ABC LLC Operating Agreement_Complex

7/29/2019 ABC LLC Operating Agreement_Complex

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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

ABC, LLC

A DELAWARE LIMITED LIABILITY COMPANY

November[], 2012


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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

ABC, LLC

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY

AGREEMENT is made effective as of the [] day of November, 2012, by and among Student A(SA), Student B (SB), Mr. Jos Prez (JP), Mr. Pedro Prez (PP) and Mrs. Mara Prez(MP).

RECITALS

WHEREAS, on January 1, 2012, the Certificate of Formation of ABC, LLC, a limitedliability company organized under the laws of the State of Delaware (the Company), was filedwith the Delaware Secretary of State.

WHEREAS, that certain Limited Liability Company Agreement (the LLCAgreement) was entered into by SA, as sole Member of the Company, as of January 1, 2012,providing for the management of the business and the affairs of the Company, the allocation ofprofits and losses, the distribution of cash of the Company among the Members, the rights,obligations and interests of the Members to each other and to the Company, and certain othermatters.

WHEREAS, the parties hereto desire to enter into this Agreement (as defined below) toamend and restate the LLC Agreement in its entirety.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable

consideration, the receipt and sufficiency of which is hereby acknowledged, the Members herebyagree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used in this Agreement have the meanings specified in the Certificateof Formation or elsewhere in this Agreement. In referring to sections or provisions of the Codeor Treasury Regulations, it is intended that the terms partner and partnership (or variationsthereof) appearing therein shall be read, respectively, as Member or Company (or variationsthereof).

1.1 Act means the Delaware Limited Liability Company Act, codified in theDelaware General Corporation Law, Section 18-101 et seq., as the same may be amended fromtime to time.

1.2 Additional Capital Contribution has the meaning set forth inSection 3.3.


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Intent.ABC LLC Operating Agreement_Complex

1.3 Adjusted Capital Account Deficit means, with respect to any Person,the deficit balance, if any, in such Persons Capital Account as of the end of the relevant FiscalYear, after giving effect to the following adjustments:

(a) credit to such Capital Account any amounts which such Person isobligated to restore pursuant to any provision of this Agreement or is deemed to be obligated torestore pursuant to the next to the last sentence of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of theTreasury Regulations after taking into account any changes during such year in CompanyMinimum Gain and Member Minimum Gain; and

(b) debit to such Capital Account the items described in Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations.

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with theprovisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations and shall be interpretedconsistently therewith.

1.4 Affiliate means with respect to a specified Person: (a) any Person thatdirectly or indirectly through one or more intermediaries, alone or through an affiliated group,controls, is controlled by, or is under common control with, such specified Person, (b) anyPerson that is an officer, director, partner, trustee, or employee of, or serves in a similar capacitywith respect to, such specified Person (or an Affiliate of such specified Person), (c) any Personthat, directly or indirectly, is the beneficial owner of 10% or more of any class of equitysecurities of, or otherwise has a substantial beneficial interest in, the specified Person or of whichthe specified Person is directly or indirectly the owner of 10% or more of any class of equitysecurities or in which the specified Person has a substantial beneficial interest, or (d) any relativeor spouse of the specified Person.

1.5 Agreement means this Amended and Restated Limited LiabilityCompany Agreement, as originally executed and as amended from time to time.1.6 Allocated Portion of a Member, with respect to any Offered Interest

pursuant to Article VIII, means the portion of such Offered Interest that such Member is entitledto purchase, stated as a percentage, the numerator of which shall be such Members PercentageInterest as of the applicable date, and the denominator of which shall be the aggregate PercentageInterests of all Members having the right to purchase such Membership Interests pursuant toArticle VIII as of the applicable date.

1.7 Board of Managers has the meaning set forth in Section 5.1(a).1.8 Bona Fide Offer means a written offer from any proposed Transferee

of any Offered Interest that states (a) the form and amount of consideration being offered by suchproposed Transferee for such Offered Interest, (b) other material terms of the proposed Transfer,and (c) the proposed timetable for the consummation of the proposed Transfer.

