Affidavit of Legal Interest_BVA Eagle View, LLC Operating AgreementOPERATING AGREEMENT
OF
BVA EAGLE VIEW, LLC
THE INTERESTS DESCRIBED AND REPRESENTED BY THIS OPERATING
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 ("FEDERAL ACT") OR ANY APPLICABLE STATE SECURITIES LAWS
("STATE ACTS") AND ARE RESTRICTED SECURITIES AS SUCH TERM IS
DEFINED IN RULE 144 UNDER THE FEDERAL ACT. THE INTERESTS MAY NOT
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
QUALIFICATION UNDER THE FEDERAL ACT AND APPLICABLE STATE ACTS
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
FEDERAL ACT AND APPLICABLE STATE ACTS, THE AVAILABILITY OF WHICH
IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
S:\Docs\BVA Development, LLC\Elks-ICCU Acquisition and DevelopmentTORKOpemting Agreement - BVA Eagle View, LLC v.3 (4-22-
2019).docx
OPERATING AGREEMENT
OF
BVA EAGLE VIEW, LLC
THIS OPERATING AGREEMENT OF BVA EAGLE VIEW, LLC, a limited liability
company organized pursuant to the Act, is entered into to be effective as of the Effective Date,
by BV PROPERTIES, LLC, an Idaho limited liability company, and AHLQUIST
DEVELOPMENT, L.L.C., an Idaho limited liability company, as the Initial Members, on behalf
of themselves and the Company, and BV MANAGEMENT SERVICES, INC., an Idaho
corporation, and AHLQUIST DEVELOPMENT, L.L.C., an Idaho limited liability company, as
the Managers.
ARTICLE I
FORMATION
1.1 Organization. The Initial Members have organized the Company as an Idaho
limited liability company pursuant to the provisions of the Act. The Initial Members hereby
authorize and ratify the Certificate in the form filed with the Secretary of State. The Initial
Members, for themselves and the Company, and the Managers agree that, from and after the
Effective Date, this Agreement shall be the sole and entire operating agreement of the Company,
governing to the fullest extent permitted by the Act all the relations among the Members as
members and between the Members and the Company, all rights and duties of the Managers, all
activities of the Company and the conduct of those activities, and the means and conditions for
amending this Agreement. No oral or implied agreements, whether made or claimed to have
been made in the past, present or future, shall ever be or become part of or included in this
Agreement or otherwise constitute all or part of this Agreement or all or part of any operating
agreement of the Company under the Act. This Agreement may be amended only as provided
herein.
1.2. Name. The name of the Company is BVA Eagle View, LLC, and all business of
the Company shall be conducted under that name.
1.3 Effective Date. This Agreement shall be effective as of the date and time of
filing of the Certificate with the Secretary of State on April 3, 2019.
1.4. Term. The Company shall be dissolved and its affairs wound up in accordance
with the Act or this Agreement.
1.5. Designated Office. The Company's designated office shall be as set forth in the
Certificate, as the same may be changed from time to time by the Company filing with the
Secretary of State a statement of change in form and substance required by the Act.
1.6. Registered Agent. The Company's registered agent for the service of process
shall be as set forth in the Certificate, as the same may be changed from time to time by the
Company filing with the Secretary of State a statement of change in form and substance required
by the Act.
1 — Operating Agreement of BVA Eagle View, LLC
1.7. Purpose of Company. The Company is created to acquire membership interests
in BVABC Eagle View, an Idaho limited liability company. The Company shall have the
authority to do all things necessary or convenient to accomplish its purpose and operate its
business as described in this Agreement.
ARTICLE II
DEFINITIONS
For purposes of this Agreement, unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
Act. The Idaho Uniform Limited Liability Company Act and all amendments to the Act.
AD Member. Ahlquist Development, L.L.C., an Idaho limited liability company, and its
successors and assigns.
Affiliate(s). Affiliate(s) is defined to include any Person that owns in whole or in part
any Member or Manager; any Person owned in whole or in part by any Member or Manager; and
any Person that is under common ownership in whole or in part with any Member or Manager.
Agreement. This Operating Agreement including all amendments adopted in accordance
herewith.
Approved Budget. Any annual, operating, construction, other budget, or operating plan
for the Company approved by Unanimous Consent from time to time.
BV Member. BV Properties, LLC, an Idaho limited liability company, and its
successors and assigns.
Capital Account. The account maintained for a Member or Transferee determined in
accordance with Article III.
Capital Contribution. A contribution of or an obligation to contribute Property or
services to the Company by or on behalf of a Member or Transferee that is described in this
Agreement or otherwise in writing signed by all Members. No service or other benefit by any
Person to the Company shall constitute or be deemed a Capital Contribution, unless described as
a Capital Contribution in this Agreement or other written instrument signed by all Members. All
agreements to contribute capital must be in writing signed by the Members. No oral, or claimed
oral, agreements shall create any obligation to contribute capital to the Company or any
membership or other interest of any kind or nature in the Company.
Certificate. The Certificate of Organization of the Company as filed with the Secretary
of State, as the same may be amended from time to time by filing authorized by Majority
Consent in form and substance required by the Act with the Secretary of State.
Code. The Internal Revenue Code of 1986 as amended from time to time.
2 — Operating Agreement of BVA Eagle View, LLC
Company. BVA Eagle View, LLC, a limited liability company formed under the Act,
and any successor limited liability company.
Company Liabilities. All debts, obligations and other liabilities of the Company,
whether arising in contract, tort or otherwise.
Company Property. Any and all other Property owned by the Company.
Conversion Election Date. Conversion Election Date has the meaning set forth in
Section 3.5 of this Operating Agreement.
Converted Units. Converted Units has the meaning set forth in Section 3.5 of this
Operating Agreement.
Defaulting Member. Defaulting Member has the meaning set forth in Section 3.5 of this
Operating Agreement.
Defaulting Member Loan(s). Defaulting Member Loan(s) has the meaning set forth in
Section 3.5 of this Operating Agreement.
Defaulting Member Note(s). Defaulting Member Note(s) has the meaning set forth in
Section 3.5 of this Operating Agreement.
Disposition (Dispose). Any sale, assignment, transfer, exchange, mortgage, pledge,
grant, hypothecation, or other transfer, absolute or as security or encumbrance (including but not
limited to Dispositions by operation of law).
Dissociation (Dissociate). Any action which causes a Person to cease to be a Member as
described in Article X of this Agreement.
Distribution (Distribute). A transfer of Property by the Company to a Member as
described in Articles VI and XI.
Effective Date. The Effective Date of this Agreement as specified in Section 1.3 of this
Agreement.
Executive Manager. The Executive Manager shall mean BV Management Services,
Inc., an Idaho corporation, and any other Person(s) that succeed the Executive Manager in that
capacity as may be appointed from time to time by the BV Member, in its sole discretion.
References to the Executive Manager in the singular, the Executive Managers in the plural or as
it, them or other like references shall also include the plural or singular or the masculine or
feminine reference as the case may be.
Initial Capital Contributions. The Capital Contributions agreed to be made by the
Initial Members as described in Article III.
3 — Operating Agreement of BVA Eagle View, LLC
Initial Members. Those Persons identified on Exhibit A attached hereto and made a part
of this Agreement by this reference who have executed this Agreement.
Lending Member(s). Lending Member(s) has the meaning set forth in Section 3.5 of
this Operating Agreement.
Losses. The losses and deductions of the Company determined in accordance with
accounting principles consistently applied from year to year employed under the method of
accounting adopted by the Company and as reported separately or in the aggregate, as
appropriate, on the tax return of the Company filed for federal income tax purposes.
Majority Consent. Majority Consent requires that Members holding a majority of the
Units entitled to vote on a particular matter either consent to or otherwise authorize such matter
in writing. Transferees shall not be considered Members with Units entitled to vote for the
purpose of determining Majority Consent.
Managers. The Executive Manager and the Operations Manager. References to the
Manager in the singular, to the Managers in the plural, or to the Manager or the Managers as
him, her, it, them or other like references, shall include the singular or plural reference and/or the
masculine, feminine or neuter reference as applicable.
Member. A Person who holds Units and who also has the right to exercise the Voting
Rights attributable to those Units by reason of being (i) an Initial Member, or (ii) admitted as a
Member pursuant to Article VIII or Article IX. A Person may become a Member only as
provided in this Agreement.
Mortgage. Any mortgage, deed of trust, lien or other encumbrance on or against any
Property, any improvements thereon or any part thereof.
Operations Manager. The Operations Manager shall mean Ahlquist Development,
L.L.C., and any other Person(s) that succeeds the Operations Manager in that capacity as may be
appointed from time to time by the AD Member with the prior written approval of the BV
Member. References to the Operations Manager in the singular, the Operations Managers in the
plural or as it, them or other like references shall also include the plural or singular or the
masculine or feminine reference as the case may be.
Permitted Transferee. Permitted Transferee is defined to include any Member; any
Person that owns (in whole or in part, directly or indirectly) any Member; any Person owned (in
whole or in part, directly or indirectly) by any Member; any Person that is under common
ownership (in whole or in part, directly or indirectly) with any Member; and the spouse and
lineal descendants of any of the foregoing and any trust of which any one or more of the
foregoing and/or any Member is a beneficiary.
Person (person). Any individual, trust or entity having the legal capacity to own a Unit
and be a Member in the Company or to be a Manager of the Company.
4 — Operating Agreement of BVA Eagle View, LLC
Primary Purpose. The purpose of the Company as described in Section 1.7 of this
Agreement.
Profits. The income and gains of the Company determined in accordance with
accounting principles consistently applied from year to year employed under the method of
accounting adopted by the Company and as reported separately or in the aggregate, as
appropriate, on the tax return of the Company filed for federal income tax purposes.
Property. Any real property and personal property, tangible or intangible, including
money and any legal or equitable interest in such property, but excluding services and promises
to perform services in the future.
Regulations. Except where the context indicates otherwise, the permanent, temporary,
and proposed regulations of the Department of the Treasury under the Code as such regulations
may be lawfully changed from time to time.
Remaining Members. In the event of Dissociation of a Member, all of the Members at
the time of such Dissociation other than the Member who is Dissociated. hi the event of a
Member who has any potential conflict of interest or is involved in a transaction between the
Member and the Company, the Members not having the potential conflict of interest or
transaction. In the event of a Disposition of Units, the Members not disposing of their Units.
Required Capital Contributions. Required Capital Contributions has the meaning set
forth in Section 3.4 of this Operating Agreement.
Secretary of State. The Secretary of State of Idaho.
Sharing Ratio. With respect to any Member or Transferee, a fraction (expressed as a
percentage), the numerator of which is the total number of Units of such Member or Transferee
and the denominator of which is the total number of Units of all Members and Transferees. As
of the Effective Date the Members have the Sharing Ratios reflected in Exhibit A-1.
Taxable Year. The taxable year of the Company as determined pursuant to §706 of the
Code.
Transferee. A Person to whom the right to receive Distributions from the Company has
been transferred but who has not been admitted as a Member. A Transferee, by becoming a
Transferee, shall be subject to and bound by all the obligations of this Agreement imposed on
Members, including without limitation confidentiality obligations, but shall not be entitled to the
rights and privileges of Members under this Agreement, including without limitation rights to
receive financial information or reports from the Company or its Managers (other than
information returns for tax purposes required by law) or to access, inspect or copy books and
records of the Company. A Transferee is treated as a Member for the limited purposes of
accounting, taxation and Distributions, whether or not specifically referred to in those sections of
this Agreement dealing with such matters. The treatment of a Transferee as a Member for such
limited purposes does not confer upon the Transferee any rights to vote or participate in any
manner in the management of the Company.
