS AND CAPITAL AcCOUNTS
6A INITI L C. PITAL CON'rRIBUTIONS. Each Member shall n-iakc t ae Capital
Contfibutio described f()r that ennber on Exh;bit A at the 6me and on thic terms specified on
Exhibit A. The value of the Capital Contribution shall be: as set fords on Exhibit A. No interest
shall accrue € n. any Capital Contribution and. no Member shall have the right to withdraw or be
repaid airy Capit Conrri.bution. except, as provided in this Operating Agreenneni,
6,2 ADDrriONAL CAPITAL CONTRIB TEONs. In addition to the; lniti.ai. Capital.
Contributions, a Majority of the Members may determine fron-j- time to time that additional
Contributions are needed to enable tlhe Company to conduct its business. Upon making such a
deter ination, the Company shall give written notice to all Members, at least. thirty (0) days
prior to the date; on vi ich such Additional nal Contribution is due. Snell Notice shall set forth the
an unt of Additional Contribution seeded, the purpose'mr which. the Additional Contribution is
needed, and tlhe dated b y hick th-c ? embers shoui.d c onaribute. i ac::h Membershall be entitled to,
contribute a C3i'o'po tionate slimure of such Additional Con: nbution, `. Cte "="i-ned ii'1 accordance.} with
their respe �v(E Sharing (Zatios, No ��,'�rei�1be-r sl-�. � i7� obi�ated to make any Additional
Ctri-butions. fir t1he evc nl. any one or more Members do not i-nake t'iieir ratable ,sect r e Gran
Additional ral Contribution. the: other Meinbe-s shall be given the oppo °,Unity to miakt the
contrib boon s, In prop rfioti to their rrespr cfi- ,, Sharing Ratios (excluding for t. fris purpo.-s the
Stearn; Ratilos of the Memtr)ers that do not elect to contribute their ratable shares). Each.
i dditimnal Member steal` make the Capital Contribution on to which such Member has a,greed.; at
f:l7v ti�.ne or times and upon the tern s to which the Company and. the Additional e giber agree:.
6.3 MAINTENANCE OF CAPITM, ACCOUNTS, The Company shall establish. and
maintain Capital Accounts for each Member ber and Assignee. 1~ach [fie giber"s Capital Account
shall. be increased by () the amount of any cash actually contributed by the Member to. the
capital of°the Company; (2) the fair market value of any property or other consideration
contributed, as Bete iced by the Company and "lie contributing Member at arms length at the
time of Contribution (net € f liabilities assumed by the Company or net of liabilities -which the
Company takes such property subject to., within the meaning of Code § 75%); and (3) the
ember`s share of net profits and of any separately allocated items of income or gain (including
any gain and income from unrealized income with respect to accounts receivable allocated to the
Member to reflect the difference between the book value and tax basis of assets contributed by
the ;Member). Each ember's Capital Account shall be decreased by: (I) the amount of any
cash actually distributed to the Member; (2) the fair market value of any property distributed to
the Member, as determined by the Company and the contributing Members at arm's length value
at the time of distribution(net of lilabifinies of the Co?`Ipary assunied. by the Member or net Cif'
liabilhits which the Member takes such property :subject to within the riaeaning of Code 752)=
and Q) the Nei ber',s share of nct losses and ofany separately allocated iterns of deduction or
loss (IncludiMz any less or deduction allocated to the Member to reflect the difference betweerl.
the boob value and tax basis of assets contributed by the Member).
6A TRANSFER OF MEMBERSHIP INTEREST. In the event of a Transfer of some or all
of a M.embcrsbip Interest in the Company, the Capital Account of theTransferring Huber shall
become the Capital Account of the !ssiee, to the extent it relates to the po? tloR of the
Membership ip nterest transferred.
6.5 COMPLIANCE ITH. CODE § 7 ()m 1-he mannerin hi€;h Capital Accounts are
to be maintained pursuant to this Articie 6 is intended to comply, with the requirements ol`Code
704(b) and the Regulations pyomulgated there unGer. If in the opinion. of°the Company s legal
counscl or accountants, tht, manner in which Capital Accounts are to be maintained pursuant to
the preceding provisions ofthis Article 6 should be modified in order to comply with Code §.
7 4(b) and. the Regulations tlief-e under. tuber' notwithstanding anything to the cant ary contained
in the precedin provisions. of this Article dm the method i-hic.h Capital Accounts ai-e
maintained shall be so modi fled, provieled, however, .that any change in the manner of
maintaining Capital Accounts shall not materially alter the economic agreement betvtieeri or
arnong the Members. 1` otwitlEstai-tdin- anything herein to the co-rftrary- this Operatin 1.
