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Sommersby No. 1 PBA 13-009Planning Division PROPERTY BOUNDARY ADJUSTMENT Application Checklist All applications are required to contain one copy of the following unless otherwise noted: Applicant N) _ Description(i) Staff Please provide two (2) copies of each of the items listed below: (/ Completed & signed Administrative Review Application ✓ Narrative fully describing the requested property boundary adjustment t% Legal description (metes and bounds) of the new property boundaries and closure sheet Recorded warranty deed for the subject property . / V Affidavit of Legal Interest signed & notarized by the property owner (if owner is acurporation, submits copy of the Articles of Incorporation or other evidence to show that the pemon signing is an authorized agent.) Scaled vicinity map showing the location of the subject property i/ Existing recorded plat in which the subject property lies (8 t/z" x I1 ") (if a licable) Existing Record of Surveys used and/or referenced (8 %" x 11") (/ Record of Survey (18" x 24" paper copy) t/ Parcel verification letter from Development Services (887-2211) Fee 3 fey . 0 Property boundary adjustments are allowed for the adjustment of property lines between existing properties and to allon, for the reduction in the number of buildable lots. A property bounden), adjustment does not vacate the platted lot lines or easements of a recorded subdivision (UDC II -6B-8). APPLICATION WILL NOT BE ACCEPTED UNLESS ALL ITEMS ON THE CHECKLIST ARE SUBMITTED. 33 E. Broadway Avenue, Suite 102 • Meridian, Idaho 83642 Phone: (208) 884-5533 • Facsimile: (208) 888-6854 • Website: www,meridiancity.org (021042013) Type of Review Requested ( ❑ Accessory Use ❑ Alternative Compliance 1Htcrtificate of Zoning Com ❑ Certificate of Zoning Com ❑ Conditional Use Permit M l2tesign Review ❑ Private Street ®`Property Boundary Adjust ❑ Time Extension (Director) ❑ Vacation ❑ Other Meant Information Planning Division s ADMINISTRATIVE REVIEW APPLICATION all that Verification Applicantname: "M KL -1 IN Phone:26%`alc'g3H t_ � Applicant address:3941 i5 Cr-AC,M[f✓:d04M Zip:3L(Z.E-mail:'�YNi�)�'d'uMCa7LSyaN®. ti'c.nJa Applicant's interest in property: ❑ Own ❑ Rent ❑ Optioned RKOther Owner name: i<e,l l� 4 v+q —% Phone: Jam^ R49^ G '4 (Fax: Owner address: .33Y3 0, Lia. SIA CYae,V / ZKC r Cd A Zip: W3&q 7, E-mail:k yztt[taYNSre�'P �tMte d� • UIVI Agent name (e.g., architect, engh eer, developer, representative): %e_P`fP8 tLn) Firmname: >It Swf S 1-1°C Phone: &b Address: I 014j C-. P��rO h45 rx Ga � I� (L Zip: %,%A iv E-mail: ����u �6� M59t • CdWi Primary contact is: C9'Applicant ❑ Owner ❑ Agent ❑ Other Ccntact. name: Phone: Fax: Ccntact address: Zip: E-mail: Subject Property Information Location/street address: 1 Assessor's parcel number(s): P*5 Township, range, section: 3N i V Current land use: v 5; rA" ®SI N. Total acreage: 0,091,9•o?'�t Current zoning district: K-1,6 33 E Broadway Avenue, Suite 102 • Meridian, Idaho 83642 Phone: (208) 884- 533 • Facsimile: (208) 888-6854 • Website: www.meridiancity.org 1 (02/0&12013) ra Pioject/subdivision name: _Li General description of proposed Proposed zoning district(s): Acres of each zone proposed: Type of use proposed (check all ®'Residential ❑ Commerci Who will own & maintain the pi Which irrigation district does th Primary irrigation source: rva Square footage of landscaped ,it Residential Number of residential units: _ Number of common lots: Proposed number of dwelling on 1 bedroom: Minimum square footage of strut Minimum property size (s.f): _ Gross density (DU/acre-tonal land): _ Percentage of open space provide Percentage of qualified open spas Type of open space provided in a Amenities provided with this dev Type of dwelling(s) proposed: ❑ Duplexes ❑ Multi -family ❑ 1 Non-residential Number of building lots: GI oss floor area proposed: Hours of operation (days and he Percentage of site/project devot Landscaping: Total number of employees: Total number of parking spaces Authorization Print applicant name: 1 i Applicant signature: 33 Phone: (208) 88, 19 4 IV �• tat apply): ❑ Office ❑ Industrial ❑ Other ssurized irrigation system in this development? %t�' AAO V a property lie within? ALm�' we I" 'ry' t�t� It, i _'S+ 4�4tt- i",B.e,kcy\ Secondary: lei l ^ is to be irrigated (if primary or secondary point of connection is City wa(er): .� Number of building lots: Number of other lots: (for multi -family developments only): 2 - 3 bedrooms: 4 or more bedrooms: re(s) (excl. garage): Proposed building height: Average property size (s.f.): Net density (DU/acre-excluding roads & alleys): Acreage of open space: acreage: (See Chapter 3, Article G, for qualified open space) es (i,e., landscaping, public, common, etc): opment (if applicable): Single-family Detached ❑ Single-family Attached 93'1'ownhomes Other lots: Existing (if applicable): Building height: to the following: Building: Paving: Number and ages of students/children (if applicable): ovided: Number of compact spaces provided: M Date: "Al Suite 102 • Meridian, Idaho 83642 (208) 888-6854 • Website: www.meridiancity.org 2 11 The purpose for applying for this property line adjustment is to build three town House Units that are the same size in order to achi ve an acceptable architectural appearance. Lot 2 was reduced to 26' in width to accommodate the ex ct dimensions of the townhome. The remaining area was equally distributed to lot 1 and lot 3. � a BaaiM o 2fm gg P Sa m a o �g fpCn AN g I' a �'m ry "'� O ly BPs15 8E GEARING �KS'1 'p 6�R y ��5'" Novp3'm'E u36.i1____ N, WN MILE ROAR m g�'i m� VMt <oq;3W cri��_ I� `. .P� 6ayss6• E _ \zz9+'--- v gij � •`m. O 4' A y N 00'03'50" E 129.54' n 5410' 16.80' moa m m g$ a 0 2 ➢j r6Alp s J i� Z to C` 2 S C ISI 1;- u�n� j ulOCz, .9t-:i��9�J � 41"Vi AGI 1� r I ~ f > 1I 14 0l \//y VI Vi L l m m Y z z< o _ SPR °0` Im N° m DO A. _ oma -8o �a A<I�Z1 k IIx aS'i �1 s �� � u 4 1 mm o S I o� 0 0 e - z N 1509' 0 _--_ 43.85' gp.38' m s osn]•w• _ �0 Z O j SO21MEl75BY NO. 2 SUB. y , z y ➢ o P A i l i ®O Off•o = ¢� o ➢I� N � O I. m N r 1 Wr�rP. D P l i P10fes 101141 s April 22, 2013 Lot 1, and the 1, as same is recorded more particularly desc Lot 1; Thence S 87'57' Thence S 00003' Thence 10.88 fee feet, a central angle of 3 Thence 12.70 fee feet, a central angle of 1 Thence N 89'33' Thence N 00003' Sq. Ft, more or less, R����7T i p 208.860.3442 V L. 111 V G. LLC dtpeugh@msn.com Surveyor 1506 E. ProhaAa Ct. Eagle, ID 83616 SOMME RSBY SUB NO. 1 PARCEL A Orth 6.50 feet of Lot 2, Block 1 of Sommersby Subdivision No. Book 97 of Plats at Page 12141, records of Ada County, Idaho, led as follows: BEGINNING at the Northwest corner of said E, 95.06 feet to the Northeast corner of said Lot 1; W; 28,70 feet; along the are of a curve to the right, having a radius of 20.00 °10'06", and a long chord bearing S 15°38'53" W, 10.75 feet; along the are of a curve to the left, having a radius of 50.00 °33'24", and a long chord bearing S 23°57'14" W, 12.67 feet; ?5" W, 86.98 feet to a point on the West line of said Lot 2; 50" E, 53.34 feet to the Point of Beginning. Containing 4865 I— e D T-- - A c-4_6su2 c- wa---F PROJECT: Monday, April 22,2013 DESCRTPTION: 12:11 PM FILE: junk.cgx PAGE 1 UNITS: U.S. SURVEY FOOT INSTRUMENT SETUP Instrument point: - 503.318 500.060 Backsi.ght point: 7 503.318 500.060 Backsight Bearing: 1 00000'00" E Distance: 0.00 Remarks: TYPE FROM TO D RECTION DISTANCE NORTHING FASTING ----- ----- INV 1 ----- 2 ----- S ---------- 7057'22" E ---------- --------------- 95.06 499.927 --------------- 595.060 INV 2 3 S 0003'50" W 28.70 471.227 595.028 INVCRV pc->rp 3 4 N 9056131" W 20.00 471.248 575.028 31°10'47" delta right) 20.00 radius 0.74 Mid Ordinate 10.88 arc le gth 0.76 External 5.58 tangen - 286028144" Degree of Curve (arc) 10.75 chord 00`00'00" Degree of Curve (chord) S 15"38°53" W chord earing rp->pt 4 5 S 58045143" E 20.00 460.876 592.128 INVCRV pc-:>rp 5 6 S 58046102" E 50.00 434.950 634.882 14033'28" de1La (left) 50.00 radius 0.40 Mid Ordinate 12.70 arc length 0.41 External 6.39 tangent 114035'30" Degree of Curve (arc) 1.2.6'/ chord 00000'00" Degree of Curve (chord) S 23057'14" W chord bearing rp->p. 6 7 N 73'19'30'r W 50.00 449.297 586.984 INV 7 8 N 89033125" W 86.98 449.969 500.007 INV 8 9 N 0)003'50" E 53.34 503.309 500.066 Closure Closing line: S 36 34'08" E 0.01 from 9 to 1 Latitude (N): -0.01 Perimeter: 287.67 Departure (E): 0.01 Error of Closure: 1:28607 Area: 4365.31 Square feet 0.1117 Acres N 1 208.860.3442 w-.Ot —r ll�r U U R Y E I I V G LL C dtpcugb@nisn.com P Professional L rad Surveyor 1506 E. Prohaska Ct. s Eagle, ID 83616 April 22, 2013 SOMME RSBY SOB NO. 1 PARCEL B Lot 2, Block 1 Sommersby Subdivision No. 1, as same is recorded in Book 97 of Plats at Page 12141, cords of Ada County, EXCEPTING therefrom the North 6.50 feet and also EXCEPT G therefrom the South 6.50 feet, more particularly described as follows: Commencing t the Southwest corner of Lot 1, Block 1 of said Sommersby Subdivision No. 1; Th ce S 00'03'50" W, 6.50 feet to the REAL POINT OF BEGINNING, Thence S 89°33' 5" E, 86.98 feet to a point on the Westerly right-of-way of N. Lightning Place; Thence 26.31 fe t along the arc of a non -tangent curve to the left, having a radius of 50.00 feet, a central gle of 30108'47", and along chord bearing S 1'36'08" W, 26.01 feet; Thence departin said Westerly right-of-way N 89°33'25" W, 86.29 feet to a point on the West line o said Lot 2; Thence N 00'03'50" E, 26.00 feet to the Point of Beginning. Containing 2223 Sq. ftmore or less. PROJECT: DESCRIPTION: FILE: junk.cgx UNITS: U.S. SURVEY FOOT INSTRUMENT SETUP Monday, April 22,2013 12:15 PM PAGE 1 Instrument point: 1 500.000 500.000 BacksighL point: 1 500.000 500.000 Racksight Bearing: N 00000'00" E Distance: 0.00 Remarks: TYPE FROM TO DI CTION DISTANCE. NORTHING EASTING ------- ----- ----- ----`- INV 1 2 S B --------- °33`25" --`------- E --------------- 86.98 ------------`--- 499.327 586.977 iNVCRV PC->rp 2 3 S 7 °19'18" E 50.00 484.978 634.874 30°09'07" delta ( eft) 50.00 radius1.72 Mid Ordinate 26.31 are len th 1.78 External 13.47 tangent 114°35'30" Degree of Curve (arc) 26.01 chord 00°00'00" Degree of Curve (chord) S O1°36'08" W chord b aring rp->Pt 3 4 S 7 031134" W 50.00 473.328 586.250 INV 4 5 N 8 033125" W 86.29 473.995 499.963 INV 5 6 N 0 003150" E' 26.00 499.995 499.992 Closure Closing line: S 57 57173" W 0.01 from 6 to .1. Latitude (N): -0.01 Perimeter.: 225.58 Departure (E): -0.01 Error of Closure: 1.:23095 Area: 2 23.08 Square feet 0.0510 Acres April 22, 2013 Lot 3, and the S 1, as same is recorded it more particularly descri Lot 3; Thence N 00°03 Thence S 89°33' Lightning Place; Thence 49.08 €e curve to the left, having chord bearing S 41'35", Thence S 31°46' Thence N 89°56 Sq. Ft., more or less. R�g7�AT 208.860.3442 V li 211 V Gy LLc dtpengli@insn.com Simeyor 1506 E. Prohaska Ct. Eagk, Ill 83616 SOMMERSBY SUB NO.1 PARCEL C )uth 6.50 feet of Lot 2, Block 1 of Sommersby Subdivision No. Book 97 of Plats at Page 12141, records of Ada County, Idaho, led as follows: BEGINNING at the Southwest comer of said 50" E, 50.20 feet; 25" E, 86.29 feet to a point on the Westerly right-of-way of N. along said right-of-way and along the are of a non -tangent radius of 50.00 feet, a central angle of 56°14'24", and a long " E, 47.13 feet; 9" W, 16.95 feet; 0" W, 108.70 feet to the Point of Beginning. Containing 5058 �ih 26"4-a-13 x.431 PROJECT: DESCRIPTION: FILE: jink. cgx UNITS: J.S. SURVEY FOOT INSTRUMENT SETUP Instrument point: Backsight point: Backsight Bearing: Remarks: TYPE FROM '1'0 DI ------- ----- ----- ------ INV 1 2 N C INV 2 3 S 8 INVCRV pc.->rp 3 4 N 7 56°14'15" delta 50.00 radius 49.08 arc ler. 26.72 tangent 47.13 chord S 41°35'2.7" F. chord t rp->pt: 4 5 S 2 INV 5 6 S 3 INV 6 7 N 8 Closure Closing line: S 25 51112" E 0.00 from 7 to 1 Latitude (N): 0.00 Perimeter: 311.22 Departure (E): 0.00 Error of Closure: 1:78618 Area: 5 58.55 Square feet 0.1161 Acres 500.000 500.000 500.000 500.000 00000'00" E Distance: 0.00 Monday, April 22,201.3 12:18 PM PAGE 1 ECTION DISTANCE NORTHING FASTING 003'50" E 50.20 550.200 500.056 033'25" E 86.29 549.533 586.343 031'40" E 50.00 561.181 634.968 eft) 5.90 Mid Ordinate th 6.69 External 114'35'30" Degree of curve (arc) 180°00'00" Degree of Curve (chord) Bring 017'26" W 50.00 514.284 61.7.629 046'49" W 16.95 499.875 608.702 056'10" W 108.70 499.996 500.002 Order Number: 13220765 For value received, Theodore K. Thomas and Marie A. ADA COUNTY RECORDER Christopher D. Rich AMOUNT 10.00 9 BOISE IDAHO 04/09/2013 12:29 PM DEPUTY Victoria Bailey H 1 N 11 1 EEgg pp11{{ 66{{ RECORDED -REQEsT OF IIIIII VIIIIIIIiIIIflIIlI�III�III��Ih �IIIl�IIfIIII III II III RECORDED-RHQUEeT OF TITLEONE BOISE 113037952 Warranty Deed husband and wife the grantor, does hereby grant, bargain, set, and convey unto KSA Properties LLC, an Idaho Limited Liability Company whose current address Is 3843 W. Dalsy Ctsek St. Meridian, ID 83642 the grantee, the following described preml Lots 1, 2 and 3 in Block 1 of Sommersby I Page(s) 12141 and 12142, records of Ada To have and to hold the said premises, wit And the said Grantor does hereby covens said premises; that they are free from all a subject and (hose made, suffered or done righl(s) of way, protective covenants, zonk genoral taxes and assessments, including due and payable, and that Grantor will war con o4 so requires, the singular gumber it State of in Ada County, Idaho, to wit: Alvision No. 1, according to the plat thereof, filed in Book 97 of Plats at ounty, Idaho. ;heir appurtenances unto the said Grantee, its heirs and assigns forever, to and with the said Grantee, that Grantor Is the owner in fee simple of umbrances except those to which this conveyance is expressly made the Grantee; and subject to all existing patent reservations, easements, ordinances, and applicable building codes, laws and regulations, igafion and utility assessments (if any) for the current year, which are not nt and defend the same from all lawful claims whatsoever. Whenever the Was the plural. as. On this °' day of April in the year of 2013, before me, the undersigned, a Notary Public In and for said State, personally a red Theodore K. Thomas nd Marie A. Thomas, known or identified to me to be the persons whose naNpsp s scribed to the within instmm nt and acknowledged to me that they executed the same. Ada County parcel Parcel ID #: 118038270( Property Addr: 1099 N Ligh Meridian, ID Property Type: Residential Owner Information Owner Name: Ksa Propertl Second Owner: Mail Addr: 3843 W Dai: Meridian, ID Assessor Information Legal Desc: LOT 01 BLK Subdivision: SOMMERSB` Lot/Block: 1/1 Section: 11 Acres: 0.0990 Irrigation Dist: NAMPA MER Tax Code Area: 03 Levy Rate 2011: 0.01368513 Levy Rate 2012: 0.01501672 Levy Rt Change: 9.73% Zoning: City of Merit Homeowner $ Exemption: Land Information Residential Acres: 0.099 Water Source: Public View: Utilities: Underground Transfer Information PI LLC Creek St 11 SOMMERSBY SUB NO 01 SUB NO 61 Alec Coldticil aletr ciEid c"11a c 1* t �„- #rder.,.r 31. �L...,.,, a3n` I Treasurer Information IRR Year: 2010 Tax: $310 Year: 2011 Tax: $278 Year: 2012 Tax: $300 Assessor Categories Year Cat. Description Acres Value 15 2012 200 RES LOT OR TRACT 0.099 $20,000 Totals: 0.099 $20,000 rmmereial Acres: 0 Other Acres: 0 Street: Asphalt/Concrete Sewer: Public Sidewalks: Y Curbs and Gutters: Y Water Influence: 1 Water Frontage: 0 Corner: N Topography: Level Rec. Date: 04/09/13 Doc Num: 0113037952 Doc Type: Warranty Deed Owner: KSA PROPERT ES LLC Grantor: THOMAS,THEODORE K & MARIE A )rig. Loan Amt: VFinance Title Cc: TITLE ONE Type: Loan Type: Lender: sentry Dynamics, Inc, and its customers make no ri presentationz, wartantles or conditions, express or Implied, as to the accuracy m completeness of'dbmration mmm—d in tMs report. Ada County Parcel Parcel ID #: R8038270� Property Addr: 1075 N Ligt Meridian, II Property Type: Residential Owner Information Owner Name: Ksa Propert Second Owner: Mail Addr: 3843 W Dai Meridian, IC Assessor Information Legal Dose: LOT 02 BLK Subdivision: SOMMERSB Lot/Block: 2/1 Section 11 Acres: 0.0770 Irrigation Dist: NAMPA MEF Tax Code Area: 03 Levy Rate 2011: 0.0136851-. Levy Rate 2012: 0.0150167: Levy Rt Change: 9.73% Zoning: City of Meru Homeowner Exemption: Land Information Doc Num; 0113037952 I Doc Type: lWarranty Deed Residential Acres: 0.077 Water Source: Public View: $278 Utilities: Underground Transfer Information PI LLC Creek St 3642-7969 1 SOMMERSBY SUB NO 01 SUB NO 01 N16'r<; i;fOiNYcl1 e 7148tumer serVtC2 also cAninu: v ii+ar �b ls.eve�i 'h ir} s t. t20a$ 338-4361 rIIc r. _.rar; r. iO eP. Treasurer Information Doc Num; 0113037952 I Doc Type: lWarranty Deed Owner: KSA PROPERT IRR Year: 2010 Tax: $310 Title Co; ITITLE ONE Year; 2011 Tax: $278 Year: 2012 Tax: $300 Assessor Categories Year Cat. Description Acres Value 45 2012 200 RES LOT OR TRACT 0.077 $20,000 Totals: 0.077 $20,000 orlrmercial Acres: 0 Other Acres: 0 Street: Asphalt/Concrete Sewer: Public Sidewalks: Y Curbs and Gutters: Y Water Influence: 1 Water Frontage: 0 Corner: N Topography: Level Rec. Date: 04/09/13 11 Doc Num; 0113037952 I Doc Type: lWarranty Deed Owner: KSA PROPERT ES LLC Grantor: THOMAS,THEODORE K & MARIE A (frig. Loan Amt: Title Co; ITITLE ONE Finance Type: I I Loan Type:j Lender: Santry Dynamics, Inc. and Its Customers make no express or Implied, as to On, accuracy or completeness of Inrurmallon contained In this report. Ada County Parcel Parcel ID #: R8038270( Property Addr: 1051 N Ligh Meridian, ID Property Type: Residential Owner Information Owner Name: Ksa Propertl Second Owner: Mail Addr: 3843 W Dai: Meridian, ID Assessor Information Legal Desc: LOT 03 ELK Subdivision: SOMMERSB` Lot/Block! 