5 — Operating Agreement of BVA Eagle View, LLC
Unanimous Consent. Unanimous Consent requires that Members holding all of the
Units entitled to vote on a particular matter either consent to or otherwise authorize such matter
in writing. Transferees shall not be considered Members with Units entitled to vote for the
purpose of determining Unanimous Consent.
Units. Ownership rights of a Member of the Company as further set forth in Article III.
Voting Rights. The rights of a Member to vote on, consent to or authorize actions of the
Company. Every Member may vote its Units on any issue subject to a vote of the Members,
except the Seller's Units shall be ignored for all votes under Article VIIL A Transferee shall
have no right to vote any of its Units or participate in any manner in the management of the
Company. The Voting Rights may be limited by the requirements for Majority Consent or
Unanimous Consent
ARTICLE III
UNITS, CONTRIBUTIONS AND CAPITAL ACCOUNTS
3.1. Units. Ownership rights in the Company are reflected in Units. Each Unit held
by a Member has equal Voting Rights with every other Unit held by Members and in matters
subject to a vote of Members has one vote. Each Unit has equal rights with every other Unit
with respect to the sharing of Profits and Losses and with respect to Distributions, except as
otherwise provided in this Agreement. The rights of consent associated with Units, i.e. the
Voting Rights, to the extent conferred hereunder, may only be exercised by Members as set forth
herein and shall be subject to the requirements that certain decisions require either Majority
Consent or Unanimous Consent.
3.2. Disposition of Units. No Member may Dispose of Units except as provided in
this Agreement, and any other Disposition of Units shall be void. Any such Disposition results
in the Disposition of the rights in Profits and Losses and to Distributions and the rights in the
Capital Account attributable to the Units, but no Voting Rights unless the Transferee becomes a
Member in accordance with the terms and conditions of this Agreement.
3.3. Initial Capital Contributions. The description and value of the Initial Capital
Contributions and the number of Units issued to each Initial Member are as set forth in the
attached Exhibit A.
3.4. Additional Capital Contributions. If the Company's revenues and cash
reserves are insufficient to pay operating expenses (including without limitation insurance,
utilities, taxes and assessments), debt obligations (including without limitation debt secured by
any Company Property) of the Company, or construction or other costs included in any
Approved Budget, within five (5) business days after the request of the Executive Manager, the
Members shall make additional Capital Contributions sufficient for the Company to pay its
operating expenses, debt obligations, construction and/or other costs when and as due ("Required
Capital Contributions"), unless the Members agree otherwise by Unanimous Consent. All
Members shall participate in Required Capital Contributions on a pro rata basis in accordance
with their Sharing Ratios. Except as provided above, no Member shall be required to make
6 — Operating Agreement of BVA Eagle View, LLC
additional Capital Contributions without such Member's written consent. The Capital Account
of a contributing Member shall be adjusted to reflect any additional Capital Contribution.
Additional Units in excess of the 100 Units issued as of the Effective Date may be issued to a
contributing Member only upon Unanimous Consent.
3.5. Member Loans. If any Member does not make a Required Capital Contribution
when due (the "Defaulting Member"), one or more other Members (the "Lending Member(s)")
may, but shall not be obligated to, loan to the Defaulting Member an amount equal to the
Required Capital Contribution of such Member (the "Defaulting Member Loan(s)"). If more
than one Lending Member makes the Defaulting Member Loan(s), the Lending Members will
make the loan(s) in proportion to their Sharing Ratios unless otherwise agreed in writing by the
Lending Members. The funds for the Defaulting Member Loan(s) shall be delivered to the
Company and credited to the Capital Account of the Defaulting Member. The Defaulting
Member shall sign and deliver a promissory note to each Lending Member in the form attached
hereto as Exhibit C for the portion of the Defaulting Member Loan(s) made by such Lending
Member (the "Defaulting Member Note(s)"). If a Defaulting Member does not sign and deliver
the Defaulting Member Note(s) as provided above, such Defaulting Member shall nevertheless
be deemed to have signed the Defaulting Member Note(s) and shall be subject to the same
obligations and liabilities to the Lending Member(s) as provided therein. Each Defaulting
Member Note shall bear interest at the rate of twelve percent (12%) per annum compounded
annually and shall be payable in full ninety (90) days after the date the Defaulting Member Loan
funds are delivered by the Lending Member(s) to the Company.
If the Defaulting Member does not pay the Defaulting Member Note(s) in full, including
all principal and accrued interest, when due, each Lending Member thereafter shall have the
option, in the Lending Member's sole discretion, to pursue collection against the Defaulting
Member for default of the Defaulting Member Note payable to such Lending Member or to elect
to convert the Defaulting Member Note obligation to Units of the Defaulting Member (the
"Converted Units") and have the Converted Units transferred from the Defaulting Member to
such Lending Member on the books and records of the Company effective as of the date written
notice of such election is delivered to the Company (the "Conversion Election Date"). The
Converted Units shall consist of (i) an increase in the Capital Account of the Lending Member
and a decrease in the Capital Account of the Defaulting Member in each case by an amount
equal to the amount of the applicable Defaulting Member Note, including principal and interest,
remaining unpaid on the Conversion Election Date; and (ii) an increase in the number of Units of
the Lending Member and decrease in the number of Units of the Defaulting Member in an
amount to be calculated as follows:
A x 2.0 x Total Number of Units Outstanding = Number of Converted
B Units (rounded to the
nearest whole Unit)
"A" equals the amount of the applicable Defaulting Member Note, including principal and
interest, remaining unpaid on the Conversion Election Date. `B" means the sum of the Capital
Accounts of all Members on the Conversion Election Date. For example, if A were equal to
$100,000.00, B were equal to $4,000,000.00, and there were 100 total Units outstanding, then the
number of Converted Units would be calculated as follows:
7 — Operating Agreement of BVA Eagle View, LLC
100,000 x 2.0 x 100 Units = 5 Converted Units
4,000,000
Assuming the Lending Member and the Defaulting Member on the Conversion Election Date
each owned 50 Units, this would result in the Defaulting Member owning 45 Units (50 Units — 5
Converted Units = 45 Units) and the Lending Member owning 55 Units (50 Units + 5 Converted
Units = 55 Units). If the number of Converted Units were 50 Units instead of 5 Units under this
example, then the Defaulting Member would no longer have any interest in the Company and the
Lending Member would own 100 Units.
3.6. Capital Accounts. The Company shall establish and maintain a Capital Account
for each Member and Transferee. Each Member's Capital Account shall be increased by (1) the
amount of any money actually contributed by the Member to the capital of the Company, (2) the
fair market value at the time of contribution of any Property contributed by the Member (net of
liabilities assumed by the Company or subject to which the Company takes such Property, within
the meaning of §752 of the Code), and (3) the Member's share of Profits and of any separately
allocated items of income or gain except adjustments required by the Code (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 Member's Capital Account shall be decreased by (1) the amount of any money
Distributed to the Member by the Company, (2) the fair market value at the time of Distribution
of any Property Distributed to the Member (net of liabilities of the Company assumed by the
Member or subject to which the Member takes such Property within the meaning of §752 of the
Code), and (3) the Member's share of Losses and of any separately allocated items of deduction
or loss (including any loss or deduction allocated to the Member to reflect the difference between
the book value and tax basis of assets contributed by the Member). Capital Accounts (and the
book value of Company property) shall be further adjusted upon any event described in Treasury
Regulation Sections 1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(g) in the manner described in
those Treasury Regulations.
3.7. Distribution of Property. If the Company at any time Distributes any Company
Property in -kind to any Member, the Capital Account of each Member shall be adjusted to
account for that Member's allocable share (as determined under Article VI) of the Profits or
Losses that would have been realized by the Company had it sold the Property that was
Distributed at its fair market value immediately prior to its Distribution.
ARTICLE IV
ACCOUNTING AND RECORDS
4.1. Records to be Maintained. The Company's books and records shall be
maintained by or under the direction of the Executive Manager at the designated office of the
Company or such other place as the Executive Manager shall determine. Each Member shall at
all times have reasonable access to and may inspect and copy, at the Member's expense, the
books and records of the Company. The Company shall maintain books and records which
properly reflect all financial transactions made by the Company in with a method of accounting
8 — Operating Agreement of BVA Eagle View, LLC
consistently applied between periods as determined by the Executive Manager, and such other
records as the Executive Manager or Members, by Majority Consent, may direct.
4.2. Reports to Members. All Members shall be entitled to receive financial reports
on the Company at least semi-annually upon request. All Members shall be provided in a timely
manner with IRS Schedules K-1 and other tax -related information returns required by law. The
furnishing of such financial reports and information returns shall be deemed to satisfy the
obligations of the Company and its Members and Managers to furnish to each Member and/or
Manager the information required by the Act.
ARTICLE V
RIGHTS AND DUTIES OF MANAGERS AND MEMBERS
5.1. Management. The business and affairs of the Company shall be managed by the
Managers. The Members agree that only the Managers shall have responsibility for the
management of the Company, and no Member or Affiliate or any shareholder, director, officer,
manager, member, employee, agent or other representative of any Manager, Member or Affiliate
shall have any responsibility or liability for the management of the Company or any acts or
omissions of any Manager relating to the management of the Company or any other matter.
5.2. Authority of Executive Manager. Except for situations in which Majority
Consent or Unanimous Consent is expressly required by this Agreement or by non-waivable
provisions of applicable law, the Executive Manager shall have full and complete authority,
power and discretion to manage and control the business, affairs and properties of the Company,
to make all decisions regarding those matters, and to perform any other acts and activities
customary or incident to the management of the Company's business. The fact that a Manager
or a Member is directly or indirectly affiliated or connected with a Person shall not prohibit the
Executive Manager from dealing with that Person. Without limiting the generality of the
forgoing and subject to the requirements of Section 5.24, the Executive Manager shall have
power and authority, on behalf of the Company:
5.2.1. To acquire property from any Person as the Executive Manager may
determine consistent with Section 5.24.
5.2.2. To sell or otherwise dispose of the Company's assets in the ordinary
course of the Company's business, and with Unanimous Consent to sell or otherwise dispose of
all or substantially all of the assets of the Company as part of a single transaction or plan.
5.2.3. To invest any Company funds temporarily (by way of example but not
limitation) in time deposits, short-term governmental obligations, commercial paper, or other
investments.
5.2.4. To borrow money for the Company from banks, other lending institutions,
any Manager, any Member or any Affiliate on such terms as the Executive Manager deems
appropriate, and in connection therewith, to hypothecate, encumber and grant liens on and
security interests in any or all Company Property to secure repayment of the borrowed sums.
9 — Operating Agreement of BVA Eagle View, LLC
5.2.5. To execute all instruments and documents, including but not limited to
checks, drafts, notes and other negotiable instruments; mortgages, deeds of trust, security
agreements and financing statements; documents providing for the acquisition, disposition and
lease of Company Property; partnership agreements and operating agreements of other entities;
and any other instruments or documents, deemed necessary or advisable by the Executive
Manager for the Company or its business.
5.2.6. To enter into any and all other agreements with any other Person for any
purpose deemed necessary or advisable by the Executive Manager for the Company or its
business.
5.2.7. To employ accountants, legal counsel, managing agents, or other experts
to perform services for the Company and to compensate them from Company funds.
5.2.8. To purchase liability, property and other insurance to protect the Company
and Company Property.