Agreement shall not be co strued as creating a deficit restor€itioil obligation or to otherwise
personally obligate any Member r to make a capital Contribution it excess of the initial
cortrib Lion.
ARTICLE `7
ALLOCATIONS AND DISTRIBUTIONS
NS
7,1 ALLOCATIONS . Tr '1T.`.3 AN o-,,;sEs FROM OPERATIONS. l:',XCCj3t a'
r- av be required by Code § 70 (c) and this Article 7, net profit , yet losses, and other items of
Is'sw(me»gam, loss, d'edi?dion and credit �habel �apportioned. arn.ong the Me€T`o. ens in., proportion
to theirSharing
=:Shari Ratios.
7.2 LIMYFA110N' The net loss allocated to eacti Member for arty Company fiscal year
pursuant to Section 7.1 shall not exceed the maximum amount of net lass that can be so allocated
under Regulation § 1304- 1 (b)(2)(ii). The foregoing limitation shall. be applied on a Member -by -
Member basis so as to allocate the maximum permissible net losses to each Member tender
Regulation § I.704-1(b) (2) (ii).
73 DETERMINATION OF NET PROFIT OR Loss.
(a) COMPUTATION OF NET PROFITORLOS& "..Yhe not profit or net .Loss of the
Company., for each fiscal year or other period, shall be an amount equal to the
Company's taxable income or loss for such period, determined ill accordance with Code
§ 703(a) (and, for this purpose, all items of income, gain, lass or deduction required to be
stated. separately pursuant to Code § 703(a)(1), including income and gaze. exempt from
federal income tax, shall be included in taxable incorne or loss).
(b) DJUTSrMEN'r'r(o NF'r PRO FITOs
t xable I11C.'ODIC or loss on the disposition ofaRlitem- ofCompauIy property oi" for T2rD0seS
of determining the cost recovery, € cpre€ ialiop, oir amortization deduction nth respect to
any property, the Company shall use such property's, book 4-aluc determined ln.
accordance with Regulation § l . /04-1(b),
7.4 MANDATORY TAx ALLOCATIONS UNDER CODF § 7 (c). In accordance with
Code § 704(e) and Regulation § 1,704-3, ineonie,, gain, lass and cic,€luc;tlon with respect to any
property contributed to the a-pital of the Company shall, solely :For tax purposes, be allocated
arnonc� the l ernbers so as to take account of any variation between the adjusted basis of such
property to the Cornpany for federal income tax purposes and its rMtial book value. Prior to tl,le
contribution of any property to the CoMpany that has a fair Market value that diffors; front its
adjusted tax basis in the hLui s of he € oninbting Member on ie date of contribution., the
contributing i cmbe„r and the C:oMpany, shall agree upon theallocallon method to be applied wi.1.11
respect to that Property under Regulation § 1: o7 W �_
7m5 INTFIUMDISTRIBUTION'S. 'Sa FsoM tl'Miie, to ngelc the Compan ��)ith the consent of a
Mgjor:ityl. ofthe, :Members shall, with reasonable°judgment_ r etermine to what extent,. ifany, the
Company-'s cash on hand exceMs the current and anticipated needs, including, without
lire tation, needs for operating expenses, debt service.l acquisitions. reserw,,s, and mandatory
Distributions, if anvil. To th.e oxtent such.. excess exists, the Coo. pany May make Distributions to
the l ernbefs in accordance with their Sllar-ing Ratios. Srrclr. l�i.strib��tions sl.r.all 1�o in. asl o�°
other property (which .n ,e not be distributed proportionately) or partly- in both, as deterM.ined by
the C `onapany.
ARTICLE E
.l ELECTIONS, ;CTIONS, A 1<vr.sjori0 of the .Membtrs may rna .e, any tax elections for the
Company
. t .11 _ f the Code � to x laws
t si th �.
C,�irn:�ar�-�' �� o�'CCl �r<cft " :-.ti, or tll� .:.� r.�Tv.: C1.R. any �� €fir 6� ��` 1Y�i�.�EY.C:E.fon having
LYE" SCI' boll over the C,€ Tai-. pang.
02 rAX MATTERS PARTNFR. ,.l..he Members realize that the Company will be
classified for federal income tax purposes as a partnership sub ec;t to taxation pursuant to
ubehapter K of the Code. Furthermore, the Members recognize that none of them will be a
general partner" nor have liability for debts, liabilities and obligations of the Company.