3/1 Section: 11 Acres: 0.1030 Irrigation Dist: NAMPA MER Tax Code Area: 03 Levy Rate 2011: 0.01368513 Levy Rate 2012: 0.01501672 Levy Rt Change: 9,73% Zoning: City of Meric Homeowner $ Exemption: Land Information Residential Acres: 0.103 1Nater Source: Public View: Utilities: Underground Transfer Information Q LLC Creek St 11 SOMMERSBY SUB NO 01 SUB NO 01 Cvslnmer Service alncr ALLff�� € NIC -E clnrir+I, ll3 r..ab+te Ant I Men a ,_u:1^_, 1:+;1 Treasurer Information IRR Year: 2010 Tax! $310 Year: 2011 Tax: $278 Year: 2012 Tax: $300 Assessor Categories Year Cat. Description Acres Value 15 2012 200 RES LOT OR TRACT 0.103 $20,000 Totals: 0.103 $20,000 )mmercial Acres: 0 Other Acres: 0 Street: Asphalt/Concrete Sewer: Public Sidewalks: Y Curbs and Gutters: Y Water Influence: 1 Water Frontage: 0 Corner: N Topography: Level Rec. Date:04/09/13. Doc Num: 0113037952 Doc Type: Warranty Deed Owner: KSA PROPER ES LLC Grantor: THOMAS,THEODORE K & MARIE A Orig. Loan Amt: Title Co: TITLE ONE I Finance Type: I Loan Type: Lender: _entry oynar�¢s, mc. a�a hs resmreers or c.ndffi n ,express o, implied, as m the accuracy or rompleleness of Nformallon -Ml 1ed N thls report. OPERATING AGREEMENT F OLID RUN CONSTRUCTION, L.L.C. This Operating Agreement of Elk Run Construction, L.L.C., an Idaho limited liability company organii ed pursuant to the Act is entered into and shall be effective as of the Effective Date, by and among the Company and the Persons executing this Operating Agreement as Members. For purposes of this Operating Agreement (as defined below), unless the context clearly indicates otherwise, the following terms shall have the following meanings: 1.1 Act - The Idaho Limited Liability Company Act and all amendments to the Act, 1.2 Additional Member - A Member other than an Initial Member or a Substitute Member who; has acquired a Membership Interest frorn the Company. 1.3 Appendix) A - Appendix A is attached hereto and shall be part of this Operating Agreement, 11 in the event of any conflict or redundancy between the Operating Agreement excluding Appendix A, and Appendix A, then Appendix A shall control. 1.4 Articles 1 The Articles of Organization of the Company as properly adopted and arnended from time to time by the Members and filed with the Secretary of State. 1.6 Assignee] - A transferee of a Membership Interest who has not been admitted as a Substituted Member. 1.6 Cade - The Internal Revenue Code of 1986, as amended. 1.7 Commitment - The Capital Contributions, or loans or advances, that a Member or Assignee is'pbligated to make under this Operating Agreement, 1.8 Company - Elk Run Construction, L.L.C., a limited liability company formed under the laws of Idaho, and any successor limited liability company. 1.9 Company, Property - Any Property owned by the Company. 1.10 Contributing Members - Those Members making contributions as a result of the failure of a Delinquent Member to make the contributions required by the Commitment as described in Article 3. -1_ 1.11 Default mate - The day after the date a Member fails to perform a Commitment. 1.12 Default Interest - Interest, compounded on the first day of each calendar quarter occurring after a relevant Default Date, on a Delinquent Member's outstanding Delinquent Amount at the Member interest Fate, which shall be initially determined on such Default Date and subsequently adjusted on the first day of each calendar quarter occurring thereafter. 1 1,13 Delinquent Amount - With respect to any Delinquent Member, the sum of the amount of the Delinquent Contribution or unpaid Commitment, including unpaid required advances and',ioans of such Member, pus the amount of any unpaid Default Interest owing with respect to such Delinquent Contribution. All contributions made to retire any Delinquent Amount shall be treated, first, as a contribution of that portion of the Delinquent Amount!, which represents the Delinquent Contribution and then as a payment of that portion which represents Default Interest. Any payments that are treated as payments 'of Default Interest shall not be credited to the Delinquent Member's Capital Account, but shall be treated as income by the Company. 1.14 Delinquent Contribution - With respect to any Delinquent Member, the amount of any required working capital loan that is not made when due, and remains unmade as of such time, or the amount of any other obligation, including any unpaid loan or advance, of a Delinquent Member owed to the Company or owed on behalf of the Company. 1.16 Delinquent Member - An Initial Member who fails to make any Capital Contribution required pjarsuant to Article 3.1 hereof or a Member who fails to perform such Member's Commitjnent, on or before the due date thereof. 1.16 Disposition (Dispose) - Any sale, assignment, transfer, exchange, mortgage, pledge, grant, hypothecation, or other transfer, absolute or as security or encumbrance (including dispositions by operation of law). 1.17 Dissoci Member as described 1.18 Dissolut dissolution of the Com the contrary. 1.19 Distrib Membership interest 1.20 Ecor Interest Owner in Losses, gains, dec 1.21 Ecor not a Member. )n - Any action which causes a Person to cease to be a Article 12 hereof. Event - An event, the occurrence of which will result in the V under Article 13 unless the Members unanimously agree to - A transfer of Property to a Member with respect to a acribed in Article 4 or Article 13. Interest - The rights of a Member or Assignee or Economic 3utions (liquidating or otherwise) and allocations of Profits, 3 and credits of the Company. Interest Owner - The owner of an Economic Interest who is -2- 1.22 Executive',; Committee - The two (2) person Committee consisting of two (2) Members with Management Rights, and of whom one is the Chairman of the Committee and the Managing Member, 1.23 Initial Capital Contribution - The Capital Contribution made from the Initial Members or by any Additional Members as described in Article 3.1 or on Exhibit A, which is attached hereto and made part hereof. 1.24 Initial Members - Those persons identified on Exhibit A attached hereto and made a part hereof!,by this reference who have executed the Operating Agreement. 1.25 Interest Holder- A person who has an Economic Interest, whether or not such person is a Member. 1.26 Majority -'The affirmative vote or consent; or approval of more than one- half (112) of the Sharing Ratios of all Members, excluding Interested Members, defined as a "Majority" in Article;5.7 hereof. 1.27 Management Right - The right of a Member, or, in the case of an Assignee, the rights of the assigning Member and not the Assignee, to participate in the management of the Company, including the rights to information and to consent or approve or vote on actions of the Company. 1.25 Managing Member - A Member selected to manage the affairs of the Company under Article'; 6 hereof. A Managing Member may also be referred to as a Manager. 1.29 Member-Ilnitial Member, Substituted Member or Additional Member, and, unless the context expressly indicates to the contrary, includes Managing Members and Assignees. j 1.30 Membership Interest - The entire rights of a Member in the Company including the rights of a Member in Distributions (liquidating or otherwise) and allocations of the profits, losses, gains, deductions, and credits of the Company, and the Management Rights of a Member, In the case of an Assignee, such rights are limited to an assigning Member's rights in their Economic Interest. 1.31 Member Western Edition of the 1.52 Net Cash less the portion thereo and debt payments contingencies, as deter net be reduced by de allowances. est Rate - The prime rate of interest published in the Street Journal. Available - Gross cash proceeds from Company operations used to pay or establish reserves for all Company expenses third parties, capital improvements, replacements, and pined by the Executive Committee. Net Cash Available shall rreciation, amortization, cost recovery deductions, or similar Member - Any Member who is not a Delinquent Member. -3- U4 Operating Agreement - This Operating Agreement including amendments adopted in accordance with the Operating Agreement and the Act. 1.35 Organizaion - A Person other than a natural person. Organization includes, without limitation, corporations (both non-profit and other corporations), partnerships (both limit�d and general), joint ventures, limited liability companies, and unincorporated associations, but the term does not include joint tenancies and tenancies by the entirety. 1.36 Person An individual, trust, estate, or any incorporated or unincorporated organizotion permitted to be a member of a limited liability company under the laws of Idaho] 1.37 Property Any property real or personal, 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. 1.38 Regulations - Except where the context indicates otherwise, the permanent, temporary,, proposed, or proposed and temporary regulations of the Department of the Trqlasury under the Code as such regulations may be lawfully changed from time to time. 1.39 Resignati#n - The act by which a Managing Member ceases to be a Managing Member. 1.40 Sharing patio - With respect to any Member, the percentage as specified on Exhibit A to this Operating Agreement, 1.41 Substitute Member - An Assignee who has been admitted to all of the rights of membership p rsuant to the Operating Agreement. 1.42 Taxable Ylear - The taxable year of the Company as determined pursuant to §706 of the Code. 1.43 Taxing Jtiriscliction - 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. M 2.1 Orgat Limited liability com 2.2 Agreemen contained and for other which is hereby ackno hereby agree to the ten time to time be amend Members that the Oper Parties, and, except to incorporates federal in Regulations or is expri Agreement shall govern of the Act or any othe Agreement is prohibited considered amended to effective under the Act, such a way to make any valid, such provision sh interpretation or amendr 2.3 Name - business of the Con registered DBA. 2.4 Effective the date the Articles are ARTICLE, 2 FORMATION )n - The Members hereby organize the Company as an Idaho pursuant to the provisions of the Act. . - For and in consideration of the mutual covenants herein food and valuable consideration, the receipt and sufficiency of viedged, the Members executing the Operating Agreement is and conditions of the Operating Agreement, as it may from �d according to its terms. It is the express intention of the Ming Agreement shall be the sole source of agreement of the .he extent a provision of the Operating Agreement expressly :ome tax rules by reference to sections of the Code or ssly prohibited or ineffective under the Act, the Operating even when inconsistent with, or different than, the provisions law or rule, To the extent any provision of the Operating or ineffective under the Act, the Operating Agreement shall be the smallest degree possible in order to make the agreement In the event the Act is subsequently amended or interpreted in provision of the Operating Agreement that was formerly invalid all be considered to be valid from the effective date of such name of the Company is Elk Run Construction, L.L.C. and all r shall be conducted under that name, or an appropriately - The Operating Agreement shall become effective as of with the Secretary of State. 2.5 Term - The Company shall be dissolved and its affairs wound up in accordance with the Act and the Operating Agreement on June 11, 2022, unless the term shall be extended by amendment to the Operating Agreement and the Articles of Organization, or unless the Company shall be sooner dissolved and its affairs wound up in accordance with the Act or the Operating Agreement. 2.6 Registers process and the regisi Articles as filed in the from time to time, than the Secretary of State. registered agent or ct designate a repiacemei appropriate filings with I Agent and Office - The registered agent for the service of 'ed office shall be that Person and location reflected in the flee of the Secretary of State. The Managing Member, may, the registered agent or office through appropriate filings with f the Managing Member shall fail to designate a replacement nge of address of the registered office, any Member may registered agent or file a notice of change of address through Secretary of State. -5- 2.7 Principal gffice - The Principal Office of the Company shall be located at 3891 W. Daisy Creek Stl Meridian, ID 83642, and such other locations as are selected by, the Managing Member, upon giving ten (10) days written Notice to the Members. 2.8 Authority to do Business - The Company is formed to own and operate a construction business.; In addition, the Company may engage in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company does business. The Company shall have the authority to do all things necessary or convenient to accomplish its purpose and operate its business. 2.9 Limitation. on Location of Business - The Company shall not do business outside the State of Idaho unless the Company will be afforded limited liability under the pertinent laws in such other jurisdiction. 2.10 Names and Addresses of Members - The names and addresses of the Members are as reflected on Exhibit A attached hereto and by this reference made a part hereof. 3.1 Initial Cotributions - The Initial Capital Contribution of each Initial Member is set forth on thibit A. The Member's initial Capital Account balance shall be as set forth on Exhibit A. No interest shall accrue on any Capital Contribution and no Member shall have the right to withdraw or be repaid any Capital Contribution except as provided in this Operating Agreement. Each Additional Member shall make the Capital Contributions as !shall be agreed by the Company and such Additional Member, which shall be a Commitment. 3.2 Delinquent Amount as Recourse Debt - The Members hereby acknowledge and agree !that any Delinquent Amount resulting from the failure to satisfy a Commitment when and where required, shall constitute that Member's full recourse, personal liability debt to the Company, which Commitment(s) shall also be subject to suit for specific performance as set forth herein. 3.3 Enforcema Delinquent Member, the the failure to meet such fails to perform the Co comply with the Commis notice, the Nondelinque advance to the Compai Members shall also be e as a loan from the Cor Intetest from the Default Membership Interest in Members shall be paid I have been entitled as t nt of Commitments- In the event any Member becomes a Managing Member shall give the Delinquent Member notice of Delinquent Member's Commitment. If the Delinquent Member nmitment (including any costs associated with the failure to vent and Default Interest) within ten (10) days of the giving of 7t Members may elect, but shall not be obligated, to lend or y, the amount of the unpaid Commitment, The Contributing ntitled to treat the amounts contributed pursuant to this section Abuting Members to the Delinquent Member bearing Default Date, as adjusted below, secured by the Delinquent Member's the Company. Until they are fully repaid, the Contributing to rata all Distributions to which the Delinquent Member would ayments under said loan. Notwithstanding the foregoing, no -6- Commitment may be enforced by a creditor of the company unless the Member expressly consents to such enforcement or to the assignment of the obligation to such creditor, The Member Interest Rate shall be adjusted, based on the amount of time from the Default Date to the date a Default is cured as follows. i Period from Rate of Default Date Interest Charged 1 - 30 daysr Member Interest Rate 31 - 60 day6 Member Interest Rate + 2% over 66 days Member Interest Rate + 4% Provided that in no event shall the total interest charged exceed the maximum interest allowed by applicable laud. The Member's Commitment as set forth herein and in the Member's signed Promi0sory Note to the Company shall be subject to suit for specific performance, and the Company shall be entitled to an award of reasonable attorney's fees for any such suit in any court, appellate court, or bankruptcy court. 3.4 Maintenance of Capital Accounts - The Company shall establish and maintain Capital Accounts for each Interest Holder as more fully set forth in Appendix A, 3.5 Loans. 3.5.1 From' members - Any Member may, with the approval of a Majority of the Members, lend or advance money to the Company. If any Member shall make any loan or loans to the Company or advance money on its behalf, the amount of any suufih loan or advance shall not be treated as a contribution to the capital of the Cornpany but shall be a debt due from the Company. The amount of any such loan or advance by a lending Member shall be repayable out of the Company's cash'',, and shall bear interest at the rate agreed between the Company and the', lending Member, None of the Members shall be obligated to make any loan or advance to the Company. 