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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 152 of 204 “Member'sPercentageV otingInterest”inExhibitAheretoand,ii)forpurposesofallocationsofNetPro?tsandNetLossestoaMember,thepercentageofaMembersetforthoppositethenameofsuchMember,respectively,inthecolumnsheaded“Member'sNetPro?tsPercentage“or“Member'sNetLossesPercentage”inExhibitBheretoassuchpercentageinterestsmaybeappliedunderParagraph5.1andadjustedfromtimetotimepursuanttothetermsoftheAgreement.APercentageInterestforonlytheabovepurposesshallbedetermined,unlessotherwiseprovidedherein,inaccordancewiththerelativeproportionsoftheCapitalAccountsofMembers,effectiveasofthefirstdayofthe?scalyearofCompanybutwithalldistributionsunderParagraph5.2,hereoftobedeemedtohaveoccurredonsuchdayimmediatelypriortodetenninationofPercentageInterestofaMember.W.“Person”shallmeanindividuals,generalpartnerships,limitedpartnerships,otherlimitedliabilitycompanies,corporations,trusts,estates,realestateinvestmenttrustsandanyotherassociation.X.“SuperMajority-In-Interest”shallmean,unlessotherwisede?nedforaparticularpurposeherein,fromsixty-sixpercent(366%)oftheV otingInterestofMembers.Y .“Transfer”means,withrespecttoanInterestoranyelementofanInterest,anysale,assignment,gi?,InvoluntaryTransfer,Encumbrance,orotherdispositionofsuchanInterestoranyelementofsuchInterest,directlyorindirectly,otherthananEncumbrancethatisexpresslypermittedunderthisAgreement.Z.“TreasuryRegulations”shallmean,unlessthecontextclearlyindicatesotherwise,theregulationscurrentlyinforceas?nalortemporarythathavebeenissuedbytheU.S.DepartmentofTreasurypursuanttoitsauthorityundertheInternalRevenueCodeof1986,asamended.AA.“V ote"meansawrittenconsentorapproval,aballotcastatameeting,oravoicevote.
BB.“V otingInterest”shallmeanthoserightsofaMemberdescribedinArticleIIIoftheAgreementastheymaybelimitedelsewhereintheAgreement,theArticlesandtheAct.CC.“RetumofCapital”shallmeananydistributiontoaMembertotheextentofthepositivebalanceintheCapitalAccountofMemberimmediatelybeforethedistribution.DD.“RegisteredOf?ce”shallmeantheof?cemaintainedbytheregisteredorstatutoryagentofCompanyatthestreetaddressoftheagentforserviceofprocessoftheCompanyintheStateofDelaware.ARTICLEII.MEMBERS,CAPITALCONTRIBUTIONSANDWITHDRAW ALS,MEMBERSHIPINTERESTS,ADMISSIONS,CERTIFICATESANDLIMITATIONSONLIABILITIESANDRESPONSIBILITIESOFMEMBERS2.1NAMES,ADDRESSESOFINITIALMEMBERSANDTHEIRCAPITALCONTRIBUTIONSTheinitialMembersshallbeeachofthepersonsexecutingtheAgreementandmakingtheinitialCapitalContributionssetforthoppositetheirrespectivenamesinExhibitA.EachsuchpersonisadmittedasaMembereffectiveasofthebeginningofthetermoftheAgreement.Members,theirrespectiveaddresses,theirrespectiveaggregateCapitalContributionstoCompany,andtheirrespectiveV oting
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 153 of 204 InterestsandPercentageInterestsinNetPro?tsandNetLosses(EconomicInterests)ofCompanyaresetforthonExhibitsAandB,astheexhibitsmaybeamendedfromtimetotime.
2.2FORMOFCAPITALCONTRIBUTIONSAsprovidedintheArticlesortheAgreement,MembersshallmaketheinitialCapitalContributionsintheformofmoney,property(includingpromissorynotes)orservicesrenderedortoberenderedorotherobligationtocontributemoneyorpropertyortorenderservices.MembersmaymakeanysubsequentCapitalContributionsinanytypeofmoney,property(includingpromissorynotes)andservicesrenderedortoberenderedasmaybeagreeduponbyalloftheMembers.NoMembershallberequiredtomakeanyCapitalContributionstoCompanyotherthanthecapitalcontributionssetoppositetothenameofMemberonExhibitA,asitmaybeamendedfromtimetotime.Inordertoobtainadditionalfundsorforotherbusinesspurposes,aMembermaycontributeadditionalcapitaltoCompany,butonlyuponthewrittenconsentofallotherMembers.2.3ADMISSIONOFADDITIONALMEMBERSMembersmayadmittoCompanyanypersonasanadditionalMemberwhowillparticipateinthepro?ts,losses,availablecash?ow,andownershipoftheassetsofCompanyonsuchtermsasaredeterminedbyallMemberssubjecttoArticleVII.AdmissionofanysuchadditionalMembershallrequirethewrittenconsentofthethenexistingMembersholdingaMajority-In-Interest,ormore.AdmissionofanyadditionalMembermayresultinadilutionofthePercentageInterestsofthethenMembersintheirV otingInterestsandEconomicInterests(NetPro?tsandNetLosses).2.4WITHDRAW ALSAMembershallnotbeentitledtowithdrawanypartoftheMember’sCapitalContributionortoreceiveanydistributions,whetherofmoneyorproperty,fromtheCompanyexceptasprovidedinthisAgreement.2.5PERCENTAGEINTERESTOFMEMBERANDCERTIFICATETheMembershipInterestofCompanyheldbyeachMembermaybedividedintoaPercentageInteresttorepresent,respectively,votingpower,allocationofNetPro?tsandallocationofNetLossesasre?ected,respectively,onExhibitAandExhibitBaseachexhibitmaybeamendedfromtimetotime.TheMembershipInterestinCompanymayberepresentedbyaCerti?cateofMembership.TheexactcontentsofaCerti?cateofMembershipmaybedeterminedbyactionoftheMembersbutshallbeissuedsubstantiallyinconformitywiththefollowingrequirements:A.EachCerti?cateofMembershipshallbeconsecutivelynumberedbeginningwithNumber1,asitisissued,shallbesignedbytheauthorizedrepresentativesofCompanyandshallbeimpressedwithCompanySealorafacsimilethereof.B.EachCerti?cateofMembershipshallstatethenameofCompany,thelawsofthestateunderwhichCompanyisorganized,thenameofthepersontowhomissued,thedateofissueoftheCerti?cate,andthePercentageInterestrepresentedbytheCerti?cate.C.EachCerti?cateshallcontainastatementofthedesignations,preferences,quali?cations,limitations,restrictions,andspecialorrelativerightsoftheInterestsrepresentedthereby,setforthinfullorsummarizedonthefaceorbackoftheCerti?cateswhichCompanyshallissue.
LiL 7
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 154 of 204 Or,inlieuthereof,theCerti?catemaysetforththattheCompanyshallfurnishthestatementorsummarytoanyholderoftheInterestsuponrequestandwithoutcharge.2.6CANCELLATIONANDREPLACEMENTOFCERTIFICATESAllCerti?catesofmembershipsurrenderedtoCompanyfortransfershallbecanceledandnonewCerti?catesofmembershipshallbeissuedinlieuthereofuntiltheformerCertificatesforalikenumberofMembershipInterestsshallhavebeensurrenderedandcanceled,exceptashereinprovidedwithrespecttolost,stolen,ordestroyedCerti?cates.AnyMemberclaimingthathis,heroritsCerti?cateofMembershipislost,stolen,ordestroyedmaymakeanaf?davitoraf?rmationofthatfactandlodgethesamewithaManagerofCompany,accompaniedbyasignedapplicationforanewCerti?cate.Thereupon,anduponthegivingofasatisfactorybondofindemnitytoCompanynotexceedinganamountdoublethevalueoftheMembershipInterestsasrepresentedbysuchCerti?cate(thenecessityforsuchbondandtheamountrequiredtobedeterminedbyaManagerofCompany),anewCerti?catemaybeissuedofthesametenorandrepresentingthesamePercentageInterestsaswererepresentedbytheCerti?cateallegedtobelost,stolen,ordestroyed.2.7LINIITATIONSONLIABILITYOFMEMBERSFORDEBTSOFCOMPANYExceptasprovidedintheAct,noMembershallbeliableunderajudgment,decreeororderofacourt,orinanyothermanner,foradebt,obligationorliabilityofCompanywhetherthatliabilityorobligationarisesincontractortort.NoMembershallberequiredtoloananyfundstoCompany.NoMembershallberequiredtomakeanycontributiontoCompanybyreasonofanynegativebalanceinhis,heroritscapitalaccount,norshallanynegativebalanceinaMember'scapitalaccountcreateanyliabilityonthepartoftheMembertoanythirdparty.2.8LIABILITYOFMEMBERSTOCOMPANYA.LiabilityofMemberstoCompanyAMemberisliabletoCompany:(i)forthedifferencebetweenhis,heroritscontributiontocapitalasactuallymadeandthatstatedintheArticles,theAgreement,subscriptionforcontributionorotherdocumentexecutedbytheMemberashavingbeenmadebytheMember;and(ii)foranyunpaidcontributiontocapitalwhichhe,sheoritagreedintheArticles,theAgreementorotherdocumentexecutedbytheMembertomakeinthefutureatthetimeandontheconditionsstatedintheArticlesorAgreementorotherdocumentevidencingsuchagreement.NoMembershallbeexcusedfromanobligationtoCompanytoperformanypromisetocontributemoney,propertyortoperformservicesbecauseofdeath,disability,dissolutionoranyotherreason.B.MemberasTrusteeforPropertyofCompanyAMemberholdsastrusteeforCompany(i)speci?cpropertystatedintheArticles,theAgreementorotherdocumentexecutedbytheMemberascontributedbysuchMember,butwhichwasnotcontributedorwhichhasbeenwrongfullyorerroneouslyreturned;and(ii)moneyorotherpropertywrongfullypaidorconveyedtosuchMemberonaccountofhis,heroritscontribution.
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 155 of 204 C.WaiverofLiabilityofMemberTheliabilitiesofaMemberassetoutinthisParagraph2.8canbewaivedorcompromisedonlybytheconsentofallMembers;butawaiverorcompromiseshallnotaffecttherightofacreditorofCompanywhoextendedcreditorwhoseclaimaroseafterthe?lingandbeforeacancellationoramendmentoftheArticles,toenforcetheliabilities.
D.LiabilityofMemberReceivingaReturnofCapitalWhenaMemberhasrightfullyreceivedthereturninwholeorinpartofthecapitalofhis,heroritscontribution,theMemberisneverthelessliabletoCompanyforaperiodofsix(6)yearsa?erreturnofthecapitalcontributionforanysum,notinexcessofthereturnwithoutinterest,necessarytodischargeitsliabilitytoallcreditorsofCompanywhoextendedcreditduringtheperiodthecapitalcontributionwasheldbyCompanyorwhoseclaimsarosebeforethereturn.
E.NoResponsibilityforPre-ForrnationCommitmentsIntheeventthatanyMember(oranyofsuchMember'sShareholders,orAf?liates)hasincurredanyindebtednessorobligationpriortothedatehereofthatrelatedtoorotherwiseaffectsCompany,neitherCompanynoranyotherMembershallhaveanyliabilityorresponsibilityfororwithrespecttosuchindebtednessorobligationunlesssuchindebtednessorobligationisassumedbyCompanypursuanttoawritteninstrumentsignedbyallMembers.Furthermore,neitherCompanynoranyMembershallberesponsibleorliableforanyindebtednessorobligationthatisherea?erincurredbyanyotherMember(oranyofsuchMember'sShareholdersorAffiliates).IntheeventthataMember(oranyofsuchMember'sShareholdersorAffiliates),(collectively,the“liableMember”),whetherpriortoorafterthedatehereof,incurs(orhasincurred)anydebtorobligationthatneitherCompanynortheotherMembershasanyresponsibilityorliabilityfor,theliableMembershallindemnifyandholdharmlessCompanyandtheotherMembersfromanyliabilityorobligationtheymayincurinrespectthereof.2.9RIGHTSOFJUDGMENTCREDITOROFMEMBERIfaMembershipInterestischargedbyacourtofcompetentjurisdictionwiththeunsatis?edamountofajudgmentwithinterest,thejudgmentcreditorhasonlytherightsofanassigneeoftheMembershipInteresttotheextentsocharged.ThisParagraph2.9doesnotdepriveanyMemberofthebenefitofanyexemptionfromlegalprocessapplicabletohis/herinterest.2.10MEMBERREMUNERATIONNoMemberisentitledtoremunerationforactingonCompanybusinessexceptforreasonablecompensationforwindingupofaffairsofCompany.ARTICLEIII.MANAGEMENTANDCONTROL
3.1MANAGEMENTOFCOMPANY
A.ManagementofCompany
AsprovidedintheArticles,allpowersofCompanyshallbeexercisedbyorundertheauthorityof,andthebusinessandaffairsofCompanyshallbemanagedunderthedirectionofthe t7