Nevertheless, the Members are eocyoizant of that fact that a tax matters partner must be appointed
for the Company, 'Wherefore, the Members shall designate one of the Members as the tax Matters
partner of the Company pursuant to Code fie § 6231 a) (7). Any Member designated as the Lax
Matters partner shall tale such action as May be necessary to cause each other Member to
become a notice partner within the meaning of Code § 6223), Any Member who is the
designated tax Matters partner May not tape any action contemplated by Code §§ 62 through
6232 without the consent of a Majority of the Members.
8.3 CASH METHOD OF A coUN 'INN. The records of the Company shall be
Maintained on a cash receipt and disbursements Method of accounting.
CAP€,PATING AGM. r-MENT - P.9
ARTWLE9
TRANSFERS OF MEMIBERSITIP NTERESTS
9n1 RESTRICTION ON TRANSFE So Withowthe prior written consent of a Mkj'ority of
the Members, no Member may directly or indirectly sell, transfer, assign, pledige or otherwise
encumber. voi ntarily or involuntariive all or any part of its Membership Interest in the Company
except as pro'v'rf��',C."� II"� this Article �'�. Any �"ili.li�.','r €rcirl s'�:er orer2C€.]:t r�i��<x.ni,€ sl"i<�Il be�'or`: � �"?�.; t�,c?n�.�:Y
of this Section 9.1 shall not restric4; i�€r giver. e `i"r�.I�s er: (a) by any Menaber on account t of such
Mtniber`s death to a transferee permitted rider this Section 9,1 a (b) by a I cinber to a trust for
the benefit of, or a co-ri-porabon or partnership at !east eiity percent (80ft) ofthe € q ity of which
is owned by the Member, tl e Merg ber s spouse. <rr lineal ancestors or Irneall descendants offlie
Member; (c) by way oi`dissol tion or Iiquid" .tion. to tile beneficiaries of a trust, or equity owners
of a corporation or partners -hip., that worrid qualify as a transferee ender clause (b) of this
sentenec: (d by av Merrlber- to another - emb r; or (6 it, respect to any indi.viduad Member, the
transfer or assignment by g6ft or bequest to such Ddember `°s spouse, or tie B erri. ancestors or
lineal descendants of the Meer- her; provided, however, that notwrti>sta ding the foregoing
provisions, in the event a Member `s spouse acquires arr Membership Interest ir, the Company,
such spouse may not convey, transfer, sell or otherwise dispose of such'Membership lrltei-CM
without the prier written consent of Majority of the Members., except for transfers to a
or lineal descendant of a. Member who is an original party e this Agreenient. Notwithstanding
the ahove provisions allowing certain `rar sfers. consistent with the provis€oi.:i s of Section 9.4, a
frransf€%r does nol; entitle the Assignee to becor e a .Member unless .dae Assignee is admitted as a
Substitute k1ember .in accordance ;,v th Section 9.5. l..a. the event ofanv trar?sl r Pursuant to t'ris
Section 91. the Assi.gncue shall be bound by this Agreement. Ins no event, however, steal E arid-
trarrsfcr Pursuant to t is, Sc tion 9.1 rl,li-: ve the tran.sfi l-or of my of its olbliga.ti€rns under this
Agreement.
92 ID. addi6on. to the €ffi.er l .r itatio�ns a i l r:strrc.ti€ins se,r.
tIordi in this Article; 9, except as pernritted by Section 9.1 he:rcof, no en -fiber shall 'rransfer all of
any porti€err of his or her Men.ibcrsbip Interest (the "Offered Interest"") Iroless such l ember (the
"Seller") feast offers to sell the Offered Interest pursuant to the terns of dies section. 9.2.
(a) LmITA ION ON TRANsFyRs. No Transfers may be made under this
Section 9.2 € mess the Seller has received a Moira fide written offer (the -Purchase Offer'')
from a person (the "Purchaser") to purchase the Offered Interest for a purchase price (the
"Offer price) denominated and payable in United States dollars at closing or according to
specified terms, with or without interest, which offer shall be i n writing signed by the
Purchaser and shall be irrevocable for a period ending no sooner than the day following
the end of the Offer Period as hereinafter defined..
(b) OFFER TO MEMBERS.
