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Sample Operating Agreement For ____________, LLC

A Delaware Limited Liability Company


This Operating Agreement (the "Agreement") is made efective as of ______, by and
among and those Persons (the Members) identi!ed in "#hibit A$
%n consideration of the m&t&a' covenants and conditions herein, the Members
agree as fo''o(s)
ARTICLE I
ORGANIATION
!"! Formation and #$ali%&ation" The Members have formed a 'imited
'iabi'ity company (the *ompany) &nder the +e'a(are ,imited ,iabi'ity *ompany
Act (c&rrent'y *hapter -. of Tit'e / of the +e'a(are *ode) (the "Act") by !'ing
Artic'es of Organi0ation (ith the +e'a(are 1ecretary of 1tate$
!"' Go(erning Law" This Agreement sha'' be governed by and constr&ed
and interpreted in accordance (ith the 'a(s of the 1tate of +e'a(are, inc'&ding the
+e'a(are ,imited ,iabi'ity *ompany Act, (the "Act") as amended from time to time,
(itho&t regard to +e'a(are2s con3icts of 'a(s princip'es$ The rights and 'iabi'ities
of the Members sha'' be determined p&rs&ant to the Act and this Agreement$ To
the e#tent that any provision of this Agreement is inconsistent (ith any provision
of the Act, this Agreement sha'' govern to the e#tent permitted by the Act$
!") Name" The name of the *ompany sha'' be " ___________, ,,*$" The
b&siness of the *ompany may be cond&cted &nder that name or, on comp'iance
(ith app'icab'e 'a(s, any other name that the 4oting Members deem appropriate
or advisab'e$ The 4oting Members on beha'f of the *ompany sha'' !'e any
certi!cates, artic'es, !ctitio&s b&siness name statements and the 'i5e, and any
amendments and s&pp'ements thereto, as the voting Members consider
appropriate or advisab'e$
!"* Term" The term of the *ompany commenced on the !'ing of the Artic'es
of Organi0ation and sha'' be perpet&a' &n'ess disso'ved as provided in this
Agreement$
!"+ O,i&e and Agent" The principa' ofice of the *ompany sha'' be at s&ch
p'ace or p'aces of b&siness (ithin or (itho&t the 1tate of +e'a(are as the 4oting
Members may determine$ The *ompany sha'' contin&o&s'y maintain a registered
agent in the 1tate of +e'a(are as re6&ired by the Act$ The registered agent sha''
be as stated in the *erti!cate or as other(ise determined by the 4oting Members$
!"- .$rpo/e o0 Company" The p&rpose of the *ompany is to engage in a''
'a(f&' activities, inc'&ding, b&t not 'imited to the fo''o(ing activities)
_________________________________________________________________
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ARTICLE II
1E12ERS3I. INTERTESTS, 4OTING AND 1ANAGE1ENT
Se&tion '"! Initial 1ember/" The initia' Members of the *ompany are the
Members (ho are identi!ed in "#hibit A$
Se&tion '"' Cla//i%&ation o0 1ember/5ip Intere/t/" The *ompany sha''
iss&e *'ass A 4oting *apita' (4oting *apita'), to the 4oting Members (the 4oting
Members)$ The 4oting Members sha'' have the right to vote &pon a'' matters &pon
(hich Members have the right to vote &nder the Act or &nder this Agreement, in
proportion to their respective Percentage 4oting %nterest ("Percentage 4oting
%nterest") in the *ompany$ The Percentage 4oting %nterest of a 4oting Member
sha'' be the percentage that is derived (hen the Member7s 4oting *apita' acco&nt
is divided by the tota' of a'' of the 4oting *apita' acco&nts$
The *ompany may iss&e *'ass 8, 9onvoting *apita' (9onvoting *apita')$
Members may o(n interests in both 4oting *apita' and 9onvoting *apita'$
Members (ho o(n interests on'y in 9onvoting *apita' (9onvoting Members)
sha'' have no right to vote &pon any matters$ 9ot(ithstanding, to the e#tent
other(ise permitted by this agreement, a 9onvoting Member sha'' have the right
to !'e or participate in a mediation or an arbitration action, and sha'' be bo&nd by
an amendment to this agreement on'y if he signs s&ch amendment$
Se&tion '") .er&entage Owner/5ip and 4oting Intere/t/" A Member7s
O(nership %nterest (O(nership %nterest) is the tota' of his interests in 4oting
*apita' and 9onvoting *apita', together (ith a'' of the rights, as a Member or
Manager of the *ompany, that arise from s&ch interests$ The Percentage
O(nership %nterest ("Percentage O(nership %nterest") of a Member sha'' be
ca'c&'ated by adding together that Member7s 4oting *apita' Acco&nt and
9onvoting *apita' Acco&nt, and then dividing this s&m by the tota' of a'' of the
Member7s 4oting *apita' and 9onvoting *apita' Acco&nts$
The Members sha'' have the initia' O(nership, Percentage O(nership and
Percentage 4oting %nterests in the *ompany that are identi!ed in "#hibit A,
immediate'y fo''o(ing the ma5ing of the capita' contrib&tions set forth therein$
Se&tion '"* 1anagement by 4oting 1ember/" The 4oting Members sha''
manage the *ompany and sha'' have the right to vote, in their capacity as
Managers, &pon a'' matters &pon (hich Managers have the right to vote &nder the
Act or &nder this Agreement, in proportion to their respective Percentage 4oting
%nterests in the *ompany$ 4oting Members need not identify (hether they are
acting in their capacity as Members or Managers (hen they act$
The 9onvoting Members sha'' have no right to vote or other(ise participate in the
management of the *ompany$ 9o 9onvoting Member sha'', (itho&t the prior
(ritten consent of a'' of the 4oting Members, ta5e any action on beha'f of, or in the
name of, the *ompany, or enter into any contract, agreement, commitment or
ob'igation binding &pon the *ompany, or perform any act in any (ay re'ating to the
*ompany or the *ompany2s assets$
Se&tion '"+ 4oting" "#cept as other(ise provided or permitted by this
Agreement, 4oting Members sha'' in a'' cases, in their capacity as Members or
Managers of the *ompany, act co''ective'y, and, &n'ess other(ise speci!ed or
permitted by this Agreement, &nanimo&s'y$ "#cept as other(ise provided or
permitted by this Agreement, no 4oting Member acting individ&a''y, in his capacity
as a Member or Manager of the *ompany, sha'' have any po(er or a&thority to
sign for, bind or act on beha'f of the *ompany in any (ay, to p'edge the *ompany2s
credit, or to render the *ompany 'iab'e for any p&rpose$
:n'ess the conte#t re6&ires other(ise, in this Agreement, the terms Member or
Members, (itho&t the 6&a'i!ers 4oting or 9onvoting, refer to the 4oting and
9onvoting Members co''ective'y; and the terms Manager or Managers refers
to the 4oting Members$
Se&tion '"- Liability o0 1ember/" A'' debts, ob'igations and 'iabi'ities of
the *ompany, (hether arising in contract, tort or other(ise, sha'' be so'e'y the
debts, ob'igations and 'iabi'ities of the *ompany, and no Member sha'' be ob'igated
persona''y for any s&ch debt, ob'igation or 'iabi'ity of the *ompany so'e'y by reason
of being a Member$
Se&tion '"6 New 1ember/" The 4oting Members may iss&e additiona'