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 156 of 204 Manager(s),unlessotherwiseprovidedintheArticles,ortheAgreementthatCompanyshallbemanagedbyallMembersasManagers(member-managed).ManagementofCompanyshallbevestedinone(1)ormoreManagerswhoshallbeelectedsolelybytheMembersasprovidedbelow.AMember,unlessalsoappointed(orhired)asaManager,officerorotheremployee,shallnotparticipateinthedaytodayoperationsofthebusinessaffairsofCompanyandifsoappointed(orhired),shallparticipateonlywithinthescopeofauthorityofsuchpositionasdefinedintheAgreementorelsewhere.AManagerneednotbeaMember,anindividual,aresidentoftheStateofDelaware,oracitizenoftheUnitedStates.TheinitialManagershallbeNghiT.Leandshallholdof?ceuntilhissuccessorshallhavebeendulyelectedandquali?edoruntilhisdeathoruntilheshallresignorshallhavebeenremovedinthemannerprovidedforherein,whicheveroccursfirst..ElectionofManagersbyMembers(ManagementbyManagers)Companyshallhaveone(1)ormoreManagers.EachManagershallbeelectedateachannualmeetingofMembersbyMembers,includingMemberswhoareManagersandcandidatestobeManagers,holdingaSuperMajority-In-Interest.AManagershallserveforatermexpiringattheearlierof(i)thefollowingannualMembers‘meeting(ii)thedateonwhichasuccessoriselectedandquali?esor(iii)thedateonwhichhe,sheoritresignsorbecomesdisabledandunabletoserve.AManagerwhosetermhasexpiredcontinuestoserveuntilasuccessoriselectedandquali?es.AnyManagermayberemovedwithorwithoutcausebyMembersholdingaSuperMajority-In-InterestatameetingcalledexpresslyforthatpurposewithnoticetotheManagerasrequiredbytheAct.AnyManagerelectedto?llavacancyshallserveasaManageruntilthenextannualmeetingoftheMembersanduntilasuccessoriselectedandquali?es.AnyManagermayresignatanytimeuponwrittennoticetoCompany.IftheMembersareunabletoappointaManagerinanyyear,theexistingManagershallcontinuetoserveasManager..DutytoQualifytoDoBusinessinOtherStatesIfrequiredbylaw,aManagershallqualifytheCompanytodobusinessinanystatebyobtainingaCerti?cateofAuthoritytodosofromtheSecretaryofStateofthestateasrequired..DutyofManagersorMemberstoDetermineTimeandPlaceofAnnualMeetingsofMembersTheannualmeetingoftheMembersshallbeheldeachyearatsuchaplaceastheManagersorMembersactingasManagersmaydetermineasprovidedinParagraph3.6..DutytoCallMeetingsofMembersUponwrittenrequestbyanypersonentitledtocallameetingofMembers,aManagershallimmediatelycausenoticetobegiventotheMembersentitledtovotethatameetingwillbeheldatatimerequestedbythepersoncallingthemeeting,notlessthanten(10)daysnormorethansixty(60)daysa?erthereceiptoftherequest.Ifthenoticeisnotgivenwithintwenty(20)daysafterreceiptoftherequest,thepersonentitledtocallthemeetingmaygivethenoticeor,upontheapplicationofthatperson,thesuperiorcourtofthecountyinwhichtheprincipalexecutiveof?ceoftheLimitedLiabilityCompanyislocated,oriftheprincipalexecutiveof?ceisnotinthisstate,thecountyinwhichtheLimitedLiabilityCompany'saddressinthisstateislocated,shallsummarilyorderthegivingofthenotice,a?ernoticetotheLimitedLiabilityCompanyaffordingitanopportunitytobeheard.Thecourtmayissueanyorderasmaybe 10
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 157 of 204 appropriate,including,withoutlimitation,anorderdesignatingthetimeandplaceofthemeeting,therecorddatefordeterminationofMembersentitledtovote,andtheformofnotice.DutytoSafekeepFundsofCompanyManagersorMembersactingasManagersshallhave?duciaryresponsibilityforthesafekeepinganduseofallfundsandassetsofCompany,whetherornotintheirimmediatepossessionorcontrol.ThefundsofCompanyshallnotbecommingledwiththefundsofanyotherpersonandtheManagershallnotemploy,orpermitanyotherpersontoemploy,suchfundsinanymannerexceptforthebene?tofCompany.ThebankaccountsofCompanyshallbemaintainedinsuchbankinginstitutionsasareapprovedbyManagersandwithdrawalsshallbemadeonlyintheregularcourseofCompanybusinessandasotherwiseauthorizedintheAgreementonsuchsignatureorsignaturesasManagersmaydetermine..DutytoHireEmployeeforRecordKeepingManagersorMembersactingasManagersshallemployacompetentpersontobeanemployeeofCompanywhoshallberesponsiblefor:authenticatingtherecordsofCompany,includingkeepingcorrectandcompletebooksofaccountwhichshowaccuratelyatalltimesthe?nancialconditionofCompany,safeguardingallfunds,notes,securities,andothervaluableswhichmay?omtimetotimecomeintopossessionofCompany,depositingallfundsofCompanywithsuchdepositoriesasManagersshalldesignate.SuchemployeeshallhavesuchotherdutiesasManagersmayfromtimetotimeprescribe,butundernocircumstanceshallsuchemployeehaveanyoftherights,powers,responsibilitiesordutiesofaManagerorMemberofCompanyasprescribedhereinorbylaw.POWERSOFMANAGERSORMEMBERSASMANAGERSA.PowersAManagershallhaveallnecessarypowerstocarryoutthepurposes,business,andobjectivesofCompany,including,butnotlimitedto,therighttoenterintoandcarryoutcontractsofallkinds;toemployemployees,agents,consultantsandadvisorsonbehalfofCompany;tolendorborrowmoneyandtoissueevidencesofindebtedness;tobringanddefendactionsinlaworatequity;tobuy,own,manage,sell,lease,mortgage,pledgeorotherwiseacquireordisposeofCompanyproperty.EachManagermaydealwithanyrelatedperson,?rmorcorporationontermsandconditionsthatwouldbeavailablefromanindependentresponsiblethirdpartythatiswillingtoperform.EachManagershallhavetheauthoritytosignagreementsandotherdocumentsonbehalfofCompanywithoutjoinderofanyotherManagerprovidedtheManagerisappointedasanof?certheappointeeshallactwithinthecustomaryscopeoftheauthorityoftheof?ce,unlesstheappointeeobtainstheconsentoftheotherManagerorManagers.WithoutlimitingthegeneralityofthisSubparagraph3.2.A.,eachManager(actingsinglyorjointly)shallhavepowerandauthority,toactonbehalfofCompanyandsubjecttothelimitationsoftheActandthelimitationssetforthhereina?er:(a)ToacquirepropertyfromanyPersonastheManagermaydetermine.ThefactthataMemberisdirectlyorindirectlyaf?liatedorconnectedwithanysuchPersonshallnotprohibitaManagerfromdealingwiththatPersonorEntity; \)7ll
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 158 of 204 (b)
(C)
(d)
(6)
(f)
(g)
(h)
(i)
(k)
Toborro\vmoneyforCompanyfrombanks,otherlendinginstitutions,theMembers,orAffiliatesoftheMembersorManageronsuchtermsastheydeemappropriate,andinconnectiontherewith,tohypothecate,encumberandgrantsecurityinterestsintheassetsofCompanytosecurerepaymentoftheborrowedsums.ExceptasotherwiseprovidedintheAct,nodebtshallbecontractedorliabilityincurredbyoronbehalfofCompany,exceptbytheManagers;TopurchaseliabilityandotherinsurancetoprotectthepropertyandbusinessofCompany;ToholdandownanyCompanyrealandpersonalpropertiesinthenameofCompany;ToinvestanyfundsofCompanytemporarily(bywayofexamplebutnotlimitation)intimedeposits,short-tenngovernmentalobligations,commercialpaperorotherinvestments;ToexecuteonbehalfofCompanyallinstrumentsanddocuments,including,withoutlimitation,checks;drafts;notesandothernegotiableinstruments;mortgagesordeedsoftrust;securityagreements;?nancingstatements;documentsprovidingfortheacquisition,mortgageordispositionofpropertyofCompany;assignments;billsofsale;leases;partnershipagreements;andanyotherinstrumentsordocumentsnecessary,intheopinionoftheManager,tothebusinessofCompany;Toemployaccountants,legalcounsel,managingagentsorotherexpertstoperformservicesforCompanyandtocompensatethemfromCompanyfunds;Toretainandcompensateemployeesandagentsgenerally,andtodefinetheirduties;ToenterintoanyandallotheragreementsonbehalfofCompany,withanyotherPersonorEntityforanypurposenecessaryorappropriatetotheconductofthebusinessofCompany;TopayreimbursementfromCompanyofallexpensesofCompanyreasonablyincurredandpaidbytheManageronbehalfofCompany;andTodoandperformallotheractsasmaybenecessaryorappropriatetotheconductofthebusinessofCompany;B.LimitationsonPowersofaManagerorMemberActingasManagerAManagershallnothavetheauthoritytocauseCompanytoengageinanytransactionrequiringavoteofMemberswithoutfirstobtainingtherequiredaf?rrnativevoteorwrittenconsentoftheMembers.Further,aManagershallnothaveauthorityhereundertocauseCompanytoengageinanyoftheextraordinarytransactionsassetforthinthisSubparagraph3.2.Bbelow,exceptwiththeaf?nnativevoteoftheMembersasdescribedforeachtransactionbelowandtheconcurrenceofallotherManagersincluding,butnotlimitedto,thefollowing:
12
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 159 of 204 (a)Thesale,exchangeorotherdispositionofall,orsubstantiallyall,ofCompany'sassetsoccuningaspartofasingletransactionorplanshallrequiretheaf?rmativevoteofMembersholdingatleastSixty-SixandTwo—ThirdPercent(662/3%)ofallV otingInterestsinCompany,butnotlessthanamajorityininterest. (b)ThemergerofCompanywithanyotherLimitedLiabilityCompany,limitedpartnershiporcorporationshallrequiretheaf?rmativevoteofMembersholdingatleastSixty-SixandTwo—ThirdPercent(662/3%)ofallV otingInterestsinCompany.(c)ThecontractiononbehalfofCompanyofanydebtorliabilityofmorethan$50,000shallrequiretheaf?rmativevoteofMembersholdingatleastSixty-SixandTwo-ThirdPercent(662/3%)ofallV otingInterestsinCompany.((1)ThechangeintheamountorcharacterofCapitalContributions,orchangeinthecharacterofthebusinessofCompanyshallrequiretheaf?rrnativevoteofMembersholdingatleastSixty-SixandTwo—ThirdPercent(662/3%)ofallV otingInterestsinCompany.C.AgentofCompanyEveryManagerisanagentofCompanyforthepurposeofitsbusiness,andforeveryotherManager,forpurposesoftheexecutioninnameofCompanyofanyinstrumentforapparentlycarryingonintheusualwaythebusinessofCompanyandbindsCompany,unlesssuchactisincontraventionoftheArticlesortheAgreementorunlesstheManagersoactingotherwiselackstheauthoritytoactforCompanyandthepersonwithwhomtheManagerisdealinghasknowledgeofthefactthattheManagerhasnosuchauthority.D.ActsasConclusiveEvidenceofAuthorityEverycontract,deed,mortgage,leaseandotherinstrumentexecutedbyanyManagershallbeconclusiveevidenceinfavorofeverypersonrelyingthereonorclaimingthereunderthatatthetimeofthedeliverythereof(i)Companywasinexistence,(ii)neithertheAgreementnortheArticleshad/havebeenamendedinanymannersoastorestrictthedelegationofauthorityamongMembersorManagers,and(iii)theexecutionanddeliveryofsuchinstrumentwasdulyauthorizedbyMembersandManagers.AnypersonmayalwaysrelyonaCerti?cateaddressedtohimandsignedbyanyManagerhereunder:(i) astowhoaretheMembersorManagershereunder;(ii)astotheexistenceornon-existenceofanyfactwhichconstitutesaconditionprecedenttoactsbytheMembersortheManagersorinanyothermannergennanetotheaffairsofCompany;(iii)astowhoisauthorizedtoexecuteanddeliveranyinstrumentordocumentofCompany; ‘LE13
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 160 of 204 (iv)astotheauthenticityofanycopyoftheArticles,theAgreement,amendmentstheretoandanyotherdocumentrelatingtotheconductoftheaffairsofCompany;or(v)astoanyactorfailuretoactbyCompanyorastoanyothermatterwhatsoeverinvolvingCompany,anyManageroranyMemberinthecapacityasaMemberorManager.3.3OTHERACTIVITIESOFMANAGERSANDMEMBERSPERMITTEDAnypersonsewingasManagermayengageinotherbusinessactivitiesnotincompetitionwiththespeci?cpurposesoftheCompanyassetforthinParagraph1.1andshallbeobligatedtodevoteonlyasmuchofhis/hertimetothebusinessofCompanyasshallbereasonablyrequiredinlightofthepurposesofCompany.AManagershallperformhis/herdutiesasaManageringoodfaith,inamannerhe,sheoritreasonablybelievestobeinthebestinterestsofCompany,andwithduecare.Apersonwhosoperformshis,heroritsdutiesshallnothaveanyliabilitybyreasonofbeingorhavingbeenaManagerofCompany.ThenegligentconductofaManagershallnotviolatehis/herdutyofduecare,butfraud,deceit,grossnegligence,recklessorintentionalmisconduct,oraknowingviolationoflawshallviolatethedutyofduecare.3.4W ARRANTEDRELIANCEONOTHERSInperfonningtheirduties,eachManagershallbeentitledtorelyoninformation,opinions,reports,orstatementsofthefollowingpersonsorgroupsunlesstheyhaveknowledgeconcerningthematterinquestionthatwouldcausesuchreliancetobeunwarranted:A.oneormoreemployeesorotheragentsofCompanywhomtheManagersreasonablybelievetobereliableandcompetentinthematterspresented;B.anyattorney,publicaccountant,orotherpersonastomatterswhichtheManagersreasonablybelievetobewithinsuchperson'sprofessionalorexpertcompetence;orC.acommitteeuponwhichheorshedoesnotserve,dulydesignatedinaccordancewithaprovisionoftheArticlesortheAgreement,astomatterswithinitsdesignatedauthority,whichcommitteetheManagersreasonablybelievetomeritcompetence.
3.5LHVIITATIONSONLIABILITYAManagershallnotbeliabletoCompanyorMembersforanylossordamageresultingfromanymistakeoffactorjudgmentoranyactorfailuretoactunlessthemistake,actorfailuretoactistheresultoffraud,badfaith,grossnegligenceorwillfulmisconduct.Managersshallnotbe?duciariesofCompanyorMembers.3.6ANNUALMEETINGOFMEMBERSThearmualmeetingofMembersshallbeheldforthepurposesoftheelection(orreelection)ofaManagerorManagersandforthetransactionortheconsiderationofanyotherbusinessthatmayproperlycomebeforethemeeting.TheannualmeetingofMembersshallbeheldatsuchdate,timeandplacewithinorwithoutthestateoforganizationasManagersmay?xfromtimetotime,oriftherearetwoormoreManagersandtheyareunabletoagreeatsuchtimeandplace,Membersholdingmorethan50percentof
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 161 of 204 theV otingInterestsshalldeterminethetimeandplace.ThemeetingplaceshallbeintheUnitedStatesofAmerica.3.7
3.8 SPECIALMEETINGSOFMEMBERSA.
NOTICES,VOTINGANDPROCEDURESATMEETINGSOFMEMBERSA.RequiredNoti?cationofMeetingsofMembers PowertoCallSpecialMeetingSpecialmeetingsofMembersforanypurposeorpurposesofaddressinganymattersonwhichMembersmayvote,unlessotherwiseproscribedbytheActorbytheArticles,maybecalledbyanyManager,oruponwrittendemandofanyMemberorMembersrepresentingmorethantenpercent(10%)oftheV otingInterestsonanyissueproposedtobeconsidered.Date,TimeandPlaceofSpecialMeetingSpecialmeetingsofMembersforanypurposeotherthantheelectionofManagersmaybeheldatsuchdate,timeandplacewithinorwithoutthestateoforganizationasshallbestatedinthenoticeofthemeetingorinadulyexecutedanddeliveredwaiverofnotice,providednoticeofthemeetingisgivennotlessthanten(10)daysnormorethansixty(60)daysbeforethedateofthemeeting.
