2003-12-02 Centre Pointe - Operating Agreement - CP Development, LLC12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 01
Phone: (76o) M-oo76
Date:
Recipient:
To Fax numbers:
Sender:
From Fax Number:
Pages
RE:
ne Law Offices of
Q/ CK J. B BURY
75140 St. Charles Place, Suite "B"
Palm Desert, California 92211
Fax: (76o) 779-i8o6
FACSUVME TRANSMISSION
December 2, 2003
Cathy Jensen
(760) 777-7101
Chadwick J. Bradbury
(760) 779-I806
SI
e-mail: bradburylaw@aol.com
Center Point Development Operating Agreement and nay
letter dated Z 2.2.02
CONFIDENTL&LITY STATEMENT:
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR
ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION
THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE
UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE
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POSTAL SERVICE. YOUR COOPERATION IS ANTICIPATED AND INDEED
APPRECIATED.
COMMENTS: .
12/02/2003 .16:.32 111.4072-4241 1 CHADWICK J BRADBURY PAGE 02
CHADWICK J. BRADBURY
ATnrOXNM' AT LAW
75-140 SSCtt-..- Charlas Place
swte NBM
Pam Desert, C_alifomia 92211
Phone: (760) 779-0076
Fax- (760) 779-1806
E-Maik bradburylawCaol.com
December 2, 2003
VIA FAX (760) 777-7101
Cathy Jensen
CITY OF LA QUINTA
78495 Calle Tampico
La Quinta, CA 92253
Re: Centex Point Development, LLC
Operating Agreement
Dear Ms. Jensen:
As I informed you over the telephone 1 am legal counsel to Richard Oliphant and Dennis
French. I have been retained for the specific purpose of representing Mr. Oliphant's and Mir.
French's interests in Center Point Development, LLC ("Center Point!). Attached hereto is a
signed copy of the Center Point Development, LLC Operating Agreement that you requested.
I ask that you pay particular attention to the following sections which state:
"5.3 Powers of Mana emirs.
A. Powers of Man_ Without limiting tlae generality of Section 5.1,
but subject to Section 5.3B and to the express limitations set forth elsewhere in this
Agreement, the Managers shall have all Necessary powers to manage and carry out the
purposes, business, property, mad affairs of the Company, including, without limitation,
the power to exercise on behalf and in the name of the Company all of the powers
described in Corporations Code Section 17003, including, without limitation, the power to:
0) Acquire, purchase, renovate, irnprove, alter, rebuild, demolish,
replace, and own zeal property and any other property or. assets that the Managers determine is
necessary or appropriate or in the interest of the business of the Company, and to acquire options
for the purchase of any such property;
(H) Sell, exchange, lease, or otherwise dispose of the real
property and other property and assets owned by the Company, or any part thereof,
or any ia�tereSt therein;
12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 03
5.3B. Limitations on Power of Managers. Notwithstanding airy other provisions
of this Agreement, no debt or liability of more than $10,000.00 may be contracted on
behalf of the Company except by the written consent of all Members. AAdditionahy, the
Managers shall not have authority hereunder to cause the Company to engage in the
following transactions without first obtaining the affirmative vote or written consent
of a Majority Interest (or such greater Percentage Interests set forth below) of the
Members:
(i) The sale, exchange or other disposition of all, or
substantially all, of the Company's assets occurring as part of a single transaction or
playa, or in multiple transactions over a three (3) month period, except in the orderly
liquidation, and winding up of the business of the Company upon its duly authorized
dissolution, shall require the affirmative vote or written consent of Members holding at
least fifty-one percent (51 %) in Percentage lj#earests;
I have also attached hereto a signed Resolution by Managing Members Oliphant and
French who hold a combined 66.66% Percentage Interest in Center Point. As stated by
the clear language of the Operating Agreement the assignment of the DD,A, agreement
from Center Point to CP Development, LLC has been approved and is appropriate. I am
also in the process of finalizing an agreement with Mir. Pickering to resolve any
differences that may exist between the Members. Even without Mr. Pickering's approval
my clients are well within their legal rights to proceed with the assignment of the DDA
Agreement from Center Point Development, LLC to CP Development, LLC. Please
forward this information to the City Counsel for their review. I apologize for the delay in
providing you this information, but we have been involved with ongoing negotiations for
a final resolution.
I will be present at the counsel meeting tonight at 6:30 to address any questions that may
arise.
Sincerely yours,
Chadwick J. Bradbury
Enclosure as stated.
Cc: Dennis French
Richard Oliphant
12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY PAGE 04
CENTER POINT DEVELOPMENT, LT-C
RESOLUTION AND RATIFICATION OF ACTION OF MEMBERS WITHOUT
MEETING AND WAIVER- OF MEETING
We the undersigned Members ("Members") of CENTER POINT DEVELOPMENT,
LLC ("Company") do hereby waive notice of time, place and purpose for a special
meeting of the members of the Company and do hereby gratify, affirm, and adopt the
following actions notwithstanding any provisions of the Company's operating agreement.
T U; FFORE upon motion duly made, seconded and unanimously passed by all of the
Members, the Members hereby agree to an assignment of all rights, title, interests,
obligations and liabilities in the City of La Quinta DDA agreement for the development
of the projects known as the Center Point Project from Center Point Development, LLC
to CP Development, LLC, a California Limited Liability company.
FU tTE ERMORE upon motion duly made, seconded and unanimously passed by all of
the Members, the Members hereby approve the payment of consideration the sufficiency
of which is hereby acknowledged to Curtis E. Pickering upon Mr. Pickering's execution
of this resolution.
WITNESS our bands this 2nd day of December, 2003.
By: 200.(
RICHARD OLIPHANT
OLIPHANT FANMY TRUST
BY: '
ENNIS FRENCH, Individually and n behalf of
NM INC.
By:
CURTIS E. PICKERING
TWELVE STONE TRUST
12/02/2003 16t-32 1114072-4241 CHADWICK J BRADBURY PAGE "05
OPERATING AGREEMENT
FOR
CENTER POINT DEVELOPMENT, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED UNDER ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS
QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES
LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH
QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE
SECURITIES REPRESENTED BY THIS AGREEMENT IS FURTHER SUBJECT TO OTHER
RESTRICTIONS, TERMS AND CONDITIONS W 11CH ARE SET FORTH HEREIN.
12/02/2003 16:32 1114072-4241 CHADWICK J BRADBURY
PAGE 06
OPERATING AGREEMENT
• FOR
CENTER POINT DEVELOPMENT, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
This Operating Agreement, is made as of the ist day of Mauch, 2003, by and among the parties
listed on the signature pages hereof, with reference to the following facts:
A. On January 27, 2003, Articles of Organization for CENTER POINT DEVELOPMENT,
LLC, (the "Company"), a limited liability company organized under the laws of the State of California, were
filed with the California Secretary of State.
B. The parties desire to adopt and approve an operating agreement for the Company.
NOW, TI MREFORE, the parties by this Agreement set forth the operating agreement for the
Company under the laws of the State of California upon the terms and subject to the conditions of this
Agreement,
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings set forth below (all
terms used in this Agreement that are not defined in this Article I shall have the meanings set forth
elsewhere in this Agreement):
1.1 "Art" shall mean the Beverly-Killea Limited Liability Company Act, codified in the
California Corporations Code, Section 17000 at sec}., as the same may be amended from time to time.
1.2 "Affiliate" of a Member or Manager shall mean any Person, directly or indirectly, through
one or more intermediaries, controlling, controlled by, or under common control with a Member or
Manager, as applicable. The term "control," as used in the immediately preceding sentence, shall mean with
respect to a corporation or limited liability company the right to exercise, directly or indirectly, more than
fifty percent (50%) of the voting rights attributable to the controlled corporation or limited liability
eompariy, and, with respect to any individual, partnership, trust, other entity or association, the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies of the
controlled entity.
1.3 " Amement" shall mean this Operating Agreement, as originally executed and as amended
from time to time.
1 A "Articles" shall mean the Articles of Organization for the Company originally filed with the
California Secretary of State and as amended from time to time.
1.S "Assignee" shall mean the owner of an Economic Interest who has not been admitted as a
substitute Member in accordance with Article VII.
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.CHADWICK J BRADBURY PAGE 07
1.6 " " shall mean: (a) the filing of an application by a Member for, or his or her
consent to, the appointment of a trustee, receiver, or custodian of his or her other assets; (b) the entry of an
order for relief with respect to a Member in proceedings under the United States Bankruptcy Code, as
amended or superseded from time to time; (c) the making by a Member of a general assignment for the
benefit of creditors; (d) the entry of an order, judgment, or decree by any court of competent jurisdiction
appointing a trustee, receiver, or custodian of the assets of a Member unless the proceedings and the person
appointed are dismissed within ninety (90) days; or (e) the failure by a Member generally to pay his or her
debts as the debts become due within the meaning of Section 303(h)(1) of the United States Bankruptcy
Code, as determined by the Bankruptcy Court, or the admission in writing of his or her inability to pay his
or her, debts as they become due.
1.7 "Cani al A _ .n +nt" shall mean with respect to any Member the capital account which the
Company establishes and maintains for such Member pursuant to Section 33.
J.& "C'aital irnntrihmian" shall mean the total amount of cash and fair market value of
property contributed and/or services rendered or to be rendered to the Company by Members.
1.9 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, the
provisions of succeeding law, and to the extent applicable, the Regulations.
1.10 "Campan " shall mean CENTER POINT DEVELOPMENT, LLC, a California limited
liability company.
1.11 "Company Mit)imti gain" shall have the meaning ascribed to the term "Partnership
Minimum Gain" in the Regulations Section 1.704-2(d).
1.12 "C_ornnratinna Code" shall mean the California Corporations Code, as amended from time
to time, and the provisions of succeeding law.
1.13 "Diccnhitinn EUpt)t" shall mean with respect to any Member one or more, of the following:
the death, insanity, withdrawal, resignation, retirement, expulsion, Bankruptcy or dissolution of any
Member.
1.14 "Distrihignbir. CaSh" shall mean the amount of cash which the Managers deem available for
distribution to the Members, taking into account all debts, liabilities, and obligations of the Company then
due, and working capital and other amounts which the Managers deem necessary for the Companys
business or to place into reserves for customary and usual claims with respect to such business.
1.15 "Ennnom is intar st" shall mean the right to receive distributions of the Company's assets
and allocations of income, gain, loss, deduction, credit and similar items from the Company pursuant to this
Agreement and the Act, but shall not include any other rights of a Member, including, without limitation,
the right to vote or participate in the management of the Company, or except as provided in Section 17106
of the Corporations Code, any right to information concerning the business and affairs of the Company.
1.16 "Fiscal Year" shall mean the Company's fiscal year, which shall be the calendar year.
1.17 "Form&.r Member" shall have the meaning ascribed to it in Section 8.1.
-3.
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1.18 "Fnrmer Artembods Interest", shall have the meaning ascribed to it in Section 8.1.
1.19 "MAinrity int=stt", shall mean those Members who hold a majority of the Percentage
Interests which all Members hold.
1.20 "Manager"or "Managers" . shall mean OLIPH,ANT ENTERPRISES, INC., a California
corporation, andior any other Member appointed as manager by a Majority Intereg or any other persons that
succeed any of them as a manager of the Company.
1.21 "Member" shall mean each Person who (a) is an initial signatory to this Agreement, has
been admitted to the Company as a Member its accordance with the Articles or this Agreement or is an
Assignee who has become a Member in accordance with Article VII, and (b) has not become the subject of
a Dissolution Event or ceased to be a Member its accordance with Article VIII or for any other reason.
1.22 "MeWgC__Nnnrerrotrce T g to shall have the meaning ascribed to the term "Partner
Nonrecourse Debt" in Regulations Section 1.704-2(b)(4).
1.23 "Mnmher Nnn=nJ1rg0 Deductions" shall mean items of Company loss, deduction, or Code
Section 705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt.
1.24 " Mcwhars ' t" shall mean a Membees entire interest in the Company including the
Members Economic Interest, the right to vote on or participate in the management, and the right to receive
information concerning the business and affairs, of the Company.
1.25 'UAt p " and "Net T asset" shall mean the income, gain, loss and deductions of the
Company in the aggregate or separately stated, as appropriate, determined in accordance with the method of
accounting at the close of each Fiscal Year on the Company's information tax return filed for federal income
tax purposes.
1.26 "Nonrernurse T inbilicy" shall have the meaning set forth in Regulations Section 1.752-
1(a)(2).
1.27 "Percentage Tatecest" shall meats the percentage of a Member set forth opposite the name of
such Member under the column "Members Percentage Interest" in Exhibit "A" hereto, as such percentage
may be adjusted from time to time pursuant to the terms of this Agreement. Percentage Interests shall be
determined annually, unless otherwise provided herein, in accordance with the relative proportions of the
aggregate Capital Contributions of the Members.
1.28 "Ecx=" shall mean an individual, partnership, limited 'partnership, limited liability
company, corporation, trust, estate, association or any other entity.
1.29 " shall, unless the context clearly indicates otherwise, mean the regulations in
force as final or temporary that have been issued by the U.S. Department of Treasury pursuant to its
authority under the Code, and any successor regulations.
1.30 "Remaining Mt; hem_ " shall have the meaning ascribed to it in Section 8.1.
1.31 "Tar Matter_-, PArMPr" (as defined in Code Section 6231) shall be CALIFORNIA
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INTELLIGENT COMMUNITIES, LLC, a California limited liability company, or its successor as
designated pursuant to Section 9.8. 9
ARTICLE 11
ORGANIZATIONAL MATTERS
2.1 Formatinn. The Members shall form (or have formed) a California limited liability
company under the laws of the State of California by filing the Articles with the California Secretary of
State and entering into this Agreement, which Agreement shall be deemed effective as of the date the
Articles were so filed. The rights and liabilities of the Members shall be determined pursuerit to the Act and
this Agreement. To the extent that the rights or obligations of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to
the extent permitted by the Act, control.
2.2 Wnmt-. The name of the Company shall be "CENTER POINT DEVELOPMENT, LLC."
The business of the Company may be conducted under that name or, upon compliance with applicable laws,
any other name that the Managers deem appropriate or advisable. The Managers shall file any fictitious
name certificates and similar filings, and any amendments thereto, that the Managers consider appropriate
or advisable.
2.3 Term. The term of this Agreement commenced on the fling of the Articles and shall
continue until the completion of the primary purpose for which this Company was formed, unless extended
or sooner terminated as hereinafter provided.
2.4 Offee And Ament. The Company shall continuously maintain an office and registered agent
in the State of California. The principal office of the Company shall be 44-139 Monterey Avenue, Suite
201, Palm Desert, CA 92260. The Company may also have such offices, anywhere within and without the
State of California, as the Managers may determine from time to time, or the business of the Company may
require. The registered agent shall be as stated in the Articles or as otherwise determined by the Managers.
2.5 Adjrpssec of the hdr.MhprS And the Mignag=. The respective addresses of the Members
and the Managers are set forth on Exhibit A. A Member may Change his or her address upon notice thereof
to the Managers.