4oting *apita' or 9onvoting *apita' and thereby admit a ne( Member or
Members, as the case may be, to the *ompany, on'y if s&ch ne( Member (i) is
approved &nanimo&s'y by the 4oting Members; (ii) de'ivers to the *ompany his
re6&ired capita' contrib&tion; (iii) agrees in (riting to be bo&nd by the terms of
this Agreement by becoming a party hereto; and (iv) de'ivers s&ch additiona'
doc&mentation as the 4oting Members sha'' reasonab'y re6&ire to so admit s&ch
ne( Member to the *ompany$
:pon the admission of a ne( Member or Members, as the case may be, to the
*ompany, the capita' acco&nts of Members, and the ca'c&'ations that are based on
the capita' acco&nts, sha'' be ad<&sted appropriate'y$
ARTICLE III
CA.ITAL ACCO7NTS
)"! Initial Capital Contrib$tion/" "ach origina' Member to this
Agreement sha'' ma5e an initia' *apita' *ontrib&tion to the *ompany in
accordance (ith "#hibit A, at the time of each Member2s e#ec&tion of this
Agreement$
)"' Capital A&&o$nt/" A separate capita' acco&nt sha'' be maintained for
each Member7s o(nership interest in *'ass A 4oting *apita' (the "4oting *apita'
Acco&nt") and *'ass 8 9onvoting *apita' (the "9onvoting *apita' Acco&nt")$
The capita' acco&nt of each Member sha'' be increased by (i) the amo&nt of any
cash and the fair mar5et va'&e of any property contrib&ted to the *ompany by s&ch
Member (net of any 'iabi'ity sec&red by s&ch contrib&ted property that the
*ompany is considered to ass&me or ta5e s&b<ect to), (ii) the amo&nt of income or
pro!ts a''ocated to s&ch Member$
The capita' acco&nt or acco&nts of each Member sha'' be red&ced by (i) the amo&nt of
any cash and the fair mar5et va'&e of any property distrib&ted to the Member by the
*ompany (net of 'iabi'ities sec&red by s&ch distrib&ted property that the Member is
considered to ass&me or ta5e s&b<ect to on acco&nt of his o(nership interest), (ii) the
amo&nt of e#penses or 'oss a''ocated to the Member$ %f any property other than cash
is distrib&ted to a Member, the *apita' Acco&nts of the Members sha'' be ad<&sted as
if the property had instead been so'd by the *ompany for a price e6&a' to its fair
mar5et va'&e and the proceeds distrib&ted$
=&aranteed Payments (=&aranteed Payments) for sa'ary, (ages, fees, payments
on 'oans, rents, etc$, may be made to the Members$ =&aranteed Payments sha'' not
be deemed to be distrib&tions to the Members on acco&nt of their O(nership
%nterests, and sha'' not be charged to the Members7 capita' acco&nts$
9o Member sha'' be ob'igated to restore any negative ba'ance in his *apita'
Acco&nt$ 9o Member sha'' be compensated for any positive ba'ance in his *apita'
Acco&nt e#cept as other(ise e#press'y provided herein$ The foregoing provisions
and the other provisions of this Agreement re'ating to the maintenance of *apita'
Acco&nts are intended to comp'y (ith the provisions of >eg&'ations 1ection -$?@AB
-(b)(C) and sha'' be interpreted and app'ied in a manner consistent (ith s&ch
>eg&'ations$ The Members agree that the initia' *apita' Acco&nts of the Members
on the date hereof are as set forth in "#hibit A$
)") Additional Contrib$tion/" %f, at any time or times hereafter, the
4oting Members sha'' determine that additiona' capita' is re6&ired by the
*ompany, the 4oting Members sha'' determine the amo&nt of s&ch additiona'
capita' and the anticipated time s&ch additiona' capita' (i'' be re6&ired; (hether
s&ch additiona' capita' sha'' be provided by the Members by (ay of additiona'
*apita' *ontrib&tions or by (ay of 'oans from Members; (hether additiona'
*apita' *ontrib&tions, if any, sha'' be of in the form of *'ass A 4oting *apita' or
*'ass 8 9onvoting *apita'$ 9o Member sha'' be ob'igated, at any time, to
g&arantee or other(ise ass&me or become 'iab'e for any ob'igations of the
*ompany or to ma5e any additiona' *apita' *ontrib&tions advances or 'oans to
the *ompany, &n'ess s&ch ob'igations are speci!ca''y accepted and agreed to by
s&ch Member$
%n the event that additiona' *'ass A 4oting *apita' is to be iss&ed, the 4oting
Members (ho e#ist immediate'y prior to s&ch iss&ance sha'' be provided (ritten
notice of this intent, and sha'' be ofered in s&ch notice the opport&nity to ma5e
additiona' capita' contrib&tions in *'ass A 4oting *apita' in proportion to their
respective Percentage 4oting %nterests; provided that this right, if not e#ercised
(ithin ninety (D@) days after s&ch notice is received, sha'' e#pire a&tomatica''y,
&n'ess this period is e#tended by the 4oting Members$ Any 'oans or additiona'
capita' contrib&tions sha'' be vo'&ntary$
The capita' acco&nts of the Members, and the ca'c&'ations that are based on the
capita' acco&nts, sha'' be ad<&sted appropriate'y to re3ect any transfer of an
interest in the *ompany, distrib&tions, or additiona' capita' contrib&tions$
ARTICLE I4
1ANNER OF ACTING
*"! O,i&er/ and Agent/ o0 t5e Company" The 4oting Members may
a&thori0e any Member or Members of the *ompany, or other individ&a's or
entities, (hether or not a Member, to ta5e action on beha'f of the *ompany, as the
4oting Members deem appropriate$ Any Member may 'end money to and receive
'oans from the *ompany, act as an emp'oyee, independent contractor, 'essee,
'essor, or s&rety of the company, and transact any b&siness (ith the *ompany that
co&'d be carried o&t by someone (ho is not a Member; and the *ompany may
receive from or pay to any Member rem&neration, in the form of (ages, sa'ary,
fees, rent, interest, or any form that the 4oting Members deem appropriate$
The 4oting Members may appoint oficers of the *ompany (ho, to the e#tent
provided by the 4oting Members, may have and may e#ercise a'' the po(ers and
a&thority of the Members or Managers in the cond&ct of the b&siness and afairs of
the *ompany$ The oficers of the *ompany may consist of a President, a Treas&rer,
a 1ecretary, or other oficers or agents as may be e'ected or appointed by the
4oting Members$ The 4oting Members may provide r&'es for the appointment,
remova', s&pervision and compensation of s&ch oficers, the scope of their
a&thority, and any other matters re'evant to the positions$ The oficers sha'' act in
the name of the *ompany and sha'' s&pervise its operation, (ithin the scope of
their a&thority, &nder the direction and management of the 4oting Members$
Any action ta5en by a d&'y a&thori0ed oficer, p&rs&ant to a&thority granted by the
4oting Members in accordance (ith this Agreement, sha'' constit&te the act of and
serve to bind the *ompany, and each Member hereby agrees neither to disp&te
s&ch action nor the ob'igation of the *ompany created thereby$
*"' 1eeting/ o0 4oting 1ember/" 9o reg&'ar, ann&a', specia' or other
meetings of 4oting Members are re6&ired to be he'd$ Any action that may be ta5en
at a meeting of 4oting Members may be ta5en (itho&t a meeting by (ritten
consent in accordance (ith the Act$ Meetings of the 4oting Members, for any