3.5.2 From Third parties - The Company may obtain loans from third parties upon the consent of a Majority of the Members. 3.5.3 Repayment of Loans - The Company shall not repay any loans made by the Members or make any Distributions to the Members except as hereinafter provided. Before any portion of such loans are repaid or any other Distributions are rrwade to the Members, all expenses of operation shall be paid, all amounts currently due at such time on outstanding loans from Persons other than Members shall be paid, and adequate provision shall be made for the working capital requirements of the Company, including adequate reserves for maintenance, management, promotion, and tax expenses. Loans shall be repaid in accord with the terms and conditions of the loan agreement from Net Cash Available. All other Distributions shall be made to the Members in proportion to theirl5haring 'Ratios. -7- a � e NWID 01011011 . r 4.1 Allocations of Profits and Losses from Operations - Except as may be required by §704{c} of the Code, Profits, tosses, and other items of income, gain, loss, deduction, and credit shall be apportioned among the Interest Holders as follows: I 4.1.1 Allocation of Profits - After giving effect to the special allocation and limitations set forth in Appendix A, if any, Profits for any Taxable Year shall be allocated among the Interest Holders in proportion to their Sharing Ratios. 4.1.2 Allocation of Losses - After giving effect to the special allocations and limitations set forth in Appendix A, if any, Losses for any Taxable Year shall be allocated among the Interest Holders in proportion to their Sharing Ratios. 4.2 Distributions'of Net Gash Available - Distributions of Net Cash Available shall be made to the ,Members when the accounting reports of the Company, as provided in Article 7.2, Aare furnished to the Members, but no less frequently than annually. Distributions- of Net Gash Available may be made over a shorter period of time in the discretion of the Members. Distributions of Net Cash Available shall be made in the following order and priority: 4.2.1 First, to pay Member loans as provided in Article 3.5.3; and then 4.2.2 Second, the balance, if any, to the Members in proportion to their Sharing Ratios. 4.2.3 The ;determination as to the amount of Net Cash Available for distribution shall be made by vote of the majority of the Members. 5.1 Voting Right vote on any matter subr to vote on any matters Member or a Substitute to the selection of the M as full voting Members. 5.2 Acts Requ Operating Agreement, the Company and its authorized only by the Assignee, or through scope of its authority. - All Members who have not Dissociated shall be entitled to Red to a vote of the Members. Assignees shall not be entitled however, Assignees who are family devisees of an original lember who had voting rights, shall be entitled to vote only as tubers of the Executive Committee, unless otherwise admitted I a Majority Vote - Except as otherwise provided in this determinations, decisions, approvals, and actions affecting iness and affairs shall be determined, made, approved, or rotative vote of a Majority vote of the Members, excluding any authorization of the Executive Committee, acting within the 5.3 liability of Members - No person solely by virtue of his/her/its Member status shall be liable as such for the liabilities of the Company, The failure of the Company to observe aty formalities or requirements relating to the exercise of its powers or management , f its business or affairs under this Operating Agreement or the Act shall not be grounds tor imposing personal liability on the Members or Managers for liabilities of the Company. .4 Indemnifications - The Company, its receiver or trustee shall indemnify, save harmless, and pay all judgments and claims against each Member, Managing Member, and agent for all costs, losses, liabilities, and damages paid or accrued by such Member, Managing Member or agent by reason of any act performed or omitted to be performed by such'Member or Managing Member in connection with the business of the Company to thefullest extent provided or allowed by the laws of the State, including attorney fees and costs incurred by such Member or Managing Member. However, no Member or Managing Member shall be indemnified from any liability for fraud, bad faith, willful Misconduct, or gross negligence. Each Member shall have the right of contribution from the other Members for any amounts paid or advanced, including payments by a guarantor who is an affiliate of such Member, in excess of such Members pro rata; share based on the Members Sharing Ratios, together with interest on money advanced at the Member Interest Rate, 5.5 Representations and Warranties - Each Member hereby represents and warrants to the Company' and each other Member that: (a) that the Member is acquiring an interest in the Company for the Member's own account as an investment and without an intent to distribute the interest; and (b) the Member acknowledges that the interests 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. 5.6.1 A Me'mber, including a Managing Member, shall not be entitled to enter into transactions that may be considered to be competitive with, or a business opportunity that maybe beneficial to, the Company, it being expressly understood that some of the Members may enter into transactions that are similar to the tranaaetions into which the Company may enter, Notwithstanding the foregoing, Members shall account to the Company and hold as trustee for It any property, profit, or benefit derived by the Member, without the consent of the other Members, in the conduct or winding up of the Company business or from a use or appropriation by the Member of Company Property including information developed exclusively, for the Company and opportunities expressly offered to the Company. 5.6.2 A Mejnber, including a Managing Member does riot violate a duty or obligation to the Company merely because the Member's conduct furthers the Member's own interest. A Member may lend money to and transact other business with the !Company. The rights and obligations of a Member who lends money to or transacts business with the Company are the same as those of a l pet -son who is not Member, subject to other applicable law and this Agreement. No transaction wish the Company shall be void able solely because a Member has, a direct or ind'rect interest in the transaction if either the transaction is fair to the Company or the disinterested Managing Member or disinterested Members; in either case, knowing the material facts of the transaction and the Member's interest, authorize approve, or ratify the transaction. 5.6.3 Tothe extent otherwise consistent with this Agreement, the Members, may, wcth prior disclosure to the other Members, deal with the Company, and wil�h its affiliates, either directly or through a Member's affiliates, officers, employees, and agents in providing necessary services or goods to the Company (provided the cost of such goods or services is equal to or less than the; cost of obtaining such goods or services from third parties) and neither the Company nor any of the Members shall have any right by virtue of this Agreement, to participate in or to claim any interest in the income or profits derived therefrom.) 61 Members' Standard of Care - A Member's duty of care in the discharge of the Member's duties to the Company and the other Members is to refrain from negligent conduct, violation of the terms of this Agreement, or violation of law. In discharging its duties, a Member shall be fully protected in relying in good faith upon the records required to be maintained under Article 7 and upon such information, opinions, reports, or statements by any of its other Members, or agents, or by any other Person, as to matters the Member reasonably believes are within such other person's professional or expert ccrnpetence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports, or statements as to the value, and amount of the assets, liabilities, profits, or losses of the Company or any other facts pertinent to the existence and amount of assets from which distributions to Members might propetly be paid. 5.8 Majority -'Whenever any matter is required or allowed to be approved by a Majority of the Members or a Majority of the remaining Members under the Act or the Operating Agreement, such matter shall be considered approved or consented to upon the receipt of the affirmative approval or consent, either in writing or at a meeting of the Members, of Members (raving Sharing Ratios in excess of one-half of the Sharing Ratios of all the Members entitled to vote on a particular matter excluding Interested Members. For this purpose, the Sharing Ratios of all Members shall be considered in determining whether a Majority have voted in favor of an action, irrespective of whether or not a Member participates in such vote. Assignees and, in the case of approvals to withdrawal where consent of the remaining Members is required, Dissociating Members shall not be considered' Members entitled to vote for the purpose of determining a Majority. In the case of a Member who has disposed of that Member's entire Membership Interest to in Assignee, but has not been Dissociated as a Member, the Sharing Ratio of such A�sighee shall be considered in determining a Majority and such Member's vote or consertt shall be determined by such Sharing Ratio. 5.9 Leasing Beyond Term of Company - The Company shall have the power to lease to others all or portions of the Real Property notwithstanding that the term of such -10- leases may extend beyond the term of this Company. The Managing Member shall have full authority to ehter into, amend, and terminate leases in the name of the Company and for its account. ARTICLE 6 MANAGING MEMBER 6.1 Original Managing Member - Subject to the limitations and restrictions set forth in this Operating agreement, the Managing Member shall have the sole and exclusive right and powef to manage the business of the Company, and to do all things necessary or convenient to carry out the business and affairs of the Company, and shall have all of the rights and powers that may be possessed by Managing Members under the Act, includingl without limitation those rights and powers described in this Article 6. The initial Manoging Member shall be: Timothy J. Kelly. 6.2 Term of Office as Managing Member - No Managing Member shall have any contract right to such position, Each Managing Member shall serve until the earliest of. 6.2.1 the Dissociation of such Managing Member; 6.2.2 removal of the Managing Member; or 6.2.3 the voluntary withdrawal of a Managing Member; 6.2.4 the election of a new Managing Member by the Membership. 6.3 Authority of Members to Bind the Company - The Members hereby agree that only the Managing Member and authorized agents of the Company shall have the authority to manage the; Company, make representations or warranties, or enter into contracts on behalf of th¢ Company (Le., Bind the Company). No Member other than a Managing Member shall ;take any action as a Member to bind the Company, and each Member shall indemnify'land save the Company harmless for any costs or damages incurred by the Compar',ry as a result of the unauthorized action of such Member. Subject to the terms of this Operating Agreement, the Managing Member has the power and the right, on behalf lof the Company, to do all things necessary or convenient to carry out the business and affairs of the Company under the Act, including, without limitation, the right and ppwer to: 6.3.1 Acquire by purchase, lease, or otherwise any real or personal property which ',may, be necessary, convenient, or incidental to the accomplishment of the purposes of the Company; 6.3.2 Operate, maintain, finance, improve, construct, own, grant options with respect to, sell, convey, assign, mortgage, and lease any real estate and any personal property necessary, convenient, or incidental to the accomplishment of the purposes of the Company; -11- 6.3.3 Execute any and all agreements, contracts, documents, certifications, and instruments necessary or convenient in connection with the management, maintenance, and operation of Company Property, or in connection with managing the affairs of the Company, including executing amendments to the Operating Agreement in accordance with the terms of the Operating Agreement, both as Managing Member and, if required, as attorney- in-fact for the Members pursuant to any power of attorney granted by the Members to the Managing Member; 6.3.4 Borrow money and issue evidences of indebtedness necessary, convenient, or incidental to the accomplishment of the purposes of the Company, and secure the same by mortgage, pledge, or other lien on any Company Property; 6.3.5 Execute, in furtherance of any or all of the purposes of the Company, any deed, tease, mortgage, deed of trust, mortgage note, promissory note, bili of sale, contract; or other instrument purporting to convey or encumber any or all of the Company Property; 6.3.6 Prepay in whole or in part, refinance, recast, increase, modify, or extend any liabilities affecting the Company Property and in connection therewith execute any extensions or renewals of encumbrances on any or all of the Company Property; 6.3.7 Care', for and distribute funds to the Members by way of cash, income, return of (capital, or otherwise, all in accordance with the provisions of this Operating Agreement, and perform all matters in furtherance of the objectives of the Company or this Operating Agreement; 6.3.6 Controct on behalf of the Company for the employment and services of employees andlor independent contractors, such as lawyers and accountants, and delegate to sr!ich Persons the duty to manage or supervise any of the assets or operations of the Company; 6.3.9 Engage in any kind of activity and perform and carry out contracts of any kind (includin'g contracts of insurance covering risks to Company Property and Company and Member liability) necessary or incidental to, or in connection with, the accomplishment of the purposes of the Company, as may be lawfully carried on or performed by a limited liability company under the laws of each state in which the Company is then formed or qualified; 6.3.14 Take, or refrain from taking, actions not expressly proscribed or limited by this Operating Agreement, as may be necessary or appropriate to accomplish the purposes of the Company; and 6..3.11 Institute, prosecute, defend, settle, compromise, and dismiss lawsuits or other judicial or administrative proceedings brought on or in behalf of, or against, the Company or the Members in connection with activities arising out -12- of, connected with, or incidental to this Operating Agreement, and to engage counsel or others In connection therewith. 6.3.12 All Of the foregoing power and authority is subject to the express limitation that the !powers hereinabove described shall be limited to those items and amounts expressly approved by the Membership in the Annual Budget, and may extend to any,, non -budgeted item not to exceed a value of $300,000.00. 6.4 Right to Rely on Managing Members - Any Person dealing with the Company may rely (without duty of further inquiry) upon a certificate signed by any Managing Member as to:![ 6.4.1 The identity of any Member; 6*2 The existence or nonexistence of any fact or facts which constitute a condition precedent to ants by a Managing Member or which are in any other manner ger niane to the affairs of the Company; 6.4.3 The Persons who are authorized to execute and deliver any instrument or document of the Company, or 6.4.4 Any fact or failure to act by the Company or any other matter whatsoever involving the !Company or any Member. 6.5 Restrictions on Authority of Managing Member - The Managing Me=mber shall not have the authority to, and covenants and agrees that they shall not, do any of the following a6ts without a unanimous majority vote of the Members: 6,51 Cause: or permit the Company to engage in any activity that is not consistent with the purposes of the Company as set forth in Article 2 hereof; 6.5.2 Knowingly do any act in contravention of this Operating Agreement; 6.5.3 Knowingly do any act which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Operating Agreement; 6.5.4 Possess Company Property, or assign rights in specific Company Property, for other; than a Company purpose; 6.5.5 Knowingly perform any act that would subject any Member to personal liability irk any jurisdiction. 6.5.6 Enter !into any agreement for the sale of all, or substantially all of the Company Property. -13- 6.6.1 The business and ope or any affiliates, it not allowing fund; funds or other a Member or any Company separa Member and thr formalities, inclui meetings and a authorization of tt- assets of the Cor dealings with thin entity. 