(1) OFFER NOTWCE. prior to making any transfer that is subject to the
terms of this Section 9.2. the Seller shall give to the other Mernbers a written
notice (the "Offer notice'") which shall include a copy of the Purchase Offer and
an offer (the "Offer") to sell the Offered Interest to the other Members for the
€ PFRA'rti 3 AGi�Fr +AErW - P.10
Of c r Price, pc`:avable accordino to the sarne terms as (or more favorable ternns
than) those contained in the Purchase Offer. provided that the Offer shiall be .made
Without regard to the requir—emenl ofvany earr'?est money or similar deposit
required of. the Purchaser prior to closing, and without regard to any security
(other than the Offered interest) to be provided by the Purchaser for any deferred
portion of the Offer Price
(2) OFFER PERIOD, 'rhe Offer shall be irrevocable for a period (the
-offer Period") ending at 11,59 p.m., local time at the Company's principal
office, can. the ninetieth (90th) day follo-"irr£g the date of the Offer Notice,
C3 ACCEPTANCF OF OFFER. At any tirrrc, durima the Offer Period, the
fferces may accept the Offfer by feting written no ice cif such acceptance O the
Seller and the Company. if nTore than one Cif feree ac cppts (the "-Accepting
offerees") the C ¢er, each such Accepting Off"eree shall have the right to purchase
a portion of the Offered interest equal to the propoilion. that lTis or her sharing
ratio bears to al, the; Sharing patio of all Accepting Of'ferecs.
(4� Ct:.OSM, o` PuRCHASE Uga r AN' TO OFF, ri a if thy: fft.�Y %s
accepted, the closing €rf�the sale of the Offered Interest shall take plane within
thirty (0) days after the Offer is accepted or, if latc-ra the data of closing set forth
in the Prrrclra; Offer. r. rlf6r Seller and the AcceptingC fferecs shall execute such
documents and nstr rRnients as rna�, be necessary or appropriate t(o aff€ ct fl c saic
of tlTe C fered Interest pursr.rant to tiletcrrr s ref the Offer arrd this Secdon 92.
? SALE i sI)T: T 'r to Ci sl C FT r rj c, , , f tl e 0-iffer
is not accepted irr the. inanner h.creinafter provided, tl .t Seller may sell the Offered
l.r r.terr st t: tHr I� rc a r at a � t r . ,itl i s; t r days fr. tl�. ias-1 o f id- Offer
Period. Drovided 4 € such a, IL" ; ha" be r?ai` on terms, no rnore favorable to he
Purcliaser than teri s contained in the P€mrehasc Oftcr and pro -vide urther t-ha such.
sate cow -plies with the other terms, conditions, and restrictions of this Acyreenaeni that are
apphcable `to saless of Intr �s�',` €`_s el.n ear no ,;xp ressl �'`�eade inappli able tra scale `oc �€i"�`� UT
Linder this Section 9.2, if the Offered Interest is not sold i . accordance with the terms of
the preceding sentence, the Offered merest shall again become subject to all of the
conditions and restrictions of this Agreement.
9.3 CONDITIONS TO PERNIrrTED TRANSFERS. Notwithstanding the ability € f a
Member to Transfer all or a portion. of their Membership Interest in accordance with Sections 9.1
or 9.2, a Transfer shall not be permitted under Sections 9.1 and 9.2 unless and unfit the following
conditions are satisfied:
(a) The Assignor and Assiunee shall exectae and deliver to the Company such
documents and instruments of conveyance as may be necessary or appropriate in the
opinion of counsel to the Company to effect such Transfer and to confirm the agreement
ofthe Assignee to be bound by the provisions of this Article 9; provided that, in the case
of are involuntary Transfer, the Transifer shall be confined by presentation to the
Company of legal evidence of such Transfer,- in forin and. substance reasonably
s itr lactory to counsel to the Cora.ip 31 , n all cases, the Cornipany shall be ";:irnburs C by
the Assignor and/or" assignee l:or all costs and expenses that -t reisonably rnctrrrs in
connection witl$ t_ne Tram sg€ °.
(b) The Assignor shall. fr^mish to th—c Company an opinion of counsel, which
counsel and opinion shall be reasonably satisffictory to the Company, that theTransfer
Transfer
will not cause the Company to terminate for federal income tax purposes under Code
70and that: such.Transfer will. not cause the application of the rules of Code
I68( )(D( ) and 168(h) (generally referred to as the -tax exempt entity leasing rules"') or
similar rules to apply to the Company, the Company property or the M, embers.
(C) he Assi�7, for and Assignee sF`alI provide to the Company the
taxpayer ide nti,rrca ion, ni rr-rber, srrfliclent info-rnnation to deters -nine the Assignee's initial
tax bans in the Membership Interest transferred and any other lnforrreation reasonably
necessary to perry 4 the Company to File ale required fo-Lderal and state tax returns arid.
other Icoally required information staterntnts or returns. Without ninitin- the L)7 ;,,neMlity
of the florefgoing, the Company shall not lie ire ui ed to make any Distribution oflnerwisc
provided for ir,r this Operating Agreement With respect to cnRy Miembership Interest
transferred instil it has reb erved such information.