2.6 P.yttpo-;it�snd of thl•,Cnrnpany. The purpose of the Company is to engage in any
lawful activity for which a limited liability company may be organized under the Act. Notwithstanding the
foregoing, without the consent of all of the Members, the Company shall not engage in any business other
than the following:
A. The business of acquiring, financing, developing, marketing and selling, or
operating real estate development projects on real property in La Quints, California, more particularly
described on Exhibit "B" attached hereto, and by this reference trade a part hereof, to be acquired for that
purpose; and
B. Such other activities directly related to and in furtherance of the foregoing business
as may be necessary, advisable, or appropriate, in the reasonable opinion of the Managers.
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ARTICLE III
CAPITAL CONTRIBUrlONS
3.1 InitiqJ C.411ital Cnntrihutinns. Each Member shall contribute such amount as is set forth on
Exhibit "A" as his or her initial Capital Contribution, which Exhibit "A" shall be revised to reflect any
additional contributions made in accordance with Section 3.2.
3.2 Additinnal ['Anita.) C; ntr;b1! inns. No Member shall be required to make any additional
Capital Contributions. To the extent unanimously approved by the Managers and a Majority interest, from
time to time, the Members may be permitted to make additional Capital Contributions if and to the extent
they so desire, and if the Managers determine that such additional Capital Contributions are necessary or
appropriate for the conduct of the Company's business. In that event, the Members shall have the
opportunity, but not the obligation, to participate in such additional Capital Contributions on a pro rats basis
in accordance with their Percentage Interests. Each Member shall receive a credit to his or her Capital
Account in the amount of any additional capital which he or she contributes to the Company. Immediately
following such Capital Contributions, the Percentage Interests shall be adjusted by the Managers to reflect
the new relative proportions of the Capital Accounts of the Members.
3.3 Capital Arnmintc. The Company shall establish and maintain an individual Capital
Account for each Member in accordance with Regulations Section 1.704-1(bx2xiv). If a Member transfers
all or a part of his or her Membership Interest in accordance with this Agreement, such Member's Capital
Account attributable to the transferred Membership Interest shall carry over to the new owner of such
Membership Interest pursuant to Regulations Section 1.704-1(b)(2)(iv)(1).
3.4 Na interact, No Member shall be entitled to receive any interest on his or her Capital
Contributions.
3.5 FailLire to Make Cnntri utinnc. If a Member does not timely contribute capital when
required, that Member shall be in default under this Agreement. In such event, the Managers shall send the
defaulting Member written notice of such default, giving him or her fourteen (14) days froth the date such
notice is given to contribute the entire amount of his or her required capital contribution (if the defaulting
Member did not make a required contribution of property or services, the Company may instead require the
defaulting Member to contribute cash equal to that portion of the fair market value of the contribution that
has not been made). If the defaulting Member does not contribute his or her required capital to the
Company within said fourteen (14)-day period, those non -defaulting Members who hold a majority of the
Percentage Interests held by all non -defaulting Members may elect any one or more of the following
remedies:
A. The non -defaulting Members may advance ;funds to the Company to cover those
amounts which the defaulting Member fails to contribute. Amounts which a non -defaulting Member so
advances on behalf of the defaulting Member shall become a loan due and owing from the defaulting
Member to such non -defaulting Member and bear interest at the rate of ten percent (10%) per annum,
payable monthly. All cash distributions otherwise distributable to the defaulting Member tinder this
Agreement shall instead be paid to the non -defaulting Members making such advances until such advances
and interest thereon are paid in full. In any event, any such advances shall be evidenced by a promissory
note in a form reasonably acceptable to the Managers, and be due and payable by the defaulting Member
one (1) year from the date that such advance was made. Any amounts repaid shall first be applied to interest
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and thereafter to principal. Effective upon a Member becoming a defaulting Member, each Member grants
to the non -defaulting Members who advance funds under this Section 3.5A, a security interest in his or her
Economic Interest to secure his or her obligation to repay such advances and agrees to execute and deliver a
promissory note as described herein together with a security agreement in a form reasonably acceptable to
the Managers, and such UCC-1 financing statements and assignments of certificates of membership (or
other documents of transfer) as such non -defaulting Members may reasonably request.
B. The Percentage Interests shall be adjusted, in which event each Members
Percentage Interest shall be a fraction, the numerator of which represents the aggregate amount of such
Membees Capital Contributions and the denominator of which represents the sum of all Members' Capital
Contributions.
C. The non -defaulting Members who hold a majority of the Percentage Interests held
by all non -defaulting Members may dissolve the Company, in which event the Company shall be wound -up,
liquidated and terminated pursuant to Article X.
D. The Company or the non -defaulting Members may purchase the defaulting
Member's entire Membership Interest in accordance with the same terms and conditions as those set forth in
Article VIII except that the purchase price shall be an amount equal to eighty percent (80%) of the purchase
price determined in accordance with Section 8.3.
E. The defaulting Members shall have no right to receive any distributions from the
Company until the non -defaulting Members have first received distributions in an amount equal to the
additional capital contributed by each non -defaulting Member to the Company plus a cumulative, non -
compounded return thereon at the rate of ten percent (10%) per annum.
P. The defaulting Member shall lose his or her voting and approval rights under the
Act, the Articles and this Agreement until such time as the defaulting Member cures the default.
G. The defaulting Member shall lose his or her ability (whether as a Member or a
Manager) to participate in the management and operations of the Company.
Each Member acknowledges and agrees that (i) a default by any Member in making a required
capital contribution will result in the Company and the non -defaulting Members incurring certain costs and
other damages in an amount that would be extremely difficult or impractical to ascertain and (ii) the
remedies described in this Section 3.5 bear a reasonable relationship to the damages which the Members
estimate may be suffered by the Company and the non -defaulting Members by reason of the failure of a
defaulting Member to make any required Capital Contribution and the election of any or all of the above
described remedies is not unreasonable under the circumstances existing as of the date hereof.
The election of the Managers or nor -defaulting Members, as applicable, to pursue any remedy
provided in this Section 3.5 shall not be a waiver or limitation of the right to pursue an additional or
different remedy available hereunder or of law or equity with respect to any subsequent default.
3.6 $eyiij_rr►ment to C loran r,S'nrignicxi0 T nana� nn�ie ncattnn
------� n----,.� CompensatiAn. No Manager nor
Member shall be required to provide anv personal guaranty of any type, kind or nature to further the
business of the Company; p=ided hn1Ut&U, that any Manager or Member that does elect, if requested by
Manager, to provide personal guaranty to any lender required to further the business of the Company, shall
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be entitled to a bonus compensation equal to 5% of the amount of such sum guaranteed out of profits as a
bonus compensation before division of net profits of Company.
ARTICLE IV
MEMBERS
4.1 i.4niteri l J hility. Except as expressly set forth in this Agreement or required by law, no
Member shall be personally liable for any debt, obligation, or liability of the Company, whether that liability
or obligation arises in contract, tort, or otherwise.
4.2 Admisginn if Additional Mem}%ers, The Managers, with the approval of all Members, may
admit to the Company additional Members. Any additional Members shall obtain Membersbip Interests and
will participate in the management, Net Profits, Net Losses, and distributions of the Company on such terms
as are determined by and approved by all Members. Notwithstanding the foregoing, Assignees may only be
admitted as substitute Members in accordance with Article VII.
4.3 WirhdrAl�yS� _nr.ResionAt. �c ic_, Any Member who is under an obligation to render services
to the Company may withdraw or resign as a Member at any time upon one hundred twenty (120) days prior
written notice to the Company, without prejudice to the rights, if any, of the Company or the other Members
under any contract to which the withdrawing Member is a party. In the event of such withdrawal, such
Member's Membership Interest shall terminate pursuant to Section 4.4. No other Member may withdraw or
resign from the Company.
4.4 TerminAtinn of_Memher_ahin iatgMq. Upon (a) the transfer of a Members Membership.
Interest in violation of Article VII, (b) the occurrence of a Dissolution Event as to such Member which does
not result in the dissolution of the Company under Article X, or (c) the withdrawal or resignation of a
Member in accordance with Section 4.3, the Membership Interest of a Member shall be terminated by the
Managers and thereafter that Member shall be an Assignee only unless such Membership Interest shall be
purchased by the Company and/or remaining Members as provided in Article VI11. Each Member
acknowledges and agrees that such termination or purchase of a Membership Interest upon 'the occurrence
of any of the foregoing events is not unreasonable under the circumstances existing as of the date hereof.
4.5 Competing Activities, The Members and their officers, directors, shareholders, partners,
members, managers, agents, employees and Affiliates may engage or invest in, independently or with others,
any business activity of any type or description, including without limitation those that might be the same as
or similar to the Company's business and that might be in direct or indirect competition with the Company.
Neither the Company nor any Member shall have any right in or to such other ventures or activities or to the
income or proceeds derived therefrom. The Members shall not be obligated to present any investment
opportunity or prospective economic advantage to the Company, even if the opportunity is of the character
that, if presented to the Company, could be taken by the Company. The Members shall have the right to
hold any investment opportunity or prospective economic advantage for their own account or to recommend
such opportunity to Persons other than the Company. Each Member acknowledges that the other Members
and their Affiliates own and/or manage other businesses, including businesses that may compete with the
Company and for the Members' time. Each Member hereby waives any and all rights and claims which they
may otherwise have against the other Members and their officers, directors, shareholders, partners,
members, managers, agents, employees, and Affiliates as a result of any of such activities.
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4.6 Transactin6„s 5UUh The Cmmpan . Subject to any limitations set forth in this Agreement
and with the prior approval of the Managers; a Member may lend money to and transact other business with
the Company. Subject to other applicable law, such Member has the same rights and obligations with
respect thereto as a Person who is not a Member.
4.7 Ramuneratinn To,,hdambe s, Except as otherwise specifically provided in this Agreement,
no Member is entitled to remuneration for acting in the Company business.
4.8 Mcmha - Are Not A gents. Pursuant to Section 5.1 and the Articles, the management of the
Company is vested in the Managers. The Members shall have no power to participate in the management of
the Company except as expressly authorized by this Agreement or the Articles and except as expressly
required by the Act. No Member, acting solely in the capacity of a Member, is an agent of the Company nor
does any Member, unless expressly and duly authorized in writing to do so by a Manager or Managers, have
any power or authority to bind or act on behalf of the Company in any way, to pledge its credit, to execute
any instrument on its behalf or to under it liable for any purpose.
4.9 doting Rigs. Except as expressly provided in this Agreement or the Articles, Members
shall have no voting, approval, or consent rights. Members shall have the right to approve or disapprove
matters as specifically stated in this Agreement, including the following:
A. I.Inmnimnus Ann:, rnvAl. The following matters shall require the unanimous vote,
approval or consent of all Members who are not the subject of a Dissolution Event or an assignor of a
Membership Interest:
(i) A decision made pursuant to Section 8.1 to continue the business of the
Company after the occurrence of a Dissolution Event;
(ii) Except as provided in Section 7.4, the transfer of a Membership Interest
and admission of the Assignee as a Member of the Company in accordance with Article VII;
(iix) Any amendment of the Articles or, in accordance with Section 13.15, this
Agreement; and
(iv) A decision to compromise the obligation of a Member to make a Capital
Contribution or return money or property paid or distributed in violation of the Act.
B. ApDMVal by Memherq Holding a Mainrity int,grgg- Except as set forth in Section
5.3B, in all other matters in which a vote, approval or consent of the Members is required, a vote, consent or
approval of a Majority Interest (or, in instances in which there are defaulting or remaining members, non -
defaulting or remaining Members %vho hold a majority of the Percentage Interests held by all non -defaulting
or remaining Members) shall be sufficient to authorize or approve such act.
C. Oer Voting Rights. Besides the rights granted in Section 4.9A, Members may
vote, consent or approve to the extent and on the terms provided in this Agreement in the following
Sections:
(i) Section 3.2 on additional Capital Contributions;
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(ii) Section 3.5on remedies for a Membees failure to matte a contribution;
(iii) Section 4.2 on admission of new Members;
Managers;
(iv) Section 5.2 on election and removal of a Manager;
(v) Section 5,38 on a change in the purpose or business of the Company-,
(vi) Section 5.313 on reorganization of the Company;
(vii) Section 5.38 on other limitations on the Managers' authority;
(viii) Section 5.7 on transactions with the Managers and Affiliates of the
(ix) Section 5.9A on management fees payable to Managers;
(x) Section 10.1 on dissolving the Company; and
(xi) Section 11.7 on indemnification by the Company.
n. Ap=yal StAndard, Except as otherwise specifically provided in this Agreement,
all votes, approvals or consents of the Members may be given or withheld, conditioned or delayed as the
Members may determine in their sole and absolute discretion.
4.10 Meetings of Mr;mhem,
A. D,aW- Time and Placg�nf Meetings of 1deWhCrs- Secretary. Meetings of Members
may be held at such date, time and place within or without the State of California as the Managers may fix
from time to time, or if there are two or more Managers and they are unable to agree to such time and place,
Members holding a Majority Interest shall determine the time and place. No annual or regular meetings of
Members are required. At any Members' meeting, the Managers shall appoint a person to preside at the
meeting and a person to act as secretary of the meeting. The secretary of the meeting shall prepare minutes
of the meeting which shall be placed in the minute books of the Company.
B. Power to Qa1I MP_P.lin . Meetings of the Members maybe called by any Manager,
or upon written demand of Members holding more than ten percent (10%) of the Percentage Interests for the
purpose of addressing any matters on which the Members may vote.
C. Nntice of MFp+..1;nS. Written notice of a meeting of Members shall be sent or
otherwise given to each Member in accordance with Section 4.1OD/Corporations Code Section 17104(e)(2)
not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify
the place, date and hour of the meeting and the general nature of the business to be transacted. No other
business may be transacted at this meeting. Upon written request to a Manager by any person entitled to
call a meeting of Members, the Managers shall immediately cause notice to- be given to the Members
entitled to vote that a meeting will be held at a time requested by the person calling the meeting, not less
than test (10) days nor more than sixty (60) days after the receipt of the request. 1f the notice is not given
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within twenty (20) days after the receipt of the request, the person entitled to call the 'meeti'ng may give the
notice. •
D. Manner nfaying Notice- Afficiayir a f Notice. Notice of any meeting of Members
shall be given either personally or by first-class mail or telegraphic or other written communication, charges
prepaid, addressed' to the Member at the address of that Member appearing on the books of the Company or
given by the Member to the Company for the purpose of notice. If no such address appears on the
Company's books or is given, notice shall be deemed to have been given if sent to that Member by first-class
mail or telegraphic or other written communication to the Company's principal executive office, or if
published at least once in a newspaper of general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or
sent by telegram or other means of written communication,.
If any notice addressed to a Member at the address of that Member appearing on the books
of the Company is returned to the Company by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the Member at that address, all future notices
or reports shall be deemed to have been duly given without further mailing if these shall be available to the
Member on written demand of the Member at the principal executive office of the Company for a period of
one year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any meeting shall be
executed by the Manager or any secretary, assistant secretary, or any transfer agent of the Company giving
the notice, and shall be filed and maintained in the minute book of the Company.