6.6,2 TI necessary or apt as a limited liar which such exisl or to enable the for the accompl development, rrr accordance with and regulations. ylanaging Member shall cause the Company to conduct its rtions separate and apart from that of any Managing Member luding, without limitation, ('r) segregating Company assets and or other assets of the Company to be commingled with the sets of, held by, or registered in the name of, Managing filiates, (ii) maintaining books and financial records of the from the books and financial records of any Managing affiliates, and observing all Company procedures and ng, without limitation, maintaining minutes of Company Ing on behalf of the Company only pursuant to due Members, (iii) causing the Company to pay its liabilities from Dany, and (iv) causing the Managing Member to conduct its oarties in his own name and as a separate and independent Managing Member shall take all actions which may be mate (t) for the continuation of the Company's valid existence Company under the Act and of each other jurisdiction in ;e is necessary to protect the limited liability of the Members npany to conduct the business in which it is engaged, and (ii) nent of the Company's purposes, including the acquisition, enance, preservation, and operation of Company Property in provisions of this Operating Agreement and applicable laws 6.6.3 The Managing Member's duty of care in the discharge of their duties to the Company and the other Members is to refrain from negligent conduct, violation of the terms of this Agreement, or violation of law. 6.6.4 The Managing Member shall cause to be provided, or cause the Company to carry; such Insurance as is customary in the business in which the Company is engaged and, in the places in which it is so engaged. 6.7 Compensation of Managing Member - Except as expressly provided for in this Operating ;Agreement, no Managing Member shall be entitled to compensation for services rendered to or on behalf of the Company. 6.8.1 Managing Member - Except as provided in this Article 6, no Person shall be admittedlto the Company as a member or Managing Member without the unanimous vote of the Members. -14- 6.8..1 A Managing Member shall cease to be a Managing Member upon the first to occur of (i) the Bankruptcy of such Member, (ii) the involuntary transfer by operation of law of such Member's interest in the Company, (iii), the unanimous vote of the remaining Members to approve a request by such Member to retire, or (iv) the vote of a Majority of the Members to remove such Member after such Member has attempted to make a transfer of his Membership Interest that is not permitted by Article 10 hereof, committed a material breach of this Operating Agreement or its representations and warranties hereunder, or committed (any other act or suffered any other condition that would justify a decree of dissolution of the Company under the Act. In the event a Person ceases to be a Member without having transferred his entire Membership Interest, such Person shall be treated as an Assignee as a result of anunpermitted transfer of a Membership Interest. If a ;Managing Member ceases to be a Member for any reason hereunder,; such Person shall not be discharged from any debts and obligations ;such Managing Member may have had to or on behalf of the Company existing at the time such Person ceases to be a Managing Member, regardless of whether, at such time, such debts or liabilities were known or unknown, actual or contingent. A Person shall not be liable as a Managing Member for Company debts and an obligation arising after such person ceases to be a Member or Managing Member. Any debts, obligations,' or liabilities in damages to the Company of any Person who ceases to be a Managing Member shall be collectible by any legal means and the Company is authorized, in addition to any other remedies at law or in equity, to apply any amounts otherwise distributable or payable by the Company to such Person to satisfy such debts, obligations, or liabilities. 6.842 it is the intention of the Members that the Company not dissolve asa result of the cessation of any Managing Member's status as a Manapind Member. 6.8,3 Election of Now Managing Members -'the Company shall have a Managing Member. The Membership shall select the Managing Member by a unanimous majority vote. ARTICLE 7 ACCOUNTING AND RECORD 7.1 Rooks and Records - The Company shall keep adequate books and records at its principal place of business, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Company. Any Mernbef or his designated representative shall have the right, at any reasonable time, to have access to and inspect and copy the contents of such book or records. Such Member', or designated representative shall pay to the Company the reasonable costs of inspection and obtaining copies of such books or records. -15- 7.2 Accounting and Records - Within ninety (90) days after the end of each fiscal year, the Managing Member shall cause the Company to furnish to the Members financial statements of t1je Company containing such information as determined by the Members to include a balance sheet, profit and loss statement, and cash flow analysis for the year just expired.; When the Members determine it to be appropriate, the books and records of account and the year-end financial statements shall be reviewed as of the close of each fiscal year by a firm of independent certified public accountants approved by the Members, who shall prepare financial statements in accordance with generally accepted accounting principles. 7.3 Tax Returhs - Such accountant or firm of accountants as may be approved by the Managihg Member shall prepare the Company's federal and state tax returns, The Managing Member agrees to use its best efforts to cause said returns to be furnished to the Members on or before April 1 of each calendar year. For purposes of this Article 7, the fiscal' year shall be the calendar year, 7.4 Accounts L The Managing Member shall maintain a record of Capital Accounts for each Membier in accordance with Article 3.4. 7,6 Elections federal, state, and loc,c permitted by applicable Code Sections 754, 734 in connection with transf to extend the statute of with respect to adjustme to the extent provided in and Members before tax affecting the Company E returns and to execute a tax matters, including e respect to such tax m Members. 7.6 Taxes of acknowledges that Idah Member's Membership submit to an agreemei payments to Idaho for it and penalties assessed an agreement or fails to Company shall withhold determined under the la, made to Idaho with resp for purposes of Article 4 the rules of any Taxing , reflecting the income of I all of the members on The Managing Member may make any and all elections for tax purposes including, without limitation, any election, if aw: (i) to adjust the basis of Company Property pursuant to b), and 743(b), or comparable provisions of state or local law, ws of interests in the Company and Company distributions; (ii) mitations for assessment of tax deficiencies against Members its to the Company's federal, state, or local tax returns; and (iii) Code Sections 6221 through 6231, to represent the Company ng authorities or courts of competent jurisdiction in tax matters ,id Members in their capacity as Members, and to file any tax ry agreements or other documents relating to or affecting such Ireements, or other documents that bind the Members with fitters or otherwise affect the rights of the Company and Taxing Jurisdictions - Each non -Idaho resident Member ) claims taxing jurisdiction over such Members through such nterest in the Company. Such non-resident Members shall it indicating that the Member will make timely income tax come taxes attributable to the Member's income, and interest, )y Idaho on such income. If the Member fails to provide such )erform under such agreement, or if the Member so elects, the and pay over to Idaho the amount of tax, penalty and interest vs of Idaho with respect to such income. Any such payments pct to the income of a Member shall be treated as a distribution In addition, the Managing Members may, where permitted by urisdiction, file a composite, combined or aggregate tax return ie Company and pay the tax, interest and penalties of some or such, income to the Taxing Jurisdiction, in which case the -16- Company shall inform the Members of the amount of such tax interest and penalties so paid. ARTICLE 8 AMENDMENT, MEETINGS 8.1 Operating Agreement.May Be Modified - The Operating Agreement may be amended or modified from time to time only by a written instrument adopted and executed by a majority vote of the Members, excluding Assignees. 8.2 Meetings of the Members. 8.2.1 Meetings of the Members may be called by the Managing Member or may be called !upon the written request of Members holding twenty percent (20%) or more of the Membership Interests. The call shall state the nature of the business to be transacted. Except as provided in Article 8.3, notice of any such meeting shall be iven to all Members not less than ten (10) business days nor more than thirty ( 0} days prior to the date of such meeting. Members may vote in person or by prxy at such meeting. Whenever the vote or consent of Member is permitted or required under the Agreement, such vote or consent may be given at a meeting of Members or may be given in accordance with the procedure prescribed in Section 8.3 hereof. Except as otherwise expressly provided in the Agreement, the vote of a Majority of the Members shall control. 8.2.2 For the purpose of determining the Members entitled to vote on, or to vote at, any meeting of the Members or any adjournment thereof, the Managing Members or the Members requesting such meeting may fix, in advance, a date as the record date for any such determination. Such date shall not be more than thirty (30) days or less than ten (10) business days before any such meeting. 8.2.3 Each'Member may authorize any Person or Persons to act for him by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or his attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it. 8.2.4 Each; meeting of Members shall be conducted by the Managing Member or such 61her Person as the Managing Member may appoint pursuant to such rules for the ponduct of the meeting as the Managing Member or such other Person deems appropriate. 8.3 Unanimous Consent - The Company may take any action contemplated under this Agreement ifsapproved by a 213 majority of the Members acting without a meeting, such consent to be provided in writing or by telephone or facsimile, if such telephone conversation or facsimile is followed by a hard copy of the telephone 17- conversation or facsimile communication sent by registered or certified mail, postage and charges prepaid, adressed as described in Section 2.10, or to such other address as such Person may fro time to time specify by notice to the Members. 9.1 Right to Members determine tha arising in the ordinary collectively are either un in that event, the Memb right to sell an equity p Members. The terms of shall use their best effor manner that avoids or m 9.2 Sale to be an equity position as ss relinquish a pro rata sha example, if the Membe Company, then in that e twenty percent (20%). 9,3 First Rlgl position is to be offered or group of Members, Membership Interest. 10.'1.1 No the Company wit consent will not t wll - If at any time during the term of this Company the additional funds are required to pay the costs and expenses course of business of the Company, and the Members ble or unwilling to make loans as provided in Article 3.5, then rs (if the Members agree by 2/3 majority vote) shall have the sition in the Company to a third party to be selected by the ;uch sale shall be determined by the Members. The Members to structure the sale of an equity position to a third party in a timizes any tax liability which may result to the Members. Iro Rata Shares - In the event that the Members elect to sell forth above, then each of the Members shall be required to of'its'respective Membership Interest as part of the sale. For elect to sell a twenty percent (20%) equity interest in the .nt, each Member's Membership Interest would be reduced by of Refusal - Notwithstanding the foregoing, if an equity a third party the existing Members, or any individual Member all have the first right to acquire, on a pro rata basis, such ember may sell, assign or pledge his Membership Interest in 'Lit the consent, by majority vote of the other Members, which unreasonably withheld or delayed. 10.1.2 Notwithstanding the provisions of Article 10.1.1, the Members shall each have the right to transfer their Membership Interest to another entity which is an affiliate of the Member, subject to the prior approval of the other Member which is not to be unreasonably withheld or delayed. 10.2 Successio incapacity of any of the Members. r In the event of the dissolution, withdrawal, bankruptcy, or Members, the business may be continued by the remaining I". 10.3.1 Should a Member (the "Selling Member") desire to dispose of its Membership Interest to a third party on the terms specified in a written offer from a third party, such Selling Member shall first offer the same to the other Members by written notice specifying the name of the purchaser, the purchaser's financial and business standing, the price and terms of payment which must include a ten perdent (10%) deposit with an escrow holder, and all other terms, covenants, conditions, and details of the offer. The third party offer shall provide that the ten percent (10%) deposit is applicable towards the purchase price but otherwise non-refundable to the offering third party except for contingencies for such third party's due diligence and for termination of its offer due to purchase by a Member, or group of Members, pro rata, pursuant to this right of refusal. 10.3.2 Following receipt of the written notice, the other Members, or any one or a group of them (pro rata) may elect to purchase the Selling Member's Membership Interest at the same price and upon the same terms, covenants, and conditions, by notice to the Selling Member delivered on or before thirty (30) days after receipt of the Selling Member's notice; provided, however, that notwithstanding tY�e terms of such offer the Purchasing Member shall have thirty (30) days from its. election to purchase to make the ten percent (10%) deposit and an additional thirty(30) days after that to close (Le_ the Purchasing Mernber(s) shall have ninety (90) days from receipt of the offer to close its purchase). 10.3.3 If the other Members do not exercise the right to purchase as aforesaid, the Selling Member may sell or transfer his Membership Interest, but only to the purchaser specified in the offer, and only for the price and on the other terms, covenants and conditions set forth in the notice to the other Member. The purchaser shall thereupon be required to assume and be bound by all the terms;, covenants, conditions, and provisions of this Operating Agreement for which the Selling Member was obligated by an instrument in writing delivered to the Company and other Member, and, unless the requirements of Article 10.7 are satisfied, the purchaser shall be an Assignee. In the event the third party purchaser defaults in his obligation to consummate the purchase transaction, the ten percent (10%) deposit shall be paid from the escrow holder pro!, rata to each of the Members. 10.4 Interest of Member -Any Member may have a director indirect interest in any offer submitted for the purchase of the Membership Interest of a Member or the Project provided that it discloses the extent of its interest, direct or indirect to the other Member. 10.5 Prohibited, Dispositions - Any purported Disposition of Membership Interests that is not in accordance with this Operating Agreement shall be null and void and of no force or effect whatever; provided that, if the Company is required to recognize such a Disposition (or if the Company, in its sole discretion, elects to recognize such a Disposition), the Membership Interest disposed of shall be strictly -19- limited to the transferor's Economic Interest as provided by this Operating Agreement with respect to the transferred Membership Interests, which Economic Interest may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, of liabilities for damages that the transferor or Assignee of such Membership Interests may have to the Company, in the case of a Disposition or attempted Disposition of Membership Interests that is not in accordance with this Operating Agreement, the parties engaging or attempting to engage in such Disposition shall be liable to indemnify and "hold harmless the Company and the other Members from all cost, liability, acid damage that any of such indemnified persons may incur (including, without limitatjon, incremental tax liability and lawyers' fees and expenses in any court, appellate court, or bankruptcy court) as a result of such Disposition or attempted Disposition and efforts to enforce the indemnity granted hereby. 