p&rpose or p&rposes, may be ca''ed at any time by a ma<ority of the 4oting
Members, or by the President of the *ompany, if any$ The 4oting Members may
designate any p'ace as the p'ace of meeting for any meeting of the 4oting
Members$ %f no designation is made, the p'ace of meeting sha'' be the principa'
p'ace of b&siness of the *ompany$
*") Noti&e o0 1eeting/" %n the event that a meeting of the 4oting Members
is ca''ed, (ritten notice stating the p'ace, day and ho&r of the meeting and the
p&rpose or p&rposes for (hich the meeting is ca''ed sha'' be de'ivered not 'ess
than !ve nor more than si#ty b&siness days before the date of the meeting &n'ess
other(ise provided, either persona''y or by mai', by or at the direction of the
Members ca''ing the meeting, to each 4oting Member$ 9otice of a meeting need
not be given to any 4oting Member (ho signs a (aiver of notice or a consent to
ho'ding the meeting or an approva' of the min&tes thereof, (hether before or after
the meeting, or (ho attends the meeting (itho&t protesting, prior thereto or at its
commencement, the 'ac5 of notice to s&ch 4oting Member$
*"* Re&ord Date" Eor the p&rpose of determining 4oting Members entit'ed
to notice of or to vote at any meeting of 4oting Members or any ad<o&rnment
thereof, the date on (hich notice of the meeting is provided sha'' be the record
date for s&ch determination of the 4oting Members$ Fhen a determination of
4oting Members has been made as provided in this 1ection, s&ch determination
sha'' app'y to any ad<o&rnment thereof$
*"+ #$or$m" Members ho'ding at 'east /?G of the 4oting *apita' in the
*ompany represented in person, by te'ephonic participation, or by pro#y, sha''
constit&te a 6&or&m at any meeting of 4oting Members$ %n the absence of a
6&or&m at any s&ch meeting, a ma<ority of the 4oting Members so represented
may ad<o&rn the meeting from time to time for a period not to e#ceed si#ty days
(itho&t f&rther notice$ Ho(ever, if the ad<o&rnment is for more than si#ty days, or
if after the ad<o&rnment a ne( record date is !#ed for another meeting, a notice of
the ad<o&rned meeting sha'' be given to each 4oting Member$ The 4oting Members
present at a d&'y organi0ed meeting may contin&e to transact b&siness on'y as
previo&s'y provided on the agenda &nti' ad<o&rnment, not(ithstanding the
(ithdra(a' d&ring s&ch meeting of that n&mber of 4oting Members (hose absence
(o&'d ca&se 'ess than a 6&or&m$
*"- 4oting" %f a 6&or&m is present, a &nanimo&s vote of the 4oting Members
so represented sha'' be the act of the Members or Managers, &n'ess the vote of a
'esser proportion or n&mber is other(ise re6&ired by the Act, by the *erti!cate or
by this Agreement$
ARTICLE 4
ALLOCATIONS AND DISTRI27TIONS
+"! Allo&ation/ o0 .ro%t/ and Lo//e/" Pro!ts and ,osses, after ded&cting
=&aranteed Payments, sha'' be a''ocated among the Members in proportion to
their Percentage O(nership %nterests$ Any specia' a''ocations necessary to comp'y
(ith the re6&irements set forth in %nterna' >even&e *ode 1ection ?@A and the
corresponding >eg&'ations, inc'&ding, (itho&t 'imitation, the 6&a'i!ed income
ofset and minim&m gain chargebac5 provisions contained therein, sha'' be made if
the 4oting Members deem these actions to be appropriate$
+"' Di/trib$tion/" 1&b<ect to app'icab'e 'a( and any 'imitations e'se(here
in this Agreement, the 4oting Members sha'' determine the amo&nt and timing of
a'' distrib&tions of cash, or other assets, by the *ompany$ "#cept as other(ise
provided in this Agreement, a'' distrib&tions sha'' be made to a'' of the Members,
in proportion to their Percentage O(nership %nterests$ "#cept as other(ise
provided in this Agreement, the decision as to (hether to ma5e distrib&tions sha''
be (ithin the so'e discretion of the 4oting Members$
A'' s&ch distrib&tions sha'' be made on'y to the Members (ho, according to the
boo5s and records of the *ompany, are the ho'ders of record on the act&a' date of
distrib&tion$ The 4oting Members may base a determination that a distrib&tion of
cash may be made on a ba'ance sheet, pro!t and 'oss statement, cash 3o(
statement of the *ompany or other re'evant information$ 9either the *ompany nor
the Members sha'' inc&r any 'iabi'ity for ma5ing distrib&tions$
+") Form o0 Di/trib$tion" 9o Member has the right to demand and receive
any distrib&tion from the *ompany in any form other than money$ 9o Member may
be compe''ed to accept from the *ompany a distrib&tion of any asset in 5ind in 'ie&
of a proportionate distrib&tion of money being made to other Members e#cept on
the disso'&tion and (inding &p of the *ompany$
ARTICLE 4I
TRANSFER AND ASSIGN1ENT OF INTERESTS
-"! Re/ignation o0 1ember/5ip and Ret$rn o0 Capital" Eor a period of
one (-) year after the Artic'es of Organi0ation for the *ompany are !'ed (the
!'ing), no Member may vo'&ntari'y resign his membership in the *ompany, and no
Member sha'' be entit'ed to any ret&rn of capita' from the company, e#cept &pon
the (ritten consent of a'' of the other 4oting Members$ +&ring the second year
after the !'ing, a Member may vo'&ntari'y resign his membership, b&t s&ch
Member sha'' be entit'ed to receive from the *ompany on'y the boo5 va'&e of his
O(nership %nterest, ad<&sted for pro!ts and 'osses to the date of resignation,
&n'ess other(ise agreed by (ritten consent of a'' of the other 4oting Members$
1&bse6&ent to the second year after !'ing, a Member may vo'&ntari'y resign his
membership and sha'' be entit'ed to receive from the *ompany the fair mar5et
va'&e of his O(nership %nterest, ad<&sted for pro!ts and 'osses to the date of
resignation$ Eair mar5et va'&e may be determined informa''y by &nanimo&s
agreement of a'' of the 4oting Members, inc'&ding the resigning Member$ %n the
absence of an informa' agreement as to fair mar5et va'&e, the 4oting Members
sha'' hire an appraiser to determine fair mar5et va'&e$ The cost of any appraisa'
sha'' be ded&cted from the fair mar5et va'&e to (hich the resigning Member is
entit'ed$ The other 4oting Members may e'ect, by (ritten notice that is provided to
the resigning Member (ithin thirty (I@) days after the resignation date, for the
*ompany to p&rchase the resigning Member7s %nterest ((hether the interest is
being p&rchased at boo5 va'&e or fair mar5et va'&e) in fo&r (A) e6&a' ann&a' insta'' B
ments, (ith the !rst insta''ment being d&e si#ty (/@) days after the Member7s
resignation$
-"' Deat5 o0 a 1ember" :pon the death of a Member, the Member7s
estate or bene!ciary or bene!ciaries, as the case may be, sha'' be entit'ed to
receive from the *ompany, in e#change for a'' of the deceased Member7s
O(nership %nterest, the fair mar5et va'&e of the deceased Member7s O(nership
%nterest, ad<&sted for pro!ts and 'osses to the date of death$ Eair mar5et va'&e