E. Validity of Action. Any action approved at a meeting, other than by unanimous
approval of those entitled to vote, shall be valid only if the general nature of the proposal so approved was
stated in the notice of meeting or in any written waiver of notice'
F. 011orum. The presence in person or by proxy of a Majority Interest shall constitute
a quorum at a meeting of Members, The Members present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding the loss of a quorum, if
any action taken after loss of a quorum (other than adjournment) is approved by at least Members holding a
Majority Interest Percentage Interests which taken together exceed fifty (50%) percent of all Percentage
Interests,
G. A linumed Meeting- Natirp.Any Members' meeting, whether or not a quorum is
present, may be adjourned from time to time by the vote of the majority of the Membership Interests
represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business
may be transacted at that meeting, except as provided in Section 4.1OF. When any meeting of Members is
adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place
are announced at a meeting at which the adjournment is taken, unless a new record date for the adjourned
meeting is subsequently fixed, or unless the adjournment is for more than forty-five (45) days from the date
set for the original meeting, in which case the Managers shall set a new record date. At any adjourned
meeting the Company may transact any business which might have been transacted at the original meeting.
14. Waiver of NntiCi or Consent, The actions taken at any meeting of Members
however called and noticed, and wherever held, have the same validity as if taken at a meeting duly held
after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after
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the meeting, each of the Members entitled to �►'ote, who was not present in person or by proxy, signs a
written waiver of notice or consents to the holding of the meeting or approves the minutes of the meeting.
All such waivers, consents or approvals shaII be filed with the Company records or made a part of the
minutes of the meeting,
Attendance of a person at a meeting shall constitute a waiver of notice of that meeting,
except when the person objects, at the beginning of the meeting, to the transaction of any business because
the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice of the meeting if that objection
is expressly made at the meeting. Neither the business to be transacted nor the purpose of any meeting of
Members need be specified in any written waiver of notice except as provided in Section 4.1 OE.
1. . Any action that may be taken at a
meeting of Members may be takers without a meeting, if a consent in writing setting forth the action so
taken, is signed and delivered to the Company within sixty (60) days of the record date for that action by
Members having not less than the minimum number of votes that would be necessary to authorize or take
that action at a meeting at which all Members entitled to vote on that action at a meeting were present and
voted. All such consents shall be filed with the Managers or the secretary, if any, of the Company and shall
be maintained in the Company records. Any Member giving a written consent, or the Membees proxy
holders, may revoke the consent by a writing received by the Managers or secretary, if any, of the Company
before written consents of the number of votes required to authorize the proposed action have been filed.
Unless the consents of all Members entitled to vote have been solicited in writing, (i) notice
of any Member approval of an amendment to the Articles or this Agreement, a dissolution of the Company,
or a merger of the Company, without a meeting by less than unanimous written consent, shall be given at
least ten (10) days before the consummation of the action authorized by such approval, and (ii) prompt
notice shall be given of the taking of any other action approved by Members without a meeting by less than
unanimous written consent, to those Members entitled to vote who have not consented in writing.
J. Tglepbnnir PaWcinintinn by Member at Me t� ine . Members may participate in any
Members' meeting through the use of any means of conference telephones or similar communications
equipment as long as all Members participating can hear one another. A Member so participating is deemed
to be present in person at the meeting.
K. Recard Date. In order that the Company may determine the Members of record
entitled to notices of any meeting or to vote, or entitled to receive any distribution or to exercise any rigbts
in respect of any distribution or to exercise any rights in respect of any other lawful action, a Manager, or
Members representing more than ten percent (10%) of the Percentage Interests may fix, in advance, a record
date, that is not more than sixty (60) days nor less than ten (10) days prior to the date of the meeting and not
more than sixty (60) days prior to any other action. If no record date is fixed, the record date shall be as set
forth in Section I7104(k),
L. Prnriec. Every Member entitled to vote for Managers or on any other matter shall
have the right to do so either in person or by one or more agents authorized by a written proxy signed by the
person and filed with the Managers or secretary, if any, of the Company. A proxy shall be deemed signed if
the Member's name is placed on the proxy (whether by manual signature, typewriting., telegraphic
transmission, electronic transmission or othenvise) by the Member or the Membees attorney in fact. A
proxy may be transmitted by an oral telephonic transmission if it is Submitted with information from which
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12IO2/2003 ',1640 1114072-4241 ,,CHADWICK J;BRADBURY PAGE, 07
it may be determined that the proxy was authorized by the Member or the Member's attorney in fact. A
validly executed proxy which does not state that it is irrevocable shall continue in full force and effect
unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered
to the Company stating that the proxy is revoked, or by a subsequent proxy executed by, or attendance at the
meeting and voting in person by, the person executing the proxy; or (R) written notice of the death or
incapacity of the maker of that proxy is received by the Company before the vote pursuant to that proxy is
counted; provided, however, that no proxy shall be valid after the expiration of eleven (11) months from the
date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face
that it is irrevocable shall be governed by the provisions of Corporations Code Sections 705(e) and 705(f).
" ■I u - in, I w
A. CertMicatR. A Membership Interest may be represented by a certificate of
membership. The enact contents of a certificate of membership may be determined by action of the
Managers but shall be issued substantially in conformity with the following requirements. The certificates
of membership shall be respectively numbered serially, as they are issued, shall be impressed with the
Company seal or a facsimile thereof, if any, and shall be signed by the Managers of the Company. Each
certificate of membership shall state the name of the Company, the fact that the Company is organized
under the laws of the State of California as a limited liability company, the name of the person to whom the
certificate is issued, the date of issue, and the Percentage Interest represented thereby. A statement of the
designations, preferences, qualifications, limitations, restrictions, and special or relative rights of the
Membership Interest, if any, shall be set forth in full or summarized on the face or back of the certificates
which the Company shall issue, or in lieu thereof, the certificate may set forth that such a statement or
summary will be furnished to any holder of a Membership interest upon request without charge. Each
certificate of membership shall be otherwise in such form as may be deternrtined by the Managers.
13. rancel1at6o0 of r~,erf;fir-ste, Except as herein provided with respect to lost, stolen,
or destroyed certificates, no new certificates of membership shall be issued in lieu of previously issued
certificates of membership until former certificates for a like number of Membership Interests shall have
been surrendered and cancelled. All certificates of membership surrendered to the Company for transfer
shall be cancelled.
C. Replacement of 1 _net_ Sralgtt, nrnr neatrwerl Certifigam. Any Member claiming that
his or her certificate of membership is lost, stolen, or destroyed may make an affidavit or affirmation of that
fact and request a new certificate. Upon the giving of a satisfactory indemnity to the Company as
reasonably required by the Managers, a new certificate may be issued of the same tenor and representing the
same Percentage Interest of membership as was represented by the certificate alleged to be lost, stolen, or
destroyed.
ARTICLE V
MANAGEMENT AND CONTROL OF THE COMPANY
A. Exclusive Migna gmeml...b_y Managers. The business, property and affairs of the
Company shall be managed exclusively by the Managers. Except for situations in which the approval of the
Members is expressly required by the Articles or this Agreement, the Managers shall have full, complete
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12/02/2003'- :16: 4'0 1114072`-4241 CHAD4JICK J BRADBURY PAGE -'08
and exclusive authority, power, and discretion to manage and control the business, property and affairs of
the Company, to make all decisions regarding those matters and to perform any and all other acts or activi-
ties customary or incident to the management of the Company's business, property and affairs,
B. .Subject to Section 5.313:
The Manager is authorized to endorse
checks, drafts, and other evidence of indebtedness made payable to the order of the Company, but only for
the purpose of deposit into the Company's accounts, and may sign all checks, drafts, and other instruments
obligating the Company to pay money, and may sign contracts and obligations on behalf of the Company up
`to the amount of V0,000.00. All checks, drafts, and other instruments obligating the Company to pay
money, or contracts in an amount of more than $10,000.00, must be signed on behalf of the Company by
any Manager and a Member other than the Manager. Anything to the contrary notwithstanding, the
procedures for the writing and signing of all checks shall be those procedures in place at CIC or determined
by the Majority Interest.
C. gars. Meetings of the Managers, if more than one Manager, may
be called by any Manager. All meetings shall be held upon four (4) days notice by mail or forty-eight (48)
hours notice (or upon such shorter notice period if necessary under the circumstances) delivered personally
or by telephone, telegraph or facsimile. A notice need not specify the purpose of any meeting. Notice of a
meeting need not be given to any Manager who sighs a waiver of notice or a consent to holding the meeting
(which waiver or consent need not specify the purpose of the meeting) or an approval of the minutes
thereof, whether before or after the meeting, or who attends the meeting without protesting, prior to its
commencement, the lack of notice to such Manager. All such waivers, consents and approvals shall be filed
with the Company records or made a part of the minutes of the meeting. A majority of the Managers
present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than twenty-four (24) hours, notice of any adjournment shall be given prior to
the time of the adjourned meeting to the Managers who are not present at the time of the adjournment.
Meetings of the Managers may be held at any place within or without the State of California which has been
designated in the notice of the meeting or at such place as may be approved by the Managers. Managers
may participate in a meeting through use of conference telephone or similar communications' equipment, so
long as all Managers participating in such meeting can hear one another. Participation in a meeting in such
manner constitutes a presence in person at such meeting. A majority of the authorized number of Managers
constitutes a quorum of the Managers for the transaction of business. Except to the extent that this
Agreement expressly requires the approval of all Managers, every act or decision done or made by a
majority of the Managers present at a meeting duly held at which a quorum is present is the act of the
Managers. A, meeting at which a quorum is initially present may continue to transact business
notwithstanding the withdrawal of Managers, if any action taken is approved by at least a majority of the
required quorum for such meeting.
Any action required or permitted to be taken by the Managers may be taken by the
Managers without a meeting, if a majority of the Managers individually or collectively consent in writing to
such action, unless the action requires the unanimous vote of the Managers, in which case all Managers
must consent in writing. Such action by written consent shall have the same force and effect as a majority
vote or unanimous vote, as applicable, of such Managers_
The provisions of this Section 5.1C govern meetings of the Managers if the Managers elect,
in their discretion, to hold meetings. However, nothing in this Section 5.1C or in this Agreement is intended
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12l02l2003 ` 16t"40 11T4072-4241-CHADWICK J 'BRADBURY ',''PAGE '09
•w
to require that meetings of Managers be held, it being the'intent of the Members that meetings of Managers
are not required.
5.2 Election of Managers,
A. I. The Company shall initially have one (1)
Manager. The number of Managers of the Company shall be fixed from time to time by the affirmative vote
or written consent of a Majority Interest, provided that in no instance shall there be less than one Manager
and provided further that if the number of Managers is reduced from more than one to one, the Articles shall
be amended to so state, and if the number of Managers is increased to more than one, the Articles shall be
amended to delete the statement that the Company has only one Manager. Unless he or she resigns or is
removed, each Manager shall hold office until a successor shall have been elected and qualified or, for a
term of one (1) year. Managers shall be elected by the affirmative vote or written consent of Members
holding a Majority Interest. A Manager need not be a Member, an individual, a resident of the State of
California, or a citizen of the United States.
B. Re-giZngtonn. Any Manager may resign at any time by giving written notice to the
Members and remaining Managers without prejudice to the rights, if any, of the Company under any
contract to which the Manager is a parry. The resignation of any Manager shall take effect upon receipt of
that notice or at such later time as shall be specified in the notice. Unless otherwise specified in the notice,
the acceptance of the resignation shall not be necessary to make it effective. The resignation of a Manager
who is also a Member shall not affect the Managers rights as a Member and shall not constitute a
withdrawal of a Member.
C. RemnYal. Any Manager may be removed at any time, with or without cause, by
the affirmative vote of a Majority Interest at a meeting called expressly for that purpose, or by the written
consent of a Majority Interest. Any removal shall be without prejudice to the rights, if any, of the Manager
under any employment contract and, if the Manager is also a Member, shall not affect the Manager's rights
as a Member or constitute a withdrawal of a Member. For purpose of this Section, "cause" shall mean
fraud, gross negligence, willful misconduct, embezzlement or a breach of such Manager's obligations under
this Agreement or any employment contract with the Company.
A Manager also may be removed by the affirmative vote or written consent of a majority of
the remaining Managers if such Manager becomes incapable of fulfilling his or her obligations under this
Agreement because of injury or physical or mental illness and such incapacity shall exist for thirty (30)
working days in the aggregate during any consecutive six (6) month period.
D. Any vacancy occurring for any reason in the number of Managers may
be filled by the affirmative vote or written consent of Majority Interest.
� idol Z 1 a 1A
A Powers nf kbna=r_%, Without limiting the generality of Section 5.1, but subject to
Section 5.39 and to the express limitations set forth elsewhere in this ,Agreement, the Managers shall have
all necessary powers to manage and carry out the purposes, business, property, and affairs of the Company,
including, without limitation, the power to exercise on behalf and in the name of the Company all of the
powers described in Corporations Code Section 17003, including, without limitation, the power to,
(i) Acquire, purchase, renovate, improve, alter, rebuild, demolish, replace,
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and own real property and any other property or assets that the Managers determine is necessary or
appropriate or in the interest of the business of the Company, and to acquire options for the purchase of any
such property; .
(ii) Sell, exchange, lease, or otherwise dispose of the real property and other
property and assets owned by the Company, or any part thereof, or any interest therein;
(iii) Borrow money from any party, issue evidences of indebtedness in
connection therewith, refinance, increase the amount of, modify, amend, or change the terms of, or extend
the time for the payment of any indebtedness or obligation of the Company, and secure such indebtedness
,the
mortgage, deed of trust, pledge, security interest, or other lien on Company assets;
obligation of any Person; (iv) Guarantee the payment of money or the performance of any contract or
(v) Sue on, defend, or compromise any and all claims or liabilities in favor of
or against the Company; submit any or all such claims or liabilities to arbitration; and confess a judgment
against the Company in connection with any litigation in which the Company is involved; and
(vi) Retain legal counsel, auditors, and other professionals in connection with
the Company business and to pay therefor such remuneration as the Managers may determine.
B. Notwithstanding aay other provisions of this
Agreement, no debt or liability of more than $10,000.00 may be contracted on behalf of the Company
except by the written consent of al I Members. Additionally, the Managers shall not have authority hereunder
to cause the Company to engage in the following transactions without first obtaining the affirmative vote or
written consent of a Majority Interest (or such greater Percentage Interests set forth below) of the Members:
(i) The sale, exchange or other disposition of all, or substantially all, of the
Company's assets occurring as part of a single transaction or plan, or in multiple transactions over a three (3)
month period, except in the orderly liquidation and winding up of the business of the Company upon its
duly authorized dissolution, shall require the affirmative vote or written consent of Members holding at least
fifty-one percent (51 %) in Percentage Interests;
(ii)` The merger of the Company with another limited liability company or
limited partnership shall require the affirmative vote or written consent of Members holding at least fifty -on
percent (51%) in Percentage Interests; provided in no event shall a Member be required to become a general
partner in a merger with a limited partnership without his express written consent or unless the agreement of
merger- provides each Member with the dissenter's rights described in the Act;
(iii) The merger of the Company with a corporation or a general partnership or
other Person shall require the affirmative vote or written consent of all Managers and Members;
(iv) The establishment of different classes of Members;
(v) An alteration of the primary purpose or business of the Company as set
forth in Section 2.6;
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12/02/2003 `16. 40 "."CHADWICK__ J 'BRADBURY PAGE . 11
(vi) Transactions between the Company and one or more of the Managers or
Members or one or more of any Member's Affiliates, or transactions in which one or more Managers or
Members, or one or more of any Manager's or Members Affiliates, has a material financial interest;
(vii) Without limiting subsection (vi), the lending of money by the Company to
any Manager, Member, or officer,
(viii) Any act which would make it impossible to carry on the ordinary business
of the Company.