1.9 Book Value means, with respect to any asset of the Company, theassets adjusted basis for federal income tax purposes, except as follows:


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(a) The initial Book Value of any asset contributed by a Member to theCompany shall be such assets gross fair market value at the time of such contribution, asdetermined by the Board of Managers;

(b) The Book Value shall be adjusted in the same manner as would the assetsadjusted basis for federal income tax purposes, except that the depreciation deduction taken intoaccount each Fiscal Year for purposes of adjusting the Book Value of an asset shall be theamount of Depreciation with respect to such asset taken into account for purposes of computingNet Income or Net Loss for the Fiscal Year;

(c) The Book Value of any asset distributed to a Member by the Companyshall be such assets gross fair market value at the time of such distribution, as determined by theBoard of Managers; and

(d) The Book Value of all assets of the Company shall be adjusted to equaltheir respective gross fair market values as of the following times: (A) the acquisition of anadditional interest in the Company by any new or existing Member in exchange for more than ade minimis Capital Contribution; (B) the distribution by the Company to a Member of more thana de minimis amount of property (including cash) as consideration for an interest in theCompany; (C) the liquidation of the Company within the meaning of Treasury RegulationsSection 1.704-1(b)(2)(ii)(g); and (D) the grant or vesting of an interest in the Company (otherthan a de minimis interest) as consideration for the provision of services to or for the benefit ofthe Company; provided, however, that the adjustments pursuant to clauses (A) and (B) aboveshall be made only if and to the extent that the Board of Managers determines that suchadjustments are necessary, appropriate or advisable to reflect the relative economic interests ofthe Members in the Company.

1.10 Budget has the meaning set forth in Section 5.1(d)(ii).1.11 Business means the operation of a subscription-based prepaid credit and

debit card linked to a mobile application and point-of-sale system allowing cardholders to accessreal-time paperless discounts at affiliated merchants and any and all other licit activitiesreasonably necessary or convenient to carry out the foregoing or approved by the Board ofManagers from time to time.

1.12 Business Day means any day that is not a Saturday, Sunday or other dayon which commercial banks in Delaware are authorized or required by law to remain closed.

1.13 Capital Account means, in respect of any Member, the capital accountthat the Company establishes and maintains for such Member pursuant to Section 3.2.

1.14 Capital Contribution means, with respect to any Member, theaggregate amount of money and the fair market value of any property (other than money)contributed to the Company (net of any liabilities assumed by the Company or secured by suchproperty) with respect to the Membership Interests held by such Member. The initial CapitalContributions of the Members are reflected on Schedule I.


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1.15 Cash Flow means all cash, revenues and funds received by theCompany, less the following: (i) interest, principal and other amounts due with respect to anyindebtedness of the Company, (ii) cash funds used to pay expenses of the Company (includingany fees paid to the Members for services rendered to the Company), and (iii) reasonablereserves for future expenses, debt payments, capital improvements and replacements, or any

other purpose related to the business of the Company, as reasonably determined by the Membersas provided in Section 5.1(a) hereof.

1.16 Certificate of Formation means the Certificate of Formation of theCompany filed pursuant to Section 2.1.

1.17 Code means the Internal Revenue Code of 1986, as amended, or anycorresponding provision of any succeeding law.

1.18 Company means ABC, LLC, a Delaware limited liability company.1.19 Company Minimum Gain means the excess of the Nonrecourse

Liabilities of the Company over the adjusted tax basis of property securing such liabilities. Theamount of Company Minimum Gain shall be determined in accordance with TreasuryRegulations Section 1.704-2(d).

1.20 Company Right of First Refusal Exercise Notice has the meaningascribed thereto in Section 8.5(b).

1.21 Company Right of First Refusal Option has the meaning ascribedthereto in Section 8.5(b).

1.22 Company Right of First Refusal Option Period has the meaningascribed thereto in Section 8.5(b).

1.23 Company Right of First Refusal Notice has the meaning ascribedthereto in Section 8.5(a).

1.24 Controls, Control, Controlling, whether or not capitalized, meansthe power, directly or indirectly, to direct or cause the direction of the management and policiesof a person or entity through ownership of voting securities, contract or otherwise.

1.25 Conversion Loan shall have the meaning assigned to that term inSection 3.2 hereof.

1.26 Deceased Member means any Member who becomes deceased duringthe term of this Agreement.

1.27 Depreciation means an amount equal to the depreciation, amortizationor other cost-recovery deduction allowable with respect to an asset for the Fiscal Year or otherperiod, except that if the Book Value of an asset differs from its adjusted tax basis at thebeginning of the Fiscal Year or other period, Depreciation will be an amount which bears thesame ratio to the beginning Book Value as the Federal income tax depreciation, amortization orother cost-recovery deduction for the Fiscal Year or other period bears to the beginning adjusted


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tax basis; provided, however, that if the Federal income tax depreciation, amortization or othercost-recovery deduction for the Fiscal Year or other period is zero, Depreciation will bedetermined by reference to the beginning Book Value using any reasonable method.