5.2.9 To do and perform all other acts as may be necessary or appropriate to the
conduct of the business of the Company.
5.3. Limitations on Authority of Executive Manager. Notwithstanding any other
provision of this Agreement, but subject to Section 5.2 and Section 5.24, the Executive Manager
shall not cause or commit the Company to do any of the following without Unanimous Consent:
5.3.1. Purchase, sell, lease or otherwise dispose of any Company Property, other
than in the ordinary course of business.
5.3.2. Incur or refinance any indebtedness for money borrowed by the Company,
whether secured or unsecured and including any indebtedness for money borrowed from a
Member, other than in connection with the development, improvement, financing and/or
refinancing of any Property.
5.3.3. Hypothecate, encumber or grant liens on and security interests in any or
all Company Property, other than in connection with the development, improvement, financing
and/or refinancing of any Property.
5.3.4. Enter into or cause the Company to enter into any sale, lease, loan, license,
guarantee, services or other transaction or agreement with any Member, Manager or Affiliate of
any Member or Manager unless: (a) such transaction or agreement is in all material respects on
reasonable arms -length and fair market terms; or (b) the transaction or agreement has received
Unanimous Consent.
5.4. Limited Authority of Operations Manager. The Operations Manager shall be
responsible for providing all management and oversight services to the Company consistent with
the provisions of this Article V. The actions by the Operations Manager shall be undertaken in
accordance with the Approved Budget. The Operations Manager shall prepare and deliver to the
Members and the Managers such reports as the Executive Manager may request from time to
10 — Operating Agreement of BVA Eagle View, LLC
time. Notwithstanding any other provision of this Agreement, no Operations Manager shall
cause or commit the Company to do any of the following without the prior written authorization
of the Executive Manager:
5.4.1. Construct any capital improvements, repairs or alterations.
5.4.2. Purchase, sell, lease or otherwise dispose of any Company Property.
5.4.3. Incur or refinance any indebtedness for money borrowed by the Company,
whether secured or unsecured and including any indebtedness for money borrowed from a
Member.
5.4.2. Hypothecate, encumber and grant liens on and security interests in any or
all Company Property.
5.5. Limitations on Authority of Others. Unless authorized by this Agreement or by
the Executive Manager, no Operations Manager, attomey-in-fact, employee, or other agent of the
Company shall have any power or authority to bind the Company in any way, to pledge its
credit, or to render it liable for any purpose. No Member shall have any power or authority to
bind the Company unless the Member has been authorized by the Executive Manager to act as an
agent of the Company in accordance with the previous sentence.
5.6. Title to and Conveyance of Company Property. Title to Company Property
shall be held in the Company name. Conveyance of title to real property held in the name of the
Company shall be effective only upon the execution of all documents relating thereto by the
Executive Manager.
5.7. No Exclusive Duty to Company; Liability of Managers. The Managers shall
not be required to manage the Company as their sole and exclusive function. The Members shall
not be required solely and exclusively to invest and participate in the Company. The
management or participation in other businesses, investments, developments or other activities
by a Manager, whether or not such compete with the Primary Purpose, shall not constitute a
violation or breach of the duty of loyalty or any other fiduciary duty of such Manager to the
Company, any Member, any Transferee or any other Manager. Each Manager shall perform its
duties as a Manager in good faith, in a manner it reasonably believes to be in the best interests of
the Company, and in a manner that does not constitute intentional misconduct or gross
negligence. A Manager who performs its duties as a Manager in a manner that does not
constitute intentional misconduct or gross negligence shall not have any liability to the
Company, the Members or any Transferees by reason of being or having been a Manager of the
Company. The Managers do not guarantee the return of the Members' or Transferees' Capital
Contributions or a profit for the Members or Transferees from the operations of the Company.
The Managers shall not be liable to the Company or to any Member or Transferee for any money
damages sustained by the Company or any Member or Transferee, except for fraud, deceit, gross
negligence, intentional misconduct toward the Company or any Member or Transferee, breach of
this Agreement, or breach of the duty of loyalty as such duty has been altered or limited by this
Agreement, a financial benefit received by such Manager to which such Manager is not entitled,
such Manager's consent to a Distribution in violation of the Act, such Manager's intentional
11 — Operating Agreement of BVA Eagle View, LLC
infliction of harm to the Company, a Member or Transferee, or such Manager's knowing
violation of law or intentional violation of criminal law. Notwithstanding the foregoing, the
Managers and Members actions from and after the Effective Date shall be subject to and taken
consistent with Section 5.24 below.
5.8. Indemnification of Managers, Employees and Other Agents. The Company
shall indemnify and hold harmless the Managers for and from any liability, whether civil or
criminal, and any loss, damage, or expense, including reasonable attorney fees, incurred in
connection with the ordinary and proper conduct of the Company's business and the preservation
of its business and property, or by reason of the fact that such Person is or was a Manager, if the
Manager to be indemnified (i) acted in good faith, in a manner such Manager believed to be
consistent with the provisions of this Agreement and in a manner that does not constitute
intentional misconduct or gross negligence; and (ii) with respect to any criminal action or
proceeding, the Manager to be indemnified had no reasonable cause to believe the conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a
presumption that indemnification is not available hereunder. The obligation of the Company to
indemnify any Manager hereunder shall be satisfied out of Company assets only, and if the assets
of the Company are insufficient to satisfy its obligation to indemnify any Manager, such
Manager shall not be entitled to contribution from any Member. The Company shall indemnify
each of its employees and other agents who is not a Manager to the fullest extent permitted by
law, provided that such indemnification in any given situation is authorized by Majority Consent.
5.9. Compensation of Managers. No Manager shall be entitled to a salary or any
other compensation for performing services for the Company except with Majority Consent.
5.10. Removal of Managers. Any Manager may be removed at any time with or
without cause by Majority Consent; provided that the Operations Manager may not be removed
other than for negligence, intentional misconduct or the failure to perform its duties under this
Agreement.
5.11. Vacancies of Managers. Any vacancy occurring for any reason in the Managers
of the Company shall be filled by a Person appointed by the Member(s) having the right to
appoint such Manager pursuant to Article II. Any position to be filled by reason of an increase
in the number of Managers shall be filled by Majority Consent.
5.12. Liability of Members. The Company Liabilities are solely the debts, obligations
and liabilities of the Company, and do not become the debts, obligations or liabilities of a
Member solely by reason of the Member acting as a Member. The failure of the Company to
observe any particular formalities relating to the exercise of its powers or management of its
activities under this Agreement or the Act shall not be grounds for imposing liability on the
Members for any Company Liabilities. No Member shall be liable or responsible for the acts or
decisions of the Managers, whether or not authorized by this Agreement. The parties agree that
any act, business or transaction engaged in by any Member that is authorized or permitted by, or
otherwise complies with, the provisions of this Agreement, shall not violate any fiduciary duty or
contractual obligation of good faith and fair dealing of such Member. Notwithstanding anything
12 — Operating Agreement of B VA Eagle View, LLC
in this Agreement to the contrary, this Agreement shall not be construed as creating a deficit
restoration obligation.
5.13. Indemnification of Members. The Company shall indemnify the Members, and
their agents for all costs, losses, liabilities, and damages paid or accrued by them in connection
with the business of the Company, to the fullest extent provided or allowed by the laws of the
State of Idaho.
5.14. Compensation and Reimbursements to Members. No Member is entitled to a
salary or any other compensation for performing services for the Company except with Majority
Consent. No Member may incur fees or expenses on behalf of the Company. If any Member
incurs management or other fees and expenses incident to its membership in the Company
(including but not limited to fees and expenses that may be ordinary and necessary in the
operation of the Company), such Member shall be personally responsible for the payment of
such fees and expenses without reimbursement by the Company.
5.15. Duties of Members. A Member does not have any fiduciary duty to the
Company or to any other Member solely by reason of being a Member. No conduct described in
Section 5.16 or 5.17 or otherwise permitted by this Agreement or the Act shall constitute a
breach of any duty of loyalty, care, good faith and fair dealing or any other fiduciary duty to the
Company or any Member. No Member shall be required to devote full time to the affairs of the
Company but each Member shall devote whatever time, effort and skill may be necessary for the
efficient and successful conduct of the Company's business. Provided, however, that
notwithstanding the foregoing, the Members actions from and after the Effective Date shall be
subject to and taken consistent with Section 5.24 below.
5.16. Outside Activities of Members or Managers. A Member or Manager may
engage in or possess an interest in other business ventures of every nature and description
independently or with others, including but not limited to the ownership of an investment in
stock, securities, real estate and other investment properties and activities that may compete
directly with the Company; and neither the Company nor the other Members or Managers shall
have any right by virtue of this Agreement in and to such independent ventures or to the income
or profits derived therefrom. Provided, however, that notwithstanding the foregoing, Managers
and Members actions from and after the Effective Date shall be subject to and taken consistent
with Section 5.24 below.
5.17. Conflicts of Interest. A Member or Manager shall be entitled to enter into
transactions that may be considered to be competitive with, or a business opportunity that may be
beneficial to, the Company. A Member or Manager does not violate a duty or obligation to the
Company merely because the Member's or Manager's conduct furthers the Member's or
Manager's own interest. A Member or Manager may lend money to and transact other business
with the Company. The rights and obligations of a Member or Manager who lends money to or
transacts business with the Company are the same as those of a Person who is not a Member or
Manager, subject to other applicable law. No act or transaction by a Member or Manager with
the Company shall constitute a breach of the duty of loyalty or any other fiduciary duty of such
Member or Manager to the Company or any other Member, Transferee or Manager or be
voidable solely because a Member or Manager has a direct or indirect interest in the act or
13 — Operating Agreement of BVA Eagle View, LLC
transaction, if either (i) the act or transaction is fair to the Company or (ii) after full disclosure of
all material facts, the act or transaction is authorized or ratified by Majority Consent. A Member
acting in the capacity of creditor to the Company shall be treated as other creditors of the
Company who are not Members to the fullest extent permitted by law. Provided, however, that
notwithstanding the foregoing, Managers and Members actions from and after the Effective Date
shall be subject to and taken consistent with Section 5.24 below.
5.18. Representations and Warranties. Each Member hereby represents and warrants
to the Company and each other Member that: (a) the Member is acquiring its interest in the
Company for the Member's own account as an investment and without an intent to distribute the
interest; (b) the Member acknowledges that the Units have not been registered under the
Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the
Member without appropriate registration or the availability of an exemption from such
requirements.
5.19. Confidentiality. Each Member and Manager agrees to keep confidential and not
disclose to any individual or entity any business, property, financial or other information relating
to the Company, its Members, Transferees or Managers, except as may be reasonably necessary
to conduct the Company's business in the ordinary course or as may be authorized by Majority
Consent.
5.20. Certification. The Executive Manager is hereby authorized to certify as correct
and complete and deliver, as the Executive Manager determines in its sole discretion, copies of
this Agreement and any amendments hereto to creditors and other third parties.
5.21. Statement of Authority and Other Filings with the Secretary of State. The
Executive Manager is hereby authorized to sign and file with the Secretary of State, as the
Executive Manager determines in its sole discretion, one or more statements of authority to
identify the Managers or Manager who has authority to sign documents and take actions on
behalf of the Company and to include in such statement(s) of authority such other information as
the Executive Manager deems advisable or appropriate in accordance with the Act. The
Executive Manager also may elect, in its sole discretion, to file with the Secretary of State
amendments and cancellations of statements of authority in accordance with the Act. The
Executive Manager shall also act on behalf of the Company in making other legally required
filings with the Secretary of State.