10.6 Rights of Membership Interests b Article 10.7 hereof shall Disposed of Membershi shall have no right to an not be entitled to inspec of the rights of a Membe 10.7 Admission of this Article 10, an A Company as a Substitui below in this Article 10.7. ffilauffm 10.7,2 The Member and ext Members may res the Articles) as m Member in the C terms and conditi( 10.7.3 TI- legal, Flegal, filing, and I admission of the Interests; 10.7.4 Th counsel for the representations a in Article 5.5 her€ 10.7.5 if provides the Co nadmitted Assignees - A Person who acquires one or more t who is not admitted as a Substituted Member pursuant to )e entitled only to the Economic Interest with respect to such Interests in accordance with this Operating Agreement, and information or accounting of the affairs of the Company, shall the books or records of the Company, and shall not have any under the. Act or this Operating Agreement. of Assignees as Members - Subject to the other provisions signee of any Membership Interest may be admitted to the A Member only upon satisfaction of the conditions set forth 213 majority vote consenting to such admission; ;signee becomes a party to this Operating Agreement as a tes such documents and instruments as the Managing nabiy request (including, without limitation, amendments to be necessary or appropriate to confirm such Assignee as a p'any and such Assignee's agreement to be bound by the hereof; e pays or reimburses the Company for all reasonable costs that the Company incurs in connection with the Member with respect to the Disposed of Membership Assignee provides the Company with evidence satisfactory to Company that such Assignee has made each of the d undertaken each of the warranties applicable to it described Assignee is not an individual of legal majority, the Assignee ny with evidence satisfactory to counsel for the Company of the authority of the Assignee to become a Member and to be bound by the terms and conditions of this Operating Agreement; and 10.8 Admission; of Additional Members - Subject to the other provisions of this Article 10, Additionlal Members may be admitted to the Company only upon satisfaction of the pertinent conditions set forth in Article 10,7 hereof, and the unanimous vote of the voting Members. 10.9 Rights of Heirs as Assignees - Assignees who are heirs and family members of Members who acquire the Member's interest by devise upon the death of a Member shall be subject Io the following provisions: 10.9.1 The 'Assignee Heir or Heirs may be admitted as a single unit as a Substitute Member in accordance with the provisions of this Article 10; or 10.9.2 The Assignees Heir may hold the economic interest of the Member as an Assignee, and shall not be entitled to any voting rights, except the right to vote as to the selection of the Managing Member; or 10.9.3 At any time within 12 months of the death of a Member, the remaining Members may, by majority vote, exercise a unilateral right to redeem the Member's interest, and the Assignee Heir or Heirs must sell the Members interest in accordance with the provisions of Article 12.3 herein. Alternatively, at any time within 12 months of the death of a Member, the Member's Assignee Heir or Heirs may',request that the Company redeem the Member's Interest, and the Company shall be obligated to redeem the Member's Interest in accordance with the provisions, of Article 12.3 herein. 10.9.4 If at any time during the 12 month period following the death of a Member any event occurs which shall increase or decrease the value of a Members Interest', by more than 50%, then in that event if the Company has chosen to redeem an Assignee Heir or Heir's interest, and has begun the redemption pursuant to Article 12.3, then the value of the interest being redeemed shall be adjusted to reflect the increase or decrease in the value of the deceased Member's Interest, and the remaining payments shall be prorated according to said; increase or decrease the same as if the deceased Member were stili an active;, Member of the Company. ARTICLE 11 BANKRUPTCY OF A MEMBER 11A Events of Default - In the event that any of the following events shall occur with respect to any of the Members and not be cured within the time limits specified, that Member ',shall be deemed in default under this Agreement: i) if that Member obtains or becomes subject to an order for relief under the Bankruptcy Code, ii) obtains or becomes subject to an order or decree of insolvency under state law, iii) makes an assignment for the benefit of creditors, or iv) consents to or suffers a -21- charging order against its Membership Interest that is not released or satisfied within thirty (30) days. 11.2 Conversion of Interest - In the event of the retirement, removal of any of the Members by legal means, or dissolution of a Managing Member, the Membership Interest of that Managing Member in the Company shall be converted as provided in Article 11.3. 11.3 Member Becomes Assignee - if an event of default, as described in Section 11.1 occurs and is not cured within sixty (60) days from the date of the event of default or if an event referred to in Article 11.2 shall occur, the Membership Interest of that Member shall be automatically converted to that of an Assignee, and the Assignee shall only have an Economic Interest in the Company. ARTICLE 12 DISSOCIATION OF A MEMBER 12.1 Dissociation - A Person shall cease to be a Member upon the happening of any of the following events: 12.1.1 Thelvoluntary withdrawal of a Member with the 213 majority vote consent of the remaining Members by giving thirty (30) days notice to the Managing Member. 12,1.2 The',Member ceases to be a Member of the Company due to the assignment of all Iof such Member's Membership Interest in the Company and the Assignee has become a Substitute Member. 12.1.3 The Member, is removed as a Member by the 2/3 majority vote of the Members. 12.1.4 The Member's death. 12.1.5 Tho entry of an order by a court of competent jurisdiction adjudicating the Member incompetent to manage his or her person or estate. s 12.2 Rights of prior to the expiration of 12.2,1 If tl Company under winding up of the any Distributions reduced by the d Dissolution cause to fulfill the Member's Commitments as contained in this or any other Commitments to the Company. sociating Member - in the event any Member dissociates Term of the Company: e Dissociation causes a dissolution and winding up of the krticle 13, the Member shall be entitled to participate in the Arnpany to the same extent as any other Member except that to which the Member would have been entitled shall be mages or costs sustained by the Company as a result of the by the Dissociation and winding up. -22- 12.2.2 If the Dissociation does not cause a dissolution and winding up of the Company under Article 13, then unless the event of Dissociation is a Permitted Disposition approved under Article 10, the Dissociation shall be treated under Article 12.3. 12.3 Redemption of Membership Interest - If a Member becomes Dissociated, and this Article 12.3, applies, the Company shall redeem the Member's Membership Interest undler the terms and conditions contained in this Article 12.3. l 12.3.1 Redemption Price - The price the Company shall pay for the Membership Interest of a Retiring Member shall be the Redemption Price which shall be determined in the manner set forth in Article 12.3.3. 12.3.2 Closing Date; Payment of the Redemption Price - The closing of the redemption; of the Members Membership Interest shall occur on a date and time mutuallyi convenient to the parties; provided that the closing date shall occur no later than the thirtieth (30th) day following the day that the notice of the retirement of the Member's Membership Interest is given, by the Company, which in no event shall be greater than 90 days from the event causing the retirement of the Member from the Company. The Redemption Price for the Retiring Member's interest shall be paid in installments ("installment Payments") as follows: twenty percent (20%) of the Redemption Price; shall be paid on the closing date, together with interest from the date of the bissociation event through the closing date at the Member Interest Rate in effect on the date of the Dissociation event. The remainder of the Redemption Price shall be paid in equal annual installments on the next five (5) consecutive anniversaries of the closing date. The unpaid portion of the Redemption Price shall bear simple interest, from the closing date at the Member Interest Rate in effect on the closing date and all such interest accrued through the date each installment of the Redemption Price is due shall be paid simultaneously with each such installment. On the closing date, the parties (including the Dissociated Member or his personal representative) shall execute such documents and instruments of conveyance as= be necessary or appropriate to confirm the transfer of the Dissociated Member's Membership Interest, the Dissociation of the Dissociated Member as a Member as of the date of the Dissociation event, and the reduction by offset against the Redemption Price by the Company of all liabilities of the Dissociated Member with respect to the Company, and provision for novation, if possible, of any outstanding indebtedness of the Company which may have been personally guaranteed by the Dissociated Member, 12.3.3 Reejemption Price - The "Redemption Price" of a Member's Membership Interest, shall as of any day, be an amount equal to the fair market value of the Membership Interest as of the last day of the month preceding the month during which the Retiring Event occurs less any Company Distributions to the Retiring Member after such day and less any and all costs, expenses, and -23- damages ass Price shall be 12.3.8.1 A established by thr be established ar Value of the Mem attached hereto, of operations sha as recorded in th establish said Agr the Member's inte e'Dissociation of the Member. The Redemption Ireed Value - The Redemption Price shall be an amount mutual agreement of the Members, by majority vote, and shall ruaily according to the terns of this Agreement. The Agreed let's Interest for each year shall be set forth on Exhibit B, to be 'he Agreed Value of the Member's Interest for the first full year be; the net book value of the Member's Capitol Contributions books of the Company. In the event the Members fail to ;ed Value, then the last value established by the Member's for est shall control. 13.1 Dissolution - The Company shall be dissolved and its affairs wound up, upon the first to occur of the following events (which, unless the Members agree to continue the business, shall constitute Dissolution Events): 18.1.1 the expiration of the Term, unless the business of the Company is continued with the!! consent of all of the Members; 13.1.2 the unanimous written consent of all of the Members; 13.1.3 the on" of a decree of judicial dissolution. 13.2.1 Upon dissolution, the Company shall cease carrying on as distinguished froni the winding up of the Company business. The Managing Member shall be responsible for ensuring that the winding up and dissolution of the affairs of the Company is completed. 13.2.2 Upon the liquidation of the Company caused by a termination of the Company under § 708(b)(1)(B) of the Code, the assets of the Company shall be deemed to be (distributed in-kind to the Members and Assignees as tenants- in-common and irrjmediately thereafter contributed to the capital of a new limited liability company by and among the Members and Assignees governed by a successor Operating Agreement identical to this Operating Agreement. The Members' and Assignees' respective undivided interests in such distributed assets shall equal the ratio that each Member's or Assignee's Capital Account (after taking into account all Capital Account adjustments for the taxable year of such Dissolution) ibears to the Capital Accounts (after taking into account all Capital Account adjustments for the taxable year of such Dissolution) of all the Members and Assignees. Each Member's or Assignee's Capital Account in such new limited liability company shall be credited with the fair market value of such Member's or Assidnee's undivided interest in such -24- distributed assetsl (net of the allocable percentage of liabilities securing such undivided interestin that new limited liability company is considered to assume or take subject to under §752 of the Code). 13.2.3 Upon Dissolution or liquidation of the Company from a cause other than by a termination of the Company under § 708(b)(1)(B) of the Code, the Members shall proceed to the winding up of the affairs of the Company. During such winding up process, the Net Profits, Net Losses, and Distributions shall continue to be shared by the Members and Assignees in accordance with this Operating Agreement. The Property shall be liquidated as promptly as consistent with obtaining the fair value therefor, and the proceeds therefrom, to the extent available, shall be applied and distributed by the Company on or before the end of the taxable year of such Dissolution or, if later, within one - hundred twenty (120) days after the end of the taxable year of such Dissolution, in the following order of priority: 13.2!3.1 First, to creditors, (excluding Members and Assignees who are creditors), to the extent permitted by law, in satisfaction of Company liabilities; and then 13.233.2 Second, to Members and Assignees who are creditors, to the extent permitted by law, in satisfaction of Company liabilities to them; and then 13.2.113 Third, to the establishment of any reserves which the Members determine to be reasonably necessary for any contingent or unforeseen'liabilities er obligations of the Company; and then 13.2q"3.4 Fourth, to the Members and Assignees in accordance with positive Capital Account balances taking into account all Capital Account adjustments for the Company's taxable year in which the liquidation occurs, so long as such Distribution does not materially alter the economic arrangement of the Members as set forth in this Operating Agreement, taking intol account the Capital Contributions of the Members and Assignees, !; the priority distributions and allocations, if any, and the Sharing Rafios of the Members and Assignees; and then 13.2.13.5 Thereafter, any remaining proceeds shall be distributed to the Membe(s and Assignees in accordance with their Sharing Ratios. 13.2.4 The Winding up of the Company shall be completed when all debts, liabilities, and obligations of the Company 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. 13.2.5 Upon the completion of winding up of the Company, articles of dissolution shall be executed in duplicate and verified by the Managing Member or other person charged with executing the articles, which articles shall set forth the information required by the Act. Duplicate originals of such articles of dissolution shall be delivered to the Idaho Secretary of State. 13.2.6 Upon the issuance of a certificate of dissolution, the Company shall be terminated and its existence shall cease, except for the purposes of any Proceedings and a' ny appropriate actions as provided by the Act. 13.2.7 Except as otherwise provided by the Act or other applicable law or this Operating Agreement, (a) each Member shall look solely to the assets of the Company for the teturn of their Capital Contributions and shall have no right to demand or receive Property other than cash from the Company, and (b) no Interest Folder shpill have priority over any other Interest Holder as to the returns of their Capital Contributions, distributions or allocations. Members shall have no recourse against other Members for the return of their Capital Contribution. ARTICLE 14 MISCELLANEOUS PROVISIONS 14.1 Entire Agreement - The Operating Agreement represents the entire agreement among all the: Members and between the Members and the Company, 14.2 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 nor 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 Membet making such wrongful representation shall be liable to any other Member who incurs personal liability by reason of such wrongful representation. 14.3 Partnership Intended for Tax Purposes - The Members have formed the Company under the', Act, and expressly do intend hereby to have the Company classified and treated for purposes of federal and state income taxation as a partnership. Further, it is the express intention of the Members that the Company be treated as a partnership !for purposes of federal and state taxation. If it is determined that the Company is or is not be classified as a partnership under the Code and Regulations, then the Operating Agreement shall be considered amended to the smallest degree possible', in whatever manner necessary to ensure that the Company is or shall be treated as e partnership under the Code and Regulations for purposes federal and state taxation, In the event the Code or Regulations are subsequently amended or interpreted In such a way so that the Company is taxed as other than a partnership, the provisions of this Operating Agreement may be considered amended so that the Company is taxed as a partnership beginning with the Effective Date. 14.4 Rights of Creditors and Third Parties under Operating Agreement - The Operating Agreement is entered into among the Company and the Members for the exclusive benefit of the Company, its Members, and their successors and assignees. The Operating Agreement is expressly not intended for the benefit of any 111111101111111 creditor of the Comparrylor any other Person. Except and only to the extent provided by applicable statute, no such creditor or third party shall have any rights under the Operating Agreement orilany,agreement between the Company and any Member with respect to any Capital Contribution or otherwise. 