1.28 Disabled Member shall mean any Employee Member who becomesDisabled, during the term of this Agreement. As used herein, Disabled shall mean and include(i) to the extent that the Company may, now or hereafter, maintain any policy of long termdisability insurance covering any Employee Member, then Disability shall mean the definitionof disability in such policy, or (ii) if such Employee Member is a party to an employmentagreement with the Company, the definition, if any, of disability in such employmentagreement, or (iii) in any other event, Disability shall mean such Employee Memberssubstantial inability to perform the services normally performed by such Employee Member, asdetermined by a physician reasonably acceptable to the Company, which inability continues formore than sixty (60) consecutive days, or for more than ninety (90) days in any twelve monthperiod. In the event an Employee Member makes a Permitted Transfer to a trust, as provided inSection 8.3 hereof, the trust shall be deemed a Disabled Member in the event the grantor of thetrust becomes Disabled. In the event that the Company maintains a policy of long term disabilityinsurance covering any Employee Member, which Employee Member is also a party to anemployment agreement with the Company, in the event of any inconsistency between thedefinitions of disability contained in those documents, the definition contained in theemployment agreement shall control for purposes of this Section 1.25.

1.29 Divorced Member means any Member who, during the term of thisAgreement, becomes subject or party to a legal separation, action for dissolution of marriage,separation agreement, or property settlement agreement, as a result of which all or any portion ofsuch Members Membership Interest become or are required to be Transferred to such Membersspouse or ex-spouse.

1.30 Drag Along Notice has the meaning set forth in Section 8.6(a).1.31 Drag Along Sale has the meaning set forth in Section 8.6.1.32 Economic Risk of Loss shall be determined under the rules specified in

Regulations Section 1.752-2.

1.33 Effective Date means the date first above written.1.34 Employee Member shall mean any Member who is an employee of the

Company, or otherwise performs services for the Company substantially on a full-time basis.

1.35 ERISA means the Employee Retirement Income Security Act of 1974,as amended, and all guidance promulgated thereunder.

1.36 Estate of the Deceased Member means and includes, as those termsare understood and defined under applicable state law:


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(a) The duly appointed and qualified executor, executrix, administrator,administratrix, administrator with will annexed or administratrix with will annexed under theestate of the Deceased Member;

(b) The surviving joint tenant of the Deceased Member if the MembershipInterest are owned by the Deceased Member and any other Person as joint tenants;

(c) Any other Person who may, because of the community property law orother laws of any jurisdiction, acquire without formal probate proceedings any right, title orinterest in or to the Membership Interest by reason of the death of the Deceased Member; and

(d) In the event a Member makes a Permitted Transfer to a trust pursuant toSection 8.3 hereof, the trust to which such Permitted Transfer is made, following the death of theMember making such Permitted Transfer.

1.37 Excluded Proceeding has the meaning set forth in Section 10.2.1.38 Executive has the meaning set forth in Section 11.1(a).1.39 Fiscal Year means the Companys fiscal year, which shall be the

calendar year (except as otherwise required by law), and any partial year with respect to thefiscal years in which the Company is organized and dissolved or terminated.

1.40 Free Cash Flow shall have the meaning assigned to that term inSection 4.3(a) hereof.

1.41 Funding Member(s) has the meaning set forth in Section 3.2.

1.44 Intellectual Property shall mean all of the software, systems, sourcecode, object code, executables and any other materials, including, but not limited to, manuals,documentation and any other materials used (or useful, if any), related to or associated with theoffering, implementation, operation, and/or functioning of the Business and all of the followingworldwide intangible legal rights, whether or not filed, perfected, registered or recorded andwhether now or hereafter existing, filed, issued or acquired: (i) all patents, patent applications,and patent rights, including any and all continuations, divisions, reissues, reexaminations orextensions thereof; (ii) all rights to inventions, discoveries, and ideas, whether patentable or not,including the right to seek patent protection for inventions and discoveries; (iii) all rightsassociated with works of authorship, including but not limited to copyrights, copyrightapplications and copyright registrations; (iv) all rights relating to the protection of trade secrets,know-how and other confidential information, including, but not limited to, rights in industrialproperty and all associated information and other confidential or proprietary information; (v) allindustrial design rights; (vi) the right to obtain an assignment of any of the rights set forth in thepreceding clauses under employment agreements and otherwise; and (vii) any rights analogous tothose set forth in the preceding clauses and any other proprietary rights relating to intangibleproperty together with all rights corresponding thereto throughout the world, including, withoutlimitation, all income, royalties, damages and payments for past and future infringementsthereof, together with full right to sue for and recover all damages and profits recoverable for


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infringements of such rights, and all intellectual property rights and all other proprietaryinformation including but not limited to trade secrets.