(ix) The confession of a judgment against the Company;
(x) To file a bankruptcy petition on behalf of the Company, and
(xi) Any other transaction described in this Agreement as requiring the vote,
consent, or approval of the Members.
5.4 Perfnrmanne, of.DUti - Liability of Msansiaers. A Manager shall not be liable to the
Company or to any Member for any loss or damage sustained by the Company or any Member, unless the
loss or damage shall have been the result of fraud, deceit, gross negligence, reckless or intentional
misconduct, or a knowing violation of law by the Manager. The Managers shall perform their managerial
duties in good faith, in a manner they reasonably believe to be in the best interests of the Company and its
Members, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like
position would use under similar circumstances. A Manager who so performs the duties of Manager shall
not have any liability by reason of being or having been a Manager of the Company.
In performing their duties, the Managers shall be entitled to rely on information, opinions, reports,
or statements, including financial statements and other financial data, of the following persons or groups
unless they have knowledge concerning the matter in question that would cause such reliance to be
unwarranted and provided that the Managers act in good faith arid after reasonable inquiry'when the need
therefor is indicated by the circumstances!
A. One or more officers, employees or other agents of the Company whom the
Managers reasonably believe to be reliable and competent in the matters presented;
B. Any attorney, independent accountant, or other person as to matters which the
Managers reasonably believe to be within such person's professional or expert competence; or
C. A committee upon which the Managers do not serve, duly designated in
accordance with a provision of the Articles or this Agreement, as to matters within its designated authority,
which committee the Managers reasonably believe to merit competence.
5.5 Deyntion of Time, The Managers are not obligated to devote all of their time or business
efforts to the affairs of the Company. The Managers shall devote whatever time, effort, and skill as they
deem appropriate for the operation of the Company.
5.6 Comneting Activities. The Managers and their officers, directors, shareholders, partners,
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members, managers, agents, employees and Affiliates may engage or invest in, independently or with others,
any business activity of any type or description, including without limitation those that might be the same as
or similar to the Company's'business and that might be in direct or indirect competition with the Company.
Neither the Company nor any Member shall have any right in or to such other ventures or activities or to the
income or proceeds derived therefrom. The Managers shall not be obligated to present any investment
opportunity or prospective economic advantage to the Company, even if the opportunity is of the character
that, if presented to the Company, could be taken by the Company. The Managers shall have the right to
hold any investment opportunity or prospective economic advantage for their own account or to recommend
such opportunity to Persons other than the Company. The Members acknowledge that the Managers and
their Affiliates own and/or manage other businesses, including businesses that may compete with the
Company and for the Managers' time. The Members hereby waive any and all rights and claims which they
may otherwise have against the Managers and their officers, directors, shareholders, partners, members,
managers, agents, employees, and Affiliates as a result of any of such activities,
5,7 Transartinnc hetweea_the Company and The Manao�rrc, , Notwithstanding that it may
constitute a conflict of interest, the Managers may, and may cause their Affiliates to, engage in any
transaction (including, without limitation, the purchase, sale, lease, or exchange of any property or the
rendering of any service, or the establishment of any salary, other compensation, or other terms of
employment) with the Company so long as such transaction is not expressly prohibited by this Agreement
and so long as the terms and conditions of such transaction, on an overall basis, are fair and reasonable to
the Company and are at least as favorable to the Company as those that are generally available from Persons
capable of similarly performing them and in similar transactions between parties operating at arm's
length,and provided that a Majority Interest of the Members having no interest in such transaction (other
than their interests as Members) affirmatively vote or consent in writing to approve the transaction.
A transaction between the Managers and/or their Affiliates, on the one hand, and the
Company, on the other hand, shall be conclusively determined to constitute a transaction on terms and
conditions, on an overall basis, fair and reasonable to the Company and at least as favorable to the Company
as those generally available in a similar transaction between parties operating at arm's length if a Majority
Interest of the Members having no interest in such transaction (other than their interests as Members)
affirmatively vote or consent in writing to approve the transaction. Notwithstanding the foregoing, the
Managers shall not have any obligation, in connection with any such transaction between the Company and
the Managers or an Affiliate of the Managers, to seek the consent of the Members.
5.8 Liability of Manager t_iMiled_10--Manage6s Assets. Under no circumstances will any
director, officer, shareholder, member, manager, partner, employee, agent or Affiliate of any Manager have
any personal responsibility for any liability or obligation of the Manager (whether on a theory of alter ego,
piercing the corporate veil, or otherwise), and any recourse permitted under this Agreement or otherwise of
the Members, any former Member or the Company against a Manager will be limited to the assets of the
Manager as they may exist from time to time.
5.9 ga ms to Managm, Except as specified in this ,A,greemen% no Manager or Affiliate of a
Manager is entitled to no remuneration for services rendered or goods provided to the Company. The
Managers and their Affiliates shall receive only the following payments:
A. The Company shall pay the Managers, a monthly fee for
services in connection with the management of the Company in the amount of $ 100.00 per year. Such fee
may be changed from time to time only by an affirmative vote of Members holding at least a Majority
- i 8-
1210212003 111`4072-4241 : - CHADWICK J ' BRADBURY PAGE � 13
Interest of the Members who are not Managers.
B. SenciCPS Per(hrn)Mr1 hy pag�are ar Affiliates, The Company shall pay the
Managers or Affiliates of the Managers for services rendered or goods provided to the Company to the
extent that the Managers are not required to render such services or goods themselves without charge to the
Company, and to the extent that the fees paid to such Managers or Affiliates do not exceed the fees that
would be payable to an independent responsible third party that is willing to perform such services or
provide such goods.
C. Upenses. The Company shall reimburse the Managers and their Affiliates for the
actual cost of materials used for or by the Company. The Company shall also pay or reimburse the
Managers or their Affiliates for organizational expenses (including, without limitation, legal and accounting
fees and costs) incurred to form the Company and prepare and file the Articles and this Agreement. Except
as otherwise provided herein, the Managers and their Affiliates shall not be reimbursed by the Company for
the following expenses: (i) salaries, compensation or fringe benefits of directors, officers or employees of
the Managers or their Affiliates; (ii) overhead expenses of the Managers or their Affiliates, including,
without limitation, rent and general office expenses; and (ill) the cost of providing any service or goods for
which the Managers or their Affiliates are entitled to compensation under this Agreement.
gall off•:
A. Appointment of Offir.Prs, The Managers may appoint officers at any time. The
officers of the Company, if deemed necessary by the Managers, may include a chairperson, president, vice
president, secretary, and chief financial officer. The officers shall serve at the pleasure of the Managers,
subject to all rights, if any, of an officer under any contract of employment. Any individual may hold any
number of offices. No officer need be a resident of the State of California or citizen of the United States. if
a Manager is not an individual, such Manager's officers may serve as officers of the Company if elected by
the Managers. The officers shall exercise such powers and perform such duties as specified in this
Agreement and as shall be determined from time to time by the Managers.
B. >3enarLl_, Resignationnd Filling of )Zacsney of Off regs, Subject to the rights, if
any, of an officer under a contract of employment, any officer may be removed, either with or without
cause, by the Managers at any time.
Any officer m y resign at any time by giving written notice to the Managers. Any resignation shall
take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless
otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to
which the officer is a parry.
A vacancy in any office because of death, resignation, removal, disqualification or any other cause
shall be filled in the manner prescribed in this Agreement for regular appointments to that office.
C. Sa, uics of Officers. Subject to Sections 5.7 and 5.9, the salaries of all officers and
agents of the Company shall be fixed by a resolution of the Managers.
D. IIldias and Powers of tht C_hairnprsnn. The chairperson, if such an officer be
appointed, shall, if present, preside at meetings of the Members and the Managers, and exercise and perform
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such other powers and duties as may be from time to time assigned to him by the Managers or prescribed by
this Agreement. If there is no president, the chairperson shall in addition be the chief executive officer of the
Company and shall have the powers and duties prescribed in Section 5. I OE-
E. . Subject -to such supervisory powers, if any, as
may be given by the Managers to the chairperson, if there be such an off -leer, the president shall be the chief
executive officer of the Company, and shall, subject to the control of the Managers, have general and active
management of the business of the Company and shall see that all orders and resolutions of the Members
and Managers are carried into effect. He or she shall have the general powers and duties of management
usually vested in the office of president of a corporation, and shall have such other powers and duties as
'may be prescribed by the Managers or this Agreement.
The president shall execute bonds, mortgages and other contracts, except where required or
permitted by law to be otherwise signed and executed, and except where the signing and execution thereof
shall be expressly delegated by the Managers to some other officer or agent of the Company.
F. fl tries nd Pn ym of Vice-P=jdznt The vice-president, or if there shall be more
than one, the vice-presideots in the order determined by a resolution of the Managers, shall, in the absence
or disability of the president, perform the dutie and exercise the powers of the president and shaft perform
such other duties and have such other powe s as the Managers by resolution may from time to time
prescribe. j
I
G. Dudes..and _-eQ3eta�gt- The secretary shall attend all meetings of the
Managers and all meetings of the Members, and shall record all the proceedings of the meetings in a book to
be kept for that purpose, and shall perform lie duties for the standing committees when required. The
secretary shall give, or cause to be given, noti a of all meetings of the Members and Managers and shall
perform such other duties as may be prescribe by the ,Managers. The secretary shall have custody of the
seal, if any, and the secretary shall have authors ty to affix the same to any instrument requiring it, and when
so affixed, it may be attested by his or her si ture. The Managers may give general authority to any other
officer to affix the seal of the Company, if any, nd to attest the affixing by his or her signature.
The secretary shall keep, or c ause to be kept, at the principal executive office or at the
office of the Companys transfer agent or re 91isi rar, as determined by resolution of the Managers, a register,
or a duplicate register, showing the names of al Members and their addresses, their Percentage Interests, the
number and dare of certificates issued for th same, and the number and date of cancellation of every
certificate surrendered for cancellation. The eretary shall also keep all documents described in Section
9.1 and such other documents as may be requ red under the Act. The secretary shall perform such other
duties and have such other authority as may be rescribed elsewhere inthis Agreement or from time to time
by the Managers. The secretary shall have the eaeral duties, powers and responsibilities of a secretary of a
corporation.
If the Managers choose to ppoint an assistant secretary or assistant secretaries, the
assistant secretaries, in the order of their ser iority, in the absence, disability or inability to act of the
secretary, shall perform the duties and exereis the powers of the secretary, and shall perform such other
duties as the Managers may from time to time prescribe.
14. Duties and PnWgEq,� Chi f Financial Officer, The chief financial officer shall
keep and maintain, or cause to be kept and maikttained, adequate and correct books and records of accounts
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of the properties and business transactions of the Company, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, Membership Interests and Economic Interests, The books of
account shall at all reasonable times be open to inspection by any Manager -
The chief financial officer shall have the custody of the funds and securities of the
Company, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the
Company, and shall deposit all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Managers.
_ The chief financial officer shall disburse the funds of the Cornpan.%y as may be ordered by
the Managers, taking proper vouchers for such disbursements, and shall reader to the president and the
Managers, at their regular meetings, or when Members so require, at a meeting of the members an account
of all his or her transactions as treasurer and of the financial condition of the Company.
The chief financial officer shall perform such other duties and shall have such other
responsibility and authority as may be prescribed elsewhere in this Agreement or from time to time by the
Managers. The chief financial officer shall have the general duties, powers and responsibility of a chief
financial officer of a corporation, and shall be the chief financial and accounting officer of the Company.
If the Managers choose to elect an assistant treasurer or assistant treasurers the assistant
treasurers in the order of their seniority shall, in the absence, disability or inability to act of the chief
financial officer, perform the duties and exercise the powers of the chief financial officer, and shal l perform
such other duties as the Managers shall from time to time prescribe.
S.I i r •tmi+ed_Liabilit�c. No person who is a Manager or officer or both a Manager and officer of
the Company shall be personally liable under any judgment of a court, or in any other manner, for any debt,
obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or
otherwise, solely by reason of being a Manager or officer or both a Manager and officer of the Company.
5.12 . Except as otherwise provided in this Agreement,
Membership interests held by the Managers as Members shall entitle each Manager to all the rights of a
Member, including without limitation the economic, voting, information and inspection rights of a Member.
ARTICLE VI
ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS
6.1 Allncati.Qns of Net Profit and Net I -n:sc.
A- ass. Net Loss shall be allocated to the Members in proportion to their
Percentage Interests.
Notwithstanding the previous sentence, loss allocations to a Member shall be made only to the
extent that such loss allocations will not create a deficit Capital! Account balance for that Member in excess
of an amount, if any, equal to such Membees share of Company Minimum Gain. Any loss not allocated to a
Member because of the foregoing provision shall be allocated to the other Members (to the extent the other
Members are not limited in respect of the allocation of losses under this Section 6.1 A). Any loss reallocated
under this Section 6.1A shall be taken into account in computing subsequent allocations of income and
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losses pursuant to'this Article VI, so that the net amount of any item so allocated and the income and losses
allocated to each Member pursuant to this Article VI, to the extent possible, shall be equal to the net amount
that would have been allocated to each such Member pursuant to this Article VI if no reallocation of losses
had occurred under this Section 6.1 A.
B. blAt-Prafit. Net Profit shall be allocated to the Members in proportion to their
Percentage Interests.
6.2 gnerisl A11oCAtonnS. Notwithstanding Section 6.1:
A. If there is a net decrease in Company Minimum Gain
during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for
such Fiscal Year (arid, if necessary, in subsequent fiscal years) in an amount equal to the portion of such
Member's share of the net decrease in Company Minimum Gain that is allocable to the disposition of
Company property subject to a Nonrecourse Liability, which share of such net decrease shall be determined
in accordance with Regulations Section 1.704-2(gX2). Allocations pursuant to this Section 6.2A shall be
made in proportion to the amounts required to be allocated to each Member under this Section 6.2A. The
items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(o. This
Section 6.2A is intended to comply with the minimum gaits chargebaek requirement contained in
Regulations Section l .704-2(f) and shall be interpreted consistently therewith.
a. Chaclzehark of Minimurn
. If there
is a net decrease in Company Minimum Gain attributable to a Member Nonrecourse Debt, during any Fiscal
Year, each member who has a share of the Company Minimum Gain attributable to such Member
Nonrecourse Debt (which share shall be determined in accordance with Regulations Section 1.704-2(ix5))
shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, in
subsequent Fiscal Years) in an amount equal to that portion of such Member's share of the net decrease in
Company Minimum Gain attributable to such Member Nonrecourse Debt that is allocable to the disposition
of Company property subject to such Member Nonrecourse Debt (which share of such net decrease shall be
determined in accordance with Regulations Section 1.704-2(i)(5)). Allocations pursuant to this Section
6.213 shall be made in proportion to the amounts required to be allocated to each Member under this Section
6.28. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-
2(ix4). This Section 6.28 is intended to comply with the minimum gain chargeback requirement contained
in Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
C. Wnnrgrolias Dediialiou . Any nonrecourse deductions (as defined in Regulations
Section 1.704-2(b)(1)) for any Fiscal Year or other period shall be specially allocated to the Members in
proportion to their Percentage Interests.