Managersshalldeliverormailwrittennoticestatingthedate,time,andplaceofanymeetingofMembersand,inthecaseofaspecialmeetingofMembersorwhenotherwiserequiredbylaw,adescriptionofthepurposesforwhichthemeetingiscalled,toeachMemberofrecordentitledtovoteatthemeeting,atsuchaddressasappearsintherecordsofCompany,suchnoticetobemailedatleastten,butnotmorethansixty,daysbeforethedateandtimeofthemeeting.AMembermaywaivenoticeofanymeeting,beforeora?erthedateofthemeeting,bydeliveringasignedwaivertoCompanyforinclusionintheminutesofCompany.AMember'sattendanceatanymeetingofMembers,inpersonorbyproxy(a)waivesobjectiontolackofnoticeordefectivenoticeofthemeeting,unlesstheMemberatthebeginningofthemeetingobjectstoholdingthemeetingortransactingbusinessatthemeeting,and(b)waivesobjectiontoconsiderationofaparticularmatteratthemeetingthatisnotwithinthepurposedescribedinthemeetingnotice,unlesstheMemberobjectstoconsideringthematterwhenitispresented.RecordDateforEligibilityofMemberstoV oteatMeetingsofMembersTherecorddateforthepurposeofdeterminingtheMembersentitledtonoticeofameetingofMembers,fordemandingaspecialmeetingofMembers,forvoting,orfortakinganyotheractionshallbethetenth(10th)daypriortothedateofthemeetingorotheraction.V otingbyMembersatMeetingsofMembersAMembermayappointaproxytovoteorotherwiseactfortheMemberpursuanttoawrittenappointmentformexecutedbytheMemberortheMember'sdulyauthorizedattomey-in-fact.AnappointmentofaproxyiseffectivewhenreceivedbytheManagersofCompany.ThegeneralproxyofafiduciaryisgiventhesameeffectasthegeneralproxyofanyotherMember. @515
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 162 of 204 Aproxyappointmentisvalidforelevenmonthsunlessotherwiseexpresslystatedintheappointmentform.D.RelativeWeightofV otesofMembersatMeetingsofMembersAtanymeetingofMembers,eachMemberentitledtovoteshallhaveanumberofvotesequaltotheproductof(i)his,heroritspercentageofV otingInterestassetforthonExhibitAhereto,asthesamemaybeamendedfromtimetotime,times(ii)onehundred(100).AtanymeetingofMembers,presenceofMembersentitledtocastatleast51percentofthetotalvotesofallMembersentitledtovoteatsuchmeetingconstitutesaquorum.ExceptformattersrequiringahighervoteunderSubparagraph3.2BortheAct,actiononamatterisapprovedifitreceivesapprovalbyatleast51percentofthetotalnumberofvotesentitledtobecastbyallMembersofCompanyentitledtovoteatsuchmeetingorsuchgreaternumberasmayberequiredbytheAct,theArticlesortheAgreementfortheparticularmatterunderconsideration.UpontheoccurrenceofaDisassociationEvent(asdefinedherein),aFormerMembershallnotbeentitledtoanyvoteindeterminingwhetherCompanyshallpurchasetheinterestofsuchFormerMemberaspermittedinSubparagraph8.7Bhereof.Also,anyassigneeofaMember'sInterestshallnotbeentitledtovoteorparticipateonanymattersatanymeetingunlesssuchassigneebecomeasubstituteMemberasprovidedinParagraph7.2hereof.E.TelephonicParticipationbyMembersatMeetingsofMembersAnyorallMembersmayparticipateinanyannualorspecialMembers’meetingby,orthroughtheuseof,anymeansofcommunicationbywhichallMembersparticipatingmaysimultaneouslyheareachotherduringthemeeting.AMembersoparticipatingisdeemedtobepresentinpersonatthemeetingofMembers.F.AppointmentofChairandSecretaryforMeetingsofMembersAtanyannualorspecialmeetingofMemberstheManagersshallappointapersontopresideaschairatthemeetingandapersontoactasSecretaryofthemeeting.TheSecretaryofthemeetingshallprepareminutesofthemeeting,whichshallbeplacedintheminutebooksofCompany.G.ConsentbyMembersInlieuofMeetingsofMembersSubjecttotheapplicablelawsofthestateoforganization,anyactionrequiredorpermittedtobetakenataMembers’meetingmaybetakenwithoutameetingiftheactionistakenbyalloftheMembersentitledtovoteontheaction.Theactionmustbeevidencedbyoneormorewrittenconsentsdescribingtheactiontobetaken,signedbyalltheMembersentitledtovoteontheaction,anddeliveredtoCompanyforinclusionintheminutes.TherecorddatefordeterminingMembersentitledtotakeactionwithoutameetingisthe?rstdateaMembersignstheconsenttosuchaction.ARTICLEIV .CAPITALACCOUNTS4.1CAPITALACCOUNTFOREACHMEMBERManagersshallmaintainaseparateCapitalAccountasdefinedinsimplifiedforminParagraph4.2belowforeachMemberstrictlyinaccordancewiththerequirementsofCodeSection704(b)andapplicableregulationspromulgatedthereunder.MembersintendthattheCapitalAccountsofMembersbemaintained 16
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 163 of 204 strictlyinaccordancewiththerulesofTreasuryRegulationsSection1.704—1(b)(2)(iv),asamendedfromtimetotime.Inthisconnection,totheextenttheresultsdeterminedunderaliteralapplicationofthisParagraph4.1varyfromtheresultsthatwouldbeobtainableundertherulesdescribedinTreasuryRegulationsSection1.704-l(b)(2)(iv),therulessetforthinTreasuryRegulationsSection1.704-1(b)(2)(iv)shallbeusedandgovernthemaintenanceofcapitalaccountsundertheAgreement.4.2SIMPLIFIEDDESCRIPTIONOFCAPITALACCOUNTDETERMINATIONSubjecttotheotherparagraphsintheAgreement,“CapitalAccount”generallymeans:TheamountofmoneycontributedbyMembertoCompany,increased(credited)by:(i)ThefairmarketvalueofpropertyotherthanmoneycontributedbyMembertoCompanyasdeterminedbythecontributingMemberandCompany,and(ii)TheNetPro?tsallocatedtoMember,and(iii)TheamountofanyliabilitiesofCompanyassumedbyMemberorwhicharesecuredbypropertydistributedtoMemberbyCompany,anddecreased(debited)by:(i) TheamountofmoneydistributedtoMember,(ii)ThefairmarketvalueofpropertydistributedtoMemberbyCompanyasdeterminedbyrecipientMemberandCompany,(iii)TheMember'sshareofexpendituresofCompanydescribedinCodeSection705(a)(2)(B)(including,forthispurpose,losseswhicharenondeductibleunderCodeSection267(a)(1)orSection707(b),(iv)TheMember'sshareofamountspaidorincurredbyCompanytoorganizeCompanyortopromotethesaleof(ortosell)aninterestinCompany(excepttotheextentproperlyamortizableforincometaxpurposes),(V)TheNetLossesallocatedtoMember,and(vi)TheamountofanyliabilitiesMemberassumedbyCompanyorsecuredbypropertycontributedbyMemberofCompany.4.3CAPITALACCOUNTADJUSTMENTSFORSPECIALEVENTSA.SuccessiontoCapitalAccountIntheeventalloraportionofaMembershipInterestistransferredinaccordancewiththetermsoftheAgreement,thetransfereeshallsucceedtotheCapitalAccountofthetransferortotheextentitrelatestothetransferredinterest.B.AssumptionofLiability
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 164 of 204 AnassumptionofunsecuredliabilitybyCompanyshallbetreatedasadistributionofmoneytoMembers.AnassumptionoftheunsecuredliabilityofCompanybyaMembershallbetreatedasacashcontributiontoCompany.Indeterminingtheamountofanyliabilityforthispurpose,thereshallbetakenintoaccountCodeSection752(c)andanyotherapplicableprovisionsoftheCodeandRegulations.C.AdjustmentforNoncashDistributionIntheeventthatassetsofCompanyotherthancasharedistributedinkindtoaMember,CapitalAccountsshallbeadjustedforthehypothetical“book”gainorlossthatwouldhavebeenrealizedbyCompanyifthedistributedassetshadbeensoldfortheirfairmarketvaluesinacashsale(inordertore?ectunrealizedgainorloss).D.AdjustmenttoFairMarketUponTransferorAcquisitionofInterestCapitalAccountsshallbeadjustedtore?ectfairmarketvalueofallpropertiesintheeventofacquisitionofMembershipInterestbyanexistingornewMember.E.AdjustmentforConstructiveTenninationofCompanyCapitalAccountsalsoshallbeadjustedupontheconstructiveterminationofCompanyasprovidedunderCodeSection708inaccordancewiththemethodsetforthintheimmediatelyprecedingparagraph(asrequiredbyTreasuryRegulationsSection1.704-1(b)(2)(iv)(b).F.AdjustmentforRecaptureofCertainCreditsCapitalAccountsshallbeadjustedappropriatelyonaccountofinvestmenttaxcreditandinvestmenttaxcreditrecaptureinaccordancewiththeprinciplesofCodeSection48(q).4.4POWERTOMODIFYCAPITALACCOUNTSTOCOMPLYWITHTAXREGULATIONSTheforegoingprovisionsandtheotherprovisionsoftheAgreementrelatingtothemaintenanceofCapitalAccountsareintendedtocomplywithTreasuryRegulationsSection1.704-l(b)(2)(iv),andshallbeinterpretedandappliedinamannerconsistentwithsuchRegulations.IntheeventManagersorMembersactingasManagersdeterminethatitisnecessarytomodifythemannerinwhichtheCapitalAccountsarecomputedinordertocomplywithsuchRegulationsandtore?ecttheagreeduponallocationofthedistributionofcash,Managersmaymakesuchmodification,providedthatitisnotlikelytohaveamaterialeffectontheamountsdistributabletoanyMemberuponthedissolutionofCompany.ManagersalsoshallmakeanyappropriatemodificationsintheeventunanticipatedeventsoccurthatmightotherwisecausetheAgreementnottocomplywithTreasuryRegulationsSection1.704-1(b)(2)(iv).4.5MAINTENANCEOFINCOME(DRAWING)ACCOUNTSAseparateindividualincomeaccountshallbemaintainedforeachMember.Attheendofeach?scalyear,eachMember'sshareoftheNetProfitsandNetLossesofCompanyshallbecreditedordebitedto,andhis/herwithdrawalsduringthe?scalyeardeductedfrom,his/herincomeaccount.A?ersuchamountshavebeencreditedordebitedtoanddeductedfromtheincomeaccountofaMember,anybalanceorde?citremaininginsuchaccountshallbetransferredtoorchargedagainsttheindividualcapitalaccountofsuchMember.
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 165 of 204
4.6SUCCESSIONTOCAPITALACCOUNTSBYTRANSFEREEOFINTEREST
IntheeventanyinterestinCompanyistransferredinaccordancewiththetermsoftheAgreement,thetransfereeshallsucceedtotheCapitalAccountofthetransferortotheextentitrelatestothetransferredinterest.ARTICLEV .ALLOCATIONSOFNETPROFITSANDNETLOSSESANDDISTRIBUTIONS
5.1ALLOCATIONOFNETPROFITSANDNETLOSSESTheallocationsofNetPro?ts,income,gains,NetLosses,anddeductionssetforthintheAgreementareintendedtocomplystrictlywithTreasuryRegulationsSection1.704-1(b),TreasuryRegulationsSection1.704-1T(b)(4)(iv),andTreasuryRegulationsSection1.704-2,andareintendedtohave“substantialeconomiceffect”withinthemeaningofthoseRegulations.A.AllocationofNetPro?tsExceptasotherwiseprovidedelsewhereundertheAgreementandafter?rstgivingeffecttothespecialallocationsinSubparagraphs5.1.C.through5.l.L.,NetPro?tsforany?scalyearshallbeallocatedtoeachMemberinaccordancewithhis,heroritsPercentageInterestinNetPro?tsassetforthinExhibitB.SubjecttoanylimitationsdescribedelsewhereintheAgreementincludingbutnotlimitedtoSubparagraphs5.1.M.and5.1.N.,theaboveallocationofNetPro?tsmaybemodi?edbysubsequentagreementtoconformtoadjustmentsmadetothePercentageInterestinNetPro?tsbecauseofloansconvertedtoCapitalContributions,anydistributiormofcashandanyliquidatingdistribution.IfaMember'sPercentageInterestinNetPro?tsisnotthesamethroughoutagiven?scalyear,theManagersshalldeterminetheallocationofNetPro?tsbytakingintoaccountthisvaryingPercentageInterestduringtheyearbutsuchdeterminationshallbeinconformitywiththerequirementsofCodeSection706(d)andtheregulationsthereunder.“NetProfits”referstoallitemsofincome(includingallitemsofgainandincludingincomeexemptfromtax)asproperlydetemiinedfor“bookpurposes”.NetPro?tsshallbedeterminedbasedonthe“bookvalue”oftheassetsofCompanyassetforthonthebooksofCompanyinaccordancewiththeprinciplesofRegulationsSection1.704-1(b)(2)(iv)(g).OtherwiseNetIncomeandlossshallbedeterminedstrictlyinaccordancewithFederalincometaxprinciples(includingrulesgoverningdepreciationandamortization),appliedhypotheticallybasedonvaluesofCompanyassetsassetforthonthebooksofCompany.B.AllocationofNetLossesExceptasotherwiseprovidedundertheAgreementanda?ergivingeffecttothespecialallocationsinSubparagraphs5.1.C.through5.1.L.,NetLossesforany?scalyearshallbeallocatedtoeachMemberaccordancewithhis,heroritsPercentageInterestinNetLossessetforthinExhibitB.SubjecttoanylimitationsdescribedelsewhereintheAgreementincludingbutnotlimitedtoSubparagraphs5.1.M.and5.l.N.,theaboveallocationofNetLossesmaybemodi?edbysubsequentagreementtoconformtoadjustmentsmadetothePercentageInterestinNetLossesbecauseofloansconvertedtoCapitalContributions,anydistributionsofcashandanyliquidationdistributions.IfaMember'sPercentageInterestinNetLossesisnotthesamethroughoutagiven?scalyear,theManagersshalldeterminetheallocationofNetLossestotheMemberbytakingintoaccounthis/hervaryingPercentageInterestinNetLossesduring 19l*/
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 166 of 204 theyearbutsuchdeterminationshallbeinconformitywiththerequirementsofCodeSection706(d)andtheregulationsthereunder.“NetLosses”referstoallitemsofloss(includingdeductions)asproperlydeterminedfor“bookpurposes”.NetLossesshallbedeterminedbasedonthevalueoftheassetsofCompanyassetforthonthebooksofCompanyinaccordancewiththeprinciplesofTreasuryRegulationsSection1.704—l(b)(2)(iv)(g).Othenavise,NetLossesshallbedeterminedstrictlyinaccordancewithfederalincometaxprinciples(includingrulesgoverningdepreciationandamortization)appliedhypotheticallybasedonvaluesofCompanyassetsassetforthonthebooksofCompany..AllocationofCompanyMinimumGainNotwithstandinganyotherprovisionoftheAgreement,ifthereisanetdecreaseinCompanyMinimumGainforaCompanytaxableyear,theneachMembershallbeallocateditemsofincomeandgainforsuchyear(and,ifnecessary,forsubsequentyears)inproportionto,andtotheextentof,anamountequaltothegreaterof(a)theportionofsuchMember'sshareofthenetdecreaseinCompanyMinimumGainduringsuchyearthatisallocabletothedispositionofCompanypropertysubjecttoonenormoreNonrecourseLiabilitiesofCompanyand(b)thede?citbalanceinsuchMember'scapitalaccountattheendofsuchyear.SuchallocationsshallbemadebeforeanyotherallocationofCompanyitemsfortheyear.ForthepurposeofthisParagraph5.1,thebalanceinaMembers’capitalaccountattheendofsuchyearshallbedeterminedwiththeadjustmentsprescribedbyTreasuryRegulationsSection1.704-1T(b)(4)(iv)(e)(2).SuchallocationsshallbemadeinaccordancewiththeprovisionsofTreasuryRegulationsSection1.704—lT(b)(4)(iv)(e).CompanyMinimumGainshallbedefinedanddeterminedinaccordancewithTreasuryRegulationsSection1.704-2(d)..AllocationofMember'sShareofMinimumGainNotwithstandinganyotherprovisionoftheAgreement,ifthereisanetdecreaseduringaCompanytaxableyearintheMember'sShareofMinimumGain,thenanyMemberwithashareoftheMinimumGainatthebeginningofsuchyearshallbeallocateditemsofCompanyincomeandgainforsuchyear(and,ifnecessary,subsequentyears)inproportionto,andtotheextentofanamountequaltothegreaterof(a)theportionofsuchMember'sshareofthenetdecreaseintheMinimumGainthatisallocabletothedispositionofCompanypropertysubjecttosuchMember'sNonrecourseDebt,and(b)thede?citbalanceinsuchMember'scapitalaccountattheendofsuchyear.TheitemsofCompanyincomeandgainallocatedbythisParagraph5.1shallnotincludeanyitemsofincomeorgainallocatedpursuanttotheParagraphabove.TheallocationsunderthisParagraph5.1shallbemadebeforeanyotherallocation(exceptanyallocationsmadepursuanttothisParagraph5.1above)ofCompanyitemsfortheyear.ForthepurposeofthisParagraph5.1,thebalanceinaMember'scapitalaccountattheendofsuchyearshallbedeterminedwiththeadjustmentsprescribedby,andtheallocationshereundershallbemadeinaccordancewith,theprovisionsofTreasuryRegulationsSection1.704-1T(b)(4)(iv)(h)(4).Member'sshareofMinimumGainshallbedefinedanddetemiinedinaccordancewithTreasuryRegulationsSection1.704-2(d)..AllocationofNetPro?tsandGainsUnderQuali?edIncomeOffsetItemsofNetPro?tsandgainshallbespeciallyallocatedtoeachMemberinanamountandmannersufficienttoeliminate,totheextentrequiredbytheRegulations,theAdjustedCapitalAccountDeficitoftheMemberdeterminedunderTreasuryRegulationsSection1.704- 20
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 167 of 204 1(b)(2)(ii)(d)asquicklyaspossibleintheeventanyMemberunexpectedlyreceivesany(i)distributionsthat,asoftheendofsuchyear,reasonablyareexpectedtobemadetoaMembertotheextenttheyexceedoffsettingincreasestosuchMember'scapitalaccountthatreasonablyareexpectedtooccurduring(orpriorto)Companytaxableyearsinwhichsuchdistributionsreasonablyareexpectedtobemade(otherthanincreasespursuanttoaminimumgainchargebackoftheAgreement)or(ii)adjustments,allocations,ordistributionsdescribedinTreasuryRegulationsSection1.704-l(b)(2)(ii)(d)(4),(5)or(6).Thissubparagraph5.lEisintendedtocomplywithTreasuryRegulationSection1.704-1(b)(2)(ii)(d)andshouldbesointerpreted.AllocationofNonrecourseDeductionsCompanyNonrecourseDeductionsshallbeallocatedtotheMember,ifany,thatbearstheeconomicriskoflossfortheMemberNonrecourseDebttowhichtheMemberNonrecourseDeductionsareattributable.IfmorethanoneMemberbearstheeconomicriskoflossforaMemberNonrecourseDebt,theNonrecourseDeductionattributabletosuchMemberNonrecourseDebtshallbeallocatedamongsuchMembersinaccordancewiththeratiosinwhichtheMemberssharetheeconomicriskoflossforsuchNonrecourseDebt.Otherwise,NonrecourseDeductionsshallbeallocatedinthesamemanneras,andbesubjecttothesamerestrictionsimposeduponNetLosses.MemberNonrecourseDebtshallbede?nedanddeterminedinaccordancewithTreasuryRegulationsSection1.704-2(b)(4).CompanyNonrecourseDeductionsshallbedefinedanddeterminedinaccordancewithTreasuryRegulationsSection1.704-2(b)and(c)..AllocationofIncome,GainsandLossesRelatedtoContributedPropertyInaccordancewithCodeSection704(c)andtheTreasuryRegulationsthereunder,income,gain,loss,anddeductionwithrespecttoanypropertycontributedtothecapitalofCompanyshall,solelyfortaxpurposes,beallocatedamongtheMemberssoastotakeaccountofanyVariationbetweentheadjustedbasisofsuchpropertytoCompanyforfederalincometaxpurposesanditsinitialgrossfairmarketvalue,IntheeventtheinitialgrossfairmarketvalueofanyCompanyassetisadjusted,subsequentallocationsofincome,gain,loss,anddeductionwithrespecttosuchassetshalltakeaccountofanyvariationbetweentheadjustedbasisofsuchassetforfederalincometaxpurposesanditsinitialgrossfairmarketvalueunderoneofthemethodsallowedunderCodeSection704(c)andtheRegulationsthereunder.AnyelectionsorotherdecisionsrelatingtosuchallocationsshallbemadebytheManagersinanymannerthatreasonablyre?ectsthepurposeandintentionoftheAgreement.AllocationspursuanttothisSubparagraph5.1Garesolelyforpurposesoffederal,state,andlocaltaxesandshallnotaffect,orinanywaybetakenintoaccountincomputing,anyMember'sCapitalAccountorshareofNetPro?ts,NetLosses,orotheritemsordistributionspursuanttoanyotherprovisionofAgreement..AllocationofGainandLossfromSaleorOtherDispositionofPropertyNotRevaluedIf,inconnectionwiththeadmissionofanadditionalMembertoCompanyortheliquidationofaMember'sInterestinCompany,CompanypropertyisnotrevaluedpursuanttoTreasuryRegulationsSection1.704-l(b)(2)(iv)(f)andtheMembers‘capitalaccountsarenotadjustedaccordingly,then,uponanysubsequentsaleorotherdispositionofCompanyproperty,gainorlossrecognizeduponthesaleorotherdispositionshallbeallocatedamongtheMemberssoastotakeintoaccountthevariationbetweentheadjustedbasisofsuchpropertyanditsfairmarketvalueasofthedatetheadditionalMemberwasadmittedorthedatetheMember'sInterestwasliquidated,asthecasemaybe,inthesamemannerasunderCodeSection704(c).