1.42 LLC Agreement has the meaning assigned to that term in the Recitals.1.43 Losses means all damages, liabilities, awards, judgments, assessments,

fines, sanctions, penalties, charges, costs, liens, losses, payments, expenses and fees, includingall court costs and reasonable attorneys and accountants fees and expenses sustained orincurred in connection with the defense or investigation of any Proceeding.

1.44 Majority Members means Members holding at least Fifty One Percent(51%) of the Percentage Interests.

1.45 Memberor Members means the parties to this Agreement, and anyother Person, who otherwise acquires a Membership Interest and has become a party to thisAgreement, as permitted under this Agreement, whos Membership Interest, has not been

terminated. The parties expressly agree that the initial Members may, in their sole discretion,create a class of Membership Interests, which shall be granted and issued to Employee Members(other than the initial Members). The terms of such Membership Interests shall be as defined inan addendum to this Agreement, but it is the intention of the initial Members that suchMembership Interests will entitle the Employee Members only to receive a stated percentage ofthe net proceeds of certain capital events or transactions involving the Company, and that theEmployee Members who are granted such Membership Interests shall not be granted votingrights, or participate in management of the Company, and that the rights and privileges of suchMembership Interests will be limited to those provided in the addendum establishing suchMembership Interests, and references herein to Members shall include the Employee Memberswhich are holders of such Membership Interests only to the extent expressly provided in such

addendum.

1.46 Member Minimum Gain has the meaning of partner nonrecourse debtminimum gain set forth in Treasury Regulations Section 1.704-2(i)(2), which generally definespartner nonrecourse debt minimum gain as the Company Minimum Gain attributable toMember Nonrecourse Debt.

1.47 Member Nonrecourse Debt has the meaning set forth for partnernonrecourse debt in Treasury Regulations Section 1.704-2(b)(4), which generally definespartner nonrecourse debt as any liability of the Company to the extent such liability isnonrecourse and a partner (i.e., Member) (or related person) bears the economic risk of loss

pursuant to Treasury Regulations Section 1-752.2.

1.48 Member Nonrecourse Deductions means items of Company loss,deduction, or Code Section 705(a)(2)(b) expenditures that are attributable to MemberNonrecourse Debt within the meaning of Regulations Section 1.704-2(i).

1.49 Membership Interest means a Members entire interest in theCompany, including such Members economic interest, Percentage Interest, right to vote and toparticipate in the management of the Company, and the right to information concerning thebusiness and affairs of the Company, if and to the extent any or all of such rights are granted, all


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as defined in this Agreement, or in any addendum to this Agreement adopted for the purpose ofestablishing such class of Membership Interest.

1.50 Member Right of First Refusal Exercise Notice has the meaning setforth in Section 8.5(c).

1.51 Member Right of First Refusal Notice has the meaning set forth inSection 8.5(c).

1.52 Member Right of First Refusal Option has the meaning set forth inSection 8.5(c).

1.53 Member Right of First Refusal Option Period has the meaning setforth in Section 8.5(c).

1.54 Net Incomeand Net Loss means, for each fiscal year of the Company(or other period for which Net Income and Net Loss must be computed), an amount equal to theCompanys after-tax income or loss for such year or period, determined in accordance with CodeSection 703(a) and the Regulations, and, for this purpose, all items of income, gain, loss ordeduction required to be stated separately pursuant to Code Section 703(a)(1) shall be includedin taxable income or loss. The determination of Net Income and Net Loss pursuant to theprevious sentence shall be subject to the following adjustments:

(a) Any income of the Company that is exempt from federal income tax andnot otherwise taken into account in computing Net Income or Net Loss shall be added to suchtaxable income or loss;

(b) Any expenditures of the Company described in Code Section 705(a)(2)(B)or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury RegulationsSection 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Net Income orNet Loss shall be subtracted from Net Income or Net Loss;

(c) Gains or losses resulting from any disposition of a Company asset withrespect to which gains or losses are recognized for federal income tax purposes shall becomputed with reference to the Book Value of the Company asset disposed of, notwithstandingthe fact that the adjusted tax basis of such Company asset differs from its Book Value;

(d) In lieu of the depreciation, amortization and other cost recoverydeductions taken into account in computing the taxable income or loss, there will be taken into

account Depreciation;

(e) If the Book Value of any Company asset is adjusted pursuant to thedefinition of Book Value, the amount of the adjustment will be taken into account as gain orloss from the disposition of the asset for purposes of computing Net Income or Net Loss; and

(f) Notwithstanding any other provision of this subsection, any items ofincome, gain, loss or deduction that are specially allocated shall not be taken into account incomputing Net Income or Net Loss.