may be determined informa''y by a &nanimo&s goodBfaith agreement of a'' of the
4oting Members$ %n the absence of an informa' agreement as to fair mar5et va'&e,
the 4oting Members sha'' hire an appraiser to determine fair mar5et va'&e$ The
cost of any appraisa' sha'' be ded&cted from the fair mar5et va'&e to (hich the
deceased Member7s estate or bene!ciary or bene!ciaries is or are entit'ed$ The
4oting Members may e'ect, by (ritten notice that is provided to the deceased
Member7s estate or bene!ciary or bene!ciaries, (ithin thirty (I@) days after the
Member7s death, to p&rchase the deceased Member7s O(nership %nterest over a
oneByear (- year) period, in fo&r (A) e6&a' insta''ments, (ith the !rst insta''ment
being d&e si#ty (/@) days after the Member7s date of death$ :n'ess other(ise
agreed &nanimo&s'y by the 4oting Members, prior to the comp'etion of s&ch
p&rchase, the Member7s estate or bene!ciary or bene!ciaries, sha'' have no right
to become a Member or to participate in the management of the b&siness and
afairs of the *ompany as a Member or Manager, and sha'' on'y have the rights of
an Assignee and be entit'ed on'y to receive the share of pro!ts and the ret&rn of
capita' to (hich the deceased Member (o&'d other(ise have been entit'ed$ The
*ompany, or the other 4oting Members, in its or their discretion, may p&rchase
ins&rance on the 'ives of any of the Members, (ith the company or the
p&rchasing Member named as the bene!ciary, as the p&rchaser may decide, and
&se a'' or any of the proceeds from s&ch ins&rance as a so&rce of proceeds from
(hich the deceased Member7s Membership O(nership %nterest may be
p&rchased by the *ompany$
-") Re/tri&tion/ on Tran/0er" E8&ept (i) as other(ise provided in this
Artic'e or (ii) &pon the &nanimo&s consent of a'' of the other 4oting Members, no
Member sha'' se'', hypothecate, p'edge, assign or other(ise transfer, (ith or
(itho&t consideration, any part or a'' of his O(nership %nterest in the *ompany to
any other person or entity (a Transferee), (itho&t !rst ofering (the Ofer) that
portion of his or her O(nership %nterest in the *ompany s&b<ect to the
contemp'ated transfer (the Ofered %nterest) !rst to the *ompany, and second'y,
to the other 4oting Members, at the p&rchase price (hereinafter referred to as the
Transfer P&rchase Price) and in the manner as prescribed in the Ofer$
The Ofering Member sha'' ma5e the Ofer !rst to the *ompany by (ritten notice
(hereinafter referred to as the Ofering 9otice)$ Fithin t(enty (C@) days (the
*ompany Ofer Period) after receipt by the *ompany of the Ofering 9otice, the
*ompany sha'' notify the Ofering Member in (riting (the *ompany 9otice),
(hether or not the *ompany sha'' accept the Ofer and sha'' p&rchase a'' b&t not
'ess than a'' of the Ofered %nterest$ %f the *ompany accepts the Ofer to p&rchase
the Ofered %nterest, the *ompany 9otice sha'' !# a c'osing date not more than
t(entyB!ve (CJ) days (the *ompany *'osing +ate) after the e#piration of the
*ompany Ofer Period$
%n the event the *ompany decides not to accept the Ofer, the Ofering Member or
the *ompany, at his or her or its e'ection, sha'', by (ritten notice (the >emaining
Member 9otice) given (ithin that period (the Member Ofer Period) terminating
ten (-@) days after the e#piration of the *ompany Ofer Period, ma5e the Ofer of
the Ofered %nterest to the other 4oting Members, each of (hom sha'' then have a
period of t(entyB!ve (CJ) days (the Member Acceptance Period) after the
e#piration of the Member Ofer Period (ithin (hich to notify in (riting the Ofering
Member (hether or not he or she intends to p&rchase a'' b&t not 'ess than a'' of the
Ofered %nterest$ %f t(o (C) or more 4oting Members of the *ompany desire to
accept the Ofer to p&rchase the Ofered %nterest, then, in the absence of an
agreement bet(een them, s&ch 4oting Members sha'' have the right to p&rchase
the Ofered %nterest in proportion to their respective Percentage 4oting %nterests$ %f
the other 4oting Members intend to accept the Ofer and to p&rchase the Ofered
%nterest, the (ritten notice re6&ired to be given by them sha'' !# a c'osing date not
more than si#ty (/@) days after the e#piration of the Member Acceptance Period
(hereinafter referred to as the Member *'osing +ate)$
The aggregate do''ar amo&nt of the Transfer P&rchase Price sha'' be payab'e in
cash on the *ompany *'osing +ate or on the Member *'osing +ate, as the case
may be, &n'ess the *ompany or the p&rchasing 4oting Members sha'' e'ect by
(ritten notice that is de'ivered to the Ofering Member, prior to or on the *ompany
*'osing +ate or the Member *'osing +ate, as the case may be, to p&rchase s&ch
Ofered %nterest in fo&r (A) e6&a' ann&a' insta''ments, (ith the !rst insta''ment
being d&e on the *'osing +ate$
%f the *ompany or the other 4oting Members fai' to accept the Ofer or, if the Ofer
is accepted by the *ompany or the other 4oting Members and the *ompany or the
other 4oting Members fai' to p&rchase a'' of the Ofered %nterest at the Transfer
P&rchase Price (ithin the time and in the manner speci!ed, then the Ofering
Member sha'' be free, for a period (hereinafter referred to as the Eree Transfer
Period) of si#ty (/@) days from the occ&rrence of s&ch fai'&re, to transfer the
Ofered %nterest to a Transferee; provided, ho(ever, that if a'' of the other 4oting
Members other than the Ofering Member do not approve of the proposed transfer
by &nanimo&s (ritten consent, the Transferee of the Ofered %nterest sha'' have no
right to become a Member or to participate in the management of the b&siness and
afairs of the *ompany as a Member or Manager, and sha'' on'y have the rights of
an Assignee and be entit'ed to receive the share of pro!ts and the ret&rn of capita'
to (hich the Ofering Member (o&'d other(ise have been entit'ed$ A Transferee
sha'' be admitted as a Member of the *ompany, and as a res&'t of (hich he or she
sha'' become a s&bstit&ted Member, (ith the rights that are consistent (ith the
Membership %nterest that (as transferred, on'y if s&ch ne( Member (i) is
approved &nanimo&s'y by the 4oting Members; (ii) de'ivers to the *ompany his
re6&ired capita' contrib&tion; (iii) agrees in (riting to be bo&nd by the terms of this
Agreement by becoming a party hereto$
%f the Ofering Member sha'' not transfer the Ofered %nterest (ithin the Eree
Transfer Period, his or her right to transfer the Ofered %nterest free of the
foregoing restrictions sha'' there&pon cease and terminate$
-"* In(ol$ntary Tran/0er o0 a 1ember/5ip Intere/t" A creditor7s charging
order or 'ien on a Member7s Membership %nterest, ban5r&ptcy of a Member, or other
invo'&ntary transfer of Member7s Membership %nterest, sha'' constit&te a materia'
breach of this Agreement by s&ch Member$ The creditor, transferee or other