D. Member Nonrer-oursc i edurtiow. Whose items of Company loss, deduction, or
Code Section 705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt for any Fiscal
Year or other period shall be specially allocated to the Member who bears the economic risk of loss with
respect to the Member Nonrecourse Debt to which such items are attributable in accordance with
Regulations Section 1.704-2(i),
B. OaAlified tncomit-Off-se . If a Member unexpectedly receives any adjustments,
allocations, or distributions described in Regulations Section 1.7044(b)(2xii)(d)(4), (5) or (6), or any other
event creates a deficit balance in such Members Capital Account in excess of such Member's share of
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Company Minimum Gain. items of Company income and gain shall be specially allocated to such Member
in an amount and manner sufficient to eliminate such excess deficit balance as quickly as possible. Any
special allocations of items of income and gain pursuant to this Section 6.2E shall be taken into account in
computing subsequent alloea4ons of income and gain pursuant to this Article VI so that the net amount of
any item so allocated and the income, gain, and losses allocated to each Member pursuant to this Article VI
to the extent possible, shall be equal to the net amount that would have been allocated to each such Member
pursuant to the provisions of this Section 6.2E if such unexpected adjustments, allocations, or distributions
had not occurred.
6.3 Cnde SeetiW 7Q4(4 Altncatlnnc. Notwithstanding any other provision in this Article V1,
in accordance with Code Section 704(e) and the Regulations promulgated thereunder, income, gain, loss,
and deduction with respect to any property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation between the adjusted basis
of such property to the Company for federal income tax, purposes and its fair market value on the date of
contribution. Allocations pursuant to this Section 6.3 are solely for purposes of federal, state and local
taxes. As such, they shall not affect or in any way be taken into account in computing a Membees Capital
Account or share of profits, losses, or other items of distributions pursuant to any provision of this
,Agreement.
6.4 Allneatinn nfNgt Prnfita Arid t„nsses anti l)istdhiitinna in Resnect nFa Itacifermd interest,
If any Economic Interest is transferred, or is increased or decreased by reason of the admission of a new
Member or otherwise, during any Fiscal Year of the Company, Net profit or Net Loss for such Fiscal Year
shall be assigned pro rats to each day in -the particular period of such Fiscal Year to which such item is
attributable (i.e., the day on or during which it is accrued or otherwise incurred) and the amount of each
such item so assigned to any such day shall be allocated to the Member or Assignee based upon his or her
respective Economic interest at the close of such day.
However, for the purpose of accounting convenience and simplicity, the Company shall treat a
transfer of, or an increase or decrease in, an Economic Interest which occurs at any time during a
semi-monthly period (commencing with the semi-monthly period including the date hereof) as having been
consummated on the last day of such semi-monthly period, regardless of when during such semi-monthly
period such transfer, increase, of decrease actually occurs (i.e., sales and dispositions made during the first
fifteen (15) days of any month will be deemed to have been made on the 15th day of the month).
Notwithstanding any provision above to the contrary, gain or loss of the Company realised in
connection with a sale or other disposition of any of the assets of the Company shall be allocated solely to
the parties owning Economic Interests as of the date such sale or other disposition occurs.
6,5 DistrihnflOOS, of. DiStrihnrahle Cash by the t'mm�any. Subject to applicable law and any
limitations contained elsewhere in this Agreement, the Managers may elect from titre to time to distribute
Distributable Cash to the Members, which distributions shall be in the following order of priority:
(a) To the Members in proportion to their unreturned Capital Contributions until each
Member has recovered his or her Capital Contributions; and
(b) To the Members in proportion to their Percentage Interests.
All such distributions shall be made only to the Persons who, according to the
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books and records of the Company, are'the holders of record of the Economic Interests in respect of which
such distributions are made on the actual date of distribution. Subject to Section 6.7, neither the Company
nor any Manager shall incur any liability for making distributions in accordance with this Section 6.5.'
6.6 Farm of Distributina. A Member, regardless of the nature of the Member's Capital
Contribution, has no right to demand and receive any distribution from the Company in any form other than
money. Except as provided in Section 10A, no Member may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of money being made to other
Members and no Member may be compelled to accept a distribution of any asset in kind.
• �� .�I pit=.�
A. No distribution shall be made if, after giving effect to the distribution:
(i) The Company would not be able to pay its debts as they become due in the
usual course of business! or
(ii) The Company's total assets would be less than the sum of its total
liabilities plus, unless this Agreement provides otherwise, the amount that would be needed, if the Company
Nvere to be dissolved at the time of the distribution, to satisfy the preferential rights of other Members, if
any, upon dissolution that are superior to the rights of the Member receiving the distribution.
8. The Managers may base a determination that a distribution is not prohibited on any
of the following:
(i) Financial statements prepared on the basis of accounting practices and
principles that are reasonable in the circumstances;
(ii) A fair valuation; or
(iii) Any other method that is reasonable in the circumstances.
Except as provided in Corporations Code Section 17254(e), the effect of a distribution is
measured as of the date the distribution is authorized if the payment occurs within 120 days after the date of
authorization, or the date payment is made if it occurs mote than 120 days of the date of authorization.
C. A Member or Manager who votes for distribution in violation of this Agreement
or the Act is personally liable to the Company for the amount of the distribution that exceeds what could
have been distributed without violating this Agreement or the Act if it is established that the Member or
Manager did not act in compliance with Section 6.7 or Section 10.4. Any Member or Manager who is so
liable shall be entitled to compel contribution from (i) each other Member or Manager who also is so liable
and (H) each Member for the amount the Member received with knowledge of facts indicating that the
distribution was made in violation of this Agreement or the Act.
6.8 RF.MM a, Distributions. Members and Assignees who receive distributions made in
violation of the Act or this Agreement shall return such distributions to the Company. Except for those
distributions made in violation of the Act or this Agreement, no Member or Assignee shall be obligated to
return any distribution to the Company or pay the amount of any distribution for the account of the
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12102720'03' ,,16: 40 '1114072=4241 CHADWICK J BRADBURY ..-PAS : ,19
Company or to any creditor of the Company. The amount of any distribution returned to the Company by a
Member or Assignee or paid by a Member or Assignee for the account of the Company or to a creditor of
the Company shall be added to the account or accounts from which it was subtracted when it was distributed
to the Member or Assignee.
6.9 . The Members are aware of the income tax
consequences of the allocations trade by this Article VI and hereby agree to be bound by the provisions of
this Article VI its reporting their shares of Company income and loss for income tax purposes.
ARTICLE VII
TRANSFER AND ASSIGNMI✓NT OF ,INTERESTS
7.1 No Member shall be entitled to transfer, assign
convey, sell, encumber or in any way alienate all or any part of his or her Membership Interest (collectively,
"transfer") except with the prior written consent of all Members, which consent may be given or withheld,
conditioned or delayed (as allowed by this ,Agreement or the Act), as the other Member, may determine in
their sole and absolute discretion. Transfers in violation of this Article MY shall only be effective to the
extent set forth in Section 7.7. ,After the consummation of any transfer of any part of a Membership Interest,
the Membership Interest so transferred shall continue to be subject to the terms and provisions of this
Agreement and any further transfers shall be required to comply with all the terms and provisions of this
Agreement.
7.2 Furtbgr mtricrions nn Transfer of intg=-g. In addition to other restrictions found in this
Agreement, no Member shall transfer, assign, convey, sell, encumber or in any way alienate all or any part
of his or her Membership Interest: (i) without compliance with all federal and state securities law, and (ii) if
the Membership Interest to be transferred, when added to the total of all other Membership Interests
transferred in the preceding twelve (12) consecutive months prior thereto, would cause the tax termination
of the Company under Code Section 708(b)(1 xEI)•
7.3 Suhstiti&n of Mgmhars. An Assignee of a Membership Interest shall have the right to
become a substitute Member only if (i) the requirements of Sections 7.1 and 7.2 relating to unanimous
consent of Members, securities and tax requirements hereof are met, (ii) the Assignee executes an
instrument satisfactory to the Managers accepting and adopting the terms and provisions of this Agreement,
and (iii) the Assignee pays any reasonable expenses in connection with his or her admission as a new
Member. The admission of an Assignee as a substitute Member shall not result in the release of the
Member who assigned the Membership Interest from any liability that such Member may have to the
Company.
7.4 AP=itt rf Traxtsfeos. The Membership Interest of any Member may be transferred to any
other Member, subject to compliance with Section 7.2, and without the prior %Titten consent of the
Members or Managers. The )economic Interest of any Member may be transferred subject to compliance
with Section 7.2, and without the prior written consent of the Members as required by Section 7.1, upon
consent of the Managers, which shall not be unreasonably withheld, by the Member (i) by inter vivos gift or
by testamentary transfer to an), spouse, parent, sibling, in-law, child or grandchild of the Member, or to a
trust for the benefit of the Member or such spouse, parent, sibling, in-law, child or grandchild of the
Member, or (ii) to any Affiliate of the Member; it being agreed that, in executing this Agreement, each
Member has consented to such transfers.
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7.5 of Pem1trPA . Any permitted transfer of all or any portion of a
Membership Interest or act Economic Interest shall be effective as of the date provided in Section 6.4
following the date upon which the requirements of Sections 7. I, 7.2 and 7.3 have been met. The Managers
shall provide the Members with %Titten notice of such transfer as promptly as possible after the
requirements of Sections 7.1, 7.2 and 7.3 have been met. Any transferee of a Membership Interest shall take
subject to the restrictions on transfer imposed by this Agreement.
7.6 Rights -of Legs) ) nr apnrAri.,ps, If a Member who is an individual dies or is adjudged by a
court of competent jurisdiction to be incompetent to manage the Membees person or property, the Membees
executor, administrator, guardian, conservator, or other legal representative may exercise all of the
Member's rights for the purpose of seating the Member's estate or administering the Membees property,
including any power the Member has under the Articles or this Agreement to give an assignee the right to
become a Member. If a Member is a corporation, trust, or other entity and is dissolved or terminated, the
powers of that Member may be exercised by his or her legal representative or successor.
7•7 . Upon any transfer of a Membership
Interest in violation of this Article VII, the transferee shall have no right to vote or participate in the
management of the business, property and affairs of the Company or to exercise any rights of a Member.
Such transferee shall only be entitled to become an Assignee and thereafter shalt only receive the share of
one or more of the Company's Net Profits, Net Losses and distributions of the Company's assets to which
the transferor of such Economic Interest would otherwise be entitled. Notwithstanding the immediately
preceding sentences, if, in the determination of the Managers, a transfer in violation of this Article VIl
would cause the tax termination of the Company under Code Section 708(bXIXB), the transfer shall be null
and void and the purported transferee shall not become either a Member or an Assignee.
Upon and contemporaneously with any transfer (whether arising out of an attempted charge upon
that Members Economic Interest by judicial process, a foreclosure by a creditor of the Member or
otherwise) of a Membees Economic Interest (other than in accordance with Section 7.4) which does not at
the same time transfer the balance of the rights associated with the Membership Interest transferred by the
Member (including, without limitation, the rights of the Member to vote or participate in the management of
the business, property and affairs of the Company), the Company shall purchase from the Member, and the
Member shall sell to Company for a purchase price of S100, all remaining rights and interests retained by
the Member that immediately before the transfer were associated with the. transferred Economic Interest.
Such purchase and sale shall not, however, result in the release of the Member from any liability to the
Company as a Member.
Each Member acknowledges and agrees that the right of the Company to purchase such remaining
rights and interests from a Member who transfers a Membership Interest in violation ol'this Article VII is
not unreasonable under the circumstances existing as of the date hereof.
7.8 Kaght of rind j geat6tinn. If any Member desires to transfer all or any part of his or her',--,
Membership Interest other than pursuant to Section 7.4, such Member shall notify the Company and the
other Members in writing of such desire and, for a period often (1 0) days thereafter, the Members and the
Company shall negotiate with respect to the purchase of such Members Membership Interest. During such
period, the Member desiring to transfer such Membership Interest may not solicit a transferee for such
Membership Interest.
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7.9 . If the period described in Section 7.8 eXpires without an agreement
being reached as to the purchase of the Membership Interest referred to therein, the Member desiring to
transfer his or her Membership Interest may solicit transferees. In such event, each time a Member proposes
to transfer all or any part of his or her Membership Interest (or as required by operation of law or other
involuntary transfer to do so) other than pursuant to Section 7.4, such Member shall frst offer such
Membership Interest to the Company and the non -transferring Members in accordance with the following
provisions -
A. Such Member shall deliver a written notice ("Option Notice") to the Company and
the other Members stating (i) such Member's bona fide intention to transfer such Membership Interest, (ii)
the Membership Interest to be transferred, (iii) the purchase price and terms of payment for which the
Member proposes to transfer such Membership Interest and (iv) the name and address of the proposed
transferee.
B. Within ten (10) days after receipt of the Option Notice, the Company shall have the
right, but not the obligation, to elect to purchase all or any part of the Membership Interest upon the price
and terms of payment designated in the Option Notice. If the Option Notice provides for the payrnent of
non -cash consideration, the Company may elect to pay the consideration in cash equal to the good faith
estimate of the present fair market value of the non -cash consideration offered as determined by the
Managers. If the Company exercises such right within such thirty (30) day period, the Managers shall give
written notice of that fact to the transferring and non -transferring Members.
C. If the Company fails to elect to purchase the entice Membership Interest proposed
to be transferred within the thirty (30) day period described in Section 7.9B, the non -transferring Members
shall have the right, but not the obligation, to elect to purchase any remaining share of such Membership
Interest upon the price and terms of payment designated in the Option Notice. If the Option Notice provides
for the payment of non -cash consideration, such purchasing Members each may elect to pay the
consideration in cash equal to the good faith estimate of the present fair market value of the non -cash
consideration offered as determined by the Managers. Within sixty (60) days after receipt of the Option
Notice, each non -transferring Member shall notify the Managers in writing of his or her desire to purchase a
portion of the Membership Interest proposed to be so transferred. The failure of any Member to submit a
notice within the applicable period shall constitute an election on the part of that Member not to purchase
any of the Membership Interest which may be so transferred. Each Member so electing to purchase shall be
entitled to purchase a portion of such Membership Interest in the same proportion that the Percentage
Interest of such Member bears to the aggregate of the Percentage Interests of all of the Members electing to
so purchase the Membership Interest being transferred. In the event any Member elects to purchase none or
less than all of his or her pro rata share of such Membership Interest, then the other Members can elect to
purchase more than their pro rata share.
U. If the Company and the other Members elect to purchase or obtain any or all of the
Membership interest designated in the Option Notice, then within the ten (10) day period, the electing
Member shall open an escrow for the same and concurrently deposit five percent (5%) of the purchase price
(which shall become nonrefundable liquidated damages). and the closing of such purchase shall occur
within thirty (30) days after receipt of such notice and the transferring Member, the Company and/or the
other Members shall execute such documents and instruments and make such deliveries as may be
reasonably required to consummate such purchase.