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1.55 Non-Funding Member(s) has the meaning set forth in Section 3.3.1.56 Nonrecourse Liability has the meaning set forth in Treasury

Regulations Section 1.752-1(a)(2).

1.57

Non-Vested Member(s) has the meaning set forth in Section 3.5.

1.58 Notice means a written notice required or permitted under thisAgreement. A Notice shall be deemed given or sent when deposited, as certified mail, returnreceipt requested, postage and fees prepaid, in the United States mails; when personallydelivered to the recipient; when transmitted by electronic means (including e-mail), and suchtransmission is electronically confirmed as having been successfully transmitted; or whendelivered to the home or office of a recipient in the care of a person whom the sender has reasonto believe will promptly communicate the Notice to the recipient.

1.59 Offered Interest has the meaning set forth in Section 8.5(a). 1.60 Offeror has the meaning set forth in Section 8.5(a).1.61 Percentage Interest means the percentage of ownership interest of a

Member in the Company as set forth opposite the name of such Member under the columnPercentage Interest in Schedule I hereto, which shall be amended from time to time inaccordance to Section 3.2 of this Agreement to reflect any Membership Interests accruing to anynew duly admitted Member, any changes resulting from a Conversion Election or the sale ortransfer by any Member of its Membership Interests.

1.62 Permitted Transferee has the meaning set forth in Section 8.3.1.63 Person means and includes any natural person, corporation, firm, joint

venture, partnership, limited liability company, trust, unincorporated organization, governmentor any department, political subdivision or agency of a government.

1.64 Post-Employment Period means the 2-year period beginning on thedate of the transfer of the Membership Interests of the Company by Executive.

1.65 Pro Rata Allotment has the meaning set forth in Section 8.9(c).1.66 Proceeding means and includes any action, suit, arbitration, alternative

dispute resolution mechanism, investigation, administrative hearing or other proceeding, whethercivil, criminal, administrative or investigative in nature.

1.67 Purchase Price means the form and amount of consideration to be paidby the Company for any Offered Interest, which shall be the same as that set forth in the relatedBona Fide Offer, or in the event that the Company purchases less than all of the Offered Interest,the ratable portion thereof.

1.68 Qualified Appraiser has the meaning set forth in Section 8.5(e).


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1.69 Regulatory Allocations has the meaning set forth in Section 4.2(f).1.70 Remaining Members mean the Members other than the Offeror or the

Selling Member, as appropriate.

1.71

Remaining Offered Interest means, with respect to any proposedTransfer subject to Section 8.5, the portion of any Offered Interest that the Members has notnotified the Offeror it wishes to purchase pursuant to Section 8.5(b) by exercising the MembersRight of First Refusal Option, which portion shall be expressed as a percentage of allMembership Interests then outstanding.

1.72 Sale Event means the conveyance, sale, lease, transfer or otherdisposition in any transaction or series of related transactions, of all or substantially all of theCompanys business or assets, or the merger, consolidation or similar transaction of theCompany with another entity.

1.73

Selling Member means the Estate of a Deceased Member, a DisabledMember, a Divorced Member or a Terminated Member, as applicable.

1.74 Senior Loan shall have the meaning assigned to that term in Section 3.2hereof.

1.75 Supermajority Members means Members holding at least SixtyPercent (60%) of the Percentage Interests.

1.76 Terminated Member means any Employee Member, other than SA,whose employment with the Company is terminated during the term of this Agreement. As usedherein, termination of the employment of any Employee Member shall mean any termination ofthe employment of such Member as an employee of the Company, whether by the Company orthe Member, for any reason, including by death or disability, and is expressly not limited to atermination of the employment of an Employee Member for cause.

1.77 Transfer means and includes, in respect of a Membership Interest, orany element thereof, when used as a noun, any sale, hypothecation, pledge, assignment,attachment, gift or other disposition of a Membership Interest or any element thereof, and, whenused as a verb, to sell, hypothecate, pledge, assign, attach, bequest or otherwise dispose of aMembership Interest or any element thereof.

1.78 Transferee means a Person who obtains or receives a MembershipInterest or any element thereof by means of a Transfer.