c'aimant, sha'' on'y have the rights of an Assignee, and sha'' have no right to
become a Member, or to participate in the management of the b&siness and afairs
of the *ompany as a Member or Manager &nder any circ&mstances, and sha'' be
entit'ed on'y to receive the share of pro!ts and 'osses, and the ret&rn of capita', to
(hich the Member (o&'d other(ise have been entit'ed$ The 4oting Members,
inc'&ding a 4oting Member (hose interest is the s&b<ect of the charging order, 'ien,
ban5r&ptcy, or invo'&ntary transfer, may &nanimo&s'y e'ect, by (ritten notice that is
provided to the creditor, transferee or other c'aimant, at any time, to p&rchase a'' or
any part of Membership %nterest that (as the s&b<ect of the creditor7s charging
order, 'ien, ban5r&ptcy, or other invo'&ntary transfer, at a price that is e6&a' to oneB
ha'f (-KC) of the boo5 va'&e of s&ch interest, ad<&sted for pro!ts and 'osses to the
date of p&rchase$ The Members agree that s&ch va'&ation is a goodBfaith attempt at
!#ing the va'&e of the interest, after ta5ing into acco&nt that the interest does not
inc'&de a'' of the rights of a Member or Manager, and after ded&cting damages that
are d&e to the materia' breach of this Agreement$
ARTICLE 4II
ACCO7NTING, RECORDS AND RE.ORTING
6"! 2oo9/ and Re&ord/" The *ompany sha'' maintain comp'ete and
acc&rate acco&nts in proper boo5s of a'' transactions of or on beha'f of the
*ompany and sha'' enter or ca&se to be entered therein a f&'' and acc&rate
acco&nt of a'' transactions on beha'f of the *ompany$ The *ompany2s boo5s and
acco&nting records sha'' be 5ept in accordance (ith s&ch acco&nting princip'es
((hich sha'' be consistent'y app'ied thro&gho&t each acco&nting period) as the
4oting Members may determine to be convenient and advisab'e$ The *ompany
sha'' maintain at its principa' ofice a'' of the fo''o(ing)
A c&rrent 'ist of the f&'' name and 'ast 5no(n b&siness or residence address of
each Member in the *ompany set forth in a'phabetica' order, together (ith, for
each Member, the *'ass A 4oting *apita' acco&nt and *'ass 8 9onvoting *apita'
acco&nt, inc'&ding entries to these acco&nts for contrib&tions and distrib&tions;
the O(nership %nterest, Percentage O(nership and 4oting %nterests; a copy of the
*erti!cate and any and a'' amendments thereto together (ith e#ec&ted copies of
any po(ers of attorney p&rs&ant to (hich the *erti!cate or any amendments
thereto have been e#ec&ted; copies of the *ompany2s federa', state and 'oca'
income ta# or information ret&rns and reports, if any, for the si# most recent
ta#ab'e years; a copy of this Agreement and any and a'' amendments hereto
together (ith e#ec&ted copies of any po(ers of attorney p&rs&ant to (hich this
Agreement or any amendments thereto have been e#ec&ted; copies of the !nancia'
statements of the *ompany, if any, for the si# most recent Eisca' Lears; the
*ompany2s boo5s and records as they re'ate to the interna' afairs of the *ompany
for at 'east the c&rrent and past fo&r Eisca' Lears; tr&e and f&'' information
regarding the stat&s of the b&siness and !nancia' condition of the *ompany; and
tr&e and f&'' information regarding the amo&nt of cash and a description and
statement of the agreed va'&e of any other property or services contrib&ted by
each Member and (hich each Member has agreed to contrib&te in the f&t&re, and
the date on (hich each became a Member$
6"' In/pe&tion o0 2oo9/ and Re&ord/" "ach Member has the right, on
reasonab'e re6&est for p&rposes reasonab'y re'ated to the interest of the person as
a Member or a Manager, to) (a) inspect and copy d&ring norma' b&siness ho&rs any
of the *ompany2s records described in 1ection ?$-; and (b) obtain from the
*ompany prompt'y after their becoming avai'ab'e a copy of the *ompany2s federa',
state and 'oca' income ta# or information ret&rns for each Eisca' Lear$
6") A&&o$nting/" As soon as is reasonab'y practicab'e after the c'ose of
each Eisca' Lear, the 4oting Members sha'' ma5e or ca&se to be made a f&'' and
acc&rate acco&nting of the afairs of the *ompany as of the c'ose of that Eisca'
Lear and sha'' prepare or ca&se to be prepared a ba'ance sheet as of the end of
s&ch Eisca' Lear, a pro!t and 'oss statement for that Eisca' Lear and a statement of
Members2 e6&ity sho(ing the respective *apita' Acco&nts of the Members as of
the c'ose of s&ch Eisca' Lear and the distrib&tions, if any, to Members d&ring s&ch
Eisca' Lear, and any other statements and information necessary for a comp'ete
and fair presentation of the !nancia' condition of the *ompany, a'' of (hich the
Manager sha'' f&rnish to each Member$ %n addition, the *ompany sha'' f&rnish to
each Member information regarding the *ompany necessary for s&ch Member to
comp'ete s&ch Member2s federa' and state income ta# ret&rns$ The *ompany sha''
a'so f&rnish a copy of the *ompany2s ta# ret&rns to any Member re6&esting the
same$ On s&ch acco&nting being made, pro!ts and 'osses d&ring s&ch Eisca' Lear
sha'' be ascertained and credited or debited, as the case may be, in the boo5s of
acco&nt of the *ompany to the respective Members as herein provided$
6"* Filing/" The 4oting Members, at *ompany e#pense, sha'' ca&se the
income ta# ret&rns for the *ompany to be prepared and time'y !'ed (ith the
appropriate a&thorities$ The 4oting Members, at *ompany e#pense, sha'' a'so
ca&se to be prepared and time'y !'ed (ith appropriate federa' and state reg&'atory
and administrative bodies amendments to, or restatements of, the *erti!cate and
a'' reports re6&ired to be !'ed by the *ompany (ith those entities &nder the Act or
other then c&rrent app'icab'e 'a(s, r&'es, and reg&'ations$ %f the *ompany is
re6&ired by the Act to e#ec&te or !'e any doc&ment and fai's, after demand, to do
so (ithin a reasonab'e period of time or ref&ses to do so, any Member may
prepare, e#ec&te and !'e that doc&ment (ith the +e'a(are 1ecretary of 1tate$
6"+ 2an9 A&&o$nt/" The *ompany sha'' maintain its f&nds in one or more
separate ban5 acco&nts in the name of the *ompany, and sha'' not permit the
f&nds of the *ompany to be coBming'ed in any fashion (ith the f&nds of any other
Person$
6"- Ta8 1atter/ .artner" The 4oting Members may, in their e#c'&sive
discretion, appoint, remove and rep'ace a Ta# Matters Partner at any time or times$
The 4oting Members sha'' from time to time ca&se the *ompany to ma5e s&ch ta#
e'ections as they deem to be in the interests of the *ompany and the Members
genera''y$ The Ta# Matters Partner, as de!ned in %nterna' >even&e *ode 1ection
/CI-, sha'' represent the *ompany (at the *ompany2s e#pense) in connection (ith
a'' e#aminations of the *ompany2s afairs by ta# a&thorities, inc'&ding res&'ting
<&dicia' and administrative proceedings, and sha'' e#pend the *ompany f&nds for
professiona' services and costs associated there(ith$
ARTICLE 4III
DISSOL7TION AND :INDING 7.