5.22. Alteration, Limitation and Elimination of Duties and Liabilities. It is the
intent and agreement of the Members, for themselves and on behalf of the Company, and the
Managers that, except as expressly provided in this Agreement, the duty of loyalty, the duty of
care, and other fiduciary duties that may be applicable to the Members or Managers are by this
Agreement eliminated and/or limited to the fullest extent provided by law.
5.22.1. The parties agree that the Members' and Managers' compliance with the
provisions of this Agreement shall satisfy and constitute compliance by such Members and
Managers with all their fiduciary duties and obligations of good faith and fair dealing.
14 — Operating Agreement of BVA Eagle View, LLC
5.22.2. For purposes of the duty of loyalty and any other applicable fiduciary
duties, no act, decision, business or transaction other than an act, decision, business or
transaction directly applicable to the Primary Purpose may constitute a Company opportunity.
5.22.3. No act, decision, business or transaction by a Member or Manager
authorized or permitted by this Agreement shall constitute a breach of any duty, fiduciary or
otherwise, of such Member or Manager or constitute an oppressive or harmful act, under the Act
or otherwise in law or in equity, to any other Member, Transferee or Manager.
5.22.4. The parties agree that, except as expressly provided in this Agreement,
the duty of care of each Member and Manager is hereby eliminated.
5.22.5. The parties agree that no Member or Manager shall have any liability to
the Company or its Members or Transferees for money damages, except for: (1) breach of the
duty of loyalty as altered and limited by this Agreement; (2) a financial benefit received by the
Member or Manager to which the Member or Manager is not entitled; (3) the consent to or
receipt of a Distribution in violation of the Act; (4) intentional infliction of harm on the
Company or a Member; or (5) an intentional violation of criminal law.
5.22.6. The Members, for themselves and on behalf of the Company, and the
Managers agree that the alteration, limitation and/or elimination of fiduciary duties and liabilities
of Members and Managers as provided in this section and otherwise in this Agreement are not
manifestly unreasonable but rather constitute consideration and conditions to their entering into
and becoming parties to this Agreement.
5.23. Loan Indemnity. The Company may obtain one or more loans in connection
with the Primary Purpose ("Loan(s)"). All Loans shall be made to the Company and may be
secured by any Property and/or guaranteed by the Members and their Affiliates (collectively, the
"Indemnitees"). The Company and the Members shall indemnify, defend and hold harmless the
Indemnitees for, from and against any and all claims, actions, suits, liabilities, damages,
penalties, fines and costs, including but not limited to attorneys' fees and costs, (i) that may be
brought against any such hidemnitee in connection with any Loan or that any such Indemnitee
may incur or pay by way of settlement, judgment or otherwise in connection with any Loan, or
(ii) that may be brought against any such Indemnitee in connection with any other debts,
liabilities or obligations of the Company now or in the future guaranteed or paid by such
Indemnitee or that any such Indemnitee may incur or pay by way of settlement, judgment or
otherwise in connection with any such debts, liabilities or obligations. If any claim, action or
suit alleging such liabilities, damages, penalties or fines is brought against any such Indemnitee,
the Company shall defend the same at its expense by counsel reasonably satisfactory to such
Indemnitee. The Company's liability under this subsection is primary and unlimited. In the
event any liability or obligation covered by this subsection is not fully paid by the Company, the
Members' liability under this subsection is limited in proportion to their Sharing Ratios. The
foregoing to the contrary notwithstanding, the indemnity, defense and hold harmless obligations
in this Section shall not apply to any claims, actions, suits, liabilities, damages, penalties, fines or
costs arising out of or in connection with the misrepresentation, fraud or other misconduct of any
Member.
15 — Operating Agreement of BVA Eagle View, LLC
5.24. Miscellaneous Acknowledgements.
5.24.1. The Members acknowledge that as of the Effective Date, the Initial
Members and the Managers each have various interests in other entities and properties that are
engaged in businesses similar to that of the Company. The continued development, ownership,
operation, and management of or by such entities and properties shall not be prohibited and shall
not contravene this Agreement. Nothing in this Agreement shall in anyway limit the
commercially reasonable actions of the Members or Managers regarding their existing
investments and ownership of entities prior to the Effective Date.
5.24.2. The Members and the Managers acknowledge that they or their Affiliates
have previously organized BVA Development, LLC, and that certain obligations set forth in the
operating agreement thereof impose certain duties and obligations upon them and their Affiliates
regarding certain development opportunities and obligations. The Members and the Managers
acknowledge that this Agreement is made in conformance with the operating agreement for BVA
Development, LLC, and in furtherance thereof.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1. Allocations of Profits and Losses from Operations. Except as may be required
by §704(c) of the Code and Sections 6.2 and 6.3, Profits, Losses and other items of income,
gain, loss, deduction and credit shall be allocated to the Members in proportion to their Sharing
Ratios.
6.2. Distributions. Each year the Company shall Distribute cash in an amount
determined by the Executive Manager in the following order of priority:
6.2.1. to the Members, pro rata in accordance with their positive Capital
Accounts taking into account all Capital Account adjustments for the Company's current
Taxable Year, until each Member's Capital Account has been reduced to zero; and
6.2.2. to the Members in accordance with their Sharing Ratios.
6.3 Tax Distributions. Notwithstanding Section 6.2, within or not later than 90 days
after the end of each taxable year of the Company ending prior to its dissolution, the Executive
Manager shall cause the Company to distribute to the Members from the Company's reasonably
available cash (net of reasonable reserves), in proportion to each Member's respective Sharing
Ratio, an amount equal to 40% of the Company's flow -through taxable income for such year (a
"Tax Distribution"). To the extent reasonably practicable given the Company's available cash -
flow, the Tax Distribution for any taxable year shall be paid on an estimated quarterly basis
during the year to which it relates, with a true -up following year-end.
6.4. Limitations on Distributions. No Distribution shall be declared and paid if, after
the Distribution is made, (1) the Company would not be able to pay its debts as they become due
in the ordinary course of the Company's activities or (2) the Company's total assets would be
less than the sum of its total liabilities plus the amount that would be needed, if the Company
16 — Operating Agreement of BVA Eagle View, LLC
were to be dissolved, wound up and terminated at the time of the Distribution, to satisfy the
preferential rights upon dissolution, winding up and termination of Members whose preferential
rights are superior to those of persons receiving the Distribution.
ARTICLE VII
TAXES
7.1. Elections. The Executive Manager may make any tax elections for the Company
allowed under the Code or the tax laws of any state, local or foreign government that collects tax,
interest or penalties, however designated, on any Member's share of the income or gain
attributable to the Company ("Taxing Jurisdiction"). The Company shall be taxed as a
partnership.
7.2. Taxes of Taxing Jurisdictions.
7.2.1. To the extent required by the laws of any Taxing Jurisdiction, each
Member and Transferee (or such Members or Transferees as may be required by the Taxing
Jurisdiction) will submit an agreement indicating that the Member or Transferee will make
timely income tax payments to the Taxing Jurisdiction and that the Member or Transferee
accepts personal jurisdiction of the Taxing Jurisdiction with regard to the collection of income
taxes attributable to the Member's or Transferee's income, and interest, and penalties assessed
on such income. If a Member or Transferee fails to provide such agreement, the Company may
withhold and pay over to such Taxing Jurisdiction the amount of tax, penalty and interest
determined under the laws of the Taxing Jurisdiction with respect to such Member or Transferee
and such Member's or Transferee's income. Any such payments with respect to the income of a
Member or Transferee shall be treated as a Distribution for purposes of Article VI.
7.2.2. The Members may, where permitted by the rules of any Taxing
Jurisdiction, file a composite, combined or aggregate tax return reflecting the income of the
Company and pay the tax, interest and penalties of some or all of the Members on such income
to the Taxing Jurisdiction, in which case the Company shall inform the Members of the amount
of such tax, interest and penalties so paid.
7.3. Tax Matters Partner. The BV Member shall be the tax matters partner of the
Company pursuant to §6231(a)(7) of the Code. The tax matters partner may not take any action
contemplated by §6224 through §6229 of the Code without Majority Consent. For taxable years
after 2017, the tax matters partner shall be the "partnership representative" within the meaning of
Code Section 6223.
7.4. Method of Tax Accounting. For tax purposes, the records of the Company shall
be maintained on the method of tax accounting determined by the Executive Manager. The
Company shall use the "interim closing of the books" method to account for varying interests
under Code Section 706.
17 — Operating Agreement of BVA Eagle View, LLC
ARTICLE VIII
DISPOSITION OF UNITS
8.1. Restrictions on Disposition. Except as permitted in this Article VIII or by
Unanimous Consent, no Member may Dispose of Units in the Company including but not
limited to any indirect Disposition resulting from the Disposition of the ownership or control of
any Member. Any Member may transfer Units in the Company by gift or otherwise to or for the
benefit of a Permitted Transferee. In such case, the Permitted Transferee shall be admitted to the
Company as a Member and shall receive and hold such Units subject to the terms and obligations
of this Agreement.
8.2. Disposition by Sale.
8.2.1. Any Member desiring to sell any Units in the Company other than to or
for the benefit of a Permitted Transferee shall give written notice to the Company and the other
Members of an intention to sell the Member's Units. Such notice shall contain an offer to sell
the Units in accordance with the terms and conditions of any bona fide offer which such Member
shall have received for the purchase of such Units.
8.2.2. The Company shall have the option for a period of sixty (60) days (the
"Company Option Period") from the date of receipt of the notice under Section 8.2.1 above to
purchase or redeem all the Units so offered. If the option is not exercised within the Company
Option Period as to all the Units so offered, the Members shall have the option for a period of
thirty (30) days commencing with the end of the Company Option Period to purchase all the
remaining Units so offered (the "Member Option Period"). The options may not be exercised on
only a portion of the Units offered for sale. In order to be validly exercised, the options together
must be exercised on all of the Units offered for sale. If the above options are not exercised as to
all the Units so offered, the selling Member may sell the Units pursuant to the terms of the bona
fide offer within sixty (60) days of the expiration of the Member Option Period, and the
purchaser of such Units shall be admitted to the Company as a Member and shall hold such Units
subject to the terms and obligations of this Agreement. If such sale is not completed within that
time, no subsequent sale shall be made without first offering the Units to the Company and the
other Members as provided herein.
8.2.3. The purchase price and terms of payment for all Units purchased or
redeemed by the Company and/or the Members under this Section 8.2 shall be the same as those
set forth in the bona fide offer.
8.3. Disposition upon Death.
8.3.1. If a Member's Units are not transferred to or for the benefit of a Permitted
Transferee upon the death of a Member, within one hundred twenty (120) days after such death
the Member's estate or the Member's successors in interest (referred to as the "Seller") shall give
written notice to the Company and the other Members of an offer to sell all of the Units owned
by the Seller.
18 — Operating Agreement of BVA Eagle View, LLC
8.3.2. The Company shall have the option for a period of sixty (60) days (the
"Company Option Period") from the date of receipt of the notice under Section 8.3.1 above to
purchase or redeem all the Units so offered. If the option is not exercised within the Company
Option Period as to all the Units so offered, the Members shall have the option for a period of
thirty (30) days commencing with the end of the Company Option Period to purchase all the
remaining Units so offered (the "Member Option Period"). The options may not be exercised on
only a portion of the Units offered for sale. In order to be validly exercised, the options together
must be exercised on all of the Units offered for sale. If the above options are not exercised as to
all of the Units so offered, the deceased Member's Units shall be transferred pursuant to such
deceased Member's applicable Last Will and Testament or trust or, if the Member has no
applicable Last Will and Testament or trust, by the laws of intestacy to such Member's heirs, and
the transferee of such Units shall be admitted to the Company as a Member and shall hold such
Units subject to the terms and obligations of this Agreement.