1.79 Treasury Regulations means the income tax regulations promulgatedby the United States Department of the Treasury and published in the Federal Register for thepurpose of interpreting and applying the provisions of the Code, as such Regulations may beamended from time to time, including corresponding provisions of applicable successorregulations.


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ARTICLE II

ORGANIZATIONAL MATTERS

2.1 Filing of Certificate of Formation. The parties have organized theCompany pursuant to the Act and the provisions of the LLC Agreement and, for that purpose,have caused the Certificate of Formation to be prepared, executed and filed with the DelawareSecretary of State on January 1, 2012. The Members agree that the rights, duties and liabilitiesof the Members shall be as provided in the Act, except as otherwise expressly provided herein.

2.2 Name of Company. The name of the Company is ABC, LLC. TheCompany may do business under that name and under any other name or names that theMembers select. If the Company does business under a name other than that set forth in itsCertificate of Formation, then the Company shall comply with any requirements of the Act orapplicable law.

2.3

Address of Company. The principal executive office of the Companyshall be situated at [_____________________________], or such other place or places as may bedetermined by the Members from time to time.

2.4 Agent for Service of Process. The agent for service of process on theCompany shall be Business Filings Incorporated, 108 West 13th Street, Wilmington, Delaware19801 or such other agent as may be determined by the Members from time to time.

2.5 Business Purposes. The purpose of the Company is to conduct theBusiness. In conducting the Business, the Company may engage in any lawful act or activity forwhich a limited liability company may be organized under the Act. The Company shall possessand may exercise all powers necessary or convenient to the conduct and promotion of theCompany's business or activities.

2.6 Tax Treatment as Partnership. It is the intent of the Members that theCompany shall always be operated in a manner consistent with its treatment as a partnershipfor Federal and State income tax purposes. Except as provided in the foregoing sentence, theMembers intend the Company to be a limited liability company under the Act, and that they beMembers, and not partners in a partnership. No Member shall take any action inconsistent withthe express intent of the parties hereto.

2.7 Term of Companys Existence. The term of existence of the Companycommenced on the Effective Date of filing of the Certificate of Formation with the DelawareSecretary of State, and shall continue in perpetuity, unless sooner terminated by the provisions ofthis Agreement or as provided by law.

ARTICLE III

CAPITAL ACCOUNTS AND CAPITAL CONTRIBUTIONS

3.1 Capital Accounts. The Company shall maintain a separate CapitalAccount for each Member. The Capital Account of each Member shall be increased by: (i) theamount of money contributed by such Member to the Company, (ii) the Book Value of the


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property contributed by such Member to the Company (net of any liabilities relating to suchcontributed property that the Company is considered to assume or take subject to under CodeSection 752); (iii) allocations to such Member of Companys Net Income and (iv) other additionsmade in accordance with the Code and Treasury Regulations. The Capital Account of eachMember shall be decreased by: (i) the amount of money distributed to such Member by the

Company, (ii) the Book Value of the property distributed to such Member by the Company (netof any liability secured by such property distributed thereof), and (iii) allocations to suchMember of Companys Net Loss realized by the Company during each taxable year; and(iv) other deductions made in accordance with the Code and Treasury Regulations.

3.2 Additional Capital Contributions. The Members shall be required to makeadditional capital contributions to the Company to cover operating expenses and ongoing capitalrequirements of the business as required in the Budget and/or determined by the Board ofManagers from time to time (each an Additional Capital Contribution). Any approvedAdditional Capital Contribution shall be pro-rata in the same proportion as the PercentageInterest held by such Member in the Company at the time of making the Additional Capital

Contribution. Except as otherwise provided to the contrary herein, in the event that one or moreof the Members is not able to satisfy its proportionate share of the Additional CapitalContributions as approved by the Board of Managers (the Non-funding Member(s)), then theremaining Member(s) (the Funding Member(s)), at their sole discretion, may elect to fund theNon-funding Member(s)s proportionate share of the Additional Capital Contribution. Suchamount shall be a senior loan to the Company, secured by a lien on the Company and its assets,and bearing interest at an annual percentage rate of LIBOR 90-day plus 5% with a term of one(1) year(the Senior Loan). Such Senior Loan will be repaid directly by the Company out ofthe first distributions otherwise distributable to the Non-Funding Member(s). The FundingMember(s) shall, in its sole discretion, have the option, from time to time and at any time, toconvert such Senior Loan into additional Membership Interests of the Company (theConversion Election).