;"! Di//ol$tion" The *ompany sha'' be disso'ved, its assets sha'' be
disposed of, and its afairs (o&nd &p on the !rst to occ&r of) the entry of a decree
of <&dicia' disso'&tion p&rs&ant to the Act; or the &nanimo&s approva' of the 4oting
Members$
;"' :inding 7p" On the occ&rrence of an event speci!ed in 1ection .$-, the
*ompany sha'' contin&e so'e'y for the p&rpose of (inding &p its afairs in an
order'y manner, 'i6&idating its assets and satisfying the c'aims of its creditors$ The
4oting Members sha'' be responsib'e for overseeing the (inding &p and 'i6&idation
of *ompany, sha'' ta5e f&'' acco&nt of the assets and 'iabi'ities of *ompany, sha''
ca&se s&ch assets to be so'd or distrib&ted, and sha'' ca&se the proceeds
therefrom, to the e#tent s&ficient therefor, to be app'ied and distrib&ted as
provided in 1ection D$A$ The 4oting Members sha'' give (ritten notice of the
commencement of (inding &p by mai' to a'' 5no(n creditors and c'aimants (hose
addresses appear on the records of the *ompany$ The Members sha'' be entit'ed to
reasonab'e compensation for s&ch services$
;") Di/trib$tion/ in <ind" Any noncash assets distrib&ted to the Members
sha'' !rst be va'&ed at their fair mar5et va'&e to determine the pro!t or 'oss that
(o&'d have res&'ted if s&ch assets (ere so'd for s&ch va'&e$ 1&ch pro!t or 'oss
sha'' then be a''ocated p&rs&ant to this Agreement, and the Members2 *apita'
Acco&nts sha'' be ad<&sted to re3ect s&ch a''ocations$ The amo&nt distrib&ted and
charged against the *apita' Acco&nt of each Member receiving an interest in a
distrib&ted asset sha'' be the fair mar5et va'&e of s&ch interest (net of any 'iabi'ity
sec&red by s&ch asset that s&ch Member ass&mes or ta5es s&b<ect to)$ The fair
mar5et va'&e of s&ch asset sha'' be determined by the 4oting Members, or if any
4oting Member ob<ects, by an independent appraiser (and any s&ch appraiser m&st
be recogni0ed as an e#pert in va'&ing the type of asset invo'ved) se'ected by a
Ma<ority of the 4oting Members$
;"* Order o0 .ayment o0 Liabilitie/ on Di//ol$tion" After a
determination that a'' 5no(n debts and 'iabi'ities of the *ompany in the process of
(inding &p, inc'&ding, (itho&t 'imitation, debts and 'iabi'ities to Members (ho are
creditors of the *ompany, have been paid or ade6&ate'y provided for, the
remaining assets sha'' be distrib&ted to the Members in proportion to their positive
*apita' Acco&nt ba'ances, after ta5ing into acco&nt pro!t and 'oss a''ocations for
the *ompany2s ta#ab'e year d&ring (hich 'i6&idation occ&rs$
;"+ Ade=$a&y o0 .ayment" The payment of a debt or 'iabi'ity, (hether the
(hereabo&ts of the creditor is 5no(n or &n5no(n, sha'' have been ade6&ate'y
provided for if payment thereof sha'' have been ass&med or g&aranteed in good
faith by one or more !nancia''y responsib'e Persons or by the :nited 1tates
government or any agency thereof, and the provision, inc'&ding the !nancia'
responsibi'ity of the Person, (as determined in good faith and (ith reasonab'e
care by the Members to be ade6&ate at the time of any distrib&tion of the assets
p&rs&ant to this 1ection$ This 1ection sha'' not prescribe the e#c'&sive means of
ma5ing ade6&ate provision for debts and 'iabi'ities$
;"- Complian&e wit5 Reg$lation/" A'' payments to the Members on the
(inding &p and disso'&tion of *ompany sha'' be strict'y in accordance (ith the
positive capita' acco&nt ba'ance 'imitation and other re6&irements of >eg&'ations
1ection -$?@AB-(b)(C)(ii)(d), as the voting Members deem appropriate$
;"6 Limitation/ on .ayment/ 1ade in Di//ol$tion" "#cept as other(ise
speci!ca''y provided in this Agreement, each Member sha'' on'y be entit'ed to 'oo5
so'e'y to the assets of the *ompany for the ret&rn of s&ch Member2s positive
*apita' Acco&nt ba'ance and sha'' have no reco&rse for s&ch Member2s *apita'
*ontrib&tion or share of pro!ts (on disso'&tion or other(ise) against any other
Member$
;"; Certi%&ate o0 Can&ellation" The 4oting Members cond&cting the
(inding &p of the afairs of the *ompany sha'' ca&se to be !'ed in the ofice of, and
on a form prescribed by the +e'a(are 1ecretary of 1tate, a certi!cate of
cance''ation of the *erti!cate on the comp'etion of the (inding &p of the afairs of
the *ompany$
ARTICLE I>
E>C7L.ATION AND INDE1NIFICATION
?"! E8&$lpation o0 1ember/" 9o Member sha'' be 'iab'e to the *ompany
or to the other Members for damages or other(ise (ith respect to any actions
ta5en or not ta5en in good faith and reasonab'y be'ieved by s&ch Member to be in
or not opposed to the best interests of the *ompany, e#cept to the e#tent any
re'ated 'oss res&'ts from fra&d, gross neg'igence or (i''f&' or (anton miscond&ct
on the part of s&ch Member or the materia' breach of any ob'igation &nder this
Agreement or of the !d&ciary d&ties o(ed to the *ompany or the other Members
by s&ch Member$
?"' Indemni%&ation by Company" The *ompany sha'' indemnify, ho'd
harm'ess and defend the Members, in their capacity as Members, Managers, or
Oficers, from and against any 'oss, e#pense, damage or in<&ry s&fered or
s&stained by them by reason of any acts or omissions arising o&t of their activities
on beha'f of the *ompany or in f&rtherance of the interests of the *ompany,
inc'&ding b&t not 'imited to any <&dgment, a(ard, sett'ement, reasonab'e
attorneys2 fees and other costs or e#penses inc&rred in connection (ith the
defense of any act&a' or threatened action, proceeding or c'aim, if the acts or
omissions (ere not performed or omitted fra&d&'ent'y or as a res&'t of gross
neg'igence or (i''f&' miscond&ct by the indemni!ed party$ >easonab'e e#penses
inc&rred by the indemni!ed party in connection (ith any s&ch proceeding re'ating
to the foregoing matters may be paid or reimb&rsed by the *ompany in advance of
the !na' disposition of s&ch proceeding &pon receipt by the *ompany of (i) (ritten
afirmation by the Person re6&esting indemni!cation of its goodBfaith be'ief that it
has met the standard of cond&ct necessary for indemni!cation by the *ompany
and (ii) a (ritten &nderta5ing by or on beha'f of s&ch Person to repay s&ch amo&nt
if it sha'' &'timate'y be determined by a co&rt of competent <&risdiction that s&ch
Person has not met s&ch standard of cond&ct, (hich &nderta5ing sha'' be an
&n'imited genera' ob'igation of the indemni!ed party b&t need not be sec&red$
?") In/$ran&e" The *ompany sha'' have the po(er to p&rchase and
maintain ins&rance on beha'f of any Person (ho is or (as a Member or an agent of
the *ompany against any 'iabi'ity asserted against s&ch Person and inc&rred by
s&ch Person in any s&ch capacity, or arising o&t of s&ch Person2s stat&s as a
Member or an agent of the *ompany, (hether or not the *ompany (o&'d have the
po(er to indemnify s&ch Person against s&ch 'iabi'ity &nder 1ection -@$- or &nder
app'icab'e 'a($
ARTICLE >
1ISCELLANEO7S
!@"! A$t5ority" This Agreement constit&tes a 'ega', va'id and binding
agreement of the Member, enforceab'e against the Member in accordance (ith its
terms$ The Member is empo(ered and d&'y a&thori0ed to enter into this
Agreement (inc'&ding the po(er of attorney herein) &nder every app'icab'e
governing doc&ment, partnership agreement, tr&st instr&ment, pension p'an,
charter, certi!cate of incorporation, by'a( provision or the 'i5e$ The Person, if any,
signing this Agreement on beha'f of the Member is empo(ered and d&'y
a&thori0ed to do so by the governing doc&ment or tr&st instr&ment, pension p'an,
charter, certi!cate of incorporation, by'a( provision, board of directors or
stoc5ho'der reso'&tion or the 'i5e$
!@"' Indemni%&ation by t5e 1ember/" "ach Member hereby agrees to
indemnify and defend the *ompany, the other Members and each of their respective
emp'oyees, agents, partners, members, shareho'ders, oficers and directors and