E. If the Company and the other Members elect not to purchase or obtain, or default
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in their obligation to purchase or obtain, all of the Membership Interest designated in the Option Notice,
then the transferring Member may transfer the portion of the Membership Interest described in the Option
Notice not so purchased, to the proposed transferee, providing such transfer (i) is completed kvithin thirty
(30) days after the expiration of the Company's and the other Members' right to purchase such Membership
Interest, (ii) is made on terms no less favorable to the transferring Member than as designated in the Option
Notice, and (iii) complies with Sections 7.1, 7.2 and 7.3 relating to unanimous consent of Members,
securities and tax requirements; it being acknowledged by the Members that compliance with Sections 7.8
and 7.9A-D does not modify any of the transfer restrictions in Article VII or otherwise entitle a Member to
transfer his or her Membership Interest other than in the manner prescribed by Article VII. If such
Membership Interest is not so transferred, the transferring Mernber must give notice in accordance with this
Section prior to any other or subsequent transfer of such Membership Interest.
7.10 Tran_qferc Andi 4si�nmPntt of Man}�em' Interests. Notwithstanding Section 7.9, upon the
transfer of the Membership Interest oFa Manager, the remaining Managers shall have the first right, pro -rate
as to their Membership Interests as Managers, to elect to exercise the right of first refusal set forth in
Section 7.9 for a period of test (10) days after receipt of the Option Notice described in Section 7.9A. Such
exercise shall be made in writing to the Company. If any Manager fails to exercise his or her rights under
this Section 7.10, the other remaining Managers may elect to purchase the balance pro rata. If the remaining
Managers elect to purchase less than all of the transferor's Membership Interest, the portion of such
Membership Interest not elected to be purchased shall be subject to purchase and sale in accordance with
Section 7.9,
ARTICLE Vial
CONSEQUENCES OF DISSOLUTION EVENTS AND
TERMINATION OF MEMBERSHIP INTEREST
8.1 r]icsnhirian EyPnt ar Witham. Upon the occurrence of a Dissolution Event, -or
Withdrawal of a Member, the Company shall dissolve unless the remaining Members ("Remaining
Members") holding a majority of the Percentage Interests which all Remaining Members hold, consent
within thirty (30) days of the Dissolution Event to the continuation of the business of the Company. If the
Remaining Members consent to the continuation of the business of the Company, the Company and/or the
Remaining Members shall have the right to purchase, and if such right is exercised, the Member whose
actions or conduct resulted in the Dissolution Event or Withdrawal ("Former Member") or such Former
Member's legal representative shall sell, the Former Membees Membership Interest ("Former Members
Interest") as provided in this Article VIII.
8.1(a) Pur ha_ Price, The purchase price for the Former Membees Interest shal l be the Capital
Account balance of the Former Member as adjusted pursuant to Section 3.5; provided, however, that if the
Former Member, such Former Members legal representative or the Company, deems the Capital Account
balance to vary from the fair market value of the Former Member's Interest by more than ten percent (10%),
such party shall be entitled to require an appraisal by providing notice of the request for appraisal within
thirty (30) days after the determination of the Remaining Members to continue the business of the
Company. In such event, the value of the Former Membees Interest shall be determined by three (3)
independent appraisers, one (1) selected by the Former Member or such Former Member's legal
representative, one selected by the Company, and one (1) selected by the two (2) appraisers so named. The
fair market value of the Former klembees Interest shall be the average of the two (2) appraisals closest in
amount to each other. In the event the fair market value is determined to vary from the Capital Account
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2f 02I2003 v 1E: 40...._. `1114072-4241 'CHADWICK XBRADBURY PAGE . 23
balance by less than ten percent (10%), the party requesting such appraisal shall pay*all ex"penses of all the
appraisals incurred by the party offering to eater into the transaction at the Capital Account valuation, In all
other events, the party requesting the appraisal shall pay one-half of such expense and the other party shall
pay one-half of such expense. Notwithstanding the foregoing, if the Dissolution Event results from a breach
of this Agreement by the Former Member, the purchase price shall be reduced by an amount equal to the
damages suffered by the Company or the Remaining Members as a result of such breach.
8,2 Nntirc of intent to Purchaw. Within thirty (30) days after the Managers have notified the
Remaining Members as to the purchase price of the Former lumbers Interest determined in accordance
with Section 8.3, each Remaining Member shalt notify the Managers in writing of his or her desire to
purchase a portion of the Former Member's Interest, The failure of any Remaining Member to submit a
notice within the applicable period shall constitute an election on the part of the Member not to purchase
any of the Former Member's Interest. Each Remaining Member so electing to purchase shall be entitled to
purchase a portion of the Former Member's Interest in the same proportion that the Percentage Interest of
the Remaining Member bears to the aggregate of the Percentage Interests of all of the Remaining Members
electing to purchase the Former Membees Interest.
8.3 Flectiart-M Purchase T„tss Th n All of the Farmer Membees P . If any Remaining
Member elects to purchase none or less than all of his or her pro rats share of the Former Membees Interest,
then the Remaining Members may elect to purchase more than their pro rate share. If the Remaining
Members fail to purchase the entire Interest of the Former Member, the Company may purchase any
remaining share of the Former Membees Interest. If the Remaining Members and the Company do not elect
to purchase all of the Former Member's Interest, such Interest shall be that of an Economic interest only.
8,4 Payment of Purchase Price The purchase price shall be paid by the Company or the
Remaining Members, as the case may be, by either of the following methods, each of which may be selected
separately by the Company or the Remaining Members:
A. The Company or the Remaining Members shall at the closing pay in cash the total purchase price
for the Former Membees Interest; or
B. The Company or the Remaining Members shall pay at the closing ten percent (l 0%) of the purchase
price and the balance of the purchase price shall be paid in five (5) equal annual principal
installments, plus accrued interest, and be payable each year on the anniversary date of the closing.
The unpaid principal balance shall accrue interest at the current applicable federal rate as provided
in the Code for the month in which the initial payment is made, but the Company and the
Remaining Members shall have the right to prepay in full or in part at any time without penalty.
The obligation of each purchasing Remaining Member, and the Company, as applicable, to pay its
portion of the balance due shall be evidenced by a separate promissory note executed by the
respective purchasing Remaining Member or the Company, as applicable. Each such promissory
note shall be in an original principal amount equal to the portion owed by the respective purchasing
Remaining Member or the Company, as applicable. The promissory note executed by each
purchasing Remaining Member shall be secured by a pledge of that portion of the Former Member's
Interest purchased by such Remaining Member.
8.5 ['.insing of Pure igjA- Zf EQUner Mernheeg TnteWSI, The closing for the sale of a Former
Membees Interest pursuant to this Article VIII shall be held at 10:00 a-M. at the principal office of Company
no later than sixty (60) days after the determination of the purchase price, except that if the closing date falls
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1210212003 "15: 40 _ , . 11140'72 '4241 :CHADWICKJ` BRADBURY
`PAGE. 24 . `7
on a Saturday, Sunday, or California legal holiday, then the closing shall be held on the next succeeding
business day. At the closing, the Former Member or such Former Members legal representative shall
deliver to the Company or the Remaining Members an instrument of transfer (containing warranties of title
and no encumbrances) conveying the Former Membees Interest The Former Member or such Former
Membees legal representative, the Company and the Remaining Members shall do all things and execute
and deliver all papers as may be necessary fully to consummate such sale and purchase in accordance with
the terms and provisions of this Agreement.
8,6 PUrnhage Terme Varied by A_=iemcnt. Nothing contained herein is intended to prohibit
_ Members from agreeing upon other terms and conditions far the purchase by the Company or any Member
of the Membership Interest of any Member in the Company desiring to retire, withdraw or resign, in whole
or in part, as a Member.
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12IO2I2003 16:"4'0-_ -11' 4077-4241 _ .. '- CHADWICK J-13RADBURY PAGE" `-25
8.7 INTENTIONALLY OMI`[TED.
ARTICLE IX
ACCOUNTING, REC0I3,13S, REPORTING BY MEMBERS
9.1 Books.Aaocl Records. The books and records of the Company shall be kept, and the financial
position and the results of its operations recorded, in accordance with the accounting methods followed for
federal income tax purposes. The books and records of the Company shall reflect all the Company
. transactions and shall be appropriate and adequate for the Company's business. The Company shall
maintain at its principal office in California all of the following:
A. A current list of the full name and last known business or residence address of each
Member and Assignee set forth in alphabetical order, together with the Capital Contributions, Capital
Account and Percentage Interest of each Member and Assignee;
B. A currant list of the full name and business ox residence address of each Manager;
C. A copy of the Articles and any and all amendments thereto together with executed
copies of any powers of attorney pursuant to which the Articles or any amendments thereto have been
executed;
D. Copies of the Company's federal, state, and local income tax or information returns
and reports, if any, for the six (6) most recent taacable years;
E. A copy of this Agreement and any and all amendments thereto together with
executed copies of any powers of attorney pursuant to which this Agreement or any amendments thereto
have been executed;
F. Copies of the financial statements of the Company, if any, for the six (6) most
recent Fiscal Years; and
G. The Company's books and records as they relate to the internal affairs of the
Company for at least the current and past four (4) Fiscal Years.
A. Upon the request of any Member or Assignee for purposes reasonably related to
the interest of that Person as a Member or Assignee, the Managers shall promptly deliver to the requesting
Member or Assignee, at the expense of the Company, a copy of the information required to be maintained
under Sections 9.1 A, B and D, and a copy of this Agreement
B. Each Member, Manager and Assignee has the right, upon reasonable request for
purposes reasonably related to the interest of the Person as Member, Manager or Assignee, to;
(i) inspect and copy during normal business hours any of the Company
records described in Sections 9.1 A through G; and
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1210212003 " 16: 4B 71114072=4241 "CHADIII`CK J-BRADBURY ' PAGE.' 25 _
(ii) obtain front the Managers, promptly after their becoming available, a copy
of the Company's federal, state, and local income tax or information returns for each Fiscal Year.
C. Members representing at least five percent (5%) of the Percentage Interests, or
three or more Members, make a written request to the Managers for an income statement of the Company
for the initial three-month, six-month, or nine -month period of the current Fiscal Year ended more than
thirty (30) days prior to the date of the request, and a balance sheet of the Company as of the end of that
period. Such statement shall be accompanied by the report thereon, if any, of the independent accountants
engaged by the Company or, if there is no report, the certificate of a Manager that the statement was
prepared without audit from the books and records of the Company. If so requested, the statement shall be
delivered or mailed to the Members within 30 days thereafter.
D. Any request, inspection or copying by a Member or Assignee under this Section
9.2 may be made by that Person or that Person's agent or attorney.
E. The Managers shall promptly furnish to a Member a copy of any amendment to the
Articles or this Agreement executed by a Manager pursuant to a power of attorney from the Member.
9.3 Annual S atemenh.
A. If the Company has snore than thirty-five (35) Members, the Managers shall cause
an annual report to be sent to each of the Members not later than one hundred twenty (120) days after the
close of the Fiscal Year. The report shall contain a balance sheet as of the end of the Fiscal Year and an
income statement and statement of changes in financial position for the Fiscal Year. Such financial
statements shall be accompanied by the report thereon, if any, of the independent accountants engaged by
the Company or, if there is no report, the certificate of a Manager that the financial statements were
prepared without audit from the books and records of the Company.
B. The Managers shall cause to be prepared at least annually, at Company expense,
information necessary for the preparation of the Members' and Assignees', federal and state income tax
returns. The Managers shall send or cause to be sent to each Member or Assignee within ninety (90) days
after the end of each taxable year such information as is necessary to complete federal and state income tax
or information returns, and, if the Company has thirty-five (35) or fewer Members, a copy of the Company's
federal, state, and local income tax or information returns for that year.
C. The Managers shall cause to be filed at least annually with the California Secretary
of State the statement required udder California Corporations Code § 17060.
9.4 Financial and Q1hAr Information. The Managers shall provide such financial and other
information relating to the Company or any other Person in which the Company owns, directly or indirectly,
an equity interest, as a Member may reasonably request. The Managers shall distribute to the Members,
promptly after the preparation or receipt thereof by the Managers, any financial or other information relating
to any Person in which the Company owns, directly or indirectly, an equity interest, including any flings by
such Person under the Securities Exchange Act of 1934, as amended, that is received by the Company with
respect to any equity interest of the Company in such Person.
9.5 Films. Ile Managers, at Company expense, shall cause the income tax returns for the
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Company to be prepared and timely filed 'with the appropriate authorities. The Managers, at Company
expense, shall also cause to be prepared and timely filed, with appropriate federal and state regulatory and
administrative bodies, amendments to, or restatements of, the Articles and all reports required to be filed by
the Company with those entities under the Act or other then current applicable laws, rules, and regulations.
If a Manager required by the Act to execute or file any document faits, after demand, to do so within a
reasonable period of time or refuses to do so, any other Manager or Member may prepare, execute and file
that document with the California Secretary of State.
9.6 Rank Accounts, The Managers shall maintain the funds of the Company in one or more
separate bank accounts in the name of the Company, and shall not permit the funds of the Company to be
commingled in any fashion with the funds of any other Person.
9.7 A,gc,tNiaJoLlg Denkinn% and Relian= an Mr.Cs. All decisions as to accounting matters,
except as otherwise specifically set forth herein, shall be made by the Managers. The Managers may rely
upon the advice of their accountants as to whether such decisions are in accordance with accounting
methods followed for federal income tax purposes.
9.8 Ta_x Matters for the Company Hammed by Managers And Tay Matters Drtrtar, The
Managers shall from time to time cause the Company to make such tax elections as they deem to be in the
best interests of the Company and the Members. The Tax Matters Partner shall represent the Company (at
the Company's expense) in connection with all examinations of the Company's affairs by tax authorities,
including resulting judicial and administrative proceedings, and shall expend the Company funds for
professional services and costs associated therewith. The Tax Matters Partner shall oversee the Company
tax affairs in the overall best interests of the Company but shall not have the right to agree to extend any
statute of limitations without the approval of a Majority Interest. If for any reason the Tax Matters Partner
can no longer serve in that capacity or ceases to be a Member or Manager, as the case may be, a Majority
Interest may designate another to be Tax Matters Partner.
ARTICLE X
DISSOLUTION AND WINDING UP
10.1 Dissolution, The Company shalt be dissolved, its assets shall be disposed of, and its affairs
wound up on the first to occur of the following:
A. The happening of any event of dissolution specified in the Articles;
B. The entry of a decree of judicial dissolution pursuant to Corporations Code Section
1735I;
C. The vote of a Majority Interest or of non -defaulting Members holding a majority of
the Percentage Interests held by all non -defaulting Members pursuant to Section 3.5C;
D. The occurrence of a Dissolution Event and the failure of the Remaining Members
to consent in accordance with Section 8.1 to continue the business of the Company within ninety (90) days
aver the occurrence of such event or the failure of the Company or the Remaining Members to purchase the
Former Membet's Interest as provided in Section 8.2; or
E. The sale of all or substantially all of the assets of Company.
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12 f 02/ 2003 ' "16.:- 40 7 ` 111'4072-4241 "CHADWICK J . BRADBURY PAGE' 28
10.2 rertifsZata of Dissolution. 'As soon as possible following the occurrence of any of the
events specified in Section 10.1, the Managers who have not wrongfully dissolved the Company or, if none,
the Members, shall execute a Certif ic$te of Dissolution in such form as shall be prescribed by the California
Secretary of State and file the Certificate as required by the Act.