PL,M721
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 168 of 204 AllocationofGainsandLossesRelatedtoAdjustmentsinTaxBasisTotheextentanadjustmenttotheadjustedtaxbasisofanyCompanyassetpursuanttoCodeSections734(b)or743(b)isrequired,pursuanttoTreasuryRegulationsSection1.704-l(b)(2)(iv)(m),tobetakenintoaccountdeterminingCapitalAccounts,theamountofsuchadjustmenttotheCapitalAccountsshallbetreatedasanitemofgain(iftheadjustmentincreasesthebasisoftheasset)orloss(iftheadjustmentdecreasessuchbasis),andsuchgainorlossshallbespeciallyallocatedtotheMembersinamannerconsistentwiththemannerinwhichtheirCapitalAccountsarerequiredtobeadjustedpursuanttosuchSectionoftheRegulations.AllocationtoAvoidAdjustedCapitalAccountDe?citNotwithstandinganyotherprovisionofthisArticle,noMembershallreceiveanallocationofNetLosses,netcapitallosses,NonrecourseDeductionsasde?nedinTreasuryRegulations1.704-2(b)and(c),oranyotheritemoflossordeductionthatwouldcreateorincreaseanAdjustedCapitalAccountDe?citoftheMember.Anyloss,oritemthereof,thatcarmotbeallocatedtoaMemberasaresultoftheforegoinglimitationshallbeallocatedtoallMembers.Anyloss,oritemthereof,allocatedtoallMemberspursuanttotheprecedingsentenceshallbetakenintoaccountincomputingsubsequentallocationsofNetPro?tsorLossesorNetCapitalGainorLosssothatthenetamountofanyitemssoallocatedandthepro?ts,lossesandallotheritemsallocatedtoeachMembershall,totheextentpossible,beequaltothenetamountthatwouldhavebeenallocatedtoeachMemberiftheallocationsrequiredbytheprecedingsentencehadnotbeenmade..AllocationofGrossIncometoRestoreCapitalAccountDe?citIntheeventanyMemberhasadistributioninhis/herCapitalAccountattheendofany?scalyearwhichisinexcessofthesumof(i)theamounttheMemberisobligatedtorestorepursuanttoanyprovisionoftheAgreement,and(ii)theamounttheMemberisdeemedtobeobligatedtorestorepursuanttothepenultimatesentencesofSection1.704-2(g)(l)and1.704-2(i)(5)oftheTreasuryRegulations,suchMembershallbespeciallyallocateditemsofincomeandgainintheamountofsuchexcessasquicklyaspossible,providedthatanallocationpursuanttothissubparagraphshallbemadeonlyifandtotheextentthatsuchMemberwouldhaveaCapitalAccountwithade?citbalanceinexcessofsuchsuma?erallotherallocationsprovidedforinthisParagraph5.1havebeenmadeasifSubparagraph5.1.Erelatingtoallocationsunderaquali?edincomeoffsethereofandthissubparagraphwerenotintheAgreement..AllocationofCapitalEventAdjustmentsandSubsequentEffectsTotheextentthegrossfairmarketvalueofanyassetofCompanyisincreasedordecreasedfora“capitalevent”asdescribedinParagraph4.3relatingtoCapitalAccountadjustmentsforspecialevents,anyresultingbookgainorlossshallbeallocatedasrequiredforcapitalaccountpurposesandsubsequentallocationsofincome,gain,lossordeductionwithrespecttosuchassetshalltakeintoaccountanydifferencebetweentheadjustedbasisofsuchassetforfederalincometaxpurposesanditsgrossfairmarketvalue..AllocationofNetPro?tsandNetLossesConsistentwithDistributionsNotwithstandinganyotherprovisionoftheAgreement,theNetPro?tsandNetLossesshallbeallocatedinamannerthatisconsistentwiththerequirementsfordistributionsofcashdescribed 22
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 169 of 204 elsewhereintheAgreement,therequirementsfordistributionofassetsofCompanyuponitsdissolutionandwindingupstrictlyinaccordancewithcapitalaccountbalancesdeterminedinaccordancewiththeseproceduresdescribedbelowandtherequirementsfortheallocationstocomplywithapplicableRegulationsunderCodeSections704(b)and704(c)..AllocationofIncome,Gain,Losses,andDeductionstoComplywithRegulationsandIntentionsofMembersIftheallocationsdescribedabovearenotconsistentwiththemannerinwhichMembersintendtodivideCompanydistributions,theManagersareherebyauthorizedtodivideandallocateNetPro?ts,NetLosses,andotheritemsamongMemberssoastopreventtheallocationsfromdistortingthemannerinwhichtheMembersintendtheCompanydistributionstobedividedamongMemberspursuanttothisArticleV ,butinamannerconsistentwiththerequirementsofTreasuryRegulationsSection1.704-1(b)(2)(v).Ingeneral,MembersanticipatethatthisdivisionswillbeaccomplishedbyspeciallyallocatingotherNetPro?ts,NetLosses,anditemsofincome,gain,loss,anddeductionamongtheMemberssothatthenetamountoftheallocationsandsuchspecialallocationstoeachsuchMemberiszero.If,forwhateverreason,ManagersdeterminethattheallocationprovisionsoftheAgreementareunlikelytoberespectedforfederalincometaxpurposes,theManagersaregrantedtheauthoritytoamendtheallocationprovisionsoftheAgreement,totheminimumextentnecessarytoeffecttheplanofallocationsanddistributionsprovidedintheAgreement.Further,Managersshallhavethediscretiontoadoptandreviserules,conventionsandproceduresastheybelieveappropriateinanyreasonablemannerwithrespecttotheadmissionofMemberstore?ecttheMembers‘InterestsinNetPro?ts,NetLossesandotheritemsinCompanyatthecloseoftheyear..OrderforApplyingAllocationProvisionsTheallocationprovisionsofthisParagraph5.1shallbeappliedinthefollowingorderfrom?rsttolast:(i) AllocationofCompanyminimumgainasrequiredbySubparagraphC;(ii)AllocationofMember'sshareofMinimumGainasrequiredbySubparagraphD;(iii)AllocationofNetPro?tsandgainsunderquali?edincomeoffsetasrequiredbySubparagraphE;(iv)AllocationofNonrecourseDeductionsasrequiredbySubparagraphF;(v)Allocationofincome,gainsorlossesrelatedtocontributedpropertyasrequiredbySubparagraphG;(vi)AllocationofgainandlossfromsaleorotherdispositionofpropertynotrevaluedasrequiredbySubparagraphH;(vii)AllocationofNetPro?tsasrequiredbySubparagraphA;(viii)AllocationofNetLossesasrequiredbySubparagraphB; ,LL__230/
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 170 of 204 (ix)AllocationofgainsandlossesrelatedtoadjustmentintaxbasisasrequiredbySubparagraphI;(x)AllocationstoavoidAdjustedCapitalAccountDe?citasrequiredbySubparagraphJ;(xi)Allocationofgrossincometorestorecapitalaccountde?citasrequiredbySubparagraphK;(xii)AllocationofcapitalaccountadjustmentsandsubsequenteffectsasrequiredbySubparagraphL;(xiii)AllocationofNetPro?tsandNetLossesconsistentwithdistributionsasrequiredbySubparagraphM;(xiv)AllocationofNetPro?ts,incomegains,NetLossesanddeductionstocomplywithregulationsandintentionsofMembersasrequiredbySubparagraphN.5.2DISTRIBUTIONSOFNETCASHFLOWBYCOMPANYSubjecttoanylimitationsfoundelsewhereintheAgreementandunderlawincludingtherequirementsoftheActthattheassetsofCompanya?erthedistributionbeinexcessofallliabilitiesexceptforliabilitiesowedtoMembersfortheirCapitalContributions,Managersmay,butarenotrequiredtodoso,distributeanyNetCashFlowasdefinedbelowamongMembersinaccordancewiththeirrespectivePercentageInterestinNetPro?tssetforthinExhibitB,butonlytothosepersonsorentitiesrecognizedonthebooksofCompanyasMembersorasassigneesofinterestsonthedayofthedistribution.Withrespecttoany?scalperiod,NetCashFlowmeansallcashrevenuesofCompanyduringthatperiod(includinginterestorotherearningsonthefundsofCompany),lessthesumofreservesforthefollowingamounts:(i) AllpaymentsofprincipalandinterestonanyindebtednessofCompany;(ii)AllpaymentsforcarryingcostsoroperatingcostsincurredincidenttotheoperationofthebusinessofCompanyandinaccordancewiththetermsoftheAgreement;and(iii)ReasonableworkingcapitalfundsforcontingenciesincidenttotheconductofthebusinessofCompany.5.3ALLOCATIONSOFNETPROFITSANDLOSSESANDDISTRIBUTIONSINRESPECTOFTRANSFERREDMEMBERSHIPINTERESTIfanyInterestistransferred,orisincreasedordecreasedbyreasonoftheadmissionofanewMemberorotherwise,duringany?scalyearofCompany,eachitemofincome,gain,loss,deduction,orcreditofCompanyforsuch?scalyearshallbeassignedproratatoeachdayintheparticularperiodofsuch?scalyeartowhichsuchitemisattributable(i.e.,thedayonorduringwhichitisaccruedorotherwiseincurred)andtheamountofeachsuchitemsoassignedtoanysuchdayshallbeallocatedtotheMemberbaseduponitsrespectiveInterestatthecloseofsuchday.Forthepurposeofaccountingconvenienceandsimplicity,Companyshalltreatatransferof,oranincreaseordecreasein,anInterestinCompanywhichoccursatanytimeduringasemi-monthlyperiod(commencingwiththesen1i—monthlyperiodincludingthedatehereof)ashavingbeenconsummatedonthefirstdayofsuchsemi-monthlyperiod,regardlessofwhenduringsuchsemi-monthlyperiodsuchtransfer, 24
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 171 of 204 increase,ordecreaseactuallyoccurs(i.e.,salesanddispositionsmadeduringthe?rst15daysoranymonthwillbedeemedtohavebeenmadeonthe16thdayofthemonth).Notwithstandinganyprovisionabovetothecontrary,gainorlossofCompanyrealizedinconnectionwithasaleorotherdispositionofanyoftheassetsofCompanyshallbeallocatedsolelytothepartiesowningInterestsinCompanyasofthedatesuchsaleorotherdispositionoccurs.