(d) Except in the case ofan invol-untary"l'ransi%r eitlhe;r. (i) the lVeinbersh-U-)
Interest: 'I tarnerred sbal'i be re0stered under t-he Securities Act of l 9? ), as a >erided, and
,my appkable state securities lc` vTq� or .iP) the Assignor shal.= provide an opinion. of
Counsel, Esrch opinion and counsel shall. be reasonably satisfactory to The (-'ompww. to
die effect that the transfer is e xcrgpt from. all a plicabic registration requirements and
that the 1.rans� -T wi l not vroLtfe any appilicable lib;=Ys regulating, the raider- of sc'e r1ties.
` ks 'Except sir the case of air Transfer, the Assignor sh- all provide
an opinion of courrseL which. opinion.. ard c-Ounsei sh dl bc. T,�-asorrab satisraciory to the
Company, to tine e ec t that the not cause the Cor:zapan to be deemed t£) be
an mwi 9 s3r cr .t company" under the Investment Con, -,p_rrry tact of 1940.
9.4 RIGHTS AND OBLIGATIONS OF ! sstGNEES :AND ASSIGNORS.
(a) A Transfer by any Member or other person shall riot itsell`dissolve the
Company or entitle the Assignee to become a Member nor exercise any rights of a
Member, including, i.r?cluding, without limitation, any Members Management Rig ts_
N A Transfer by any Member, including, without limitation, any involuntary
Transfer, shall eliminate the l ember',s power and right to vote (in proportion to the
extent of the Membership Interest "1'raDsferred) on any matter submitted to the l enibers,
and, for voting pu poses- such Membership Interest shall. not be counted as outstanding in
proportion to the extent of the Membership Interest Transferred, The foregoing
limitation shall apply not only to die Member but, notwithstanding any contrary provision
of applicable lava, also to any successor in interest, including, without limitation, the
Member's executor, administrator, guardian, conservator or other legal representative,
unless and instil admitted as a Substitute Member. The Transfer shall not otherwise cause
t6 w IN - ember `€« be T`cl(:csed from anv Liabililv to the CL nnoaniv sole€ v as a -result of fh.
Transfer.
sfer.
An Assionee that Ts not admitted as a Substiniv€ Me be.r pursuant to
Section 9.5 shall be entitled only to the Economic Rights with respect to the 1 ern. be s i
Interest Transferred and shall bane no Mer ber's Management Rights (including, without
limitation, rights to any information or accounting of the affairs oftbc Company or to
inspect the boos or records of the Corapa y) with respect to the Membership Interest
Transferred, if the Assignee becomes a Substitute Member, the votino rights associated
with th(e Membership Interest ,rransl:erred. sl.all be restored and be held by thce Substitute
Member along with all other ember°"s Manaa,ernent Nights with. resfr€-,:c;t to the
Membership lnter€;st-Fransterred. The Assignee small have no liability as a Member
solely as a result of .lie; Transfer.
(d) If a court of competent -jurisdiction, oil behall"ofa judgment creditor o e.
ember, charges a Member's Membership Intere-st in the Company ,,mtb the, payment of
an Linsatts1"ied amount of ajudg.ment w4h i tc-r-cSt, then to the extern so € taI°'ged the
Judgment creditor shall bi treated as an Assignee.
w -s AwmssmN OF Ass2GNEE AS SIBS UU TE MEMBER. S cet to tl$o otbor
provisions of this Artichl ce an. l ,ssionee i ay achnitted to, the Company as a Substitute
Member, ber, rith all of the Management I iIgis of a Member, but only -.upon satisfaction of a of the
followino conditions. unon hich satisfaction the Substitute Miernb€ =r shall have, �o the extem
assigned the rights and p ov.2ers, and besubject to the restrictions and fiabHities, of a Member
under the Act, the Articles and this Operm'- g Agreement, and shall be liable «r any ob i€gat o is
of the Assignor to make Cont6bTations, but stall. Toot be obl ga£tcd :tor f iabilifics, reasonably,
unknown, n, to the Assignee at the fi.m.c the- Assr.,,-Tee becomes a Member,
(a) The .1-Me i"_bers then Milled to ;you—, ui!ani.-`nouslt% consent I.o such
adi ssron, which T'€3nsefit I'Tsav be <?i en or withheld. in the s€ to and a soh,a discretion of
11ach 1\4ember-1
(b) I he Assignee becomes a paiiy to this Operadng Agrcernent as a Member
by executing such documents and instruments as a Majority of the Members may
reasonably request as necessary or appropriate to confirm such Assignee as a Meniber in
the Company and such Assignee'-, agreement to be bound by the teri s and conditions of
this Operating Agreement;
(c) The Assignee pays or reimburses the Company forall reasonable legal,
filing and publication. costs that the ComlPany incurs in connection �.vith the adr issi.o . of
the Assignee as a I ember with respect to the Membership Interest Transferred; and
(d) if the Assignee is not a natural person of le —a ma o ity. ti c Assignee
provides the Company with evidence reasonably satisfactory to counsel for the Company
of the authority of the assignee to become a Member and to be bound by the terms and
conditions of ibis Operating Agreement.