14.5 Binding effect - Except as otherwise provided in this Operating Agreement, every covenant, term, and provision of this Operating Agreement shall be binding upon and inure; to the benefit of the Members and their respective heirs, legatees, legal representatives, successors, transferees, and assigns. I 14.6 Constructibn - Every covenant, term, and provision of this Operating Agreement shall be construed simply according to its fair meaning and not strictly for or against any Member. The terms of this Operating Agreement are intended to embody the economic relationship among the Members and shall not be subject to modification by, or be conformed with, any actions by the Internal Revenue Service except as this Operating Agreement may be explicitly so amended and except as may relate specifically to the filing of, tax returns. 14.7 Time- Time is of the essence with respect to this Operating Agreement. 14.8 Headings Section and other headings contained in this Operating Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope; extent, or intent of this Operating Agreement or any provision hereof. 14.9 Severability -I Every provision of this Operating Agreement is intended to be severable. If any term ori provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity^ shall not affect the validity or legality of the remainder of this Operating Agreement, 14.10 incorporation by Reference - Every exhibit, schedule, and other appendix attached to this Operating Agreement and referred to herein is not incorporated in this Operating Agreement by reference unless this Operating Agreement expressly otherwise provides. 14.11 Further Actlon - Each Member, upon the request of any Managing Member, agrees to perfolrm all further acts and execute, acknowledge, and deliver any documents which may be reasonably necessary, appropriate, or desirable to carry out the provisions of this Operating Agreement. 14.12 Variation of Pronouns - All pronouns and any variations thereof shall be deemed to refer to masculine, uline, feminine, or neuter, singular or plural, as the identity of the person or persons may require. 14.13 Governing of this Operating Agreer rights and duties of the N - The laws of the State of Idaho shall govern the validity the construction of its terms, and the interpretation of the -27- 14.14 Counterpart Execution - This Operating Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All' counterparts shall be construed together and shall constitute one agreement. 14.15 Sole and (Absolute Discretion - Except as otherwise provided in this Operating Agreement, all actions which any Managing Member may take and all determinations which any Managing Member may make pursuant to this Operating Agreement may be taken and made at the sole and absolute discretion of such Managing Member, 14.16 Specific Performance - Each Member agrees with the other Members that the other Members Would be irreparably damaged if any of the provisions of this Operating Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled, at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Operating Agreement and specifically to enforce the term and provisions hereof in any action instituted in any court of'the United States or any state thereof having subject matter jurisdiction thereof. 14.17 Notice - Ali notices shall be deemed received when personally delivered or when deposited in the United States mail postage prepaid, registered or certified, with return receipt requested, or sent by telephone, facsimile transmission or mail-o- grKam or by recognized courier delivery (e.g. Federal Express, Airborne, Burlington, etc.) addressed to the parties,, as the case may be, at the address set forth below or at such other addresses as the parties may subsequently designate by written notice given in the manner provided in this section: See Exhibit "A" Notice personally; delivered will be effective upon delivery to an authorized representative of the party at the designated address. Notice sent by mail or courier in accordance with the above shall be effective upon receipt or upon the date the party refuses to accept receipt. Notices sent by telegram, facsimile transmission or mail -o - gram will be effective upon transmission. The providing of copies of notices to the parties` respective counsel is for information purposes only and shall not constitute notice to the parties unless notice has also been given to the parties as above provided. IN WITNESS WHEREOF, we have hereunto set our hands on the date set forth beside our names. ✓ Date: MOM' 2 j ✓o i Timothy J. Ke y -28- mm Timoffi�,Kqll 3891 W. E Meridian, Member Ratio Creek St, 100% 83642 -29- Initial Capital ACGOunt 100% Name Timothy J. Kelly AgEmm I M I Address 3891 W. Daisy Greek Street, Meridian, ID 83642 251 FILED ARTICLES OF ORGANIZATION LIMITED LIABILITYC®PANY 20oSFEB -z fir, g: (1Q (Instructions on back of application) 51ATF t1F iti;;r10 1. The name of the limited liability company is: Elk Run Construction, L.L.C. 2. The street address of the initial registered office is: 2551 W. Pebblestone Ct., Meridian, Idaho 83642 and the name of the initial registered agent at the above address is: Timothy J. Kelly 3. The mailing address for future correspondence is: 2551 W. Pebblestone Ct., Meridian, Idaho 83642 4. Management of the limited liability company will be vested in: Manager(s) Q or Member(s) ❑ (please check the appropriate box) 5. If management is to be vested in one or more manager(s), list the name(s) and address(es) of at least one initial manager. If management is to be vested in the member(s), list the name(s) and address(es) of at least one initial member. Name Address Timothy J. Kelly 2551 W. Pebblestone Ct., Meridian, Ill 83642 6. Signature of at least onetjakrson r s aon ible for forming the limited liability company: Signature: secretary of State use only Typed Name: Timothy I elly Capacity: Registered Agent IDANG SECRETARY OF STATE Signature 02/02/2005 05:00 4 CN: 1245 CT: 185747 BN: 798712 Typed Name: 1 N 108.08 = 100.80 ORGAN LLC N 2 Capacity: g� WeL Fmrt. - -- 3��45 OPERA'T(NG AGREEMENT m [CSA PROPERTIES, LLC LIMITED LIABILITY COMPANY FILED L. RAMEY, P.A. Attorney at Law 300 N. Oh Street, Suite 102 Boise, Cdaho 33702 (203)344-3549 KSA PROPERTIES, LLC OPEIZATING AGREEMENT Table of Contents Page No. 1. FORMATION--- ................... 1.1 Formation..................:......................................................................... 1 L2Name................................................................................................... 1 1.3 Put3)oses.............................................................................................. 1 1.4-'I'erm.................................................................................................... 1 L5 Location— ... ....................... ....... 1 1,6 Registered Agent............................................................................... I 1,7 Capitalization...................................................................................... 2 11. NIANAGEMEN.............................................................................................2 2.1 Management ........................ 2.2 Number, Tenure and Qualifications.................................................. 2 23 Certain Powers of Manager............................................................... 2 2.4 Restrictions on Authority of Manager. ............................................... 4 2.5 Liability for Certain Acts................................................................... 5 2.6 Managers and Members Have No Exclusive Duty to Company--- 5 2.7 Bank Accounts- .... ......... ---- ... ................ 5 2.8 Indemnity of the Manager, Ecnlrloyees and other Agents 5 2.9 Resignation........ ..............................5 2.10 Removal...........................................................................................6 2.11 C'ompensation.................................................................................. 6 2.12 Right to Rely on the Managerr.......................................................... 6 Ill. N1HMBI3RS....................:...............................................................................6 3.1 Members..........................................................................................-6 3,2 Restrictions on Members,.,,. ................. - ........ 6 3.3 No PersonalLiability .......................................................................... 7 3.4 Restrictions on Authority of Members ............................................... 7 3.5 Member's Duties ................................................ .......:............ ....... ..... 8 IL'. MGE,FINGS OF MLsMBF3RS........................................................................ i3 4.1 Regular Meetings...,, .... --- ...... ... --- ........................ ....... ........... 8 4.2 Special Mer ings................................................................................. 8 4.3 Notice of Meetings.... ..... ............................. .... --- 8 TAB L E OF CON ITNTS - I 4.4 Quorum .... ................................... ....... ....... --- ..................... .............. . 9 4.5 Proxies................................................................................................ 9 4.6 Voting Righis.................................—,—...,........... 9 V, PROFITS, LOSSIES ANI) ACCOUNTfNG.................................................. 9 5.1 Allocation oCProfits and Losses ....................................................... 10 5.2 ACC9nnflng........................................................................................ 10 5.3 Members' Capital Accounts............................................................ 10 5.4 Financial Operations of the Company .............................................. 11 5.5 Cash Flow and Distributions.... ... ..................... .............................. 1 I VI. DISSOLUTION AND TERMINATION .................... 11 6.1 Events Causing; Dissolution.............................................................. 11 6,2 Successors to a Member- .... .... — ... . ..... .......................... .... 12 6.3 Winding Up...................................................................................... 12 VII. TRANSFERS OF MEMBERSHIP INTERI.51.................................... 12 Tl Sale of Interest Restricted,— .... .... ... .............................. 12 7.2 Procedure for Sale Interest.............................................................. 12 7.3 Liability Unaftected by Assignment- ...... --- .............................. - 12 7.4 Documentation, ... .......... ............ ............. — 12 VIII, DEATH OR RIE'rIREMENT OI,' A MEMBER ........................................ 13 8.1 Withdrawal or Retirement of a Member ........................................... 13 8.2 Option to Purchase Upon Death ....................................................... I', 8.3 Purchase Price................................................................................... 13 1X. LIQUIDATION. ... ....... --- ....... ....... ........... ...... 13 9,1 Application o1'Proceeds.................................................................... 13 9.2 Final Dissolution................................................................................ 14 X, AMENDMENT OF `CIIE AGREEMENT .................................................... 14 10.1 Approval of Amendments.............................................................. 14 XI. MISCELLANEOUS............ ... 11.1 Notices ................................................ 11.2 Governing Law,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,� 113 Execution in Counterparts ................... 11.4 Interpretation ....................................... 11.5 Integrated Agreement .......................... 11,6 Partial Invalidity .,.,.,„ .......................... 1 1.7 Additional 'ferns and Conditions........ 11.8 Binding Eff'ect...................................... TABLE O CONTENTS -2 .. 14 .,. 14 14 ............. 15 15 ...................... 15 ......................... 15 OPERA'T'ING AGREEMENT OF KSA PROPER,rIE5 LLC I"HIS OPERATING AGREEMENT is made effective by the undersigned as of the 15r" day of Decennber. 2010. I, FORMATION IJ Formation. The undersigned lilts formed a limited liability company under the laws of the State of Idaho by filing on December 15, 2010, a C'ertitieate of Organization with the Secretary of State of Idaho. A copy of the Certificate of Organization is attached hereto and incorporated herein by reference L2 Name. The name of this Company is KSA PROPFRTIES, LLC. 1.3 Purpnses< flue purpose for which this Company is formed is to cngage in any ItiwPal act, business or activity for which limited liability companies may be formed ander the of the State of ldaho and to do any and all other things determined by the Members to be necessary, desirable or incidental to the foregoing purpose. 1.4 Term. The term of the Company shall become effective on the date the Certificate of Organization are filed with the Secretary of State of.ldaho, and shall continue until the Company is dissolved earlier pursuant to the provisions of this Agreement or as provided it) Section 53-642, Idaho Code. I ,5 Location. The location of the principal place of business of the Company is 33413 'Wr Daisy Creek Street, Meridian, Idaho 83642, The Members may change the principal !glace of business and establish additional places of business as he deems necessary or desirable to conduct the business of the Company. L6 Registered Agent. The Company's agent for service of process shall be Kelly G. Adams, who is located at the following address: 3843 W, Daisy Creek Street, Meridian, Idaho 33642. lin the event that Kelly O. Adams resigns as registered agent or is otherwise unable to serve for any reason, Suzette M. Adams shall serve as registered agent. The agent I'or service of process apices and shall insure that in the event of service of process upon said agent with respect to any lawsuit or other proceeding, or in the event of service of any tax deficiency notice or other governmental notices, said agent will immedWely provide written notice to all Members of the service of process or receipt of such nonce, which shall include providing copies ol'any summons, complaint or other notice to all Iwlcnnbers. OPERATING AGREEMP"Pr- t L7 Capitalisation. The initial capitalization for the company shall be contributed as set forth on Exhibit "A attached hereto. II. V&NAGEMENU 2.1 lylanatternent. The business Surd all'afrs of the Company shall be managed by its Manager, The Manager shall direct, manage and control the business ofthe Company to the best of the Manager's ability. Except (or situations in which the approval of the members is expressly required by this Operating Agreement or by non- waivable provisions of applicable law, the Manager shall have full and complete authority, power and discretion to manage and control the business, affairs, and properties of the Company, and to make all decisions regarding those matters and to perform any and all other acts 01, activities customary or incident to the management of the Company's business. 2.2 Nuonber. Tenure and Qualifications. The Company shall initially have one Manager. The initial Manager shall be Kelly G. Adams, The number of Managers of the Company shall be fixed from time to time by the affirmative vote of a majority of units of ownership, but in no instance shall there be less than one Manager. Each Manager shall hold office until the Manager resigns or is removed from office and his or her successor shall have been elected and qualified. Managers shall be elected by a majority vote, of the units ofownership. Managers mast be Members of the Company. 2.3 CertainPowers ofA arias er. (a) 'Without limiting the generality ofSeetion 2.1, the Manager shall have power and authority, on behalf of the Company: (i) To acquire property from any personas the Manager may determine, The fact that a Manager or a Member is directly or indirectly affiliated or connected with any such person shall not prohibit the Manager fi-om dealing with that person, (ii) To borrow money from banks, other lending institutions, the Manager, Members, or affiliates of the Manager or Members, on such terms as the Manager deems appropriate for the normal and customary operation of the Company, and in connection therewith, to hypotheeute, encumber and taunt security interests in the assets of the Company to secure repayment of the borrowed sums; (iii) To purchase liability and other insurance to protect the Company's property and business; OPERATING AGREEWNT - 2 (iv) To hold and own any C'ongmiiy real andlor personal properties in the name of the Company; (v) To invest any Company fields temporarily (by way of example but not linutation) in time deposits, short- term governmental obligations, commercial paper or other investments; (vi) Upon the affirmative vote ofa majority ol'the units of ownership to sell or otherwise dispose of all or substantially all or the assets of the Cornpatnyas part of a single transaction or plan so long as such disposition is not in violation ofor a cause of a default under an � other agreement to which the Company may be hoond, provided however, that the affirmative vote of the VWmhk:7 s shrill not be required with respect to any sale or disposition of the Company's assets in the ordinary course of the Company's business; (vii) To execute on behalfof the Company all insirtoents and documents, including. Without lunitatlon, checks, drafts; notes and other ncgotialzte insnruntents; mortgages or deeds of trust: security agreements; financing statements; documents providing for the acquisition, mortgage or disposition ofthe Company's property; assigmncnts; bills of sale, leases:: pal tit' rsiIip agreements, operating agreements ofother limited liability companies; and any other instruments or documents necessary, in the opinion of the Manager, to the business of the Company; (viii) To employ accountants, legal counsel, managing agents or other experts to perform services for (he Company and to compensate them from Company Hinck'; (ix) To enter into any and all other agreements on behalfof the Company, with any other person for any purpose, in such forms as the Manager may approve; and (x) To do and perform all other acts as may be necessary or appropriate to the conduct of the Company's business. OPERATING AGftESMKNT.3 Unless authorized to do so by this Operating Agreement or by the Manager of the Company, no 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 pecuniarily for any purpose. No Member shill have any power or authority to bind the Company unless the Member has been authorized by the Manager to act as an agent of the Company in accordance with the previous sentence. 