8.3.3. The purchase price and terms of payment for all Units purchased or
redeemed by the Company and/or the Members under this Section 8.3 shall be determined in
accordance with Section 8.6.
8.4. Withdrawal of a Member.
8.4.1. If a Member wishes to withdraw from the Company, the Member or the
Member's successors in interest (referred to as the "Seller") shall give written notice to the
Company and the other Members of an offer to sell all of the Units owned by the Seller.
8.4.2. The Company shall have the option for a period of sixty (60) days (the
"Company Option Period") from the date of receipt of the notice under Section 8.4.1 above to
purchase or redeem all the Units so offered. If the option is not exercised within the Company
Option Period as to all the Units so offered, the Members shall have the option for a period of
thirty (30) days commencing with the end of the Company Option Period to purchase all the
remaining Units so offered (the "Member Option Period"). The options may not be exercised on
only a portion of the Units offered for sale. In order to be validly exercised, the options together
must be exercised on all of the Units offered for sale. If the above options are not exercised as to
all of the Units so offered, the Member shall not be entitled to withdraw from the Company.
8.4.3. The purchase price and terms of payment for all Units purchased or
redeemed by the Company and/or the Members under this Section 8.4 shall be determined in
accordance with Section 8.6.
8.5. Other Dispositions.
8.5.1. Upon any anticipated transfer of the Units of any Member or Transferee
that is not covered by the provisions of Section 8.1, 8.2, 8.3 or 8.4, including but not limited to
any transfer pursuant to a voluntary or involuntary bankruptcy proceeding, the Member or
Transferee or the Member's or Transferee's successors in interest (referred to as the "Seller")
shall give written notice to the Company and the Members of an offer to sell all of the Units
owned by the Seller. A Seller must offer to sell all, not part, of its Units.
19 — Operating Agreement of BVA Eagle View, LLC
8.5.2. The Company shall have the option for a period of sixty (60) days (the
"Company Option Period") from the date of receipt of the notice under Section 8.5.1 above to
purchase or redeem all the Units so offered. If the option is not exercised within the Company
Option Period as to all the Units so offered, the Members shall have the option for a period of
thirty (30) days commencing with the end of the Company Option Period to purchase all the
remaining Units so offered (the "Member Option Period"). The options may not be exercised on
only a portion of the Units offered for sale. In order to be validly exercised, the options together
must be exercised on all of the Units offered for sale. If the above options are not exercised as to
all of the Units so offered, the Seller may transfer the Units pursuant to the terms and conditions
contained in the notice under Section 8.5.1 within sixty (60) days of the expiration of the
Member Option Period. If such transfer is not completed within that time, no such subsequent
transfer shall be made without first offering the Units to the Company and to the Members as
provided herein. Any transferee (other than a Member) of any such Units shall have all rights of
a Transferee but shall not become a Member unless admitted to the Company as a Member in
accordance with Article IX.
8.5.3. The purchase price and terms of payment for all Units purchased or
redeemed by the Company and/or the Members under this Section 8.5 shall be determined in
accordance with Section 8.6.
8.6. Terms of Purchase.
8.6.1. If the Company and/or the Members (the "Purchaser") purchase or redeem
Units under Section 8.3, 8.4 or 8.5, except as otherwise agreed in a written instrument signed by
the Purchaser and the Seller, the purchase or redemption of the Units shall be on the terms and
conditions set forth below.
8.6.2. The Company Property shall be appraised. If the Purchaser and the Seller
cannot agree on an appraiser, they shall each appoint an appraiser. If the two appraisers cannot
agree upon the value of the Company Property, they shall appoint a third appraiser. If the two
appraisers cannot agree upon a third appraiser, one shall be appointed by a court of competent
jurisdiction. The decision of the majority of the three appraisers shall be binding on all parties.
If a majority of the three appraisers cannot agree upon the value of the Company Property, then
the value of the Company Property shall be the average of the three values determined by the
appraisers. The costs of appraisal shall be shared equally by the Purchaser and the Seller. The
purchase price for the Units shall be the amount the Seller would receive in connection with such
Units if the Company (i) liquidated and received the appraised value for the Company Property,
and (ii) Distributed the liquidation proceeds in accordance with Section 11.3 of this Agreement.
8.6.3. The closing date for any purchase or redemption of Units under the terms
and conditions of this Agreement shall be not later than one hundred twenty (120) days
following the effective date of the Purchaser's notice to purchase or redeem.
8.6.4. On the closing date, the Purchaser shall make a cash down payment of not
less than twenty-five percent (25%) of the total purchase price. If the Purchaser shall receive the
proceeds of any insurance policy on the life of a deceased Member such insurance proceeds shall
be paid to the Seller, up to the purchase price of the Units. If the total amount of such insurance
20 — Operating Agreement of BVA Eagle View, LLC
proceeds does not equal twenty-five percent (25%) of the total purchase price, the Purchaser
shall pay sufficient additional cash to cause the down payment to equal twenty-five percent
(25%) of said purchase price. The Seller shall have no claim to any proceeds in excess of the
purchase price.
8.6.5. The unpaid balance of the purchase price shall bear interest at the lowest
permitted applicable federal rate as of the date of closing. The balance of the purchase price and
accrued interest shall be payable in three (3) equal annual installments commencing one (1) year
following the date of closing and continuing on the same day of each successive year thereafter
until the purchase price and all accrued interest shall be paid in full. All payments shall be
applied first to accrued interest and then to reduction of principal.
8.6.6. The Purchaser may prepay principal at any time in multiples of $500.00
without penalty. Interest on such additional principal payments shall cease as of the date
payment is made. Any prepayment shall be applied to the last payment(s) coming due under this
Agreement and shall not excuse the necessity of making the next ensuing payment(s) on the date
and in the amount as required by this Agreement.
8.6.7. The Units purchased or redeemed by the Company and/or any Member
shall be pledged as security for the payment obligations hereunder. The Remaining Members
shall guarantee the Company's purchase or redemption obligations. Unless the parties agree
otherwise, the promissory note, security agreement and guarantee shall be in the forms attached
hereto as Exhibits D-1 through D-3.
8.7. Miseellaneous.
8.7. L Units purchased or redeemed by the Company shall have no voting or
other rights while held by the Company. Units purchased by any Member shall have all voting
and other rights, and said rights shall belong to the Purchaser so long as there is no default under
the terms of any agreement evidencing, securing or guaranteeing the payment of the purchase
price for such Units. If the Purchaser fails to cure any default within any applicable cure period,
the Seller shall be entitled to exercise all rights to which said Units were entitled prior to
purchase by the Purchaser.
8.7.2. So long as any part of the purchase price for Units purchased by the
Company remains unpaid, the Company will not do any of the following, without the Seller's
prior written approval: issue any additional Units; reorganize its capital structure; merge or
consolidate with any other entity; sell any of its assets except in the ordinary course of business;
incur extraordinary indebtedness; or pay salaries or other compensation in excess of that which is
reasonable. So long as any part of the purchase price for such Units remains unpaid, the Seller or
the Seller's legal representative shall have the right to examine the books and records of the
Company and to receive copies of all accounting records and reports prepared for or on behalf of
the Company; but all such information disclosed shall be confidential and the Company, in its
discretion, may require the recipient of any such information to sign a confidentiality agreement
in form and substance satisfactory to the Executive Manager.
21 — Operating Agreement of BVA Eagle View, LLC
8.7.3. If purchase offers from the Remaining Members specify in the aggregate
more Units than are available for purchase by the Members, each Member shall have priority, up
to the number of Units specified in the Member's notice, to such proportion of the available
Units as the Member's Units bears to the Units of all Members electing to purchase. The Units
not purchased on such a priority basis shall be allocated in one or more successive allocations to
those Members electing to purchase more than the Units to which they have priority right, up to
the Units specified in their respective notices, in the proportion that the Units held by each of
them bears to the Units held by those Members entitled to purchase such excess Units.
8.7.4. The Company shall make an election under §754 of the Internal Revenue
Code of 1986, as amended, for the year in which a Member Disposes of all its Units in the
Company.
8.7.5. The parties hereby declare that it is impossible to measure in money the
damages which will accrue to any party, by reason of a failure to perform any of the obligations
under this Agreement and that the remedy of the Members or the Company for a breach of this
Agreement is not adequate at law. Any Member, Seller, or the Company may enforce rights
hereunder by injunction proceedings, proceedings for specific performance, or other equitable
proceedings. Any Person (including the Company) against whom such action or proceeding is
brought hereby waives the claim or defense that an adequate remedy at law exists.
ARTICLE IX
ADMISSION OF ADDITIONAL MEMBERS
Except as otherwise provided in Article VIII, new Members shall be admitted to the
Company only by Unanimous Consent, which may be granted or withheld for any reason, or no
reason, in their sole and absolute discretion.
ARTICLE X
DISSOCIATION OF A MEMBER
A Member has no power to withdraw or to request a return of capital, except as
expressly provided in this Agreement. A Member has the power to Dissociate from the
Company only upon Disposition of its Units pursuant to Article VIII or with Unanimous
Consent. Any other Dissociation by a Member shall constitute a breach of this Agreement. A
Dissociated Member who has not Disposed of its Units shall be treated as a Transferee.
ARTICLE XI
DISSOLUTION AND WINDING UP
11.1. Dissolution. The Company shall be dissolved and its affairs wound up in
accordance with the Act or upon the written authorization of all of the Members.
11.2. Effect of Dissolution. Upon dissolution, the Company shall cease carrying on, as
distinguished from the winding up of, the Company's activities, but the Company is not
terminated, but continues only for purposes of winding up until the winding up of the affairs of
the Company, including settling and closing the Company's activities, is completed.
22 — Operating Agreement of BVA Eagle View, LLC
11.3. Distribution of Assets on Dissolution. Upon the winding up of the Company,
the Company Property shall be paid or Distributed in the following order of priority:
11.3.1. to creditors, including Members who are creditors, to the extent permitted
by law, in satisfaction of Company Liabilities;
11.3.2. to the Members, pro rata in accordance with their positive Capital
Accounts taking into account all Capital Account adjustments for the Company's current
Taxable Year, until each Member's Capital Account has been reduced to zero; and
11.3.3. to the Members in accordance with their Sharing Ratios.
Liquidation proceeds shall be paid within sixty (60) days of the end of the Company's Taxable
Year or, if later, within ninety (90) days after the date of liquidation. Such Distributions shall be
in cash or Property (which need not be Distributed proportionately) or partly in both, as
determined by Majority Consent.
11.4. Winding Up and Certificate of Dissolution. The winding up of the Company
shall be completed when all Company Liabilities have been paid and discharged or reasonably
adequate provision therefor has been made, and all of the remaining Property and assets of the
Company have been Distributed to the Members. Upon the completion of winding up of the
Company, a Statement of Dissolution in form authorized by the Act shall be delivered to the
Secretary of State for filing.