10.3 WindingJlp. [Upon the occurrence of any event specified in Section 10.1, the Company
shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets,
. and satisfying the claims of its creditors. The Managers who have not wrongfully dissolved the Company
or, if none, the Members, shell be responsible for overseeing the winding up and liquidation of Company,
shall take full account of the liabilities of Company and assets, shall either cause its assets to be sold or
distributed, and if sold as promptly as is consistent with obtaining the fair market value thereof, shall cause
the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided in Section
10.5. The Persons winding up the affairs of the Company shall give written notice of the commencement of
winding up by mail to all known creditors and claimants whose addresses appear on the records of the
Company.
10A Distrihutinnc in Kind. Any non -cash asset distributed to one or more Members shall first
be valued at its fair market value to determine the Net Profit or Net Loss that would have resulted if such
asset were sold for such value, such Net Profit or Net Loss shall then be allocated pursuant to ,article V1,
and the Members' Capital Accounts shall be adjusted to reflect such allocations. The amount distributed
and charged to the Capital Account of each Member receiving an interest in such distributed asset shall be
the fair market value of such interest (net of any liability secured by such asset that such Member assumes
or takes subject to). The fair market value of such asset shall be determined by the Managers or by the
Members or if any Member objects by an independent appraiser (any such appraiser must be recognized as
an expert in valuing the type of asset involved) selected by the Manager or liquidating trustee and approved
by the Members.
•, . ., - . .,. , . .
A. After determining that all the known debts and liabilities of the Company,
including, without limitation, debts and liabilities to Members who are creditors of the Company, have been
paid or adequately provided for, the remaining assets shall be distributed to the Members in the following
order of priority: (i) first, to the Members in satisfaction for distributions under Sections 17201, 17202 or
17255 of the Corporations Code; (R) second, to the members for the return of their contributions; and (M)
thereafter, to the Members in the proportions in which they share in distributions.
a. The payment of a debt or liability, whether the whereabouts of the creditor is
known or unknown, has been adequately provided for if the payment has been provided for by either of the
following means:
W Payment thereof has been assumed or guaranteed in good faith by one or
more financially responsible persons or by the United States government or any agency thereof, and the
provision, including the financial responsibility of the Person, was determined in good faith and with
reasonable care by the Members or Managers to be adequate at the time of any distribution of the assets
pursuant to this Section.
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The amount of the debt or liability has been deposited as provided in
Section 2008 of the Corporations Code. '
This Section 10.513 shall not prescribe the exclusive means of making adequate
provision for debts and liabilities.
10.6 i_imitat[cms an Pay=ntc Made in nf4c_n11it]An Except as otherwise specifically provided
in this Agreement, each Member shall only be entitled to look solely at the assets of the Company for the
. return of his or her positive Capital Account balance and shall have no recourse for his or her Capital
Contribution and/or share of Net Profits (upon dissolution or otherwise) against the Managers or any other
Member.
10.7 1` Artif rate of C_ancellatien, The Managers or Members who filed the Certificate of
Dissolution shall cause to be filed in the office of, and on a form prescribed by, the California Secretary of
State, a Certificate of Cancellation of the Articles upon the completion of the winding up of the affairs of
the Company.
10.8 No Actinn fnr Diswlutinn. Except as expressly permitted in this ,A,greement, a Member
shall not take any voluntary action that directly causes a Dissolution Event. The Members acknowledge that
irreparable damage would be done to the goodwill and reputation of the Company if any Member should
bring an action in court to dissolve the Company under circumstances where dissolution is not required by
Section 10.1. This Agreement has been drawn carefully to provide fair treatment of ail parties and equitable
payment in liquidation of the Economic Interests. Accordingly, except where the Managers have failed to
liquidate the Company as required by this Article X, each Member hereby waives and renounces his or her
right to initiate legal action to seek the appointment of a receiver or trustee to liquidate the Company or to
seek a decree of judicial dissolution of the Company on the ground that (a) it is not reasonably practicable to
carry on the business of the Company in, conformity with the Articles or this Agreement, or (b) dissolution
is reasonably necessary for the protection of the rights or interests of the complaining Member. Damages
for breach of this Section 10.10 shall be monetary damages only (and not specific performance), and the
damages may be offset against distributions by the Company to which such Member would otherwise be
entitled.
ARTICLE XI
INDEMNIFICATION AND NSURANCE
11.1 Indemnificatinn Qf Agmt . The Company shall defend and indemnify any Member or
Manager and may indemnify any other person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was
a Member, Manager, officer, employee or other agent of the Company or that, being or having been such a
Member, Manager, officer, employee or agent, he or she is or was serving at the request of the Company as
a manager, director, officer, employee or other agent of another limited liability company, corporation,
partnership, joint venture, trust or other enterprise (all such persons being referred to hereinafter as an
"agent"), to the fullest extent permitted by applicable law in effect on the date hereof and to such greater
extent as applicable law may hereafter from time to time permit. The Managers shall be authorized, on
behalf of the Company, to enter into indemnity agreements from time to time with any Person entitled to be
indemnified by the Company hereunder, upon stieh terms and conditions as the Managers deem appropriate
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:°CHADWICK J BRADBURY PAGE : 30
in their business judgment.
11.2 insuray= The Company shall have the power to purchase and maintain insurance on
behalf of any Person who is or was an agent of the Company against any liability asserted against such
Person and incurred by such Person in any such capacity, or arising out of such Person's status as in agent,
whether or not the Company would have the power to indemnify such Person against such liability under
the provisions of Section 1 l .1 or under applicable law.
11.3 Successfill Defeam. Notwithstanding any other provision of this Agreement, to the extent
. that a Manager or officer of the Company has been successful on the merits or otherwise in defense of any
Proceeding referred to in Section 11.2, or in defense of any claim, issue or matter therein, such Manager or
officer shall be indemnified against Expenses actually and reasonably incurred in connection therewith.
11.4 Determination of CoodLct Any indemnification under Section 11.2 (unless ordered by a
court as referred to in such Section) shall be made by the Company only as authorized in the specific case
upon a determination that indemnification of the Manager or officer of the Company is proper in the
circumstances because such Manager or officer has met the applicable standard of conduct set forth in
Section 11.2. Such determination shall be made (i) by the Managers by a majority vote of a quorum
consisting of Managers who were not parties to such Proceeding, or (ii) if such quorum is not obtainable or,
even if obtainable, a quorum of such disinterested Managers so directs, by independent legal counsel in a
written opinion, or (iii) by the Members by a vote of a majority -in -interest of Members, whether or .not
constituting a quorum, who were not parties to such Proceeding.
11,5 Pa=ent of Fxne�in Advance. Expenses incurred by a Manager or officer of the
Company in connection with a Proceeding shall be paid by the Company in advance of the final disposition
of such Proceeding upon receipt of a ,%NTitten undertaking by or on behalf of such Manager or officer to
repay such amount if it shall ultimately be determined that such Manager or officer is not entitled to be
indemnified by the Company as authorized in this Article XI.
11.6 (n&mnift ► ran of Other Agents. The Company may, but shall not be obligated to,
indemnify any Person (other titan a Manager or officer of the Company) who was or is a parry or is
threatened to be made a party to, or otherwise becomes involved in, any Proceeding (including any
Proceeding by or in the right of the Company) by reason of the fact that such Person is or was an agent of
the Company (including Members who are not Managers or officers of the Company), against all Expenses,
amounts paid in settlement, judgments, fines, penalties and ERISA excise taxes actually and reasonably
incurred by such Person in connection with such Proceeding under the same circumstances and to the same
extent as is provided for or permitted in this Article XI with respect to a Manager or officer of the Company.
11.7 IndItMniJU Nnt Rxelusive, The indemnification and advancement of Expenses provided by,
or granted pursuant to, the provisions of this Article X1, shall not be deemed exclusive of any other rights to
which any Person seeking indemnification or advancement of Expenses may be entitled under any
agreement, vote of Managers or Members, or otherwise, both as to action in such Person's capacity as an
agent of the Company and as to action in another capacity while serving as an agent. All rights to
indemnification under this Article XI shall be deemed to be provided by a contract between the Company
and each Manager and officer, if any, of the Company who serves in such capacity at any time while this
Agreement and relevant provisions of the Act and other applicable law, if any, are in effect. Any repeal or
modification hereof or thereof shall not affect any such rights then existing.
11.8 Ins ++ mnee. The Company shall have the power to purchase and maintain insurance on
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12/02/2003' �-Tb'.'40' . .1I140'7"2'=4241 - ':CHADWICK `J' BRADBURY "'PAGE 31
behalf of any Person who is or was an agent of the Company against any liability asserted against such
Person and incurred by such Person in any such capacity, or arising out of such Person's status as an agent,
whether or not the Company would have the power to indemnify such Person against such liability under
the provisions of this Article XI or of Section 17155 of the Act. In the event a Person shall receive payment
from any insurance carrier or from the plaintiff in any action against such person with respect to
indemnified amounts after payment on account of all or part of such indemnified amounts having been made
by the Company pursuant to this Article XI, such Person shall reimburse the Company for the amount, if
any, by which the sum of such payment by such insurance carrier or such plaintiff and payments by the
Company to such Person exceeds such indemnified amounts; provided, however, that such portions, if any,
of such insurance proceeds that are required to be reimbursed_ to the insurance carrier under the terms of its
insurance policy shall not be deemed to be payments to such Person hereunder, In addition, upon payment
of indemnified amounts under the terms and conditions of this Agreement, the Company, shall be subrogated
to such Person's rights against any insurance carrier with respect to such indemnified amounts (to the extent
permitted under such insurance policies). Such right of subrogation shall be terminated upon receipt by the
Company of the amount to be reimbursed by such Person pursuant to the first sentence of this Section 11.8.
11.9 T4cJrg—F-xfr'11tnm and Ariminktratnrs. The indemnification and advancement of Expenses
provided by, or granted pursuant to, this Article XI shall, unless otherwise provided when authorized or
ratified, continue as to a Person who has ceased to be an agent of the Company and shall inure to the benefit
of such Person's heirs, executors and administrators.
A. Any indemnification or advance under Section 11.2 or Section 11.$ shall be made
promptly, and in no event later than sixty (60) days, after the Company's receipt of the written request of a
Manager or officer of the Company therefor, unless, in the case of an indemnification, a determination shall
have been made as provided in Section 11.4 that such Manager or officer has not met the relevant standard
for indemnification set forth in Section 11,2.
B. The right of a Person to indemnification or an advance of Expenses as provided by
this Article X1 shall be enforceable in any court of competent jurisdiction, Neither the failure by the
Managers or Members of the Company or its independent legal counsel to have made a determination that
indemnification or an advance is proper in the circumstances, nor any actual determination by the Managers
or Members of the Company or. its independent legal counsel that indemnification or an advance is not
proper, shall be a defense to the action or create a presumption that the relevant standard of conduct has not
been met. The burden of proving that indemnification or an advance is not proper shall be on such Person.
In any such action, the Person seeking indemnification or advancement of Expenses shall be entitled to
recover from the Company any and all expenses of the types described in the definition of Expenses in
Section 11,1A of this Agreement actually and reasonably incurred by such Person in such action, but only if
he or she prevails therein.
11.11 i_imitationSnn indemnification, No payments pursuant to this Agreement shall be made by
the Company: '
A. To indemnify or advance funds to any Person with respect to a Proceeding initiated
or brought voluntarily by such Person and not by gray of defense, except as provided in Section 11.1 OB with
respect to a Proceeding brought to establish or enforce a right to indemnification under this Agreement,
otherwise than as required under California law, but indemnification or advancement of Expenses may be
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'12/02l20103-l6:'4011T4072-4241 CHADUJ`ICK J BRADBIPY
provided by the Company in specific cases if a determination is made in the manner provided in Section
11 A that it is appropriate; or
B. If a court of competent jurisdiction finally determines that any indemnification or
advance of Expenses hereunder is unlawful.
1 t.12 Partiai indemni r-atinn. If a person is entitled under any provision of this Article XI to
indemnification by the Company for a portion of Expenses, amounts paid in settlement, judgments, fines,
penalties or ERISA excise taxes incurred by such Person in any Proceeding but not, however, ;for the total
_amount thereof, the Company shall nevertheless indemnify such Person for the portion of such Expenses,
amounts paid in settlement, judgments, fines, penalties or ERISA excise taxes to which such Person is
entitled,
ARTICLE XII
INVESTMENT REPRESENTATIONS
Each Member hereby represents and warrants to, and agrees with, the Managers, the other
Members, and the Company as.follows:
12.1 Eme misting Relatlonehi„D nr EX erienee, (i) He or she has a preexisting personal or business
relationship with the Company or one or more of its control persons or (ii) by reason of his or her business
or financial experience, or by reason of the business or financial experience of his or her financial advisor
who is unaffiliated with and who is not compensated, directly or indirectly, by the Company or any affiliate
or selling agent of the Company, he or she is capable of evaluating the risks and merits of an investment in
the Membership Interest and of protecting his or her own interests in connection with this investment.
12.2 No dv . icing, He or she has not seen, received, been presented, with, or been solicited by
any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with respect to the sale of the
Membership Interest.
12.3 Investment to _nt. He or she is acquiring the Membership Interest for investment purposes
for his or her own account only and not with a view to or for sale in connection with any distribution of all
or any part of the Membership Interest. No other person will have any direct or indirect beneficial interest
in or right to the Membership Interest.
12.4 P, mnae of.Entity. If the Member is a corporation, partnership, limited liability company,
trust, or other entity, it was not organized for the specific purpose of acquiring the Membership Interest.
12.6 F.cnnnmir B isk. He or she is financially able to bear the economic risk of an investment in
the Membership Interest, including the total loss thereof.
12.7 Na. R,egi,Staition of hd1tmberghi13 Inter s , He or she acknowledges that the Membership
Interest has not been registered under the Securities ,Act of 1933, as amended (the "Securities Act"), or
qualified under the California Corporate Securities Law of 1968, as amended, in reliance, in part, on his or
-Is.
1210272003 "'16:"40 1114072-4241
;... °CHADWICK J: BRrADBURY PAGE 33
her representations, warranties, and agreements herein.
12.8 Memharsbn interest in Rgs r; .r A Re uri,y, He or she understands that the Membership
Interest is a "restricted security" under the Securities Act in that the Membership Interest will be acquired
from the Company in a transaction not involving a public offering, and that the Membership Interest may be
resold without registration under the Securities Act only in certain limited circumstances and that otherwise
the Membership Interest must be held indefinitely. In this connection, he or she understands the resale
limit itions imposed by the Securities Act and is familiar with SEC Rule 144, as presently in effect, and the
conditions which must be met in order for that Rule to be available for resale of "restricted securities,"
including the requirement that the securities must be held for at least two years after purchase thereof from
the Company prior to resale (three years in the absence of publicly available information about the
Company) and the condition that there be available to the public current information about the Company
under certain circumstances. He or she understands that the Company has not made such information
available to the public and has no present plans to do so.