2=4 Restrictions on Authority of the Nlanapr. (a) The Manager shall not have the authority to, and covenants and agrees that the Manager shall not, do any of the following acts without the unanimous vote of the traits of ownership: (i) Cause or permit the Company to engage in any activity that is not consistent with the purposes ofthe Company as set forth in Section i.a hereof; (ii) Knowingly do any act in contravention of this Operating Agreernent; (iii) Knowingly do any act which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Operating agreement; (iv) Confess a judgment against the Company, (v) Possess property, or assign rights in spceif ie properhr, for other than a Compnny purpose, (vi) Knowingly perform any act that would cause the Company to conduct business; its to .State which has neither enacted legislation which permits limited liability companies to organize in such Smte nor permits the Company to register to do business iu such Staw as a foreign limited liability company; (vii) Cause the Company to voluntarily take any action that would cense a bankruptcy of the Company; (viii) Cause the Company to make loans to any, Member; (ix) Cause a significant change in the nature of the Company's business. OPERATING AGI{FIEMENT- 4 (x) Cause the Company to admit any additional Members other than as provided herein; (xi) Sell or otherwise dispose of all or substantially all of the Company's assets other than in the ordinary course of the Company's business, except for a liquidating sale in connection with the dissolution of the Company, 2.5 Liability for Certain Acts. The Manager shall perform the Manager's duties as Manager in good faith, in a manner the Manager reasonably believed to be in the best interests of the Company, and with such care as an ordinarily prudent person in a like position would use under similar circumstances, A Manager who so performs the duties as Manager shall not have any liability by reason of being or having been a Manager of the Company, The. Manager does not, in any way, guarantee the return of itle Members' Capital Contributions or a profit for the Mernbets front the operations of the Company. The Manager shall not be liable to the Company or to any Member I'or any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of fraud, deceit, gross negligence, willful misconduct, breach of this Agreement or a wrongful taking by the Manager, 2,6 Managers and Members Have No Exclusive Duty To C2Mp ny. The Manager shall not be required to manage the Company as a solc and exclusive function tend ally Manager and/or Member may have other business interests and may engage in other activities; in addition to those relating to the Company. Neither the Company nor any Member shall have any right, by virtue of this Operating Agreement, to share or participate in such other investments or activities of the manager and/or Member or to the income or proceeds derived therefrom. Neither the Manager nor any member shall incur any liability to the Company or to any of the Members as a result of engaging in any other business or venture.. 23 Bank Accounts, The Manager may from time to time open bank accounts in the name of the Company, and the Manager shall be the sole signatory thereon, unless the ;,-tanager determines otherwise, 2.8 Indemnily of the Manager, Employees and tither Agetnls. Ilic Company shall indemnify the Manager and make advances for expenses to the maximum extent permitted under Idaho law. The Company shall indemnify its employees and other agents who are not Managers to the fullest extent permitted by law, provided that siieh indennifrctation in any given situation is approved by Members owning a Majority Interest, 2.9 Resignation. /any Manager of the Company may resign at any time by giving written notice to the Members -of the Company The resignation of any Manager shall take effect upon receipt of notice thereof or at such later time as shall be specified in such OPHOTINC ACREIRM ENT - 5 notice; tnid, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to snake it effective. The resignation of a Manager who is also a Member shall not affect the Manager's rights as it Member and shall not constitute a withdrawal of a Member. 2.10 Removal At a meeting Balled expressly for that purpose, a N14anager may be removed at any time, with or without cause., by the affirmative vote of a majority of the units of owttcrship. The retrieval of a Manager who is also a Member shall not affect the Manager's rights as it Member and shall not constitute a withdrawal of a Mcmber. 2,11 Compensation. The compensation of the Manager and Members shall be fixed from time to time by the majority vote of the Members, and no Manager shall be prevented from receiving such salary by reason of the fact that the Manager is also a Member of the Company. 2.12 Right to Rehr on the Manager. (a) Any person dealing with the Company may rely (without duty of further inquiry) upon a certificatee signed by the Manager as to: (i) The identity of the Manager or any Member; (fi) The existence or nonexistence orally fact or facts which constitute a condition precedent to acts by the Manager or which are in any other manner germane to the affairs of the Company; (iii) '11ne persons who are authorized to execute and deliver any instrument or document of the Company; or (iv) Any act or iaiiure to act by Clio Company or any other matter whatsoever involving the Company or any Member. TIC. MEMBERS 3.1 Members. The Members are listed on Exhibit "A", which is attached hereto and made a part hereof. Exhibit "A" shall reflect each Member's units of ownership of tine Company. 3.2 Restrictions on Members. lixccpt as otherwise specifically provided in this Agreement to the contrary, no Member shall have the right: (a) To have the Member's capital contribution repaid except to the extent provided in this Agreement, OHRATING AGREEMENT -6 (b) To require partition of the Company's property or to compel any sale or appraisal oftire Company's assets. (c) To sell or assign the Member's interest in the Company or to constitute the vendee or assignee thereunder, except as provided in this Agreement. ((I) 'ro voluntarily withdraw as a Member from the Company, 3.3 No Personal Liability. No Member shall be personally held accountable For any of the debts, losses, claitns,judgraents or any of the liabilities of the Company beyond the Member's contributions to the capital or the Company, except as provided by law. 3.4 Restrictions on Authority of Members. (a) Each Member shall not have the authority to, and covenants and agrees that it shall not, do any of the following acts without the unanimous vote of all units of ownership: (I) Cause or permit the Company to engage in any activity that is not consistent with the purposes ofihe Company as set forth herein; (ii) Knowingly do any act in contravention of this Operating Agreement; (Iii) Knowingly do any act which would snake it impossible to carry on the ordinary business of the Company, except as otherwise provided in this operating Agreernent; (iv) Confess a judgment against the Company; (v) Possess property, or assign rights in specific property, Im other than a Company purpose; (vi) Knowingly perform any act that would cause the Company to conduct business in a State which has neither enacted legislation which permits limited liability companies to organize in such State nor permits the Company to register to do business in such State as a foreign limited liability company; OPERATING AGREEMENT- 7 (vii) Cause the Company to voluntarily take any action that would cause a bankruptcy of the Company; (viii) Cause the Company to acquire any equity or debt securities of any Member or any of its Affiliates, or otherwise snake loans to any Member or any of its Affiliates; (ix) Cause a significant change in the nature of file Company's business. (x) Cause the Company to admit any additional Members other than as set forth herein: (xi) Sell of otherwise dispose of all or substantially all ofthe Company's assets other than in the ordinary course of the Company's business, except for a liiluidating sale in connection with the dissolution of the Company. (xii) Make any amendments to this Operating Agreement. (xiii) Commence any lawsuit or administrative proceedings on behalf of the Company or any Member of the Company. 3.5 Member's Duties. Fach Member shall perform his duties in good faith, in it manner he reasonably believes to be in the best interests of tlne Company, and with such case as an ordinarily prudent person in a like position would use tinder similar circumstances, IV. MEETINGS T'INGS OF MEM13RRS 4.1 Reolor Meetintm The Members may establish dates and times for regular meetings as they may desire. 4.2 Special Meetings. Special meetings of the Members of the Company may be held when called by the Members. 4.3 Notice of Meetings. Not less than ten (10) nor more than sixty (60) days before the date fixed for a meeting, written notice stating the time and place of line meeting (and, in the case of a special meeting, the purposes of such nneeting) Shall be given. Notice of any meeting may be waived by any Member present at the meeting. OPERATING AGRFP]NIEWF - 8 The notice shall be sent by personal delivery or by certified mail, return receipt requested, to each Member entitled to notice of the meeting who is a Member of record as of the day preceding Elie day on which notice is given, or, if a record date is duly fixed, as ot'that date. If mailed, the notice shall be addressed to the Members at their respective addresses as they appear in the records of the Company. 4.4 Quorum, Except as may otherwise be provided by law, the presence of a majority of the units of ownership of the Members; in the event notice has been given, shall constitute a quorum for such meeting. 4.5 Proxies, The Members may vote in person or by proxy. The person appointed as proxy need not be a Member. Unless the writing appointing a proxy otherwise provides, the presence at a meeting of the person who appointee) it proxy shall not operate to revoke the appointment. Notice to the Company, in writing or in open meeting, of the revocation of the appointment of a proxy shall not affect any vote or action previously taken or authorized. A person named in a general power of attorney shalt also be entitled to vote as proxy for a Member in the Member's absence, 4.6 VotingRijlits. All votes of Members shall be on the basis of one (I ) vole per unit of ownership. V PROFITS LOSSES AND ACCO1JNTINC: 5.1 Allocation of Profits and Losses: (a) Except as otherwise provided herein, net profits and losses of the Company (including profits and losses attributable to the sale or other disposition of all or any portion of the Company's property) shall be allocated among or borne by the Members as they may determine from time to time by mutual agreement. (b) Notwithstanding any provision of this Agreement to the contrary, to the extent required by law, income, gain, loss and deductimr attributable to property bontribuled to the Company by a Member shall be allocated to the Member so as to take into account any variation between the tax basis of the property and the fair market value thereof at the time of contribution, in accordance with the requirements of Section 704(c) of the Internal Revenue Code of 1986 (the "Code"), as amended, or its coun cipart in any subsequently -enacted Internal Revenue Code, and the applicable 'treasury Regulations (die "Regulations") thereunder. (c) Company profits, losses and gains shall be allocated in aecordauce with the portion of the year during which the Member has held his or her interest. All items of income and loss shall be considered to have been carried ratably over the fiscal year of the Company, except that gains and losses arising lion the disposition of assets shall be taken into account as of the dale thereof, OP i. tAT[NC AGREEMENT -9 (d) 'notwithstanding any provision of this Agreement to the contrary, in the event the Company is entitled to a deduction for imputed interest under any provision of the Code on any loan or advance from a Member, such deduction shall be allocated solely to such Member. (e) Notwithstanding any provision of this Agreement to the contrary, to the extent the payment of any expenditure by the Company is treated as a distribution to a Member for federal income tax purposes, there shall be a gross income allocation to sueh Member in the amount of such distribution. (1) Notwithstanding any provision ofthis Agreement to the contrary, if items of income or gain to be allocated include income or gain treated as ordinary income for federal income tax proposes because they are attributable to the recapture of depreciation under Section 1245 or 1250 of the Code, then Stich income or gain, to the extent treated as ordinary income, shall be allocated to, and reported by, the Member in proportion to his or her then cumulative allocation of depreciation. 5.2 Aceaumtlne; (a) 'rhe Company books shall be kept on a cash basis and in accordance with reasonable accounting principles consistently applied. The Members shall receive copies of ail of the Company's income tax documents, financial statements and other financial documents which may be prepared from time to time. (b) The fiscal year of the Company shall end on December 31. (c) The terms "net profits" and "net losses", as used herein, shat I mean the net amount of the Company's profits and losses, as determined for federal income tax purposes, and shall also include each member's share of income described in Section 705(a)(l)(B) of the Code, any expenditures described in Section 705(a)(2)(I3) of the Code, any expenditures described in Section 709(a) of the Code which are not deducted or amortized in accordance with Section 709(b) of the code, basis adjustments required pursuant to former Section 48(q) ofthe Code, and losses not dedttetible pursuant to Section 267(a) or 707(b) of the Code. 5.3 Members' Capital Accounts: (a) 'There shall be maintained a capital account for each Member in accordance with this .Article 5,3. The amount of each Member's contribution of cash, property and/or services to the capital ofthe Company shall be credited to Stich Member's capital account. From time to time, but not less often than annually, each member's share of profits, losses and distributions shall be credited or charged, as the case may be, to such member's capital account. The determination of a Member's capital account, and any adjustments thereto, shall be made in a manner consistent with tax accounting and other principles set forth in Section 704 of the Code and applicable Regulations thereunder OPFRATINC AGREEMENT- 10 (b) 11, at any time, the Company shall suffer a loss as a result of which the capital account of any Member shall be a negative amount, such loss shall be carried as a charge against that Member's capital account, and that Member's share ol'subsequent prolits of fie Company shall be applied to erase such capital acoount de1161, (c) Por purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Member's capital account, the determination,, recognition and classilieation of any such item shall be the sane as its dewrinination, recognition and classification for federal income tax purposes, taking, into account any adjustments required pursuant to Section 704 of the Code and the applicable Regulations thereunder. 