Notwithstandin2 the admission o c are Assia c �s P Substitute Member, the Assignor shad.) not be
released fret=i the Assilgin 3r's lraNlity to the Company, but such admissk-m. shallcause an.
Assignor that is a Member to cease to be a Member with .respect to the Membership Interest.
Transferred when the Assignee becomes a Safbs"tarty: Ivle:mber. In any such case, the admission
of the Assignee as a Substitute Member shall constitute the requisite consent of the Member-, to
continue the business of the Company notwithstanding that such admission will cause the
termination of the Nfembership ofthe Assignor with respect to the Mernbe- ship interest
Transferred.
INTERESTS. LJpoil ary i'r•ansfe;r during any fiscal year inade an compliance with the provisions
of this Article if, rrret orof ts, ri t lasses, each item. the i cofF and all other items attributable to such
interest for such fTsCal year shall be divieled and allocated between the ss=gno T- and the Assignee
by takino, into account their varying Interesss d=rr-i-no such fiscal vear in: accordance with Code
706(d), ar,srrrg any conventions permitted by lavv and .selected by the Compan-1 .
,f,tct_:t<, 10
1 .f ESSOC :UION. A person shalt eeasL. to be a Member upon the lrappcnisr.g ofany
of"tile f 11owing events -
The M€. @, .b r ifll�.dfG=vvs v z,ohunt<,UV act tram thw, CE}i7 pa.n_..y by f"dVii CS
(b) The Ceases ter be a Member of the Company sduc tcthe'Fr nsfer
of all of such _Members Membership Interest in the: Con-ipar.y. during his lifetirrre or a:t
death.
(e) 'rhe Member is removed as a Member by an affirmative, vote of fajority.
of the ilembers who have not assigned their Membership Interests at the time of the vote;
(d) Except where the Member obtains the written consent of all Members at
the time, the Member (i) makes are assignment for the bereft of creditors, (ii) files a
voluntary petition. in bankruptcy-, (iii) is adjudicated bankrupt or insolvent-, (iv) files an
answer or tither pleading admitting or failing to contest the material allegations of a
petition Bled against the Member hi any proceeding of this nature, or (v) seeks; consents
to, or acquiesces to the appointment of a trustee., receiver or liquidator of the Member or
of all or any substantial part of the Member's properties-,
(e) Except where the Member obtains the written consent of all Members at
the time, if within one hundred twenty (120) days after the conimencernent of any
proceeding against the Member seeking reorganization, arrangement, composition,
OPERATING AGREEMENT T - P.14
read,just:rtz€ nt, liquidation, dissohution oi, ::un lar relief under any statute- law or
regulation, the proceeding. has of been dismissed. or if wanin one hundred tweno. (. 20
days after 't the appointinent w 4n.o€it his consesi:t or acquiescence of is trrl.stb tW rt" ceiver or
=i , iidator of the Member or of all or any substantial part Of his Properties, the
appointment is not vacated or staytd or if within one hundred twenty (1.20) days after the
expiration of any stay, the appointment is not vacated, or
f i The Member ceases to be a Mernber of°the Company due to any other
;vent of Dissociation enumerated in the Act,
® RIGHTS OF DISSOCIATNNG WM13F.R. in the event any Member Dissochites prior
to the ex p ration oCthe
(a) if the Dissociation causes a dissolution and winding tap of`thy Company
under- Article f ?, the He ber ,ball be entitled to participate irr the winding up f the
Company to the same extent as any other Member except that array; Distributions to which
tfre Member would have been entitled shall be reduced by the darnages sustained by the
Company as a resuft of the Dissolution caused by the dissociation and winding up:
b if the Dissociation does not cause a dissolution and winding up of the
Company tinder Article l 2 and the event f f)issociation is under Sections i O. f (c) the
Member shall b e enti€fed to an amnount equal to the value of the Members ber's Membership
r.nterest 'n the C'omoanv, to be nand w4h'n six (O rnon€. s of the date of d.issocia!;on,
(c) As to all other events of.Dissociation defined it Section 10. , which do
not cause a dissolution, t-hic dissociated Member or successor thereto shall be considered.
an Assignee and will be entitled to receive ran amount equal to the. ember's Membership
Interest in the Company., pany., tr3 be paid drily when the Company is dissolved and wound up
in accordance wh Arillcle 12. Tine value of the Me b r`s Interest shaft
ineludt the amount of any D:stributrons to which t 'ic 'lAtmbtr is tntitle d trader this
Operating Agreement and the fair va uc:. c)f th€r err be-r's Nil embership In-terest as ofthe
date: of dissociation based upon the Members right to share in Disstr,b'atrcars.s frE3i:?"i the
Company reduced. by any damages sustained by the Company as a rest=lt ofthe Member's
Dissociation; and.