ARTICLE XII
AMENDMENT
This Agreement may be amended or modified from time to time only by a written
instrument that expressly refers to this Agreement and is executed by all of the Members at the
time of the amendment. An amendment to this Agreement does not need to be signed by any
Transferee or Dissociated Member, but to the fullest extent permitted by the Act, the obligations
of the Company and its Members and Managers to, and the rights of, Transferees and
Dissociated Members shall be governed by this Agreement as amended in accordance with this
Article XII. No Member, Transferee or Disassociated Member shall have any vested rights in
this Agreement which may not be modified through an amendment to this Agreement. The
foregoing notwithstanding, no amendment to this Agreement may amend, change or modify the
rights and obligations of the Managers, or any Manager, hereunder unless the Managers or
Manager whose rights and obligations are affected by such amendment signs the amendment.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1. Entire Agreement. This Agreement represents the entire agreement among all
the Members and between the Members and the Company pertaining to the subject matter of this
Agreement.
23 — Operating Agreement of BVA Eagle View, LLC
13.2. Income Tax Provisions. All income tax provisions on the attached Exhibit B are
incorporated by reference into this Agreement together with the income tax provisions otherwise
referenced in the body of this Agreement.
13.3. Headings and Number. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define, or limit the scope,
extent, or intent of this Agreement or any provision hereof. Whenever the singular number is
used in this Agreement and when required by the context, the same shall include the plural and
vice versa, and the masculine gender shall include the feminine and neuter genders and vice
versa.
13.4. Construction. This Agreement is the result of negotiations between the parties,
neither of whom has acted under any duress or compulsion. Accordingly, the terms and
provisions hereof shall be construed in accordance with their usual and customary meanings.
The parties hereby waive the application of any rule of law which otherwise would be applicable
in connection with the construction of this Agreement that ambiguous or conflicting terms or
provisions should be construed against the party whose attorney prepared this Agreement.
13.5. Severability. If any provision of this Agreement, or the application thereof to
any Person or circumstance shall be invalid, illegal, or unenforceable to any extent, the
remainder of this Agreement and the application thereof shall not be affected and shall be
enforceable to the fullest extent permitted by law.
13.6. Interpretation. If there are any inconsistencies between any provisions of this
Agreement and any provisions of the Act, to the fullest extent permitted by the Act, the
provisions of this Agreement shall control.
13.7. Heirs, Successors, and Assigns. Each and all of the covenants, terns,
provisions, and agreements herein contained shall be binding upon and inure to the benefit of the
parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal
representatives, successors, and assigns.
13.8. No Partnership Intended for Nontax Purposes. The Members have formed the
Company under the Act, and expressly do not intend hereby to form a partnership under either
the Idaho Uniform Partnership Act or the Idaho Uniform Limited Partnership Act. The Members
do not intend to be partners one to 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, the Member making such wrongful representation shall be
liable to any other Member who incurs personal liability by reason of such wrongful
representation.
13.9. Rights of Creditors and Third Parties under Agreement. This Agreement is
entered into among the Company and the Members for the exclusive benefit of the Company, its
Members, and their successors and Transferees. This Agreement is expressly not intended for
the benefit of any creditor of the Company or any other Person. Except and only to the extent
provided by applicable statute, no creditor or third party shall have any rights under this
Agreement, or any agreement between the Company and any Member, with respect to any
24 — Operating Agreement of BVA Eagle View, LLC
Capital Contribution or otherwise. Agreements to contribute capital to the Company shall be
enforceable only by the Company and its Members and Managers.
13.10. No Deemed or Oral Waivers. The failure of any party to seek redress for
violation of, or to insist upon the strict performance of, any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally constituted a
violation, from having the effect of an original violation, or be deemed a waiver of the same or
any other covenant or condition. No waiver shall be effective against any Member or Manager
unless in a writing that specifies the matter waived that is signed by such Member or Manager.
13.11. Waiver of Action for Partition. Each Member and Transferee irrevocably
waives during the term of the Company any right that it may have to maintain any action for
partition with respect to the Company Property, or any part thereof.
13.12. Rights and Remedies Cumulative. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party shall not preclude
or waive the right to use any or all other remedies. Said rights and remedies are given in addition
to any other rights the parties may have by law, equity, statute, ordinance, or otherwise.
13.13. Attorney's Fees. In the event of any litigation, arbitration or other dispute arising
as a result of or relating to this Agreement, the prevailing parry in any such litigation, arbitration
or other dispute shall be entitled to recover from the non -prevailing party, in addition to any
other damages assessed, its reasonable attorney's fees and all other costs and expenses incurred
in connection with such litigation, arbitration or dispute, whether incurred with or without legal
action, in preparation for or at trial, or on appeal.
13.14. Notice. Any notice required hereunder shall be effective when (i) mailed by
certified mail, postage paid, addressed as follows, or (ii) when such notice is delivered to the
recipient in person, or (iii) when sent by telefax to a number designated by the recipient. The
addresses are as follows:
Company: BVA Eagle View, LLC
Attn: Cortney Liddiard
901 Pier View Drive, Suite 201
Idaho Falls, ID 83402
P.O. Box 51298
Idaho Falls, ID 83405
BVA Eagle View, LLC
Attn: J. Thomas Ahlquist
2775 W. Navigator Drive, Suite 220
Meridian, ID 83642
25 — Operating Agreement of BVA Eagle View, LLC
Members: BV Properties, LLC
Attn: Cortney Liddiard
901 Pier View Drive, Suite 201
Idaho Falls, ID 83402
P.O. Box 51298
Idaho Falls, ID 83405
Ahlquist Development, L.L.C.
Attn: J. Thomas Ahlquist
2775 W. Navigator Drive, Suite 220
Meridian, ID 83642
Executive Manager: BV Management Services, hie.
Attn: Cortney Liddiard
901 Pier View Drive, Suite 201
Idaho Falls, ID 83402
P.O. Box 51157
Idaho Falls, ID 83405
Operations Manager: Ahlquist Development, L.L.C.
Attn: J. Thomas Ahlquist
2775 W. Navigator Drive, Suite 220
Meridian, ID 83642
Such addresses for receiving notices may be changed by any party at any time by written notice
to the other Members and the Company.
13.15. Legal Representation. Thel W. Casper, Esq. (`BV's Counsel") has represented
only the BV Member in connection with this Agreement and shall represent only the BV
Member in connection with any other work done for or on behalf of the Company. Geoffrey M.
Wardle, Esq., ("AD's Counsel") has represented only the AD Member in connection with this
Agreement, but may be retained by the Company in connection for future work done for or on
behalf of the Company. The AD Member acknowledges and agrees that it has not been and will
not be represented by BV's Counsel and that it may elect to seek the advice of separate counsel
in connection with any such matters. The BV Member acknowledges and agrees that it has not
been and will not be represented by AD's Counsel and that it may elect to seek the advice of
separate counsel in connection with any such matters.
13.16. Counterparts/Facsimile. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall constitute one and the same
instrument. The signature pages may be detached from each counterpart and combined into one
instrument. This Agreement may be signed and delivered by facsimile (email or fax)
transmission or electronic mail which shall be effective as an original.
26 — Operating Agreement of BVA Eagle View, LLC
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of
the Effective Date set forth above.
MEMBERS:
BV PROPERTIES, LLC, an Idaho limited liability
company
By: Ball Ventures, LLC, an Idaho limited
liability company, the Member
By: BV Management Services, Inc., an
Idaho corporatioA the Manager
Liddiard,
AHLQUIST DEVELOPMENT, IJ.L.C, an Idaho
limited liability company
B
J.-Thomas Ahlquist, Member
MANAGERS:
BV MANAGEMENT SERVICES, INC., an Idaho
corporation
r
AHLQUIST DEVE4PMENT, L.L.C., an Idaho
limited liability company
B
J. Thomas Ahlquist, Member �-
27 — Operating Agreement ofBVA Eagle View, LLC
EXHIBIT A
Description of
Names and Addresses of Members
Initial Capital
Contribution
Value
Units
Sharine
Ratio
BV Properties, LLC
Attn: Cortney Liddiard
901 Pier View Drive, Suite 201
Cash
$750
75
75%
Idaho Falls, ID 83402
P.O. Box 51298
Idaho Falls, ID 83405
Ahlquist Development, L.L.C.
Attn: J. Thomas Ahlquist
Cash
$250
25
25%
2775 W. Navigator Drive, Suite 220
Meridian, ID 83642
Totals
$1,000
100
100%
28 — Operating Agreement of BVA Eagle View, LLC
EXHIBIT B
INCOME TAX PROVISIONS
B.I. Compliance with § 704(b) of the Code. All provisions of the Agreement relating to maintenance of Capital Accounts are intended,
and shall be construed, and, if necessary, modified to cause the allocations of Profits, Losses, income, gain and credit pursuant to this Agreement
to have substantial economic effect under the Regulations promulgated under § 704(b) of the Code, in light of the Capital Contributions and the
Distributions made pursuant to this Agreement.
B.2. Definitions. The definitions that follow are part of the Agreement.
Company Minimum Gain. An amount determined by first computing for each Company Nonrecourse Liability any gain the Company
would realize if it disposed of the Company Property subject to that liability for no consideration other than full satisfaction of the liability, and
then aggregating the separately computed gains. The amount of Company Minimum Gain includes such minimum gain arising from a
conversion, refinancing, or other change to a debt instrument, only to the extent a Member is allocated a share of that minimum gain. For any
Taxable Year, the net increase or decrease in Company Minimum Gain is determined by comparing the Company Minimum Gain on the last day
of the immediately preceding Taxable Year with the Minimum Gain on the last day of the current Taxable Year. Notwithstanding any provision
to the contrary contained in this Agreement, Company Minimum Gain and increases and decreases in Company Minimum Gain are intended to
be computed in accordance with § 704 of the Code and the Regulations. A Member's share of Company Minimum Gain at the end of any
Taxable Year equals: the sum of Nonrecourse Deductions allocated to that Member (and to that Member's predecessors in interest) up to that
time and the Distributions made to that Member (and to that Member's predecessors in interest) up to that time of proceeds of a nomecourse
liability allocable to an increase in Company Minimum Gain minus the sum of that Member's (and that Member's predecessors' in interest)
aggregate share of the net decreases in Company Minimum Gain plus their aggregate share of decreases resulting from revaluations of Company
Property subject to one or more Company Nomecourse Liabilities.
Company Nonrecourse Liability. Any Company Liability to the extent that no Member or Related Person bears the economic risk of loss
(as defined in § 1.752-2 of the Regulations) with respect to the liability.
Member Minimum Gain. An amount determined by first computing for each Member Nonrecourse Liability any gain the Company
would realize if it Disposed of the Company Property subject to that liability for no consideration other than full satisfaction of the liability, and
then aggregating the separately computed gains. The amount of Member Minimum Gain includes such minimum gain arising from a conversion,
refinancing, or other change to a debt instrument, only to the extent a Member is allocated a share of that minimum gain. For any Taxable Year,
the net increase or decrease in Member Minimum Gain is determined by comparing the Member Minimum Gain on the last day of the
immediately preceding Taxable Year with the Member Minimum Gain on the last day of the current Taxable Year. Notwithstanding any
provision to the contrary contained in this Agreement, Member Minimum Gain and increases and decreases in Member Minimum Gain are
intended to be computed in accordance with § 704 of the Code and the Regulations.
Member Nonrecourse Liability. Any Company Liability to the extent the liability is nomecourse under state law, and on which a Member
or Related Person bears the economic risk of loss under § 1.752-2 of the Regulations because, for example, the Member or Related Person is the
creditor or a guarantor.
Nonrecourse Liabilities. Nonrecourse liabilities include Company Nonrecourse Liabilities and Member Nonrecourse Liabilities.