5,4 Cosh Flow and Distributions, 'fhe Company shall distribute available cash llow to the Members at such times and in such amount as the Manager may determine. The Manager may also elect to utilize cash flow for future propel ly ,rcd)uisitions and dCveknpr°hent, Tri the event that the allocation and repoiiing of prolits and losses results in taxable income being allocated to the Members, the Company shalt, to the extent of available cash flow, distribute funds to the Members in such amounts as may be necessary to provide funds for the payment of income taxes by the Members. V1. DISSOLUTION AND TERMINATION 6 1 Events Causing Dissolution. Upon the occurrence of'the following events, file Company shall be dissolved: (a) The death of a Member. (b) The Company sells or transfers substantially all of the assets of the Company. (c) The Company ceases it business operations. (d) The Members vote to dissolve and terminate the Company, (e) The occurrence of any event set forth in Idaho Code, Section 53-642, 6.2 Successors to a ;Member. Upon the death of a Member the Mcmbcr's personal representative, executor or administrator shall have all of the rights of a Member for the purpose of managing or settling the Member's estate, such that the interest of a deceased Member shall transfer to the surviving spouse, devisees or heirs of the Member, or to a trust or other entity established by the Member from time to line for estate planning or similar purposes. 6.3 Winding tip, In the evcnt of the dissolution of the Company, the business and affairs of the Company shall continue to be governed by this Agreement during the winding up of the Company's business and affairs. VII. TRANSFERS OF MERURSHIP INTERESTS OPERATING AGREEMFNT- 11 T 1 Sale of Interest Restricted. Should a Member desire to sell, assign or exchange all or any part of his or her interest in the Company to any person seeking to become a substituted Member (or, in the event of a transfer for no consideration, such gift or bequest), such Member (hereinafter "assignor") who desires to assign all or any part of his or her interest in the. Company shall not have the right to transfer to another the whole or any part of such interest, except as set forth in this Agreement. 7.2 Procedure for Sale of tnt'erest. If the Member desires to sell or assign all or a portion of his or her interest in the Company, as set forth in Section 7. 1, he or she shall first offer the same, in writing, to the other Member, who shall have thirty (30) days after receipt of such offer to accept or reject the offer, If the offer is rejected, in whole or in part, the Member shall be free to sell or assign the rejected interest, on the same terms and conditions, to a third patty. If the sale is not consummated within said sixty (60) days after the expiration of the thirty (30) day period referred to in the preceding paragraph, the proposed sale or assignment shall again be subject to the provisions of this Article VII. 73 Liability Unaffected by Assignment, No assignment ofamy Momber's interest in compliance with this Article VII, even if if results in (lie substitution of the assignee as a Member herein, shall release the assignor from those Liabilities to the Company which strive such assignment. 7.4 Documentation. Any assignment by a Member of all or any part of his or her interest in the Company shall be subject to the following: (a) The assignment instrument shall be in form and subsource satisfactory to the Company. Among the reasons fir }which consent may be withheld by the Company is that the Company has determined, in its sole discretion, that such substitution may: (i) have an adverse affect on the legal status of the Company under state or federal lave or both; or (if) have an adverse affect on the Members who are not participating in the transfer under state or federal law or both, The request for consent to sales or assignments shall contain a copy of all instruments and documents to be utilized in the transfer and shall be made by certified or registered mail, return receipt requested, sent to the Company at least sixty (60) days prior to the proposed date of transfer, Any additional information requested by the Company including any information relative to the assignee, shall be promptly furnished by the requesting assignor, and no decision need be reached by the Company until such information is furnished. (b) The assignee shall have submitted his or her written ttcccptance and adoption of all the terms and provisions of this Agreement, including any and all amendments to this Agreement to be made subsequent to the assignment. (c) The assignor shall have paid, or obligated himself to pay, as the Company may determine, all reasonable expenses connected with such transfer, including, but not OPERATING ACRF EMFNT - 12 limited to, the cost of preparing and filing any amendment to this Agreement necessary to effectuate the transfer. VITT. DEATH OR RETIREMENTOF A MPMITER 8.1. Withdrawal or Retiirement of a Member, A Member shall only be entitled to withdrew as a Member upon a minimtnn of sixty (60) days notice to the other Member and only with the written consent of the remaining Member. The withdrawal shalt be upon such terms and conditions as the remaining Member and the withdrawing Member shall agree, The withdrawing Member shall be entitled to be paid the purchase price of the Member's interest in the Company, as determined pursuant to Section 33 herein. Withdrawal shall not release the withdrawing Member'rrom any liabilities of the Company or obligations from the withdrawing Member to the Company, unless agreed to as part of the terms of €he withdrawal. The withdrawal of a Member for Masons related to retirement shall be accomplished pursuant to this Section. Any withdrawal in violation of these provisions shall constitute a breach of this Operating Agreement and shall not relieve the. withdrawing Member from liability foe damages resuitiog from said unauthorized withdrawal, 8.2, Option to Purchase Upon Death. Upon the death of any Member, the surviving Member may elect to purchase the deceased Member's interest in the Company for tine purchase price as determined in Section 8.3 herein. rfbe option to purchase may be elected by written notice to the deceased Member's heirs or personal representative, which notice shall be given within ninety (90) days from the date oftlne death which triggers the option. 8.3. Purchase Price, Tine purchase price in the event of the withthaw, retirement or death of a Member shall be an amount as agreed upon between the surviving Member and the withdrawing or retiring Member or the deceased Mlember's heirs or Personal Representative, as the case may be. bt the event that the affected parties are not able to mutually agree upon a purchase price, the purchase price shat I be determined by obtaining appraisals of the company's assets, and adding to the total of such appraisal as the balances in any cash, investment or similar accounts. The total debts and obligations of the company, shall then be deducted and the resulting figure shall represent the purchase price of the company as a whole. The purchase price for the withdrawing, retiring or deceased Member's interest shall be determined on a proportional basis in accordance with the Member's respective ownership interest in the company. In the absence of an agreement for tine manner of payment, the purchase price shall be payable in full over a period not to exceed five (5) years, will) interest on the unpaid balance at the Wall Street Journal Prime Rate, adjusted quarterly. IX. LIQUIDATION 9.1 Application of Proceeds. Upon the dissolution and/or ternnination ofthe. Company, the Members shall proceed with the liquidation of the Company and sale of its OPERATING AGREEMENT - 13 assets. The proceeds of such liquidation shall be applied and distributed in the following order or priority: ('a) To the payment of the debts and liabilities of the Company (other than any loans or advances that may have been made by the Members to the Company) and expenses of liquidation. (b) To the payment of any Loans or advances made to or for the benefit of the Company by the Members, or forany compensation owed to the Members. (c) To the setting up of any reserves which the Members may dean reasonably necessary in order to meet any contingent or unforeseen liabilities or obligations of the Company arising out of, or in connection with, the business ol'the. Company. Said reser vcs shall be paid over by the Company to any frtancial institution, as escrow agent, Will) trust au0107-ity in the county in which the principal accounting records of the Company have been maintained in order to be held by it for the purpose of disbursing such reserves in payment ofany of the aforementioned contingencies or liabilities; and at the expiration of such period as the Members shall deem advisable, the financial institution shall distribute the balance remaining in the manner provided in this Article 7. and in the order named above, (d) To the payment of the balance, if any, of the. respective capital account (it* the Members, ifany. 9.3 Final Dissolution. When all of the acts provided for in Section 9.1 have been accomplishccl, the Members shall file such Articles of Dissolution and any other certificate required in the State of Idaho, and in any other state that may be required by law. X. AMENDMENT O7+ TI IF AGREEMENT 10,1 Approval of Amendments. All amendments to this Agreement shall require the approval of all of the Members. XI, MISCELLANh;OUS 1 1.1 Notices. Any and all notices or other communications which may be sent to tiny Member shall be sent to the address noted in Schedule `A", unless the Company is notified in writing with regard to a change of address. Notices or other communication shall be deemed to have been given only when deposited with the United States Postal Service by registered or ecrti lied mail, return receipt requested, addressed as set forth above. 11.2 Governing Law. This Agreement shall be governed by, and construed in accordance tivith, the laws of the State of Idaho. OPERATING AGREEIVIE l'. 14 11.3 Execution in Counterparts, This Agreernent may be executed in multiple parts, each of which shall be deemed an original and all of which together shall constitute one Agreement, by each of the parties hereto on the dates indicated in the acknowledgment of said parties, notwithstanding that all of the parties are not signatories to the sante part or that signature pages from different parts are combined. The signature of any party to any part shall be docaned to be a signature to and may be appended to any other part. 1 IA luterpretation Wards ot'gender used in this Agreement shall be interpreted to include the other gender, and words in the singular number shall be interpreted to include the plural (and vice -versa), when the sense so requires. The captions to each Article are inserled only as a matter of convenience and for reference purposes and in no way define, limit or describe the scope or intent of this Agreement, nor in any way affect it. 11.5 Integrated Agreement, This Agreement contains the entire Understanding between the parties and supersedes any prior understandings and agreements between them concerning the within subject matter. There are no representations, agreements, arrangements or understandings, oral or written, between the parties hcreto relating to the subject matter of this Agreement which are not described herein. 11.6 Partial Invalidity, This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations orthejurisdictions in which the Company does business. If any provision of this Agreement or its application to any person or circumstance shall, for any reason and to any extent, be found to be invalid or unenforceable, the remainder of this Agreement or the application ofsuch provision to the other persons or circumstances shal I not be affected thereby, but rather shall be enforced to the fyreatest extent permitted by law. 11.7 Additional Terms and Definitions. The word "person', as used in thus Agreement, shall include a corporation, firm, partnership or other Ik)rm of association. "Bankruptey", as used in this Agreement, shall be deemed to occur when a Member tiles a petition in bankruptcy or voluntarily lakes advantage ofany bankruptcy or insolvency laws, or is adjudicated a bankrupt, or when a petition or answer is filed proposing the adjudication of a Member as a bankrupt and such Member either consents to the tiling or such complaint or answer is not discharged or denied prior to the expiration of sixty (60) days following the date offiling. 11,8 Binding Effect, This Agreement,, and all the terms and provisions hereof, shall be binding upon ,and shall inure to the benefit of all Members and their respective legal representatives, heirs, permitted successors and permitted assigns. OPPRATIN(, AGREEMENT- 15 IN WITNESS WHEREOF, The Members have 110-M11110 901 their hands hereto, as 1,011OWS: Dated: e6"'-11 Dated: ',:; 01, / Dated: ' 87 - // Dated:'.; 0 1, OPERATING ACIRLEMENT- 16 Ricky AOms Danielle M. Steinfeldt Nicole R. Adams EXHIBIT "A" KSA PROPI+;I2TII+,S, LLC Member No. of Units Kelly G. Adams 48,5% Suzette M. Adams 48.5% Ricky C. Adams 1% Danielle M. Steinfeldt 1% Nicole R, Adams 1% 261 ("Up'?"i HTWAA 'E' 019F 4BO, k1l"11101 L. ji TF 0 L I/ JTY CO A, i V Y (In-ItrwAions on back of application) 1. The nawL of the limited liability company K,9A Prop24e-,, i -l -C 2. The complete street and mailing addiet;es of the initial designatediprincipal office: 3843 West Daisy Creek SlmE.t, Meridian, Idaho 83642 TG111i.-9 Address, if different Ow OrW io"rest) —dmst) 3. The name and complete street address of the registered agent: Kelly GAdams 3843 West Daisy Greek Street, Mof iffian, Idaho V642 (Sirept Address) 4. The name and address of at least one member or manager of the limilod liability company: Nam M&M - Kelly G. Adams 3643 West Daisy Greek Street, Meridian, Idaho 83642 5. Mailing address for future correspondence (annual report notices): 3843 West Daisy Creek Street, Meridian, Idaho 83642 6. Future effective date of filing (optional): Signature of a manager, member or authorized person. Kelly G. Adams Typed Name: 'iignature_ lyped Narrte: 5xf0tafy Ot u'u' on'y "1,08 OR(I ' Q STATE OF "— (city) heing I first duly sworn upon. I. That I am i permission to submit lite ?. 1 a_eree to im front any ch hercirl or as 1 3. 1 hereby grm Purpose of sl Dated this VIT OF LEGAL INTEREST Sa Crr4-k !�T- 11 (a dress) iq.ci k Q (state) depose and sa.v: Ord owner or the properly described on the attached, and I grant m) 33911 w. ��(:,� cLK 55t. k r A , iii 9%9 z (address) ompanying appticalionls) pertaining to that properly. nity. defend and hold the City of Meridian and its employees harmless or liability resulting from any dispute as to the statements contained ownership of the property which is the subject of the application. mnission io City of Meridian stall'to enter the subject property for the simlions related to processing said application(s), tdav of' 20 ( z (Signature) SUBSCRIBEDANDSWORb o bethreme the day and yea • si above written. (oJJlaq public fo tesidingat:_ qQA (_W� (— My Commip 5: 311 I°Ilene: i�aNl l.'II�i� Jua1 Meme. Suite III) • Meridian, Idaho 83142 0 Vacsirnilc: P?oH188ft•685d \6'ehsile: uwu.meridinncal.erg IRri F'IDAVIT OF LEGAL INTEREST STATE OF IDAHO COUNTY OF ADA ) (nal e) (address) (city) (state) being first duly swom upon, itith, depose and say: 1. That 1 am t record owner of the property described on the attached, and I grant my permission t : t oVV\ Cr•t t� (n e) (address) to submit the accompanying application(s) pertaining to that property. 2. 1 agree to in emnify, defend and hold the City of Meridian and its employees harmless from any c] m or liability resulting from any dispute as to the statements contained herein or as the ownership of the property which is the subject of the application. 3. 1 hereby gra permission to City of Meridian staff to enter the subject property for the purpose of si inspections related to processing said application(s). 5 Dated this day of A pr 20 1 � P , (Signature) SUBSCRIBED AND SWORN to before me ON." R LDC- ®� OF IP first above V T— (Notary Public for Idaho) Residing at:i r ' • 4n ` r- Q My Commission Expires: o � 1_r D`,�i 33 Ji.I Broadway Avenue, Suite 102 • - Meridian, Idaho 83642 Phone: (208) 884 33 • Facsimile: (208) 888-6854 ® Website: www.meridiancity.org (Rev. 0210812013) N m m y ,Iy ,% 42 � pp q� e�1 y� o J yK? y �6 b bN q g yyb a y� �ry �Cy4 ryrya 6 Vl Q 6 S`u`\aq? $ i a arc o\ N Q U 5 mc�w N8 : Y [ O �S� l � ii.. � `E S l ❑ J LJ i � � � Nti .� N�� >#�<i' y N SO '�N�'O <iRo tli s•a� }�% i �Fp p.CQ �W rt LU • Y l k Oi X "QQ" N CU N> 3 �'d 4 CO sp Wa StI 3', in K'` O NQL. 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N 0 a 3 �.K J'r :a �,.l' nMR, t — lm M,05,f0A0S b ��� � Z F I 7 -m Z I va gm_$ C) O Q N¢ Ro �1 Zg p���ryj �Yf z 4' �I SN, SVG cxs'xV.S �y�l acnaaoeeea'c � 4r z l 1 q1 W Q rr 1 � 'si nosroms rc' -� nunw��w�u�o mora atFp' Tauri AW itswi r:o� r� ro s Ismer A smalV TV �&a a OVOU 311W N31 'N 5 ddd �i NOISIA 06 S ¢ 32Nf10S Ail Ni13B � rc roonS W21V3 S213HSOW � Y IIIl`T Meridian City Hall, Suite 102 33 E. Broadway Avenue Meridian, Idaho 83642 Community Development 208.887.2211 Department Parcel Verification Date: 4/24/13 The parcel information below has been researched and verified as correct by the City of Meridian Community Development Department. Project Name: Lightning Place Subdivision Lot/Block/Sub: 1,2,3/1/Sommersby #1 Parcel Numbers: R8038270010 R8038270020 R8038270030 T/R/S: 3N 1W 11 Owner: KSA Properties, LLC 3843 W. Daisy Creek St. Meridian, ID 83642 Address Verification Rev: 04/23/12