5.4DISTRIBUTIONSOFASSETSDistributionsofassetswithrespectofanInterestinCompanyshallbemadeonlytotheMemberswho,accordingtothebooksandrecordsofCompany,aretheholdersofrecordoftheinterestsinrespectofwhichsuchdistributionsaremadeontheactualdateofdistribution.NeitherCompanynoranyMembershallincuranyliabilityformakingdistributionsinaccordancewiththeprovisionsoftheprecedingsentence,whetherornotCompanyortheMemberhasknowledgeornoticeofanytransferorpurportedtransferofownershipofInterestinCompanywhichhasnotbeenapprovedbyunanimousvoteofMembers.5.5LINIITATIONSONRIGHTSTODISTRIBUTIONSNoMembershallbeentitledtoanydistributionfromCompanyuntilCompanyactuallymakesthedistribution.UnlessotherwiserequiredbytheAct,noMembershallhavetherighttodemandthatanydistributionbepaidinanyformotherthancash.5.6INIPAIRMENTOFCAPITALANDLIIVIITATIONSONDIVISIONANDDISTRIBUTIONOFNETPROFITSCompanymay,fromtimetotime,dividethenetpro?tsofitsbusinessanddistributethesametotheMembersofCompanyuponthebasisstipulatedinthisArticleV;providedthata?erdistributionismade,theassetsofCompanyareinexcessofallliabilitiesofCompanyexceptliabilitiestoMembersonaccountoftheirCapitalContributionsa?ergivingeffecttoalldistributions,revaluationsandallocations.5.7ORDEROFAPPLYINGDISTRIBUTIONSSubjecttoParagraph5.5relatingtolimitationsonrightstodistributionsofassetsbyCompany,andParagraph5.6relatingtoimpairmentofcapitalandlimitationsondivisionanddistributionofnetpro?tsandParagraph8.6relatingtolimitationsonpaymentsmadeindissolution,theprovisionsoftheAgreementrelatingtocashdistributionshallbeappliedinthefollowingorder:(i) DistributionofNetCashFlowaspermittedunderParagraph5.2;(ii)DistributionofcashfromthePurchaseofaMember'sInterestasprovidedinParagraph9.2;(iii)DistributionofcashfrompaymentofliabilitiesupondissolutionofCompanyasprovidedinsubparagraph8.7B.InexercisinganydiscretionpermittedundertheAgreementconcerningthedistributionofassets,theManagersshallnotberequiredtomakeanydistributionunderagivenparagraphoftheAgreementassignedahigherorderbeforemakingadistributionunderalowerpriorityparagraphoftheAgreement. pt’L25/
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 172 of 204 ARTICLEVI.ACCOUNTING,RECORDS,ANDREPORTING6.1ACCOUNTINGDECISIONSANDRELIANCEONOTHERSManagersorMembersasManagersshallmakealldecisionsastoaccountingmatters,exceptasotherwisespeci?callysetforthherein.ManagersmayrelyupontheadviceoftheindependentaccountantsoftheCompanyastowhethersuchdecisionsareinaccordancewithaccountingmethodsfollowedforfederalincometaxpurposes.6.2MAINTENANCEOFBOOKSANDRECORDSANDACCOUNTINGManagersorMembersasManagersshallcausethebooksandrecordsofCompanytobekept,andthefinancialpositionandtheresultsofitsoperationsrecorded,inaccordancewiththeaccountingmethodsfollowedforfederalincometaxpurposes.ThebooksandrecordsofCompanyshallre?ectallCompanytransactionsandshallbeappropriateandadequateforCompany'sbusiness.The?scalyearofCompanyfor?nancialreportingandforfederalincometaxpurposesshallbethecalendaryear.6.3PROVISIONOFACCESSFORMEMBERSTOACCOUNTINGRECORDSManagersorMembersasManagersshallcauseallbooksandrecordsofCompanytobemaintainedatanyof?ceofCompanyoratCompany'sprincipalplaceofbusiness,andeachMemberorholderofanEconomicInterest,andhis/herdulyauthorizedrepresentative,shallhaveaccesstothematsuchof?ceofCompanyandtherighttoinspectandcopythematreasonabletimes.6.4DELIVERYOFANNUALTAXINFORMATIONTOMEMBERSManagersorMembersasManagersshallusetheirbesteffortstodelivertoeachMemberwithin90daysaftertheendofeach?scalyearallinformationnecessaryforthepreparationofsuchMember'sfederalincometaxreturn.Companyshallalsouseitsbesteffortstoprepare,within120daysaftertheendofeach?scalyear,a?nancialreportofCompanyforsuch?scalyear,containingabalancesheetasofthelastdayoftheyearthenended,anincomestatementfortheyearthenended,astatementofcash?ows,andastatementofreconciliationoftheCapitalAccountsofMembers.6.5HANDLINGOFTAXMATTERSFORCOMPANYOneofthepersonsservingasManagerwhoisalsoaMember,orintheeventnoManagerisaMember,oneoftheMembersshallbedesignatedas“TaxMattersPartner”(asdefinedinCodeSection6231),torepresentCompany(atCompany'sexpense)inconnectionwithallexaminationsofCompany'saffairsbytaxauthorities,includingresultingjudicialandadministrativeproceedings,andtoexpendCompanyfundsforprofessionalservicesandcostsassociatedtherewith.Inhis/hercapacityas“TaxMattersPartner”,thedesignatedMembershalloverseeCompanytaxaffairsintheoverallbestinterestsofCompany.UnlesstheMembersdesignateanotherMembertobe“TaxMattersPartner,”theManagerappointedtotheof?ceofPresidentshallbethe“TaxMattersPartner,”providedtheappointeeisaMember.6.6FEDERALINCOMETAXELECTIONSMADEBYMANAGERSORMEMBERSManagersonbehalfofCompanymaymakeallelectionsforfederalincometaxpurposes,includingbutnotlimitedto,thefollowing:A.AccountingPeriod 26
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 173 of 204 ManagersorMembersasManagersmayelectanyannualaccountingperiodforCompanypermittedundertheCode.B.AccountingMethodFor?nancialreportingpurposes,ManagersorMembersasManagersmayelectthatthebooksandrecordsofCompanyshallbekeptaccordingtoanymethodofaccountingappliedinaconsistentmannerthatshallre?ectalltransactionsofCompanyandbeappropriateandadequateforthepurposesofCompany.Totheextentpermittedbyapplicablelawandregulations,ManagersmayelecttouseanaccelerateddepreciationmethodonanydepreciableunitoftheassetsofCompany;andC.AdjustmentofBasisofAssetsIncaseofatransferofallorpartoftheInterestofanyMember,ManagersorMembersactingasManagersonbehalfofCompanymayelect,pursuanttoCodeSections734,743,and754oftheCode,asamended(orcorrespondingprovisionsoffuturelaw)toadjustthebasisoftheassetsofCompany.6.7OBLIGATIONSOFMEMBERSTOREPORTALLOCATIONSONTAXRETURNSMembersareawareoftheincometaxconsequencesoftheallocationsmadebyArticleVoftheAgreementandherebyagreetobeboundbytheprovisionsofthisParagraph6.7inreportingtheirsharesofCompanyincomeandlossforfederalincometaxpurposes.6.8PERIODICFILINGSBYCOMPANYIfrequiredbytheAct,ManagersorMembersasManagersonbehalfofCompanyshall?lewiththeSecretaryofStateaperiodicstatement,report,listorregistration,asthecasemaybe,onaformprescribedbytheSecretaryofStateortheActandencloseanyrequired?lingfee.ThestatementrequiredtobefiledmustcontainalloftheinformationrequiredbytheAct.ARTICLEVII.WITHDRAW AL;TRANSFERANDASSIGNMENTOFINTERESTS7.1WITHDRAW ALPERMITTEDAMembermaywithdrawfromtheCompanyatanytimebygivingNoticeofwithdrawaltoallotherMembersatleast180calendardaysbeforetheeffectivedateofwithdrawal.WithdrawalshallnotreleaseaMemberfromanyobligationsandliabilitiesunderthisAgreementaccruedorincurredbeforetheeffectivedateofwithdrawal.AwithdrawingMembershalldivesttheMember’sentireMembershipInterestbeforetheeffectivedateofwithdrawalinaccordancewithandsubjecttotheprovisionsofArticleVII.7.2RESTRICTIONSONTRANSFERSANDASSIGNMENTSOFMEMBERSHIPINTERESTA.ExceptasexpresslyprovidedinthisAgreement,aMembershallnotTransferanypartoftheMember’sInterestintheCompany,whethernowownedorlateracquired,unless(i)theotherMembersthenholdingaSuperMajority-In-Interestapprovethetransferee’sadmissiontotheCompanyasaMemberonsuchTransferand(ii)iftheInteresttobesoldorexchanged,whenaddedtothetotalofallotherInterestssoldorexchangedintheprecedingtwelve(12)the NVb/27
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 174 of 204 Interesttobetransferred,whenaddedtothetotalofallotherMembershipIntereststransferredinthepreceding12months,willnotcausetheterminationoftheCompanyundertheCode.B.NoMembermayEncumberorpermitorsufferanyEncumbranceofalloranypartoftheMember’sInterestintheCompanyunlesssuchEncumbrancehasbeenapprovedinwritingbytheManager.SuchapprovalmaybegrantedorwithheldintheManager’ssolediscretion.C.AnyTransferorEncumbranceofaMembershipInterestwithoutsuchapprovalshallbevoid.NotwithstandinganyotherprovisionofthisAgreementtothecontrary,aMemberwhoisanaturalpersonmaytransferalloranyportionofhisorherInteresttoanyrevocabletrustcreatedforthebene?toftheMember,oranycombinationbetweenoramongtheMember,theMember’sspouse,andtheMember’sissue;providedthattheMemberretainsabene?cialinterestinthetrustandalloftheV otingInterestincludedinsuchInterest.AtransferofaMember’sbene?cialinterestinsuchtrust,orfailuretoretainsuchV otingInterest,shallbedeemedaTransferofanInterest.7.3RIGHTOFFIRSTREFUSALIfaMemberwishestotransferanyoralloftheMember’sInterestintheCompanyunderaBonaFideOffer(asde?nedbelow),theMembershallgiveNoticetoallotherMembersatleast30daysinadvanceoftheproposedsaleorTransfer,indicatingthetermsoftheBonaFideOfferandtheidentityoftheofferor.TheCompanyandtheotherMembersshallhavetheoptiontopurchasetheInterestproposedtobetransferredatthepriceandonthetermsprovidedinthisAgreement.IfthepricefortheInterestisotherthancash,thefairvalueindollarsofthepriceshallbeasestablishedingoodfaithbytheCompany.ForpurposesofthisAgreement,“BonaFideOffer”meansanofferinwritingsettingforthallrelevanttermsandconditionsofpurchasefromanofferorwhoisready,willing,andabletoconsummatethepurchaseandwhoisnotanAf?liateofthesellingMember.For30daysaftertheNoticeisgiven,theCompanyshallhavetherighttopurchasetheInterestoffered,onthetermsstatedintheNotice,forthelesserof(1)thepricestatedintheNotice(orthepriceplusthedollarvalueofnoncashconsideration,asthecasemaybe)and(2)thepricedeterminedundertheappraisalproceduressetforthinParagraph7.8.IftheCompanydoesnotexercisetherighttopurchasealloftheInterest,then,withrespecttotheportionoftheInterestthattheCompanydoesnotelecttopurchase,thatrightshallbegiventotheotherMembersforanadditional30-dayperiod,beginningonthedaythattheCompany’srighttopurchaseexpires.EachoftheotherMembersshallhavetherighttopurchase,onthesameterms,apartoftheinterestoftheofferingMemberintheproportionthattheMember’sPercentageInterestbearstothetotalPercentageInterestsofalloftheMemberswhochoosetoparticipateinthepurchase;provided,however,thattheCompanyandtheparticipatingMembersmaynot,intheaggregate,purchaselessthantheentireinteresttobesoldbytheofferingMember.IftheCompanyandtheotherMembersdonotexercisetheirrightstopurchasealloftheInterest,theofferingMembermay,within90daysfromthedatetheNoticeisgivenandonthetermsandconditionsstatedintheNotice,sellorexchangethatInteresttotheofferornamedintheNotice.UnlesstherequirementsofParagraph7.2aremet,thisSectionshallbecomeanAssigneeandshallbeentitledtoreceiveonlytheshareofPro?tsorothercompensationbywayofincomeandthereturnofCapitalContributiontowhichtheassigningMemberwouldhavebeenentitled. 28
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7.4TRIGGERINGEVENTSOnthehappeningofanyofthefollowingevents(“TriggeringEvents”)withrespecttoaMember,theCompanyandtheotherMembersshallhavetheoptiontopurchasetheMembershipInterestintheCompanyofsuchMember(“SellingMember”)atthepriceandonthetennsprovidedinParagraph7.8:
7.5 (1)Thedeath,mentalorphysicaldisability,bankruptcy,orwithdrawalofaMember,orthewindingupanddissolutionofacorporateMember,ormergerorothercorporatereorganizationofacorporateMemberasaresultofwhichthecorporateMemberdoesnotsurviveasanentity;providedthattheremainingMembershaveelectedtocontinuethebusinessoftheCompanyasprovidedinParagraph8.1.(2)ThefailureofaMembertomaketheMember’sCapitalContributionundertheprovisionsofArticleII.(3)Theoccurrenceofanyothereventthatis,orthatwouldcause,aTransferincontraventionofthisAgreement.EachMemberagreestopromptlygiveNoticeofaTriggeringEventtoallotherMembers.MARITALDISSOLUTIONORDEATHOFSPOUSENotwithstandinganyotherprovisionsofthisAgreement:(1)If,inconnectionwiththedivorceordissolutionofthemarriageofaMember,anycourtissuesadecreeororderthattransfers,con?rms,orawardsaMembershipInterest,oranyportionthereof,tothatMember’sspouse(an“Award”),then,notwithstandingthatsuchtransferwouldconstituteanunpermittedTransferunderthisAgreement,thatMembershallhavetherighttopurchasefromhisorherformerspousetheInterest,orportionthereof,thatwassotransferred,andsuchformerspouseshallselltheInterestorportionthereoftothatMemberatthepricesetforthbelowinParagraph7.8.IftheMemberhasfailedtoconsummatethepurchasewithin180daysafterthecourtaward(the“ExpirationDate”),theCompanyandtheotherMembersshallhavetheoptiontopurchasefromtheformerspousetheInterestorportionthereofunderParagraph7.6;providedthattheoptionperiodshallcommenceonthelaterof(a)thedayfollowingtheExpirationDateor(b)thedateofactualnoticeoftheAward.(2)If,byreasonofthedeathofaspouseofaMember,anyportionofaInterestistransferredtoaTransfereeotherthan(a)thatMemberor(b)atrustcreatedforthebene?tofthatMember(orforthebene?tofthatMemberandanycombinationbetweenoramongtheMemberandtheMember’sissue)inwhichtheMemberisthesoleTrusteeandtheMember,asTrusteeorindividually,possessesalloftheV otingInterestincludedinthatInterest,thentheMembershallhavetherighttopurchasetheInterestorportionthereoffromtheestateorothersuccessorofhisorherdeceasedspouseorTransfereeofsuchdeceasedspouse,andtheestate,successor,orTransfereeshallselltheInterestorportionthereofatthepricesetforthinParagraph7.8.IftheMemberhasfailedtoconsmrnnatethepurchasewithin180daysafterthedateofdeath(the“ExpirationDateafterDeat”),theCompanyandtheotherMembersshallhavetheoptiontopurchasefromtheestateorothersuccessorofthedeceasedspousetheInterestorportionthereofunderParagraph7.6;providedthattheoptionperiodshallcommenceonthelaterof(a)thedayfollowingtheExpirationDateafterDeathor(b)thedateofactualnoticeofthedeath.
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7.6PURCHASEOPTIONFOLLOWINGTRIGGERINGEVENTOnthelaterofthedateoftheNoticeorthereceiptofNoticebytheManagerandtheotherMembersascontemplatedbyParagraphs7.1,7.3and7.5,andonreceiptofactualnoticeofanyTriggeringEventasdeterminedingoodfaithbytheManager(thedateofsuchreceiptishereina?erreferredtoasthe“OptionDate”),theManagershallpromptlycauseaNoticeofthisoccurrenceoftheTriggeringEventtobesenttoallMembersandtheCompanyshallhavetheoption,foraperiodending30calendardaysfollowingthedeterminationofthepurchasepriceasprovidedinParagraph7.8,topurchasetheInterestintheCompanytowhichtheoptionrelates,atthepriceandonthetermssetforthinParagraph7.8,andtheotherMembers,proratainaccordancewiththeirpriorInterestsintheCompany,shallthenhavetheoption,foraperiodof30daysthereafter,topurchasetheInterestintheCompanynotpurchasedbytheCompany,onthesametermsandconditionsasapplytotheCompany.IfallotherMembersdonotelecttopurchasetheentireremainingInterestintheCompany,thentheMemberselectingtopurchaseshallhavetheright,proratainaccordancewiththeirpriorInterestintheCompany,topurchasetheadditionalInterestintheCompanyavailableforpurchase.ThetransfereeoftheInterestintheCompanythatisnotpurchasedshallholdsuchMembershipInterestintheCompanysubjecttoalloftheprovisionsofthisAgreement.7.7NONPARTICIPATIONOFINTERESTEDMEMBERNeithertheMemberwhoseinterestissubjecttopurchaseunderArticleVHnorsuchMember’sAf?liateshallparticipateinanyV oteordiscussionofanymatterpertainingtothedispositionoftheMember’sInterestintheCompanyunderthisAgreement.7.8OPTIONPURCHASEPRICEThepurchasepriceoftheInterestthatisthesubjectofanoptionunderParagraph7.6shallbethe“FairOptionPrice”oftheinterestasdeterminedunderthissection.“FairOptionPrice”meansthecashpricethatawillingbuyerwouldpaytoawillingsellerwhenneitherisactingundercompulsionandwhenbothhavereasonableknowledgeoftherelevantfactsontheOptionDate.Eachofthesellingandpurchasingpartiesshallusehis,her,oritsbesteffortstomutuallyagreeontheFairOptionPrice.Ifthepartiesareunabletosoagreewithin30daysoftheOptionDate,thesellingpartyshallappoint,within40daysoftheOptionDate,oneappraiser,andthepurchasingpartyshallappointwithin40daysoftheOptionDate,oneappraiser.Thetwoappraisersshallwithinaperiodof?veadditionaldays,agreeonandappointanadditionalappraiser.Thethreeappraisersshall,within60daysa?ertheappointmentofthethirdappraiser,determinetheFairOptionPriceoftheInterestinwritingandsubmittheirreporttoalltheparties.TheFairOptionPriceshallbedeterminedbydisregardingtheappraiser’svaluationthatdivergesthegreatestfromeachoftheothertwoappraisers’valuations,andthearithmeticmeanoftheremainingtwoappraisers’valuationsshallbetheFairOptionPrice.Eachpurchasingpartyshallpayfortheservicesoftheappraiserselectedbyit,plusonehalfofthefeechargedbythethirdappraiser,andonehalfofallothercostsrelatingtothedeterminationofFairOptionPrice.Theoptionpurchasepriceassodeterminedshallbepayableincash.7.9SUBSTITUTEDMEMBERExceptasexpresslypermittedunderParagraph7.2,aprospectivetransferee(otherthananexistingMember)ofaInterestmaybeadmittedasaMemberwithrespecttosuchInterest(“SubstitutedMember”)only(1)ontheV oteofamajorityininterestoftheotherMembersinfavoroftheprospectivetransferee’sadmissionasaMemberand(2)onsuchprospectivetransfereeexecutingacounterpartofthisAgreementasapartyhereto.AnyprospectivetransfereeofanInterestshallbedeemedanAssigneeand,therefore,theownerofonlyanEconomicInterestuntilsuchprospectivetransfereehasbeenadmittedasaSubstitutedMember.ExceptasotherwisepermittedintheAct,anysuchAssigneeshallbeentitledonlytoreceive 30
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 177 of 204 allocationsanddistributionsunderthisAgreementwithrespecttosuchInterestandshallhavenorighttoV oteorexerciseanyrightsofaMemberuntilsuchAssigneehasbeenadmittedasaSubstitutedMember.UntiltheAssigncebecomesaSubstitutedMember,theAssigningMemberwillcontinuetobeaMemberandtohavethepowertoexerciseanyrightsandpowersofaMemberunderthisAgreement,includingtherighttoV oteinproportiontothePercentageInterestthattheAssigningMemberwouldhavehadintheeventthattheassignmenthadnotbeenmade.7.10DUTIESOFSUBSTITUTEDMEMBERAnypersonadmittedtotheCompanyasaSubstitutedMembershallbesubjecttoalltheprovisionsofthisAgreementthatapplytotheMemberfromwhomtheInterestwasassigned,provided,however,thattheassigningMembershallnotbereleased?'omliabilitiesasaMembersolelyasaresultoftheassignment,bothwithrespecttoobligationstotheCompanyandtothirdparties,incurredpriortotheassignment.