Offsettable Decrease. Any allocation that unexpectedly causes or increases a deficit in the Member's Capital Account as of the end of the
Taxable Year to which the allocation relates attributable to depletion allowances under § 1.704-1(b)(2)(iv)(k) of the Regulations, allocations of
loss and deductions under §§ 704(e)(2) or 706 of the Code or under § 1.751-1 of the Regulations, or Distributions that, as of the end of the year
are reasonably expected to be made to the extent they exceed the offsetting increases to such Member's Capital Account that reasonably are
expected to occur during or (prior to) the Taxable Years in which the such Distributions are expected to be made (other than increases pursuant to
a Minimum Gain Chargeback).
Related Person. A person having a relationship to a Member that is described in § 1.752-4(b) of the Regulations.
113. Company Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain for a Taxable Year, each Member
must be allocated items of income and gain for that Taxable Year equal to that Member's share of the net decrease in Company Minimum Gain.
A Member's share of the net decrease in Company Minimum Gain is the amount of the total net decrease multiplied by the Member's percentage
share of the Company Minimum Gain at the end of the immediately preceding Taxable Year. A Member's share of any decrease in Company
Minimum Gain resulting from a revaluation of Company Property equals the increase in the Member's Capital Account attributable to the
revaluation to the extent the reduction in minimum gain is caused by the revaluation. A Member is not subject to the Company Minimum Gain
Chargeback Requirement to the extent the Member's share of the net decrease in Company Minimum Gain is caused by a guarantee, refinancing,
or other change in the debt instrument causing it to become partially or wholly a Recourse Liability or a Member Nomecourse Liability, and the
Member bears the economic risk of loss (within the meaning of § 1.752-2 of the Regulations) for the newly guaranteed, refinanced, or otherwise
changed liability.
B.4. Member Minimum Gain Chargeback If during a Taxable Year there is a net decrease in Member Minimum Gain, any Member
with a share of that Member Minimum Gain (as determined under § 1.704-2(i)(5) of the Regulations) as of the beginning of that Taxable Year
must be allocated items of income and gain for that Taxable Year (and, if necessary, for succeeding Taxable Years) equal to that Member's share
of the net decrease in the Company Minimum Gain. A Member's share of the net decrease in Member Minimum Gain is determined in a manner
consistent with the provisions of § 1.704-2(g)(2) of the Regulations. A Member is not subject to this Member Minimum Gain Chargeback,
however, to the extent the net decrease in Member Minimum Gain arises because the liability ceases to be Member Nonrecourse Liability due to
a conversion, refinancing, or other change in the debt instmrent that causes it to become partially or wholly a Company Nonrecourse Liability.
The amount that would otherwise be subject to the Member Minimum Gain Chargeback is added to the Member's share of Company Minimum
Gain. In addition, rules consistent with those applicable to Company Minimum Gain shall be applied to determine the shares of Member
Minimum Gain and Member Minimum Gain Chargeback to the extent provided under the Regulations issued pursuant to § 704(b) of the Code.
B.5. Qualified Income Offset. In the event any Member, in such capacity, unexpectedly receives an Offsettable Decrease, such Member
will be allocated items of income and gain (consisting of a pro mta portion of each item of partnership income and gain for such year) in an
amount and manner sufficient to offset such Offsettable Decrease as quickly as possible.
29 — Operating Agreement of BVA Eagle View, LLC
EXHIBIT C
PROMISSORY NOTE
For value received, the undersigned [Defaulting Member Name and Address] (the
"Borrower"), hereby promises to pay to the order of [Lending Member Name] (the "Lender"), at
[Address of Lending Member], or at any other place designated at any time by the Lender, in
lawful money of the United States of America and in immediately available funds, the principal
sum of Dollars ($_ ), together with
interest on the principal amount hereunder remaining unpaid from time to time, computed on the
basis of the actual number of days elapsed and a 365-day year, from the date hereof until this
Note is fully paid at the rate of twelve percent (12.0%) per annum, compounded annually.
The principal hereof and interest accruing thereon shall be due and payable as follows:
IN FULL NINETY (90) DAYS AFTER THE DATE OF THIS NOTE
This Note may be prepaid in whole or in part at any time without penalty. All payments
shall be applied first to the payment of accrued interest and then to the reduction of the principal
balance.
In the event that Borrower shall default in payment of this Note or under any agreement
securing this Note, Lender may, in Lender's discretion, notify Borrower in writing of such
default by personal delivery or United States certified mail, return receipt requested, addressed to
the Borrower's address set forth above. If Borrower does not correct the default within ten (10)
days after such notice of default, then Lender, in Lender's discretion, may declare the entire
balance of principal and interest hereunder to be due and payable immediately (time being the
essence hereof).
The Borrower agrees to pay on demand all costs and expenses, including (without
limitation) attorneys' fees, incurred by the Lender in connection with this Note and any other
document or agreement related hereto and the transactions contemplated hereby, including
without limitation all such costs, expenses and fees incurred in connection with the amendment,
administration, performance, collection and enforcement of this Note and all such documents and
agreements and the creation, perfection, protection, satisfaction, foreclosure or enforcement of
any agreement or interest securing this Note.
Presentment for payment, demand, and notice of dishonor and nonpayment are expressly
waived.
This Note shall be governed by and construed and interpreted in accordance with the laws
of the State of Idaho.
DATED this _ day of
[Name of Defaulting Member]
30 — Operating Agreement of B VA Eagle View, LLC
EXHIBIT D-1
SPECIMEN PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, or either of us, (referred to in the singular, whether one or more), promises and agrees to pay to
the order of (Seller) the principal sum of (S 1, together
with interest as stated below, payable at the times and in the manner set forth below.
I. Except as is otherwise provided in the following paragraphs of this Promissory Note, interest shall accrue daily on the unpaid principal
balance outstanding under this Promissory Note commencing on (interest startim date) at the rate of
percent (_%) per annum.
2. Principal and interest as provided for in the preceding paragmph shall be paid as follows
Payments shall be made in (__) equal installments of principal and interest, with the first such payment due
one year from the date of this Note. Final payment shall be due and payable (__) years from the date hereof.
3. All payments shall be applied to the payment of accrued interest and then to the reduction of the principal balance. The makers shall
have the right of making additional payments of principal at any time without incurring any prepayment penalty. Any such additional principal
payment shall be applied to the deferred balance due under this Promissory Note in the reverse order of maturity. Such additional payment shall
not in any way waive or excuse the makers from making the next ensuing payment promptly as the same becomes due. Interest shall cease on
additional payments of principal upon the date of payment.
4. If any payment required by this Promissory Note is not made when due, and remains unpaid for thirty (30) days after a written notice
is mailed to the maker hereof, or if any other event occurs or circumstance exists which under any instrument evidencing or securing the
obligations evidenced by this Promissory Now entitles the holder hereof to accelerate the maturity of such obligations, the entire unpaid principal
balance and accrued but unpaid interest hereunder shall, at the option of the holder hereof, at once become due and payable without further notice
(time being the essence hereof). Failure to exercise such option shall not constitute a waiver of the right to exercise the same in the event of any
subsequent default, event, or cirournstance giving rise to such right of acceleration.
5. The undersigned agrees to pay the holder hereof a "late charge" equal to five percent (5%) of each and any payment due pursuant to
this Promissory Note which is more than fifteen (15) days in arrears. Such late charge shall be made to cover the extra expense involved in
handling delinquent payments.
6. If any payment under this Promissory Note is not made at the time and in the manner required (whether before or after maturity), the
undersigned agrees to pay any and all costs and expenses (regardless of the particular nature thereof and whether incurred before or after the
initiation of suit or before or after judgment) which may be incurred by the holder hereof in connection with the enforcement of any of its rights
under this Promissory Note, including, but not limited to, attorney fees and all costs and expenses of collection.
7. The undersigned, sureties, guarantors, and endorsers hereof, severally waive presentment for payment, demand, and notice of dishonor
and nonpayment of this Promissory Note, and consent to any and all extensions of time, renewals, waivers, or modifications that may be granted
by the holder hereof with respect to the payment or other provisions of this Promissory Note, and to the release of any security, or any part
thereof, with or without substitution.
8. This Promissory Note is seemed by, among other things, a Security Agreement, of even date herewith, executed by the undersigned as
Debtor.
9. All of the obligations of the undersigned under this Promissory Note shall bejoint and several.
10. This Promissory Note is delivered in the State of Idaho and shall be governed by and constmed and interpreted in accordance with the
laws of said State.
11. Any notice to maker provided for in this Promissory Note shall be given in the manner provided in the Sales Documents (as defined in
the Security Agreement).
[insert date and signature blocks]
31 — Operating Agreement of BVA Eagle View, LLC
EXHIBIT D-2
SPECIMEN SECURITY AGREEMENT
This Security Agreement is executed by the undersigned, (collectively referred to as "Debtor") in favor of
, (referred to as `Secured Party").
RECITALS
A. Debtor has purchased from Secured Party an interest in a closely -held business (the `Business"), which interest is identified on the
attached Exhibit "A".
B. The interest in said closely -held business is referred to as the "Collateral".
C. Debtor's obligations are set forth in one or more of the following documents: a promissory note and a guaranty, both of even date
herewith, and the Agreement to which this Security Agreement was attached as a specimen (all of which are referred to as the "Sales
Documents").
AGREEMENT
1. Debtor hereby grams to Secured Party a security interest in the Collateral.
2. Debtor hereby authorizes Secured Patty to file financing statements and to do whatever may be necessary under applicable law to
perfect and continue Secured Party's security interest in the Collateral at Debtor's expense.
3. Debtor recognizes that in the event of default which is not cured in the manner provided in the Sales Documents, Secured Party shall
have the rights of a secured party under the Idaho Uniform Commercial Code. Said rights include, but are not limited to the right to receive all
payments from the closely -held business (whether of income, profits, dividends, capital or otherwise, and whether paid in cash or in property).
Secured Party shall also have a charging lien against the interest of Debtor.
4. If Debtor defaults under the Sales Documents, Secured Party shall have the following remedies, together with any other remedy
granted a secured party under the Idaho Uniform Commercial Code or other applicable law.
a. To notify the Business of Secured Party's rights in the Collateral and to collect all payments to which Debtor
would otherwise be entitled from the Business.
To exercise the rights provided herein.
C. To sell the Collateral at public or private sale, and to purchase the Collateral at such public or private sale as
permitted by Idaho law.
5. Debtor agrees to pay all costs of collection or realization, including a reasonable attorney fee whether incurred by litigation or
otherwise, and all other expenses and costs of collection.
6. Debtor agrees that a period of fifteen days from the time notice is sent shall be a reasonable period of notification of a sale or other
disposition of the Collateral by or for Secured Party. Any notice shall be given in the manner provided in the Sales Documents among the
parties.
7. Waiver of any default shall not constitute a waiver of any subsequent default.
8. All Secured Party's rights and remedies, whether evidenced hereby or existing at law or evidenced by other writings shall be
cumulative and may be exercised singularly or concurrently.
9. This Security Agreement is to be governed by and construed and interpreted in accordance with the laws of the State of Idaho.
10. If more than one person constitutes Debtor, the obligations of each shall bejoint and several.
11. This Security Agreement shall be binding upon the heirs, personal representative, successors and assigns of the Debtor and shall inure
to the benefit of the Secured Party and the Secured Parry's successors and assigns.