ho'd them harm'ess from and against any and a'' c'aims, 'iabi'ities, damages, costs
and e#penses (inc'&ding, (itho&t 'imitation, co&rt costs and attorneys2 fees and
e#penses) s&fered or inc&rred on acco&nt of or arising o&t of any breach of this
Agreement by that Member$
ARTICLE >I
DIS.7TE RESOL7TION
!!"! Di/p$te/ Among 1ember/" The Members agree that in the event of
any disp&te or disagreement so'e'y bet(een or among any of them arising o&t of,
re'ating to or in connection (ith this Agreement or the *ompany or its
organi0ation, formation, b&siness or management ("Member +isp&te"), the
Members sha'' &se their best eforts to reso've any disp&te arising o&t of or in
connection (ith this Agreement by goodBfaith negotiation and m&t&a' agreement$
The Members sha'' meet at a m&t&a''y convenient time and p'ace to attempt to
reso've any s&ch disp&te$
Ho(ever, in the event that the Members are &nab'e to reso've any Member
+isp&te, s&ch parties sha'' !rst attempt to sett'e s&ch disp&te thro&gh a nonB
binding mediation proceeding$ %n the event any party to s&ch mediation proceeding
is not satis!ed (ith the res&'ts thereof, then any &nreso'ved disp&tes sha'' be
!na''y sett'ed in accordance (ith an arbitration proceeding$ %n no event sha'' the
res&'ts of any mediation proceeding be admissib'e in any arbitration or <&dicia'
proceeding$
!!"' 1ediation" Mediation proceedings sha'' be cond&cted in accordance
(ith the *ommercia' Mediation >&'es of the American Arbitration Association (the
"AAA") in efect on the date the notice of mediation (as served, other than as
speci!ca''y modi!ed herein, and sha'' be nonBbinding on the parties thereto$
Any Member may commence a mediation proceeding by serving (ritten notice
thereof to the other Members, by mai' or other(ise, designating the iss&e(s) to be
mediated and the speci!c provisions of this Agreement &nder (hich s&ch iss&e(s)
and disp&te arose$ The initiating party sha'' sim&'taneo&s'y !'e t(o copies of the
notice (ith the AAA, a'ong (ith a copy of this Agreement$ A Member may
(ithdra( from the Member +isp&te by signing an agreement to be bo&nd by the
res&'ts of the mediation, to the e#tent the mediation res&'ts are accepted by the
other Members as provided herein$ A Member (ho (ithdra(s sha'' have no f&rther
right to participate in the Member +isp&te$
The Members sha'' se'ect one ne&tra' third party AAA mediator (the "Mediator")
(ith e#pertise in the area that is in disp&te$ %f a Mediator has not been se'ected
(ithin !ve (J) b&siness days thereafter, then a Mediator sha'' be se'ected by the
AAA in accordance (ith the *ommercia' Mediation >&'es of the AAA$
The Mediator sha'' sched&'e sessions, as necessary, for the presentation by a''
Members of their respective positions, (hich, at the option of the Mediator, may be
heard by the Mediator <oint'y or in private, (itho&t any other members present$
The mediation proceeding sha'' be he'd in the city that is the company7s principa'
p'ace of b&siness or s&ch other p'ace as agreed by the Mediator and a'' of the
Members$ The Members may s&bmit to the Mediator, no 'ater than ten (-@)
b&siness days prior to the !rst sched&'ed session, a brief memorand&m in s&pport
of their position$
The Mediator sha'' ma5e (ritten recommendations for sett'ement in respect of the
disp&te, inc'&ding apportionment of the mediator7s fee, (ithin ten (-@) b&siness
days of the 'ast sched&'ed session$ %f any Member invo'ved is not satis!ed (ith the
recommendation for sett'ement, he may commence an arbitration proceeding$
!!") Arbitration" Arbitration proceedings sha'' be cond&cted &nder the
>&'es of *ommercia' Arbitration of the AAA (the ">&'es")$ A Member may (ithdra(
from the Member +isp&te by signing an agreement to be bo&nd by the res&'ts of
the arbitration$ A Member (ho (ithdra(s sha'' have no f&rther right to participate
in the Member +isp&te$
The arbitration pane' sha'' consist of one arbitrator$ The Members sha'' se'ect one
ne&tra' third party AAA arbitrator (the "Arbitrator") (ith e#pertise in the area that
is in disp&te$ %f an Arbitrator has not been se'ected (ithin !ve (J) b&siness days
thereafter, then an Arbitrator sha'' be se'ected by the AAA in accordance (ith the
*ommercia' Arbitration >&'es of the AAA$ The arbitration proceeding sha'' be he'd
in the city that is the company7s principa' p'ace of b&siness or s&ch other p'ace as
agreed by the Arbitrator and a'' of the Members$ Any arbitrator (ho is se'ected
sha'' disc'ose prompt'y to the AAA and to both parties any !nancia' or persona'
interest the arbitrator may have in the res&'t of the arbitration andKor any other
prior or c&rrent re'ationship, or e#pected or disc&ssed f&t&re re'ationship, (ith the
Members or their representatives$ The arbitrator sha'' prompt'y cond&ct
proceedings to reso've the disp&te in 6&estion p&rs&ant to the then e#isting >&'es$
To the e#tent any provisions of the >&'es con3ict (ith any provision of this 1ection,
the provisions of this 1ection sha'' contro'$
%n any !na' a(ard andKor order, the arbitrator sha'' apportion a'' the costs (other
than attorney2s fees (hich sha'' be borne by the party inc&rring s&ch fees)
inc&rred in cond&cting the arbitration in accordance (ith (hat the arbitrator
deems <&st and e6&itab'e &nder the circ&mstances$
+iscovery sha'' not be permitted in s&ch arbitration e#cept as a''o(ed by the r&'es
of arbitration, or as other(ise agreed to by a'' the parties of the Member +isp&te$
9ot(ithstanding, the Members agree to ma5e avai'ab'e to one another and to the
arbitrator, for inspection and photocopying, a'' doc&ments, boo5s and records, if
determined by the arbitration pane' to be re'evant to the disp&te, and by ma5ing
avai'ab'e to one another and to the arbitration pane' personne' direct'y or
indirect'y &nder their contro', for testimony d&ring hearings if determined by the
arbitration pane' to be re'evant to the disp&te$ The Members agree, &n'ess &nd&e
hardship e#ists, to cond&ct arbitration hearings to the greatest e#tent possib'e on
consec&tive b&siness days and to strict'y observe time periods estab'ished by the
>&'es or by the arbitrator for the s&bmission of evidence and of briefs$ :n'ess
other(ise agreed to by the Members, a stenographic record of the arbitration
proceedings sha'' be made and a transcript thereof sha'' be ordered for each
Member, (ith each party paying an e6&a' portion of the tota' cost of s&ch
recording and transcription$
The arbitrator sha'' have a'' po(ers of 'a( and e6&ity, (hich it can 'a(f&''y
ass&me, necessary to reso've the iss&es in disp&te inc'&ding, (itho&t 'imiting the
genera'ity of the foregoing, ma5ing a(ards of compensatory damages, iss&ing both
prohibitory and mandatory orders in the nat&re of in<&nctions and compe''ing the
prod&ction of doc&ments and (itnesses for presentation at the arbitration hearings
on the merits of the case$ The arbitration pane' sha'' neither have nor e#ercise any
po(er to act as amicab'e composite&r or e# ae6&o et bono; or to a(ard specia',
indirect, conse6&entia' or p&nitive damages$ The decision of the arbitration pane'
sha'' be in (ritten form and state the reasons &pon (hich it is based$ The stat&tory,
case 'a( and common 'a( of the 1tate of +e'a(are sha'' govern in interpreting
their respective rights, ob'igations and 'iabi'ities arising o&t of or re'ated to the
transactions provided for or contemp'ated by this Agreement, inc'&ding (itho&t
'imitation, the va'idity, constr&ction and performance of a'' or any portion of this
Agreement, and the app'icab'e remedy for any 'iabi'ity estab'ished there&nder, and
the amo&nt or method of comp&tation of damages (hich may be a(arded, b&t s&ch
governing 'a( sha'' not inc'&de the 'a( pertaining to con3icts or choice of 'a(s of