If the Funding Member(s) make a Conversion Election, the Percentage Interest of theFunding Member(s) in the Company shall be increased to a percentage equal to the quotient(rounded up to the nearest one hundredth of one percent) obtained when the Senior Loan subjectto the Conversion Election of a Funding Member(s) is added to the fair market value of thePercentage Interest owned by such Funding Member(s) as of the date of the ConversionElection, and the result is divided by the sum of the Senior Loan subject to the ConversionElection and the fair market value of the Percentage Interest in the Company owned by allMembers as of the date of the Conversion Election. The Percentage Interest of the Non-FundingMember(s) shall be decreased by the aggregate Percentage Interest increase of all FundingMember(s) as a result of funding such Non-Funding Member(s)' portion of the AdditionalCapital Contribution. The determination of the Fair Market value of the Percentage Interests inthe Company for purposes of the above computation, shall be made by the Board of Managers,which determination, absent manifest error, shall be conclusive.

3.3 Return of Capital Contributions. Except in accordance with the terms ofthis Agreement, no Member shall be entitled to withdraw, redeem, or to receive a return of, anypart of a Capital Contribution or to receive any distributions, whether of money or property, fromthe Company.


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3.4 No Interest on Capital Contributions or Capital Accounts. Except asotherwise provided in this Agreement, no interest shall be paid on any Capital contributions oron the balance of any Capital Account.

3.5 Repurchase Option of the Company. Notwithstanding anything herein tothe contrary, the Members covenant and agree that (a) in the event that any of SB, JP PP, MPand/or any other Person who hereinafter becomes a Member (the Non-Vested Member(s))does not achieve its annual performance requirements that may be set forth by the Board ofManagers from time to time; or (b) if any of the Non-Vested Members were to breach anycovenant or obligation of theirs under this Agreement or their respective employment agreements(collectively a Repurchase Event), the Company shall have the option, but not the obligation,to repurchase all of the Membership Interests acquired by said Non-Vested Member pursuant tothis Agreement in accordance with the following terms and conditions:

(i) If the Repurchase Event occurs within twelve (12) months from thedate of this Agreement, then the Company shall have the right to call and repurchase all of the

Non-Vested Member(s) Membership Interests in the Company for One Dollar ($1.00);

(ii) If the Repurchase Event occurs within the period beginning on thefirst day of the thirteenth (13th) month and ending on the last day of the twenty fourth (24 th)month from the date of this Agreement, then the Company shall have the right to call andrepurchase (a) sixty seven percent (67%) of the Non-Vested Member(s) Membership Interests inthe Company for One Dollar ($1.00); and (b) all or part of the remaining thirty three percent(33%) at its fair market value (as the same is determined by the Board of Managers, whichdetermination shall be conclusive, absent manifest error), provided however, that in no eventshall the fair market value of the Membership Interests being repurchased be less than the BookValue thereof. The Company may, at its sole discretion, elect to exercise either or both of thetwo repurchase rights described in this section.

(iii) If the Repurchase Event occurs within the period beginning on thefirst day of the twenty fifth (25th) month and ending on the last day of the thirty sixth (36 th)month from the date of this Agreement, then the Company shall have the right to call andrepurchase (a) thirty four percent (34%) of the Non-Vested Member(s) Membership Interests inthe Company for One Dollar ($1.00); and (b) all or part of the remaining sixty six percent (66%)at its fair market value (as the same is determined by the Board of Managers, whichdetermination shall be conclusive, absent manifest error), provided however, that in no eventshall the fair market value of the Membership Interests being repurchased be less than the BookValue thereof. The Company may, at its sole discretion, elect to exercise either or both of thetwo repurchase rights described in this section;

(iv) If the Repurchase Event occurs after the last day of the thirty sixth(36th) month from the date of this Agreement, then the Company shall have the right to call andrepurchase all or part of the Non-Vested Member(s) Membership Interests in the Company at itsfair market value (as the same is determined by the Board of Managers, which determinationshall be conclusive, absent manifest error), provided however, that in no event shall the fairmarket value of the Membership Interests being repurchased be less than the Book Valuethereof.


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ARTICLE IV

PROFITS, LOSSES AND DISTRIBUTIONS

4.1 Allocations of Net Income and Net Loss. Subject to Section 4.2, NetIncome and Net Loss of the Company shall be allocated among the Members as follows:

(a) Net Income. Net Income of the Company for each Fiscal Year shall beallocated to the Members in the following order of priority:

(i) First, to the Members having Adjusted Capital AccountDeficits, in proportion to, and to the extent of, those Adjusted Capital Account Deficits; and

(ii) Second, to the Members in proportion to, and to the extent of,the excess, if any, of the cumulative amount of Net Loss previously allocated to each Memberpursuant to Section 4.1(b)(ii) over the cumulative amount of Net Income previously allocated toeach such Member pursuant to Section 4.1(a)(i) and (ii); and

(iii) Third, to the Members in proportion to their respectivePercentage Interests.