7.10SECURITIESLAWTheinitialsaleofInterestsintheCompanytotheInitialMembershasnotbeenquali?edorregisteredunderthesecuritieslawsofanystate,includingDelaware,orregisteredundertheSecuritiesActof1933,inrelianceonexemptionsfromtheregistrationprovisionsofthoselaws.NotwithstandinganyotherprovisionofthisAgreement,Interestsmaynotbetransferredunlessregisteredorquali?edunderapplicablestateandfederalsecuritieslawunless,intheopinionoflegalcounselsatisfactorytotheCompany,suchquali?cationorregistrationisnotrequired.TheMemberwhodesirestotransferaInterestshallberesponsibleforalllegalfeesincurredinconnectionwithsaidopinion.ARTICLEVIII.DISSOLUTION,WINDINGUPANDDISASSOCIATIONEVENTS
8.1CONDITIONSOFDISSOLUTIONOFCOMPANY
Companyshallbedissolved,itsassetsshallbedisposedof,anditsaffairswounduponthefirsttooccurofthefollowing:(i) Theexpirationoftheperiod?xedforthedurationofCompanytermasstatedintheArticles;or (ii)AdeterminationbytheunanimouswrittenagreementofallMembersthatCompanyshallbedissolvedandwoundup;or (iii)Theentryofajudicialdecreeor,asmaybeprovidedintheAct,noticeofadministrativedissolutionnottimelycured;or (iv)Atanytime,thereisnolongeratleastoneMember.
(v)AnyeventthatmakesitunlawfulforallorsubstantiallyallofthebusinessofCompanytocontinue.8.2FILINGSTOH\lITIATEDISSOLUTIONOFCOMPANYAssoonaspossiblefollowingtheoccurrenceofanyoftheeventsspeci?edinParagraph8.1,ManagersonbehalfofCompanyshallexecutesuchformsasshallbeprescribedbytheSecretaryofStateandshall?leanyotherformsasrequiredbytheAct.Uponthe?lingoftheforms,theCompanyshallceasetocan'yonitsbusiness,exceptinsofarasmaybenecessaryforthewindingupofitsbusiness.Itsseparate P/1/V1
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 178 of 204 existenceshallcontinueuntilthedocumentshavebeen?ledwiththeSecretaryofStateoruntiladecreedissolvingtheCompanyhasbeenenteredbyacourtofcompetentjurisdiction.Managersshallcausetobe?ledintheof?ceoftheSecretaryofStateanyotherforms(statements,Certi?catesorArticles,oranyotherforms)prescribedbytheSecretaryofStateuponthewindingupoftheaffairsofCompany.
8.3WINDINGUPAFFAIRSUpontheoccurrenceofanyoftheeventsspeci?edinParagraph8.1,Companyshallcontinuesolelyforthepurposeofwindingupitsaffairsinanorderlymanner,liquidatingitsassets,disposingofandconveyingitsproperty,collectinganddividingitsassets,satisfyingtheclaimsofitscreditorsandprescribinganddefendingactionsbyoragainstCompanyinordertocollectanddischargeobligations.NoMembershalltakeanyactionthatisinconsistentwith,ornotnecessarytoorappropriatefor,windingupthebusinessandaffairsofCompany.Totheextentnotinconsistentwiththeforegoing,allcovenantsandobligationsintheAgreementshallcontinueinfullforceandeffectuntilsuchtimeastheassetshavebeendistributedandCompanyhasterminated.8.4RESPONSIBILITYFORWINDINGUPAFFAIRSManagerswhohavenotwronglydissolvedCompanyorifnone,theMembersshallberesponsibleforoverseeingthewindingupandliquidationofCompany,shalltakefullaccountoftheliabilitiesofCompanyanditsassets,shallcauseitsassetstobeliquidatedaspromptlyasisconsistentwithobtainingthefairmarketvaluethereof,andshallcausetheproceedstherefrom,totheextentsuf?cienttherefor,tobeappliedanddistributedasnextprovided.ThepersonsresponsibleforwindinguptheaffairsofCompanyshallgivewrittennoticeofthecommencementofwindingupbymailforallknowncreditorsandclaimantswhoseaddressesappearontherecordsofCompany.8.5ORDEROFPAYMENTOFLIABILITIESUPONDISSOLUTIONInsettlingaccountsofCompanya?erdissolutionunlessotherwiserequiredbytheAct,ManagersshallsettletheliabilitiesofCompanywithpaymentsinthefollowingorder,asrequiredbytheAct:(i) TocreditorsotherthanMembers,intheorderofpriorityasprovidedbylaw,exceptthosetoMembersofCompanyonaccountoftheircontributions;(ii)TocreditorswhoareMembersinorderofpriorityexceptamountsowedtoMembersonaccountoftheircontributions;(iii)ToMembersofCompanyinrespectoftheirshareoftheNetProfitsandothercompensationbywayofincomeontheircontributions;(iv)ToMembersforreturnoftheircontributions;and(v)ToMembersofCompanyinaccordancewiththerespectivepositiveaccountcapitalbalancesa?ergivingeffecttoallCapitalContributions,distributions,revaluationsandallocationsrequiredundertheAgreement.
8.6LHVIITATIONSONPAYMENTSMADEINDISSOLUTION
ExceptasotherwisespecificallyprovidedintheAgreement,eachMembershallonlybeentitledtolooksolelyattheassetsofCompanyforthereturnofhis/herpositivecapitalaccountbalance.ManagersorMemberswindinguptheaffairsofCompanyshallbeentitledtoreasonablecompensation.Allpayments 32
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 179 of 204 totheMembersuponthewindingupanddissolutionofCompanyshallbestrictlyinaccordancewiththepositivecapitalaccountbalancelimitationandotherrequirementsofTreasuryRegulationsSection1.704-1(b)(2)(ii)(d).s.7CONSEQUENCESorDISASSOCIATIONEVENTA.ConsenttoContinueBusinessofCompanyUpontheoccurrenceofanyevent,describedasaconditionfordissolutionofCompanyunderParagraph8.1ifany,CompanyshalldissolveunlesstheremainingMembersholdingaSuperMajority-In-InterestconsentinwritingtothecontinuationofthebusinessofCompany.IftheMemberwhoseactionsorconductconstituteoneormoreoftheconditionsofdissolutionofCompanydescribedinParagraph8.1(“FonnerMember”)orsuchFormerMember'strusteesorheirs,rightfullydemandsthereturnoftheCapitalAccountofaMemberbyawrittennoticetotheremainingMembers,Company(withconsentinwritingoftheremainingMembersholdingaSuperMajority-In-Interest)may,withinsix(6)monthsfollowingsuchwrittennotice,purchasetheFormerMember'sInterestasprovidedinSubparagraph8.7BtoavoiddissolutionofCompany.B.PurchaseofInterestofaMemberUpontheoccurrenceofanyDisassociationEventdescribedasaconditionfordissolutionofCompanyunderParagraph8.1ifany,andtheunanimousconsentbytheremainingMembersholdingaSuperMajority-In-InteresttocontinuethebusinessofCompany,andifapplicable,therightfuldemandforthereturnofitsCapitalAccountbytheFormerMemberorsuchFonnerMember'strusteeorheirs,upontheinheritanceortransferbyoperationoflawtoanyperson,theotherMembers(the“RemainingMembers”)shallhaveanoptiontopurchasesuchMembershipInterest.Withinninety(90)daysoftheUnanimousConsentorwithinninety(90)daysofthereceiptoftherightfuldemandforthereturnofitsCapitalAccountbytheFormerMemberorbysuchFormerMember'strusteeorheirs,orwithinninety(90)daysoftheinheritanceortransferbyoperationoflawtoaperson,theRemainingMembersshallnotifytheManagersinwritingoftheirdesirestopurchaseaportionoftheFormerMember'sInterest.8.8FAILURETOSUBMITNOTICEOFPURCHASEThefailureofanyRemainingMembertosubmitanoticewithintheapplicableperiodshallconstituteanelectiononthepartoftheRemainingMembernottopurchaseanyoftheFormerMember'sInterestunderSubparagraph8.7B.EachRemainingMembershallbeentitledtopurchaseaportionoftheFormerMember'sInterestbasedontheRemainingMember'sproratapartonthedateoftheUnanimousConsentorthedateofreceiptoftherightfuldemandforthereturnofitsInterestbytheFormerMemberorsuchformerMember'strusteeorheirs.
8.9ELECTIONTOPURCHASELESSTHANALLOFANINTERESTIntheeventanyRemainingMemberelectstopurchasenoneorlessthanallofitsproratapartoftheFormerMember'sInterestpursuanttoSubparagraph8.7B,then,atitselection,thoseRemainingMemberscanelecttopurchasemorethantheirproratapart,i.e.,theproportionthatthePercentageInterestoftheFormerMemberbearstotheaggregateofthePercentageInterestsofallMembersandtheFonnerMember.IftheRemainingMembersfailtopurchasetheentireinterestoftheFormerMember,CompanymayelecttopurchasetheunpurchasedportionoftheFonnerMember'sInterest.Ifnoneoftheaboveelectstopurchase,thesameshallpassbyoperationoflawtoanyassigneeorshallremaininthehandsofthe MV33
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 180 of 204 FonnerMember,subjecttoanyrightoftheholderofsuchinteresttodemandpaymentthereforeaccordingtotheActorotherapplicablelaw.NotwithstandinganyprovisionoftheAgreementtothecontrary,theremainingMembersmaymutuallyagreetoanallocationoftheFormerMember'sInteresttobepurchasedbyeachofthem.8.10V ALUATIONOFINTERESTOFAMEMBERForpurposesofParagraph8.7,theFormerMember'sInterestshallbevaluedasaprorataportionofthebookvalueofallInterestsasdeterminedforfederalincometaxpurposes,provided,however,iftheFormerMemberorsuchFormerMember'strusteeorheirsoranyRemainingMemberelectingtopurchaseorCompanyifitelectstopurchase,deemsthebookvaluetovaryfromfairmarketvaluebymorethantenpercent(10%),suchpersonshallbeentitledtorequireanappraisal.Insuchevent,theFormervalueoftheFormerMember'sInterestshallequalthefairmarketvalueoftheInterestasdeterminedbyagreementwithinninety(90)daysalterthenoticetoremainingMembersor,incaseofafailuretoagreewithinsuchninety(90)dayperiod,asdeterminedbythreeappraisers,oneselectedbytheFormerMemberorsuchFormerMember'strustee(s)orheir(s),oneselectedbytheRemainingMember,andoneselectedbythetwoappraiserssonamed.ThefairmarketvalueoftheFormerMember'sinterestinCompanyshallbetheaverageofthetwoappraisalsclosestinamounttoeachother.Intheeventthefairmarketvalueisdeterminedtobewithinninety-?vepercent(95%)ofbookvalue,thepartyrequestingsuchappraisalshallpayallexpenseofthesameotherwiseincurredbythepartiesofferingtoenterintothetransactionatthebookvaluation.8.11PAYMENTOFPURCHASEPRICEFORINTERESTForpurposesofParagraph8.7,thepurchasepriceshallbepaidbyCompanyortheRemainingMember,asthecasemaybe,either:(i)inten(10)equalarmualinstallmentsofprincipaltogetherwithinterest,commencingtoaccruefromthedateofclosing,atthethencurrentApplicableFederalRate(the“AFR”)underSection1274(d)oftheCodeforthemonthinwhichthefirstpaymentismade(orarateperannumequaltowhattheAFRwouldbeforsuchmonthunderIRCSection1274(d)oftheCodeiftheAFRisnolongerpublished)tofullyamortizesuchpurchasepriceoversuchten(10)paymentswiththe?rstpaymentbeingdueandpayable60daysafterthedeterminationofthefairmarketvalueoftheFormerMember'sInterestinCompany,or(ii)within60daysa?erthedeterminationofthefairmarketvalueoftheFormerMember'sInterestinCompany,asCompanyortheRemainingMember,asthecasemaybe,mayelectintheirsolediscretion.8.12PURCHASETERMSV ARIEDBYAGREEMENTNothingcontainedhereinisintendedtoprohibitMembersfromagreeingupontermsandconditionsforthepurchasebyCompanyoranyMemberoftheInterestofanyMemberinCompanydesiringtoretire,withdraworresign,inwholeorinpart,asaMember(onsuchtermsandconditionsasmaybeagreeduponbythesellingMemberandCompanyortheremainingMembersasthecasemaybe),norisanythinghereinintendedtolimitorotherwiseaffecttheabilityofaMembertodemandareturnofhis,heroritscontributiontoCompanyasprovidedintheAct.ARTICLEIX.INDEMNIFICATION9.1INDEMNIFICATIONOFMEMBERSANDMANAGERSTothegreatestextentnotinconsistentwiththeActandtheotherlawsandpublicpoliciesoftheStateofDelaware,CompanyshallindemnifyagainstexpensesandliabilitiesanyMemberorManagermadeapartyorwhowasthreatenedtobemadeapartytoanyproceedingbyCompanyoranotherbecausesuch 34
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Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 181 of 204 partyisorwasaMemberorManager,asamatterofright,againstallliabilityincurredbysuchpersoninconnectionwithanyaction,suit,orproceedingoranythreatened,pendingorcompleteactionofsuitorproceeding;whethercivil,criminal,administrative,orinvestigativeprovidedthatitshallbedeterminedinthespeci?ccaseinaccordancewiththeproceduressetforthinParagraph9.6thatindemni?cationofsuchpersonispermissibleinthecircumstancesbecausethepersonhasmetthestandardsofconductforindemni?cationsetforthinParagraph9.5.9.2ADV ANCEUNDERTAKINGSFORINDEMNIFICATIONTothegreatestextentnotinconsistentwiththeActandotherlawsandpublicpoliciesofthestateoforganization,CompanyshallpayfororreimbursethereasonableexpensesincurredbyaMemberorManagerinconnectionwithanysuchproceedingasincurredinadvanceoffinaldispositionoftheaction,suit,orproceedingthereofif(i)thepersonfurnishesCompanyawrittenaf?rmationoftheperson'sgoodfaithbeliefthathe,sheorithasmetthestandardsofconductforindemni?cationdescribedinParagraph9.5,(ii)thepersonfurnishesCompanyawrittenundertaking,executedpersonallyoronsuchperson'sbehalf,torepaytheadvanceifitisultimatelydeterminedbyacourtofcompetentjurisdictionthatsuchpersondidnotmeetsuchstandardofconductandthatsuchpersonisnotentitledtobeindemni?ed,and(iii)adeterminationismadeinaccordancewiththeproceduressetforthinParagraph9.6thatbaseduponfactsthenlmowntothosemakingthedetermination,indemni?cationwouldnotbeprecludedunderthisArticleIX.Theundertakingdescribedabovemustbeageneralobligationoftheperson,subjecttosuchreasonablelimitationsasCompanymaypermit,butneednotbesecuredandmaybeacceptedwithoutreferenceto?nancialabilitytomakerepayment.CompanyshallindemnifyaMemberorManagerwhoiswhollysuccessful,onthemeritsorotherwise,inthedefenseofanysuchproceeding,asamatterofright,againstreasonableexpensesincurredbythepersoninconnectionwiththeproceedingwithouttherequirementofadeterminationdescribedinParagraph9.6.9.3ADV ANCEMENTOFEXPENSESUpondemandbyaMemberorManagerforindemni?cationoradvancementofexpensesincurredindefendingacivilorcriminalsuitorproceeding,asthecasemaybe,CompanyshallexpeditiouslydeterminewhethertheMemberorManagerisentitledtheretoinaccordancewiththisArticleIX.Theindemni?cationandadvancementofexpensesprovidedforunderthisArticleIXshallbeapplicabletoanyproceedingarisingfromactsoromissionsoccurringbeforeoraftertheadoptionoftheAgreement.9.4INDEMNIFICATIONOFOTHERS Companyshallbeempowered,butshallnotbeobligated,toindemnifyanypersonwhoisorwasanemployeeoragentofCompanytothesameextentasifsuchpersonwasaMemberorManager.9.5STANDARDSOFCONDUCTREQUIREDFORINDEMNIFICATIONIndemni?cationofaManagerorMemberispermissibleunderParagraph9.1exceptasotherwiselimitedbytheActonlyif(i)thepersonconducteditselfingoodfaith,and(ii)thepersonreasonablybelievedthatitsconductwasinoratleastnotopposedtobestinterestofCompany;and(iii)inthecaseofanycriminalproceeding,thepersonhadnoreasonablecausetobelievehis,heroritsconductwasunlawful.Thetemiinationofaproceedingbyjudgment,order,settlement,convictionoruponapleaofnolocontendereoritsequivalentisnot,ofitself,determinativethatthepersondidnotmeetthestandardofconductdescribedinthisParagraph9.5. l
(K35ML./
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9.6PROCEDURESTOAPPROVEINDEMNIFICATIONAdeterminationastowhetherindemni?cationoforadvancementofexpensesispermissibleshallbemadebyanyoneofthefollowingprocedures:(i)BytheMembersnotatthetimepartiestotheproceedingsholdingaSuperMajority-In-Interest;or(ii)ByMembersorManagersnotpartiestotheproceedingsinthemannerprescribedinParagraph9.7below.9.7COURTORDEROFINDEMNIFICATIONAMemberorManagerofCompanywhoisapartytoaproceedingmayapplyforindemni?cationfromCompanytothecourt,ifany,conductingtheproceedingortoanothercourtofcompetentjurisdiction.Onreceiptofanapplication,thecourt,a?ergivingnoticethecourtconsidersnecessary,mayorderindemni?cationifitdetermines:(i)InaproceedinginwhichtheMemberorManageriswhollysuccessful,onthemeritsorotherwise,theMemberorManagerisentitledtoindemni?cationunderthisParagraph,inwhichcasethecourtshallorderCompanytopaytheMemberorManagerhis,heroritsreasonableexpensesincurredtoobtainsuchcourtorderedindemni?cation;or(ii)TheMemberorManagerisfairlyandreasonablyentitledtoindemni?cationinViewofalltherelevantcircumstances,whetherornottheMemberorManagermetthestandardsofconductsetforthinParagraph9.5above.9.8DESCRIBEDINDEMNIFICATIONRIGHTSASNON-EXHAUSTIVENothingcontainedinthisArticleIXshalllimitorprecludetheexerciseorbedeemedexclusiveofanyrightunderthelaw,bycontractorotherwise,relatingtoindemni?cationoforadvancementofexpensestoanypersonwhoisorwasaMemberorManagerofCompanyorisorwasservingatCompany'srequestasaDirector,of?cer,partner,Manager,trustee,employee,oragentofanotherforeignordomesticCompany,partnership,association,LimitedLiabilityCompany,corporation,jointventure,trust,employeebene?tplan,orotherenterprise,whetherforpro?tornot.