+e'a(are; provided ho(ever, that sho&'d the parties refer a disp&te arising o&t of
or in connection (ith an anci''ary agreement or an agreement bet(een some or a''
of the Members (hich speci!ca''y references this Artic'e, then the stat&tory, case
'a( and common 'a( of the 1tate (hose 'a( governs s&ch agreement (e#cept the
'a( pertaining to con3icts or choice of 'a() sha'' govern in interpreting the
respective rights, ob'igations and 'iabi'ities of the parties arising o&t of or re'ated
to the transactions provided for or contemp'ated by s&ch agreement, inc'&ding,
(itho&t 'imitation, the va'idity, constr&ction and performance of a'' or any portion
of s&ch agreement, and the app'icab'e remedy for any 'iabi'ity estab'ished
there&nder, and the amo&nt or method of comp&tation of damages (hich may be
a(arded$
Any action or proceeding s&bse6&ent to any A(ard rendered by the arbitrator in
the Member +isp&te, inc'&ding, b&t not 'imited to, any action to con!rm, vacate,
modify, cha''enge or enforce the arbitrator2s decision or a(ard sha'' be !'ed in a
co&rt of competent <&risdiction in the same co&nty (here the arbitration of the
Member +isp&te (as cond&cted, and +e'a(are 'a( sha'' app'y in any s&ch
s&bse6&ent action or proceeding$
ARTICLE >II
1ISCELLANEO7S
!'"! Noti&e/" "#cept as other(ise e#press'y provided herein, any notice,
consent, a&thori0ation or other comm&nication to be given here&nder sha'' be in
(riting and sha'' be deemed d&'y given and received (hen de'ivered persona''y,
(hen transmitted by facsimi'e if receipt is ac5no('edged by the addressee, one
b&siness day after being deposited for ne#tBday de'ivery (ith a nationa''y
recogni0ed overnight de'ivery service, or three b&siness days after being mai'ed by
!rst c'ass mai', charges and postage prepaid, proper'y addressed to the party to
receive s&ch notice at the address set forth in the *ompany7s records$
!'"' Se(erability" %f any provision of this Agreement, or the app'ication of
s&ch provision to any Person or circ&mstance, sha'' be he'd by a co&rt of
competent <&risdiction to be inva'id or &nenforceab'e, the remainder of this
Agreement, or the app'ication of s&ch provision to Persons or circ&mstances other
than those to (hich it is he'd to be inva'id or &nenforceab'e, sha'' not be afected
thereby$
!'") 2inding E,e&t" 1&b<ect to Artic'e 4%%, this Agreement sha'' bind and
in&re to the bene!t of the parties and their respective 1&ccessors$
!'"* Co$nterpart/" This Agreement may be e#ec&ted in one or more
co&nterparts, each of (hich sha'' be deemed an origina', b&t a'' of (hich together
sha'' constit&te one and the same instr&ment$
!'"+ Entire Agreement" This Agreement contains the entire agreement of
the parties and s&persedes a'' prior or contemporaneo&s (ritten or ora'
negotiations, correspondence, &nderstandings and agreements bet(een or among
the parties, regarding the s&b<ect matter hereof$
!'"- F$rt5er A//$ran&e/" "ach Member sha'' provide s&ch f&rther
information (ith respect to the Member as the *ompany may reasonab'y re6&est,
and sha'' e#ec&te s&ch other and f&rther certi!cates, instr&ments and other
doc&ments, as may be necessary and proper to imp'ement, comp'ete and perfect
the transactions contemp'ated by this Agreement$
!'"6 3eading/A GenderA N$mberA Re0eren&e/" The headings of the
1ections hereof are so'e'y for convenience of reference and are not part of this
Agreement$ As &sed herein, each gender inc'&des each other gender, the sing&'ar
inc'&des the p'&ra' and vice versa, as the conte#t may re6&ire$ A'' references to
1ections and s&bsections are intended to refer to 1ections and s&bsections of this
Agreement, e#cept as other(ise indicated$
!'"; .artie/ in Intere/t" "#cept as e#press'y provided in the Act, nothing
in this Agreement sha'' confer any rights or remedies &nder or by reason of this
Agreement on any Persons other than the Members and their respective
1&ccessors nor sha'' anything in this Agreement re'ieve or discharge the ob'igation
or 'iabi'ity of any third Person to any party to this Agreement, nor sha'' any
provision give any third Person any right of s&brogation or action over or against
any party to this Agreement$
!'"? Amendment/" A'' amendments to this Agreement sha'' be in (riting
and signed by a'' of the Members to the agreement at the time of the amendment$
!'"!@ Attorney/B Fee/" %n any disp&te bet(een or among the *ompany and
one or more of the Members, inc'&ding, b&t not 'imited to, any Member +isp&te,
the prevai'ing party or parties in s&ch disp&te sha'' be entit'ed to recover from the
nonBprevai'ing party or parties a'' reasonab'e fees, costs and e#penses inc'&ding,
(itho&t 'imitation, attorneys2 fees, costs and e#penses, a'' of (hich sha'' be
deemed to have accr&ed on the commencement of s&ch action, proceeding or
arbitration$ Attorneys2 fees sha'' inc'&de, (itho&t 'imitation, fees inc&rred in any
postBa(ard or postB<&dgment motions or proceedings, contempt proceedings,
garnishment, 'evy, and debtor and third party e#aminations, discovery, and
ban5r&ptcy 'itigation, and prevai'ing party sha'' mean the party that is determined
in the arbitration, action or proceeding to have prevai'ed or (ho prevai's by
dismissa', defa&'t or other(ise$
!'"!! Remedie/ C$m$lati(e" 1&b<ect to Artic'e M%, remedies &nder this
Agreement are c&m&'ative and sha'' not e#c'&de any other remedies to (hich any
Member may be 'a(f&''y entit'ed$
!'"!' C$ri/di&tion and 4en$eDE=$itable Remedie/" The *ompany and
each Member hereby e#press'y agrees that if, &nder any circ&mstances, any
disp&te or controversy arising o&t of or re'ating to or in any (ay connected (ith
this Agreement sha'', not(ithstanding Artic'e M%, be the s&b<ect of any co&rt action
at 'a( or in e6&ity, s&ch action sha'' be !'ed e#c'&sive'y in the co&rts of the 1tate of
__________ or of the :nited 1tates of America 'ocated in the co&nties of ___________
or __________, as se'ected by the Member that is the p'aintif in the action, or that
initiates the proceeding or arbitration$ "ach Member agrees not to commence any
action, s&it or other proceeding arising from, re'ating to, or in connection (ith this
Agreement e#cept in s&ch a co&rt and each Member irrevocab'y and
&nconditiona''y consents and s&bmits to the persona' and e#c'&sive <&risdiction of
s&ch co&rts for the p&rposes of 'itigating any s&ch action, and hereby grants
<&risdiction to s&ch co&rts and to any appe''ate co&rts having <&risdiction over
appea's from s&ch co&rts or revie( of s&ch proceedings$ 8eca&se the breach of the
provisions of this 1ection (o&'d ca&se irreparab'e harm and signi!cant in<&ry to
the *ompany and the other Members, (hich (o&'d be dific&'t to ascertain and
(hich may not be compensab'e by damages a'one, each Member agrees that the
*ompany and the other Members (i'' have the right to enforce the provisions of
this 1ection by in<&nction, speci!c performance or other e6&itab'e re'ief in addition
to any and a'' other remedies avai'ab'e to s&ch party or parties (itho&t sho(ing or
proving any act&a' damage to s&ch parties$ Members (i'' be entit'ed to recover a''
reasonab'e costs and e#penses, inc'&ding b&t not 'imited to a'' reasonab'e
attorneys2 fees, e#pert and cons&'tants2 fees, inc&rred in connection (ith the
enforcement of this 1ection$
%9 F%T9"11 FH">"OE, this ,imited ,iabi'ity *ompany Operating
Agreement has been d&'y e#ec&ted by or on beha'f of the parties hereto as of the
date !rst above (ritten$
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E>3I2IT A
LLC 1E12ERS AND INITIAL CONTRI27TIONS
9ame %nitia' *ontrib&tion
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1ignat&re +ated
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