. Notwithstanding the foregoing, in the event a Member becomes
Dissociated as provided in Section 10. f (b) or in connection with the transfer of the
Member's entire Membership interest to a permitted transferee described in Section 9.1,
the transferring Member shall not be compensated by the Company for his Membership
Interest iinder this Section 10.2.
ARTICLE 1
ADMISSION OF ADDITIONAL MEMBERS
11.1 ADMISSION OF ADDITIONAL MEMBER. A person shall be admitted as an
Additional Member only if the Members their entitled to vote unanimously consent to such
OPEfaaTrivc AGREEMENT - P.I 5
admission, Which f'onse t may be 'given €;-ithh;eld in. the sole and absolute discrell€ n of each
Member, .be,r, Any Additional Member sl~=aH .nna e such contrIb tion as is, agreed upon by the
Additional N4e.mber in wnting and approved by the Members by their admission oday=
Additional Member, which ruing shall svvcify the value of, the Additional i.e ber's
contribution and the time for making such Contribution. Notwithstanding the Coregoingy, a
person shall not become an Additional Member unless and until such person becomes a party to
this Operating Agreement as a Member by signing a counterpart signature page to this Operating
Agreement and executing such documents and instruments as the Members reasonably Tnay
request to confirm such, person as a Member in. the Company and such person "s agreement to be
bound l v the terms and conditions of this Operating Agreern.ente
11. ACCO :NTIN �. ' o Additional Member shall be entitled to any re,troac,tive
allocation o any gain, loss or deduction, of the Cornpan . f- % Con-1pat y may at the
time an Additional Member is ad-mittfed, close the Coanpany books (as though the Conn an 's tax
year had ended) or make pro Y.-ata allocations of income, gait, loss Or deduction to 'an Additional
member For that portion ofthe Company",-, tax J eaz in Which such ]Member was admitted in
accordarict with tho ter€ visions of Code § 706(d) and the Regulations thef -under,
ARTICLE 1
DissOLUTIONt) WI:. ING UP
12.E MSSO .UTION, `flee Company shall. be dissolved and its affair; -pound up, upon
the firstto occur of the .i6howitig events (vvllt, ..I: , uniess t'e Members zagree to continu
e the
bu6iness, shall Events
(at 'The expiration Of the 1 erni- undess the business.. of the Corripany is
continued. ,xi.tlh the co fsee:t oFall ol" I l.,e l embe-s:
an aa:i.nnoa ,s v%rlgt en corsent: of all o clay Members-,
The du` soda ion. ot-any -Member, unless ffie b sib es. of the Company is
continued- wT'th the consent of all flee renna nin IVIe hers within 90 days afte suich
€ issociation; or
(d) The entry of a decree of judicial dissolution,
2.2 DiSTRIBUTION OF ASSETS ON DISSOLUTION, Upon. the occurrence of a
Dissolution Evert, the Company shall continue solely for the purposes of winding asp its affairs
in an orderly manner, satisfying the claims of its creditors and Members, and liquidating or
distributing its assets to the extent. necessary therefore: and no Member shall tale any action. that
is inconsistent with, or not necessary to or appropriate for. the orderly winding up cif t.h.ei
Company's business and affairs. To the extent not inconsistent with tine foregoin , all
obligations in this Operating Agreement shall continue its fall force and effect until such time as
the Company property has been distributed pursuant to this Section 12.2. The Members shall
oversee the winding asp and dissolution. of the Company, provide a Ball accounting of the
Company's liabilities and property, cause the Company property to be distributed in fired or to be
liquidated as promptly as is consistent with obtaining the fair value thereof and cause the
Draceeds there, from and any ren-raining Property, try the extent sufficient therefore- to be applied
and distributed in the following order -
(a) "Fo creditors« inei. ding Members who are creditors, to the extent pwrrrritted.