9.9CONSTRUCTIONOFINDEMNIFICATIONRIGHTSNothingcontainedinthisArticleIXshalllimittheabilityofCompanytootherwiseindemnifyoradvanceexpensestoanyperson.ItistheintentofthisArticleIXtoprovideindemni?cationtoMembersandManagerstothefullestextentnoworhereafterpermittedbythelawconsistentwiththetermsandconditionsofthisArticleIX.Indemni?cationshallbeprovidedinaccordancewiththisArticleIXirrespectiveofthenatureofthelegalorequitabletheoryuponwhichaclaimismadeincludingwithoutlimitationnegligence,breachofduty,mismanagement,waste,breachofcontract,breachofwarranty,strictliability,violationoffederalorstatesecuritieslaw,violationoftheEmployeeRetirementIncomeSecurityActof1974,asamended,orviolationofanyotherstateorfederallaw.9.10DEFINITIONSFORINDEMNIFICATIONPROVISIONSA.“Expenses”meanalldirectandindirectcosts(includingwithoutlimitationcounselfees,retainers,courtcosts,transcripts,feesofexperts,witnessfees,travelexpenses,duplicating 36
AGENDA ITEM #11.1
Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 183 of 204 costs,printingandbindingcosts,telephonecharges,postage,deliveryservicefeesandallotherdisbursementsorout-of-pocketexpenses)actuallyincurredinconnectionwiththeinvestigation,defense,settlementorappealofaproceedingorestablishingorenforcingarighttoindemni?cationunderthisParagraph,applicablelaworotherwise.B.“Liabilities”meantheobligations(includingoneincurredbywayofsettlement)topayajudgment,settlement,penalty,?ne,excisetax(includinganexcisetaxassessedwithrespecttoanemployeebene?tplan),orreasonableexpensesincurredwithrespecttoaproceeding.C.“Party”meansapersonwhowas,oristhreatenedtobemadeanameddefendantorrespondentinaproceeding.D.“Proceeding”meansanythreatened,pendingorcompletedaction,suitorproceeding,whethercivil,criminal,administrativeorinvestigativeandwhetherformalorinformal.9.11INSURANCEFUNDINGOFINDEMNIFICATIONTothegreatestextentnotinconsistentwiththeActandotherlawsandpublicpoliciesofthestateoforganization,Companymaypurchaseandmaintaininsuranceorotherfinancialarrangementforthebene?tofanypersonwhoisorwasaMemberorManager,employeeoragent,againstanyliabilityassertedagainstorexpensesincurredbysuchpersoninanycapacityorarisingoutofsuchperson'sservicewithCompany,whetherornotCompanywouldhavethepowertoindemnifysuchpersonagainstsuchliability.Theother?nancialarrangementsmadebyCompanymayinclude:(i) Thecreationofatrustfund;(ii)Theestablishmentofaprogramofself-insurance;(iii)Thesecuringofitsobligationofindemni?cationbygrantingasecurityinterestorotherlienonanyassetsoftheCompany;(iv)Theestablishmentofaletterofcredit,guarantyorsurety.
No?nancialarrangementmayprovideprotectionforapersonadjudgedbyacourtofcompetentjurisdiction,afterexhaustionofallappealstherefrom,tobeliableforintentionalmisconduct,fraud,oraknowingviolationoflaw,exceptwithrespecttotheadvancementofexpensesorindemni?cationorderedbyacourt.
Anyinsuranceorother?nancialarrangementmadeonbehalfofapersonpursuanttothisParagraph9.11maybeprovidedbytheCompanyorotherpersonapprovedbyManagers,ifany,orbyMembers,ifnoManagersexist. ARTICLEX.MISCELLANEOUS
10.1ADDITIONALDOCUMENTSANDACTSEachMemberagreestoexecuteanddeliversuchadditionaldocumentsandinstrumentsandtoperformsuchadditionalactsasmaybenecessaryorappropriatetoeffectuate,canyoutandperformalloftheterms,provisions,andconditionsoftheAgreementandthetransactionscontemplatedhereby. \}l-//37
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10.2AMENDMENTSAllamendmentstotheAgreementwillbeinwritingandapprovedbythevoteoftheMembersholdingaSuperMajority-In-Interest.10.3BINDINGEFFECTSubjecttotheprovisionsoftheAgreementrelatingtotransferability,theAgreementwillbebindinguponandinuretothebene?tofMembers,andtheirrespectivedistributees,successorsandassigns,butonlytotheextentthatassignmentandapprovalbyallMembersisinaccordancewiththeAct,theArticlesandtheAgreement.10.4COMPLETESTATEMENTOFAGREEMENTTheAgreementandtheArticlesreplaceandsupersedeallprioragreementsandunderstandingsbyandamongMembersoranyofthem.TheAgreementandtheArticlessupersedeallpriorwrittenandoralstatementsandnorepresentation,statement,orconditionorwarrantynotcontainedintheAgreementortheArticleswillbebindingontheMembersorhaveanyforceoreffectwhatsoever.10.5EXHIBITSAllExhibitsattachedtotheAgreementareincorporatedandshallbetreatedasifsetforthherein.10.6GENDERANDNUMBERINNOUNSANDPRONOUNSCommonnounsandpronounswillbedeemedtorefertothemasculine,feminine,neuter,singularandplural,astheidentityofthepersonorpersons,?rmorcorporationmayinthecontextrequire.Thesingularshallincludethepluralandthemasculinegendershallincludethefeminineandneuter,andviceversa,asthecontextrequires.Inparticularanyreferenceto“Members”or“Managers”shallrespectivelymeanMemberifCompanyhasonlyoneMemberorManagerifCompanyhasonlyoneManager.Anyreference_totheCode,TreasuryRegulations,theAct,statutesorlawswillincludeallamendments,modi?cations,orreplacementsofthespeci?csectionsandprovisionsconcerned.10.7HEADINGSAllheadingshereinareinsertedonlyforconvenienceandeaseofreferenceandarenottobeconsideredintheconstructionorinterpretationofanyprovisionoftheAgreement.10.8MULTIPLECOUNTERPARTSTheAgreementmaybeexecutedinseveralcounterparts,eachofwhichwillbedeemedanoriginalbutallofwhichwillconstituteoneandthesameinstrument.However,inmakingproofhereofitwillbenecessarytoproduceonlyonecopyhereofsignedbythepartytobecharged.
10.9NOTHIRD-PARTYBENEFICIARYTheAgreementismadesolelyandspeci?callyamongandforthebene?tofthepartieshereto,andtheirrespectivesuccessorsandassignssubjecttotheexpressprovisionshereofrelatingtosuccessorsandassigns,andnootherpersonwillhaveanyrights,interest,orclaimshereunderorbeentitledtoanybene?tsunderoronaccountoftheAgreementasathirdpartybene?ciaryorotherwise. 38
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10.10NOTFORBENEFITOFCREDITORSTheprovisionsoftheAgreementareintendedonlyfortheregulationofrelationsamongMembersandCompany.TheAgreementisnotintendedforthebene?tofacreditorwhoisnotaMemberanddoesnotgrantanyrightstoorconferanybene?tsonanycreditorwhoisnotaMemberoranyotherpersonwhoisnotaMember,aManager,oranof?cer.10.11NOTICESAnynoticetobegivenortobeserveduponCompanyoranypartyheretoinconnectionwiththeAgreementmustbeinwritingandwillbedeemedtohavebeengivenandreceivedattheearlierof(a)thetimewhenpersonallydeliveredtotheaddressspeci?edbythepartytoreceivethenoticeor(b)?ve(5)daysa?erdepositedintheUnitedStatesMailforFirstClassdelivery.SuchnoticeswillbegiventoaMemberattheaddressspeci?edinExhibitAhereto,asitmaybeamendedfromtimetotime.AnyMemberorCompanymay,atanytimebygiving5days‘priorwrittennoticetotheotherMembersandCompany,designateanyotheraddressinsubstitutionoftheforegoingaddresstowhichsuchnoticewillbegiven.AwritingincludesafacsimiletransmissionfollowedbydepositoftheoriginalcommunicationintheUnitedStatesMailforFirstClassDelivery.10.12REFERENCESNumberedorletteredArticles,paragraphsandsubparagraphshereincontainedrefertoArticles,paragraphsandsubparagraphsoftheAgreementunlessotherwiseexpresslystated.10.13RELIANCEONAUTHORITYOFPERSONSIGNINGIntheeventthataMemberisnotanaturalperson,neitherCompanynoranyMemberwill(a)berequiredtodeterminetheauthorityoftheindividualsigningtheAgreementtomakeanycommitmentorundertakingonbehalfofsuchentityortodetermineanyfactorcircumstancebearingupontheexistenceoftheauthorityofsuchindividualor(b)berequiredtoseetotheapplicationordistributionofproceedspaidorcreditedtoindividualssigningtheAgreementonbehalfofsuchentity.10.14SEVERABILITYIfanyprovisionoftheAgreementisheldtobeillegal,invalid,orunenforceableunderthepresentor?xturelawseffectiveduringthetermoftheAgreementincludingbutnotlimitedtotheAct,suchprovisionwillbefullyseverable;theAgreementwillbeconstruedandenforcedasifsuchillegal,invalid,orunenforceableprovisionhadnevercomprisedapartoftheAgreement;andtheremainingprovisionsoftheAgreementwillremaininfullforceandeffectandwillnotbeaffectedbytheillegal,invalid,orunenforceableprovisionorbyitsseverancefromtheAgreement.Furthermore,inlieuofsuchillegal,invalid,orunenforceableprovision,therewillbeaddedautomaticallyasapartoftheAgreementaprovisionassimilarintermstosuchillegal,invalid,orunenforceableprovisionasmaybepossibleandbelegal,valid,andenforceable.REMAINDEROFPAGEINTENTIONALLYLEFTBLANK
AGENDA ITEM #11.1
Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 186 of 204 INWITNESSWHEREOF.alloflhcMcmbcrsofIhcCompany.haveexecutedtheAgreement.effectiveasofthc?rs!dalewrittenabove. l\ll-2l\ll!l'IRS:
Hy:Nmnc:NghiT.LcTillc:Managing-Mcmbcr
NDINVESTMENT,1.C.
Numc:DunnyanTi(Ic:Managing-l\mer
By:WN~:TmongThan)hanThis:Managing-MI:n1bcr
40
AGENDA ITEM #11.1
Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 187 of 204 EXIIIBITACAPITALCONTRIBUTIONANDVOTINGPERCENTAGEOFMEMBERSNETCORELLCMember'sMcmhcr'sCapitalPercentage Mcmbcr'sName Mcmhcr'sAddressContributionV otinglntcrcst LegacyInvcstmcntsAmerica.LLC
NdInvestmentLLC
AsofOctober£32022MEMBERSLEGACYINVESTMENTSAMERICA,u.c.
By:Name:Nghi.LcTitle:Managing-Member
NDIt\'VES'l'MENTS,C.?ax‘,
Titlc:Managing-Mcmbcr
By:Name:TmongThunhNlmnTitlc:Managing-Member
4|
AGENDA ITEM #11.1
Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 188 of 204
EXHIBITBPERCENTAGEINTERESTSINNETPROFITSANDNETLOSSESNETCORELLC NctPro?tsMember'sName Pcrccntagc3
" I
LegacyInvcstmclI.LC
SSSS 7 I
33%+13%
66%+2/3%66%+2/3%NdInvestmentLLC
TOTALS:
AsofOctober2022. MEMBERSLEGACYINVESTMENTSAME!/?.ICA,LLC.
By:Name:Nghi.LeTitle:Managing-Member
NDINVESTMENT,LLC.
By: 1Name:DannyDaoTitle:Managing-Member
Nnmc:ThanhNhanTruongTitle:Managing-Member
42
AGENDA ITEM #11.1
Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 189 of 204 January 12, 2023
City of Indio
l 00 Civic Center Mall
Indio, CA 92201
NETCORE LLC Connecting to success
Subject: Virada Developn1ent, Tract No. 37224
Agent Authorization Letter
To whoni it n1ay concern:
As the new owner of the Virada Develop1nent, Netcore, LLC hereby notifies the City of Indio that Peter M. Olah, President of Paradigm Engineering Group, a professional consulting firm, is authorized to function as its agent with respect to the Assignment and Assumption Agreement and other project related entitlement and pern1itting requirements. lf you should have any questions or require additional information, please feel free to contact me at (714) 599-0652.