12. This Security Agreement constitutes the entire agreement of the Debtor and Secured Parry with respect to the subject matter hereof
and may be amended only in writing signed by Debtor and Secured Party.
[insert date and signature blocks]
32 — Operating Agreement of BVA Eagle View, LLC
EXHIBIT D-3
SPECIMEN GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty") is made this by
az hereinafter referred to collectively as "Guantors", to and for [he benefit of
referred to as "Seller."
RECITALS
A. Seller has sold an interest in a closely -held business pursuant to the terns of a separate agreement (the "Agreement'). One of the
terms of the Agreement is that Guarantors shall guarantee the obligations of the Purchaser under the Agreement (the "Purchaser"), including all
obligations under the Promissory Note executed in connection therewith (the "Promissory Note").
B. The Promissory Note is secured by a security interest in such interest in the closely -held business, pursuant to the terms of a Security
Agreement executed in connection therewith (the "Security Agreement").
C. The Agreement, the Promissory Note and the Security Agreement are hereinafter collectively referred to as the "Guaranteed
Contracts".
AGREEMENT
NOW, THEREFORE, as inducement to Seller to make the sale to the Purchaser referred to above and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, Guarantors hereby guarantee to Seller as follows:
1. Guarantee.
a. Guarantors do hereby guarantee the due and punctual payment to Seller of all sums due or to become due under this
Guaranty and the Guaranteed Contracts.
b. Guarantors do further guarantee the full, complete and unimpaired performance of each covenant, condition, duty and
obligation of Purchaser to Seller under this Guaranty and the Guaranteed Contracts.
C. This Guaranty shall be construed as an absolute, continuing, unconditional and unlimited guarantee. This Guaranty shall
be deemed irrevocable and shall terminate only upon the full and complete payment of all sums due Seller under the Agreement.
2. Representations of Guarantors. Guarantors represent that, at the time of the execution and delivery of this Guaranty, nothing exists
to impair the effectiveness of the liability of Guarantors to Seller hereunder, or the immediate taking effect of this Guaranty.
3. Waiver. Guarantors hereby waive the following:
a. Notice of acceptance of this Guaranty by Seller or Seller's successors and the failure of Seller to provide Guarantors with a
copy of the Agreement or other related documents, or any amendments or modifications thereto.
b. Diligence, presentment, notice of presentment, protest, demand for payment, notice of dishonor, extension of time for
payment, nonpayment at maturity and indulgences and notices of every kind with respect to any obligations of Purchaser under any of the
Guaranteed Contracts or as may be otherwise provided by law, or the obligation of any other person, firm or corporation, held by Seller as
collateral security for the performance any of the Guaranteed Contracts by Purchaser.
4. Continuing Guarantee. Guarantors agree that their obligations hereunder, and this Guaranty, shall continue and remain in full force
and effect and shall not be impaired, modified, changed, released, discharged, satisfied or limited, regardless of any of the following actions or
occurrences:
Any change in organization or structure of Purchaser.
b. Any impairment, modification, change, release or limitation of liability of Purchaser pursuant to any filing for relief by or
against Purchaser under any present or fume United States Bankruptcy law or other federal or state statute for the relief of Purchaser.
C. Any adverse change in the financial condition, whether such change is deemed material or immaterial under any federal or
state law, of Purchaser or the failure of Purchaser to comply with any law, statute or regulation.
d. The death of any Guarantor, it being specifically agreed by Guarantors, that this Guaranty shall continue and shall
constitute a valid claim against the estate, heirs, personal representatives and other successors in interest of such deceased Guarantor.
5. Rights of Seller. Without affecting any obligation created hereby or hereunder, Guarantors grant to Seller full power and authority, in
Seller's uncontrolled and sole discretion, and at any time, or from time to time, and in such manner and on such terms as Seller deems fit and
without notice to or the approval, consent or advice of any Guarantors, to take any of the following actions:
33 — Operating Agreement of BVA Eagle View, LLC
a. Obtain and accept from Purchaser or any other person such additional or substitute collateral or security for the payment of
the sums or performance of the obligations guaranteed. hereby. Such further collateral or security may include, but shall not be limited to,
additional personal guaranties, promissory notes or other instruments of indebtedness, mortgages, deeds of trust, security agreements or any other
document or interest which Seller may deem acceptable or in Seller's best interests.
b. Make any change, amendment or modification whatsoever to any term, covenant or condition of any Agreement now in
existence or hereafter arising which may secure or guarantee the obligations or payments of money guaranteed hereby.
C. The time of payment of any sum secured hereby, or any part thereof, may be extended; the terms on which such sums are
to be paid, including interest thereon, may be modified; the manner or method of payment may be amended; and one or more new promissory
notes or other instruments may be taken in exchange for or replacement, substitution or renewal of said instruments.
d. Substitute, add to, exchange, release, modify, consent to the transfer or sale of, surrender or otherwise deal with, in whole
or in part in any manner, any collateral securing the performance of the Agreement or the obligations of Purchaser.
e. Settle, compromise, release, discharge, compound or impair, the obligations of Purchaser of the amounts due to Seller
under any of the Guaranteed Contracts or to forebear, waive or decline to pursue any right or remedy Seller may have against Purchaser or any
other party or under any instrument securing the sums or performance guaranteed herein.
f Apply any one or more payments by, or recoveries from Purchaser or from Guarantors, or to apply any sums realized from
collateral or security hypothecated or furnished by Purchaser, or Guarantors in such manner and in such order of priority as Seller deems fit,
whether or not such obligation on which application is made is otherwise secured, or is due at the time of such application.
Obtain ajudgment or realize upon any collateral in whole or in part in satisfaction of the same guaranteed hereby.
6. Enforcement.
a. Seller shall give Guarantors the same notice pertaining to default that Seller is required to give the Purchaser under the
Guaranteed Contracts. Seller may enforce this Guaranty without first resorting to or exhausting or enforcing any other security or collateral or
without exercising any other right or remedy of Seller at law or under any of the Agreement, it being fully agreed and understood by Guarantors
that Seller may proceed directly and independently against Guarantors, without further notice or demand upon any party, including Guarantors,
upon any default in the performance of any of the covenants, terms, conditions or obligations due to Seller under any of the Guaranteed Contacts.
b. Further, Guarantors specifically agree that Seller may proceed against Guarantors for any amount guaranteed hereunder or
to compel performance of the Agreement whether any action is brought against Purchaser or whether Purchaser is joined or made a party in any
such action against Guarantors or not.
7. Assignment and Benefit.
a. Guarantors agree that Seller, without notice to, or the consent of Guarantors, may sell, assign or transfer all or any part of
its interest in the sums guaranteed hereby and its interest in and to, and the entitlement to the benefit of the Guaranteed Contracts, or any part
thereof to any party Seller may choose. Any assignee of Seller may thereafter similarly sell, assign or transfer its interest in like manner to any
party it may choose. In the event of any such assignment or transfer, each and every immediate and successive assignee, transferee, holder or
beneficiary of all or any part of the sums guaranteed hereby or entitled to the obligations due Seller under the Guaranteed Contracts, or any part
thereof, shall have the right to enforce this Guamay, by legal action or otherwise for the benefit of such assignee, transferee, holder or
beneficiary as fully as if such party was herein by name specifically given such right and power.
b. In addition to the foregoing specific rights grunted in this paragraph 7, this Guaranty shall be binding upon and inure to the
benefit of the successors and assigns of Seller. Seller's successors and assigns shall have all of the rights, privileges and powers granted
hereunder to Seller and shall have the right to rely upon this Guaranty and to enter into further and additional transactions in reliance hereon in
the same manner and with the same effect as if such successors and assigns were specifically named with Seller herein.
8. Construction. Guarantors specifically waive any right to assert that this Guaranty be construed in their favor as Guarantors.
9. Attorney Fees and Costs.
a. Guarantors hereby agree that Guarantors will pay to Seller all costs and expenses, including reasonable attorney fees,
which Seller expends in order to enforce this Guaranty and each and every tens hereof whether by suit or otherwise.
b. Guarantors further agree that Guarantors will pay to Seller any costs and expenses, including reasonable attorney fees,
which Seller must expend in pursuing any right or remedy which Seller may have against Purchaser, or in enforcing the Agreement or in realizing
on any other collateral or security for satisfaction of the sums guaranteed hereby.
10. Subrogation.
a. Guarantors shall have no right of subrogation whatsoever to any sums guaranteed hereby or to any monies due and unpaid
thereon or any collateral securing the same, unless and until Seller shall have received full payment of all sums due and owing to Seller under the
Agreement.
b. Upon default by Purchaser in the payment of any sum due or the performance of any obligation under any of the
Guaranteed Contracts, in addition to all other rights or remedies granted to Seller herein or under any of the Guaranteed Contracts, Seller shall
have the right to tender to Guarantors an assignment and transfer to Guarantors all Seller's right, title and interest under the Agreement. Upon
34 — Operating Agreement of BVA Eagle View, LLC
such tender, Guarantors shall immediately pay to Seller all principal then outstanding (and accrued interest thereon) and all other amounts due
under the Guaranteed Contracts and Guarantors upon such payment shall succeed to all of Seller's right, title and interest in and to the Guaranteed
Contracts.
11. Consideration. Guarantors hereby stale that this Guaranty is not gratuitously given, but is given for consideration, the receipt of
which is hereby acknowledged.
12. Discharge. Notwithstanding anything herein to the contrary, and not in limitation or modification of any rights granted to Seller
herein, the only event which shall result in the discharge of Guarantors hereunder shall he the full payment of all stuns guaranteed hereby. Upon
full payment of all sums guaranteed hereunder, this Guaranty shall be released and Guarantors shall have no further liability hereunder.
13. Joint and Several Liability. The obligations of each Guarantor under this Guaranty shall be joint and several and Seller and/or
Seller's assigns may release or settle with any one or more of the Guamntors at any time, without affecting the continuing liability of the
remaining Guarantor or Guamntors. As among Guarantors, any Guarantor who pays more than the Guammor's proportionate share, shall have
the right to seek contribution from the other Guarantors. Each Guarantor's proportionate share is the same percentage that such Grammer's
ownership of the closely held business bears to that of the other Guarantors.
14. Severability. If any provision of this Guaranty Agreement shall be held or deemed to be, or shall, in fact, be inoperative or
unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with
any other provision or provisions hereof, or any constitution or statute or mle or public policy, or for any other reason, such circumstance shall
not have the effect of rendering the provisions in question inoperative or unenforceable in any other case or circumstance, or of rendering any
other provisions or provisions herein contained invalid inoperative or unenforceable to any extent whatsoever. The invalidity of any one or more
phrases, sentences, clauses or sections contained in this Guaranty shall not affect the remaining portions of this Guaranty, or any part hereof.
15. Cumulative Remedies. All of Seller's rights and remedies herein specified are intended to be cumulative. No tight or remedy of
Seller whatsoever may be waived at any time except by a writing signed by Seller, nor shall any waiver be operative upon other than a single
occasion.
16. Entire Agreement; Amendment. This Guaranty constitutes the entire agreement of Guamntors with respect to the subject matter
hereof. This Guaranty may only be amended in writing signed by Seller and Guarantors.
17. Section Titles and Captions. Section titles or captions are for convenience only and shall not be deemed to be part of the agreement
and in no way define, limit, augment, extend or describe the scope, content or intent of any part or parts hereof.
18. Applicable Law. This Guaranty shall be governed by and construed and interpreted in accordance with the laws of the State of Idaho.
IN WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first above written.
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35 — Operating Agreement of B VA Eagle View, LLC