12.9 No Obli-gation to Register, He or she represents, warrants, and agrees that the Company
and the Managers are under no obligation to register or qualify the Membership Interest under the Securities
Act or under any state securities law, or to assist him or her in complying with any exemption from
registration and qualification.
12.10 No Disposition is Vinlation of tom«. Without limiting the representations set forth above,
and without limiting Article VII of this Agreement, he or she will not make any disposition of all or any part
of the Membership Interest which will result in the violation by him or her or by the Company of the
Securities Act, the California Corporate Securities Law of 1968, or any other applicable securities laws.
Without limiting the foregoing, he or she agrees not to make any disposition of all or any part of the
Membership Interest unless and until:
A. 'Marc is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such registration statement and
any applicable requirements of state securities laws; or
B. (i) He or she has notified the Company of the proposed disposition and has
furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition,
and (ii) if reasonably requested by the Managers, he or she has furnished the Company with a written
opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require
registration of any securities under the Securities Act or the consent of or a permit from appropriate
authorities under any applicable state securities law.
12.11 Legeads. He or she understands that the certificates (if any) evidencing the Membership
Interest may bear one or all of the following legends:
A. "THE SECURITIES REPRESENTED BY THIS CERTIFICATE 14AVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED
UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED
UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL
SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER
-39-
12IO2,I2003. ' 16: 4011140724 4241 C HADWICK 'J - BRADBURY PAGE' ' 3q
RESTRICTIONS, 'TERMS, AND CONDITIONS Vb'HICII ARE SET FORTH idEREITI IN THE
COMPANY'S OPERATING AGREEMENT; A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY"
B. Any legend required by applicable state securities laws.
12.12 Investment Rick. He or she acknowledges that the Membership Interestis a speculative
investment which involves a substantial degree of risk of loss by him or her of his or her entire investment in
the Company, that he or she understands and takes full cognizance of the risk factors related to the purchase
of the Membership Interest, and that the Company is newly organized and has no financial or operating
history.
12.13 1_nveetmPnr �+: =. He or she is an experienced investor in unregistered and restricted
securities of limited liability companies or limited partnerships speculative and high -risk ventures.
12.14 Re -Striations an Imnsferpthility. He or she acknowledges that there are substantial
restrictions on the transferability of the Membership Interest pursuant to this Agreement, that there is no
public market for the Membership Interest and none is expected to develop, and that, accordingly, it may not
be possible for hint or her to liquidate his or her investment in the Company.
12.15 Whrmation Rg ' .wed. He or she has received and reviewed; other documents; and all
information he or she considers necessary or appropriate for deciding whether to purchase the Membership
Interest. He or she has had an opportunity to ask questions and receive answers from the Company and its
Managers and employees regarding the terms and conditions of purchase of the Membership Interest and
regarding the business, financial affairs, and other aspects of the Company and has further had the
opportunity to obtain all information (to the extent the Company possesses or can acquire such information
without unreasonable effort or expense) which he or she deems necessary to evaluate the investment and to
verify the accuracy of information otherwise provided to him or her.
12.16 NO Re=, sentations g=Y Company. Neither any Manager, any agent or employee of the
Company or of tiny Manager, or any other Person has at any time expressly or implicitly represented,
guaranteed, or warranted to him or her that he or she may freely transfer the Membership Interest, that a
percentage of profit and/or amount or type of consideration will be realized as a result of an investment in
the Membership Interest, that past performance or experience on the part of the Managers or their Affiliates
or any other person in any way indicates the predictable results of the ownership of the Membership Interest
or of the overall Company business, that any cash distributions from Company operations or otherwise will
be made to the Members by any specific date or will be made at all, or that any specific twx benefits will
accrue as a result of an investment in the Company.
12.17 Cnn_%n1tatia with Attnrnev, He or she has been advised to consult with his or her own
attorney regarding all legal matters concerning an investment in the Company and the tax consequences of
participating in the Company, and has done so, to the extent he or she considers necessary. It is
acknowledged that Jeffrey E. Fromberg, Esquire acts as counsel only to California Intelligent Communities,
LLC in respect to this transaction.
12.18 Tat Cantseauences, He or she acknowledges that the to c consequences to his or her of
investing in the Company will depend on his or her particular circumstances, and neither the Company, the
Managers, the Members, Thor the partners, shareholders, members, managers, agents, officers, directors,
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12 02/2003 `'15:;40 1'I4072=4241 CHADGJICK J-BRADBURY PAGE 35 ..�
employees, Affiliates, or consultants of any of them will be responsible or liable for the tax consequences to ' r
him or her of an investment in the Company. i He or she will look solely to, and rely upon, his or her own
advisers with respect to the tax consequences of this investment.
12,19 N�n AasumnCe of TA,c RPn� . He or she acknowledges that there can be no assurance that
the Code or the Regulations will not be amended or interpreted in the future in such a manner so as to
deprive the Company and the Members of some or all of the tax benefits they might now receive, nor that
some of the deductions claimed by the Company or the allocations of items of income, gain, loss, deduction,
or credit among the Members may not be challenged by the Internal Revenue Service.
12.20 lndemai4. He or she shall defend, indemnify and hold harmless the Company, each and
every Manager, each and every other Member, and any officers, directors, shareholders, managers,
members, employees, partners, agents, attorneys, registered representatives, and control persons of any such
entity who was or is a party or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of or arising
from any misrepresentation or misstatement of facts or omission to represent or state facts made by him or
her including, without limitation, the information in this Agreement, against losses, liabilities, and expenses
of the Company, each and every Manager, each and every other Member, and any officers, directors,
shareholders, managers, members, employees, partners, attorneys, accountants, agents, registered
representatives, and control persons of any such Person (including attorneys' fees, judgments, fines, and
amounts paid in settlement, payable as incurred) incurred by such Person in connection with such action,
suit, proceeding, or the like,
ARTICLE X111
MISCELLANEOUS
13.1 Counsel to the amnany. Counsel to the Company may also be counsel to any Manager or
any Affiliate of a Manager, The Managers may execute on behalf of the Company and the Members any
consent to the representation of the Company that counsel may request pursuant to the California Rules of
Professional Conduct or similar rules in any other jurisdiction ("Rules"). The Company has initially
selected Jeffrey E. f romberg, Esquire ("Company Counsel") as legal counsel to the Company. Each
Member acknowledges that Company Counsel does not represent any Member in the absence of a clear and
e.Vlicit written agreement to such effect between the Member and Company Counsel, and that in the
absence of any such agreement Company Counsel shall owe no duties directly to a Member.
Notwithstanding any adversity that may develop, in the event any dispute or controversy arises between any
Members and the Company, or between any Members or the Company, on the one hand, and a Manager (or
Affiliate of a Manager) that Company Counsel represents, on the other hand, then each Member agrees that
Company Counsel may represent either the Company or such Manager (or his or her Affiliate), or both, in
any such dispute or controversy to the extent permitted by the Rules, and each Member hereby consents to
such representation. Each Member further acknowledges that: (a) Company Counsel has represented the
interests of California Intelligent Communities, LLC, a California limited liability company in connection
with the formation of the Company and the preparation and negotiation of this. Agreement and (b) while
communications with Company- Counsel concerning the formation of the Company, its Members and
Managers may be confidential with respect to third parties, no Member has any expectation that such
communications are confidential with respect to Manager.
41
12/ 02/ 2003 " 16: 40 1 114072=4241 : ' CHADWICK' J � BRADBURY PAGE 36_
13.2 e
['.Omni -tc- A gt ftau
-„ ==—...�.- This Agreement and the Articles, constitute the complete and
exclusive statement of agreement among the Members and Managers with respect to the subject matter
herein and therein and replace and supersede all prior written and oral agreements or statements by and
among the Members and Managers or any of them. No representation, statement, condition or warranty not
contained in this Agreement or the Articles will be binding on the Members or Managers or have any force
or effect whatsoever. To the extent that any provision of the Articles conflict with any provision of this
Agreement, the Articles shall control
13.3 Ainding ffec , Subject to the provisions of this Agreement relating to transferability, this
Agreement will be binding upon and inure to the benefit of the Members, and their respective successors
and assigns.
13.4 ROAL s in intemg. Except as expressly provided in the Act, nothing in this Agreement shall
confer any rights or remedies under or by reason of this Agreement on any Persons other than the Members
and Manners and their respective successors and assigns nor shall anything in this Agreement relieve or
discharge the obligation or liability of any third person to any party to this Agreement, nor shall any
provision give any third person any right of subrogation or action over or against any party to this
Agreement,
13.5 PrnnmfnS-.St_a� R - nt-ec, All pronouns and all variations thereof shall be deemed to
refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may
require, Any reference to the Code, the Regulations, the Act, Corporations Code or other statutes or laws
will include all amendments, modifications, or replacements of the specific sections and provisions
concerned.
13.6 �. All headings herein are inserted only for convenience and ease of reference and
are not to be considered in the construction or interpretation of any provision of this Agreement.
13.7 inte;=aation, In the event any claim is made by any Member relating to any conflict,
omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied
by virtue of the fact that this Agreement was prepared by or at the request of a particular Member or his or
her counsel.
13,8 Re-fsraa=-ta this Ag=rn_ent. Numbered or lettered articles, sections and subsections
herein contained refer to articles, sections and subsections of this Agreement unless othenvise expressly
stated.
13.9 Jurisdiction, Each Member hereby consents to the exclusive jurisdiction of the state and
federal courts sitting in California, in any action on a claim arising out of, under or in connection with this
Agreement or the transactions contemplated by this Agreement. Each Member further agrees that personal
jurisdiction over him or her may be effected by service of process by registered or certified mail addressed
as provided in Section 13.14 of this Agreement, and that when so made shall be as if served upon him or her
personally within the State of California.
13.10 Exhibits. All Exhibits attached to this Agreement are incorporated and shall be treated as if
set forth herein.
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12102/2003 16 40,,, 1114072-:4241 �CHADWICK'J BRADBURY' PAGE 37
13:11 SUPTAW14, 1'f any provision of this Agreement or the application of such provision to any
person or circumstance shall be held invalid,.the remainder of this Agreement or the application of such
provision to persons or circumstances other than those to which it is held invalid shall not be affected
thereby.
13.12 Add 4innal DnaumentS Piad Arts. Each Member agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms, provisions, and conditions of this
Agreement and the transactions contemplated hereby.
13.13 Notices, Any notice to be given or to be served upon the Company or any party hereto in
connection with this Agreement must be in writing (which may include facsimile) and will be deemed to
have been given and received when delivered to the address specified by the parry to receive the notice.
Such notices will be given to a Member or Manager at the address specified in Exhibit "A" hereto. Any
party may, at any time by giving five (5) days' prior written notice to the other parties, designate any other
address in substitution of the foregoing address to which such notice will be givers.
13.14 Amen wrigs, All amendments to this Agreement will be in writing and signed by all the
Members. In the absence of any opinion of counsel as to the effect thereof, no amendment to this
Agreement or the Articles shall be made which violates the Act or is likely to cause the Company to be
taxed as a corporation.
13.15 Reliance on Aigbarity of Pemnn SiM3in�eement. If a Member is not a natural person,
neither the Company nor any Member will (a) be required to determine the authority of the individual
signing this Agreement to make any commitment or undertaking on behalf of such entity or to determine
any fact or circumstance bearing upon the existence of the authority of such individual or (b) be responsible
for the application or distribution of proceeds paid or credited to individuals signing this Agreement on
behalf of such entity.
13.16 htgsfred in Cnmnagx PPmnP - Waiver of Action for Pgrtitinn. No Member or Assignee
has any interest in specific property of the Company. Without limiting the foregoing, each Member and
Assignee irrevocably waives during the term of the Company any right that he or she may have to maintain
any action for partition with respect to the property of the Company.
13.17 Multiple C4jtnMgmds. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and the same instrument.
13.18 Attnrec_FarS. In the event that any dispute between the Company and the Members or
among the Members should result in litigations or arbitration, the prevailing party in such dispute shall be
entitled to recover from the other parry all reasonable fees, costs and expenses of enforcing any right of the
prevailing party, including without limitation, reasonable attorneys' fees and expenses, all of which shall be
deemed to have accrued upon the commencement of such action and shall be paid whether or not such
action is prosecuted to judgment. Any judgment or order entered in such action shall contain a specific
provision providing for the recovery of attorney fees and costs incurred in enforcing such judgment and an
award of prejudgment interest from the date of the breach at the maximum rate of interest allowed by law.
For the purposes of this Section: (a) attorney fees shall include, without limitation, fees incurred in the
following: (1) postjudgment motions; (2) contempt proceedings; (3) garnishment, levy, and debtor and third
party examinations; (4) discovery; and (5) bankruptcy litigation and (b) prevailing party shall mean the party
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12/02/2003 7-16 49 1114072-4241 7. HADWTCK J BRADBURh PAGE 38 ..,
who is determined in the proceeding to have prevailed or who prevails by dismissal, default or otherwise.
13.19 Time is of �h�,he�e, All dates and times in this Agreement are of the essence.
13.20 Bemaifigr
rjyMT,latiy
,C. The remedies under this Agreement are cumulative and shall not
exclude any other remedies to which any person may be lawfully entitled.
13.21 Caasent of She, Within ten (10) days after any individual becomes a Member or a
Member marries, such Member shall have his or her spouse execute a consent substantially. in the form
attached to this Agreement
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12/02I2003 1640 1114072=4241 Y CHfitiDWICK" J BRDBtY .PAGE . ,..
All of the Members of CENTER POINT DEVELOOMENT, LLC, a California limited liability
company, have executed this Agreement, effective as of the date written above,
MEMBER:
OLIPHANT FAMILY TRUST
Member
BY:
Rich Oliphant, Trustee
TWELVE STONE TRUST
BY:
MRJ, INC.
BY
Dennis French, President
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V
12/02/2003' ra'.40 111�407`2=4241 DWICK J BRADBURY PAGE"w 40
`
INTENTIONALLY OMITTED
CONSENT OF SPOUSE
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.. 12%02I2003 -- 16: 40 '1114072=4'241
CHADWICK J BRADBURY• ._ PAGE ., .41 _
FXHMIT A
CAPITAL CONTRIBUTION OF MEMBERS AND ADDRESSES OF MEMBERS
AND MANAGERS AS OF
December 15, 2002
_
Membees Capital
Member's
Oliphant Famil
139 Montere
Trust
Ave., Suite 139
alrn Desert, C
2260
$33U.33,
3 .33°/
Twelve Stone Trust
4-139 Monterey
ve., Suite 139
Palm Desert, C
260
$3,333.33
33,33%
RI, Inc.
7-564 Country Club
Drive, Suite 100,
Palm Desert, CA
2211
0
is Rounded
$10.000.000,
o/
Oliphant Enterprises
4-139 Monterey
Inc., a Californiave.,
Suite 201
orporation
alm Desert, C
2260
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