Respectfully, /4 _,
.-fiv � .· /
I _r
I
�
NETCORE, LLC
Nghi Trung Le
Manager
- -
16192Coc1stal Highway, Lewes, Delaware 19958
1Gl51Brookhurst St, Fountain Valley, CA 92708
AGENDA ITEM #11.1
Resolution No. 10348 - Assignment and Assumption of Virada Development A... Page 190 of 204 City of Indio
City Council
April 5, 2023
STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Kevin H. Snyder, Dir. Of Community Development Subject: Ordinance No. 1792, an ordinance of the City Council of the City of Indio, California, approving the termination of the Madison Crossing Project Master Plan applicable to Assessor’s Parcel Numbers (APN’s) 600 -240-005, 600-240- 016, 600-240-020 and 600-240-021 and making a determination that said action qualifies for the common sense exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) as it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment and also making a determination that said action is consistent with the provisions of California Government Code Section 15183 (projects consistent with a community plan, general plan, or zoning) because said termination supports the previously approved Madison Pointe Mixed Use Project on the same parcels of land as the Madison Crossing Project Master Plan
RECOMMENDATION:
Waive full reading of Ordinance No. 1792, introduce the ordinance by title only and request the City Clerk to read the title of said Ordin ance of the City Council of the City of Indio, California, approving the termination of the Madison Crossing Project Master Plan applicable to Assessor’s Parcel Numbers (APN’s) 600-240-005, 600-240-016, 600-240-020 and 600-240-021 and making a determination that said action qualifies for the common sense exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) as it can be seen with certainty that there is no possibility that the activity in question may have a significan t effect on the environment and also making a determination that said action is consistent with the provisions of California Government Code Section 15183 (projects consistent with a community plan, general plan, or zoning) because said termination supports the previously approved Madison Pointe Mixed Use Project on the same parcels of land as the Madison Crossing Project Master Plan
SUMMARY:
Ordinance No. 1792 would upon passage by the City Council terminate the previously approved Madison Crossing Project Master Plan that is no longer applicable with the Planning Commission's approval of the Master Development Plan Permit (MDPP) approval for the Madison Pointe Mixed-Use Project that is applicable to the same project site as Madison Crossing
BACKGROUND INFORMATION:
On April 18, 2007, the Indio City Council approved Ordinance No. 1498a approving Project Master Plan 06-11-49 for the Indio Heritage Marketplace project for approximately 20 acres at the southwest corner of the Madison Street and Highway 111 intersection further identified as Assessor’s Parcel AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 191 of 204 Numbers (APN’s) 600-240-005, 600-240-016, 600-240-020 and 600-240-021. On June 3, 2009, t he Indio City Council approved Ordinance No. 1559 approving Project Master Plan amendment 09-3-53 for Madison Crossing formerly known as the Indio Heritage Marketplace project. These approvals for Indio Heritage Marketplace and Madison Crossing were conduc ted under the regulatory auspices of the previously adopted General Plan 2020.
On September 21, 2022, the Indio City Council approved Resolution No. 10326 approving the Highway 111 Corridor Specific Plan and repealing the Central Highway 111 Corridor Spe cific Plan and the Mixed Use Specific Plan 300 (MUSP -300); a n November 21, 2022, the Indio Planning Commission approved Resolution No. 2044 granting conditional Master Development Plan Permit (MDPP) approval for the Madison Pointe Mixed-Use Project pursuant to the provisions of the adopted Highway 111 Corridor Specific Plan for a project comprised of up to 400 senior housing apartment units, a 130-key hotel, 30,000 sf of medical / office space, 15,500 sf of commercial retail uses open space, recreational el ements, and outdoor gathering spaces. The adoption of the Highway 111 Corridor Specific Plan and the approval of the Madison Pointe Master Development Plan Permit were conducted under the regulatory auspices of the currently adopted General Plan 2040.
On November 29, 2022, Richard Schmid, Schmid Desert Investments, LLC, the owner of record of the aforementioned parcels of land submitted a letter to the attention of the Community Development Director for the City of Indio authorizing the termination of the Madison Crossing Project Master Plan applicable to these parcels of land.
General Plan 2040 Findings:
The termination of the Madison Crossing Project Master Plan applicable to Assessor’s Parcel Numbers (APN’s) 600 -240-005, 600 -240-016, 600 -240-020 and 600-240-021 will support the implementation of the General Plan 2040 adopted on September 18, 2019. The termination of the Madison Crossing Project Master Plan applicable to Assessor’s Parcel Numbers (APN’s) 600 -240- 005, 600-240-016, 600-240-020 and 600-240-021 will eliminate any regulatory conflicts between this Project Master Plan approval and Master Development Plan Permit (MDPP) approval for the Madison Pointe Mixed-Use Project.
Environmental Findings:
City staff has evaluated the proposed determination and has identified that based on one or more applicable categorical exemptions and previous findings of consistency, no further environmental review is necessary for the proposed termination. On September 18, 2019, the Indio City Council certified the Program Final Environmental Impact Report (PFEIR) for the General Plan 2040 through its adoption of Resolution No. 10106. This FEIR was prepared as a program EIR. Pursuant to CEQA Guidelines Sections 15162 and 15168, the termination of the Madison Crossing Project Master Plan will substantively implement the General Plan 2040's vision, intent, policies and goals and support the implementation of the Madison Pointe Mixed Use Project Master Development Plan Perm it, which is within the scope of the project covered by the PFEIR for the General Plan 2040 as the termination of the Madison Crossing Project Master Plan. Pursuant to Section §15183 (Projects Consistent with a Community Plan or Zoning) of the California E nvironmental Quality Act (CEQA) Guidelines, subsection (a) states that additional environmental review is not required for projects “which are consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR was certified”, except as might be necessary to determine whether there are project -specific significant effects. Pursuant to CEQA Guidelines Sections 15162, 15168 and 15183, the Community Development Director for the City of Indio, acting as the lead agency representative, determined that the Madison Pointe Mixed -Use Project is within the scope of the
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 192 of 204 PFEIR for the General Plan 2040 as the Project will substantively implement the General Plan 2040’s vision, intent, policies and goals and the signage and zoning amendments are intended to make these regulations consistent with the General Plan. Therefore, the Community Development Director previously determined that no new environmental documentation for this Project was required.
Planning Commission Consideration and Recommendation:
On January 25, 2023, the Planning Commission conducted a duly advertised public hearing for the proposed termination of the Madison Crossing Project Master Plan. There were no public comments received for this public hearing item. At the close of the public hearing, the Commission deliberated and recommended to the City Council on a 5 -0 motion vote the termination of the Madison Crossing Project Master Plan.
Public Notice:
A legal notice of public hearing for the Planning Commission public hearing was published in the January 13, 2023 edition of the Desert Sun, a newspaper of record and mailing of the for and a public hearing notice for the Planning Commission public hearing was mailed to a certifi ed list of property owners within 300 feet of the subject properties on January 12, 2023.
A legal notice of public hearing for the City Council public hearing was published in the March 10, 2023 edition of the Desert Sun, a newspaper of record and mailin g of the for and a public hearing notice for the City Council public hearing was mailed to a certified list of property owners within 500 feet of the subject properties on March 21, 2023.
ATTACHMENTS:
Attachment1_OrdinanceNo1792
Attachment2_VicinityMap
Attachment3_PlanningCommissionResolution No. 2050
APPROVAL(S):
Steven Graham, City Attorney Approved - 30 Mar 2023
Bryan H. Montgomery, City Manager Approved - 30 Mar 2023
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 193 of 204 1 ORDINANCE NO. 1792
AN ORD INANCE OF THE CITY COUNCIL OF THE CITY OF INDIO, C ALIFORNIA,
APPROVING THE TERMINATION OF T HE MADISON CROSSING PROJECT MASTER PLAN APPLICABLE TO ASSESSOR’S PARCEL NUMBERS ( APN’S) 600- 240-005, 600 -240-016, 600 -240-020 AND 600 -240-021 AND MAKING A
DETERMINATION THAT SAID ACTION QUALIFIES FOR THE COMMON SENSE EXEMPTION PURSUANT TO SECTION 15061(B)(3) OF THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA) AS IT CAN BE SEEN WITH CERTAINTY
THAT THERE IS NO POSSIBILITY THAT THE ACTIVITY IN QUESTION MAY HAVE A
SIGNIFICANT EFFECT ON THE ENVIRONMENT AND ALSO MAKING A
DETERMIATION THAT SAID ACTION IS CONSIST ENT WITH THE PROVISIONS OF CALIFORNIA GOVERNMENT CODE SECTION 15183 ( PROJECTS CONSISTENT
WITH A COMMUNITY PLAN, GENERAL PLAN, OR ZONING) BECAUSE SAID
TERMINATION SUPPORTS THE PREVIOUSLY APPROVED MA DISON POINTE
MIXED-USE PROJECT ON THE SAME PARCELS OF LAND AS THE MADISON
CROSSING PROJECT MASTER PLAN
WHEREAS, on April 18, 2007, the Indio City Council approved Ordinance No. 1498a approving Project Master Plan 06-11-49 for the Indio Heritage Marketplace project for approximately 20 acres at the southwest corner of the Madison Street and Highway 111 intersection further identified as Assessor’s Parcel Numbers ( APN’s) 600-240-005, 600-240-016, 600-240-020 and 600-240-021; and,
WHEREAS, on June 3, 2009, the Indio City Council approved Ordinance No. 1559 approving Project Master Plan amendment 09-3-53 for Madison Crossing formerly known as the Indio Heritage Marketplace project; and,
WHEREAS, said approvals for Indio Heritage Marketplace and Madison Crossing were conducted under the regulatory auspices of the previously adopted General Plan 2020; and,
WHEREAS, on September 21, 2022, the Indio City Council approved Resolution No. 10326 approving the Highway 111 Corridor Specific Plan and repealing the Central Highway 111 Corridor Specific Plan and the Mixed Use Specific Plan 300 (MUSP -300); and
WHEREAS, on November 21, 2022, the Indio Planning Commission approved Resolution No. 2044 granting conditional Master Development Plan Permit (MDPP) approval for the Madison Pointe Mixed -Use Project pursuant to the provisions of the adopted Highway 111 Corridor Specific Plan for a project comprised of up to 400 senior housing apartment units, a 130-key hotel, 30,000 sf of medical / office space, 15,500 sf of commercial retail uses open space, recreational elements, and outdoor gathering spaces; and,
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 194 of 204 2 WHEREAS, the ad option of the Highway 111 Corridor Specific Plan and the approval of the Madison Pointe Master Development Plan Permit were conducted under the regulatory auspices of the currently adopted General Plan 2040; and,
WHEREAS, on November 29, 2022, Richard Schmid, Schmid Desert Investments, LLC, the owner of record of the aforementioned parcels of land submitted a letter to the attention of the Community Development Director for the City of Indio authorizing the termination of the Madison Crossing Project Master Plan applicable to these parcels of land; and,
WHEREAS, Section 15061(b)(3) specifies that an activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment and where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA; and,
WHEREAS, California Environmental Quality Act (“ CEQA”) Guidelines Section 15162 specifies that when an environmental impact report (“EIR”) has been certified for a project, no subsequent EIR shall be prepared for that project unless the lead agency determines, on the basis of substantial evidence in the light of the whole record, that substantial changes are proposed that will require major revisions to the previous EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects, or substantial changes occur with respect to the circumstances under which the project will be undertaken which will require major revisions of the previous EIR; and
WHEREAS, CEQA Guidelines Section 15168 (c)(2) specifies that if the agency finds that pursuant to Section 15162, no subsequent EIR would be required, the agency can approve the activity as being within the scope of the project covered by the program EIR, and no new environmental documentation would be required; and
WHEREAS, Section §15183 (Projects Consistent with a Community Plan or Zoning) of the California Environmental Quality Act (CEQA) Guidelines, subsection (a) states that additional environmental review i s not required for projects “which are consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR was certified”, except as might be necessary to determine whether there are project-specific significant effects; and,
WHEREAS, a legal notice of public hearing was published in the January 13, 2023 edition of the Desert Sun, a newspaper of record and mailing of the for and mailing of a public hearing notice to a certified list of property owners within 300 feet of the su bject properties on January 12, 2023; and,
WHEREAS, on January 25, 2023, the Planning Commission held a duly noticed public hearing to consider the termination of the Madison Crossing Project Master Plan .
At the conclusion of the public hearing, the Planning Commission adopted this Resolution
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 195 of 204 3 recommending to the City Council the termination of the Madison Crossing Project Master Plan; and,
WHEREAS, a legal notice of public hearing was published in the March 10, 2023 edition of the Desert Sun, a newspaper of record and mailing of the for and mailing of a public hearing notice to a certified list of property owners within 500 feet of the su bject properties on March 21, 2023; and,
WHEREAS, on April 5, 2023, the City Council conducted a duly noticed public hearing and determined that the passage of this Ordinance was in the interest of the public health, safety and welfare.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF INDIO, CALIFORNIA, HEREBY FINDS, DETERMINES, AND RESOLVES AS FOLLOWS:
Section 1. Incorporation of Recitals. The City Council hereby specifically finds that all of the facts set forth in the recitals of this Ordinance are true and correct, are incorporated into the following findings by reference, and constitute a material part of this Resolution.
Section 2. General Plan 2040 Fi ndings. Based on the evidence presented at the hearing, including the staff report and written and verbal testimony, which are all incorporated herein by reference, the City Council hereby finds that:
1. The termination of the Madison Crossing Project Master Plan applicable to Assessor’s Parcel Numbers (APN’s) 600-240-005, 600-240-016, 600-240-020 and 600-240-021 will support the implementation of the General Plan 2040 adopted on September 18, 2019.
2. The termination of the Madison Crossing Project Master Plan applicable to Assessor’s Parcel Numbers (APN’s) 600-240-005, 600-240-016, 600-240-020 and 600-240-021 will eliminate any regulatory conflicts between this Project Master Plan approval and Master Development Plan Permit (MDPP) approval for the Madison Pointe Mixed-Use Project.
Section 3. Environmental Findings. The City Council has reviewed and considered the relevant exemptions and findings of no need for further environmental review incorporated herein by reference, and finds that:
1. On September 18, 2019, the Indio City Council certified the Program Final Environmental Impact Report (PFEIR) for the General Plan 2040 through its adoption of Resolution No. 10106. This FEIR was prepared as a program EIR.
2. Pursuant to CEQA Guidelines Sections 15162 and 15168, the termination of the Madison Crossing Project Master Plan will substantively implement the General Plan 2040's vision, intent, policies and goals and support the implementation of the Madison Pointe Mixed Use Project Master Development Plan Permit, which is within
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 196 of 204 4 the scope of the project covered by the P FEIR for the General Plan 2040 as the termination of the Madison Crossing Project Master Plan.
3. Pursuant to Section §15183 (Projects Consistent with a Community Plan or Zoning) of the California Environmental Quality Act (CEQA) Guidelines, subsection (a) states that additional environmental review is not required for projects “which are consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR was certified”, except as might be necessary to determine whether there are project-specific significant effects.
4. Pursuant to CEQA Guidelines Sections 15162, 15168 and 15183, the Community Development Director for the City of Indio, acting as the lead agency representative, determined that the Madison Pointe Mixed -Use Project is within the scope of the PFEIR for the General Plan 2040 as the Project will substantively implement the General Plan 2040’s vision, intent, policies and goals and the signage and zoning amendments are intended to make these regulations consistent with the General Plan.
Therefore, the Community Development Director previously determined that no new environmental documentation for this Project was required.
Section 4. City Council Approval. The City Council, based on the findings stated herein, approves the termination of the Madison Crossing Project Master Plan approval.
Section 5. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance or its application to any person or circumstance, is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases of this ordinance, or its application to any other person or circumstance. The City Council declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, phrase hereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable. Section 6. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published in the manner prescribed by law.
Section 6. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published in the manner prescribed by law.
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 197 of 204 5 PASSED, APPROVED AND ADOPTED this 5th day of April, 2023.
___________________________
OSCAR ORTIZ
MAYOR
ATTEST:
________________________________
CYNTHIA HERNANDEZ, CMC
CITY CLERK
AGENDA ITEM #11.2
Ordinance No. 1792 , an ordinance of the City Council of the City of Ind... Page 198 of 204 *IMPORTANT* Maps and data are to be used for reference purposes only. Map features are approximate, and are not necessarily accurate to surveying or engineering standards. The County of Riverside makes no warranty or guarantee as to the content (the source is often third party), accuracy, timeliness, or completeness of any of the data provided, and assumes no legal responsibility for the information contained on this map. Any use of this product with respect to accuracy and precision shall be the sole responsibility of the user. © Riverside County GIS
Legend
Vicinity Madison for Madison Crossing Project Master Plan Termination Blue dots indicate properties affected by
proposed termination
Notes
REPORT PRINTED ON... 1/19/2023 11:44:45 AM
0 1,505752 Feet
Parcels
Blueline Streams
City Areas
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