by law., in satisfaction fC om- parry Iiabi.6ities; and
(b) To Members in accordance with positive Capital Account balances takirr=g
into account all Capital Account ad ustments for the Company's taxable year in. which
the liouidation occurs. Liquidation proceeds shall be paid within sixty (60) days of the
end of the C°ompanv"s taxable year or, if later, within ninety ( ")days after the date of
liquidation. Such distributions shall. be in rnou.e y or ether p_ropert y (which mead not be
distributed proportionately) o partly i otlh. as deterinined by the Member. IfMy
Member has a capital account defii it (after giving -effect to all contributions, distributions
and allocations for all fiscal years, including the lisc;ai year during which such. liquidation
occurs), such Member shall have no obligation to make any contribution with respect tc
such deficit, and such deficit shall not be considered a debt owed by such Member to the
C`o a y or to any other person Im- any purpose whattsoever,
12.3 WINDING G UPAND (..ERTIFI � F, OF ISsSiOI rTION. The winding up of the
Company shall be completed when all debts, liabilities, and. obligrations of the Company have
be -In paid and discha~r ed or reasonably adequate. provision. thereforc has been made, and al.l of
the remaining property arrd assets of the Company have been distributed to the Nliemiberrs. Upon
the completion o.fwindi rL, up of the C oinpany, ,a C€:rtijIcate ofDissolution si-all be delli Bred to
Me Secretary° f Mate R)r filing. The Certificatcof Dissolution shall set fortis the info.rrrration.
required by the Act..
ARTiCLE 1.
AMENDMENT
i,l:lis C peratirr,o � .r,:ement may be amended or modified orn. tinvic w tirne only b-v a
written executed f ry ah of tl e..�;�.cnclbe r s.
ARTICLE .4
MISCELLANEOUS PROVISIONS
1.4.. ENTIRE AGREEMENT. This Operating Agreement represents the entire agreement
among all the Members and between the Members and the Company.
14.2 No PARTNERSHIP INTENDED FOR 1 O - kx PURPOSES. The Members have
forr ed the C oinpany under the Act, and. expressly do not intendhereby to form a partnership
under either the Idal;o General Partnership act, or the Idaho Limited Partnership Act. The
Members do not intend, for Pon -tax purposes, to be partners to one another, or partners as to any
third party. To the extent any Member, by word or action, represents to another person that any
other Member is a partner or that the Company is a partnership for stun -tax purposes, the
Member making such wrongful representation shall be liable to any other Member who incurs
personal liability by reason of such wrongf€rl representation.
OPERAI ING AGREEMENT - P,17
This Operating greencent is entered into among the Co pay and the Members for rice
exclusive benefit of the Company, its Metx bcrs, and their successors and assiLaiees. This
Operating Algreeme t is expressly not untended. for the benefit ofany creditor ofthe Company or
any other person. Except and only to the extent provided by applicable statute, no such creditor
or third party shall have any rights under this Operating Agreement or any agreeme t between
the Company and any Member with respect to any Capital Contribution or otherwise.
4.4 ATTORNEYFEES. Should any litigation be commenced. between the parties to
this Operating Agreement concerning dlic Agreement or the rights and duties of'either in Tclati.on.
thereto, the rpaily prevailing in suchr, litigation shall be entitled. in addition to such other reficifas
may be granted, to a reasonable suna as and for its attoru ey Gees in such iti.gation.. wh;ch shall 'D
determined by the c€ imt In such. litigation or in. a separate action brought for I'lat purpose,.
4m5 Am'10N HY COMPANY. Any acts, duties, responsibilities or the like of the
Company shall be construed to mean acts, duAlies, res onsibiNties or the like of a Ma okity in.
hiterest of the Members.
14.6 SEPARATEPROPERTY, it is the intent of the parties to this Agreement that the
Interests in the Company shall retalin the same character as flhe consideration pro.vided in
exchange for the hnferests, inciuding those In'crests which may in the fbture be held by or ona
behalf of a transferee of dh� Members and all capital {contr utiorls r1lade by them shall be apd
remain the separate: property of the transfer c c, t0gether with, the rents, llco e, xss es and profits
there fro , and appreciation therein, and that, exceptas othen ise provided herein, no spouseof
such a transferee shall have any interest in the su ect nnatter ofthis Agreement.
lN, WI II'.E.:SS WHERECE FR o,,';' the Panics have e.',xecLaed. this Agreement as of the date first
vvritts. i 0-ye,
" �mmY
kK
� 1 c�g�.. r eni "C�' s t, , Managing�M-em�3€.',r of CS , �. f_ C
Residing at Meridian, idaho
OPERATINc's r4tsREtv.M i' _ P. 19
ExHIBIT A
INUFLkL CAPITAL SHARING
EMBED CONTRIBUTIONNALUE RATIO
Alliance Managennent Consultants, 1,000,00 � 1 00%
L C
I