(b) Net Loss. Net Loss of the Company for each Fiscal Year shall beallocated to the Members in the following order of priority:

(i) First, to the Members in proportion to, and to the extent of, theexcess, if any, of the cumulative amount of Net Income previously allocated to each Memberpursuant to Section 4.1(a) over the cumulative amount of Net Loss previously allocated to eachsuch Member pursuant to this Section 4.1(b)(i);

(ii)

Second, to the Members in proportion to their PercentageInterests.

Notwithstanding the foregoing, allocations of Net Loss to a Member shall be made only to theextent that such allocations of Net Loss will not create or increase an Adjusted Capital AccountDeficit for that Member. Any Net Loss not allocated to a Member because of the foregoingsentence shall be allocated to the other Members (to the extent the other Members are not limitedin respect of the allocation of Net Loss under the previous sentence) in accordance with thisSection 4.1(b). Any Net Loss reallocated under this provision shall be taken into account incomputing subsequent allocations of Net Income and Net Loss so that the net amount of any itemso allocated and the Net Income and Net Loss allocated to each Member, to the extent possible,shall be equal to the net amount that would have been allocated to each such Member if noreallocation of losses had occurred under this provision.

4.2 Regulatory Allocations. Notwithstanding any other provision of thisAgreement, the following special allocations shall be made in the following order:

(a) Minimum Gain Chargeback. If there is a net decrease in CompanyMinimum Gain during any fiscal year, each Member shall be specially allocated items ofCompany income and gain for such year (and, if necessary, for subsequent years) in an amountequal to such Members share of the net decrease in Company Minimum Gain, as de termined


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under Treasury Regulations Section 1.704-2(g). Allocations pursuant to the previous sentenceshall be made in proportion to the respective amounts required to be allocated to each Memberpursuant thereto. The items to be so allocated shall be determined in accordance with TreasuryRegulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 4.2(a) is intended to complywith the minimum gain chargeback requirements of Treasury Regulations Section 1.704-2(f)

and shall be interpreted consistently therewith.

(b) Chargeback Attributable to Member Nonrecourse Debt. If there is a netdecrease in Member Minimum Gain during any Fiscal Year, each Member with a share ofMember Minimum Gain at the beginning of such Fiscal Year shall be specially allocated itemsof income and gain for such Fiscal Year (and, if necessary, for subsequent Fiscal Years) in anamount equal to such Members share of the net decrease in Member Minimum Gain,determined in accordance with Treasury Regulations Section 1.704-2(i)(4) and (5). Allocationspursuant to the previous sentence shall be made in proportion to the respective amounts requiredto be allocated to each Member pursuant thereto. The items to be so allocated shall bedetermined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(i).This Section 4.2(b) is intended to comply with the partner minimum gain chargebackrequirements of Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistentlytherewith.

(c) Qualified Income Offset. If any Member unexpectedly receives anyadjustment, allocation or distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in an Adjusted Capital Account Deficit for the Member,such Member shall be allocated items of income and book gain in an amount and mannersufficient to eliminate such Adjusted Capital Account Deficit as quickly as possible; provided,that an allocation pursuant to this Section 4.2(c) shall be made if and only to the extent that suchMember would have an Adjusted Capital Account Deficit after all other allocations provided forin this Article IV have been tentatively made as if this Section 4.2(c) were not in the Agreement.

This Section 4.2(c) is intended to constitute a qualified income offset as provided by TreasuryRegulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(d) Member Nonrecourse Deductions. Member Nonrecourse Deductions shallbe allocated among the Members who bear the Economic Risk of Loss for the MemberNonrecourse Debt to which such Member Nonrecourse Deductions are attributable in the ratio inwhich they share Economic Risk of Loss for such Member Nonrecourse Debt. This provision isto be interpreted in a manner consistent with the requirements of Treasury RegulationsSection 1.704-2(b)(4) and (i)(1).

(e) Nonrecourse Deductions. Any Nonrecourse Deductions (as defined inTreasury Regulations Section 1.704-2(b)(1)) for any Fiscal Year or other period shall bespecially allocated to the Members in proportion to their Percentage Interests.

(f) Regulatory Allocations. The allocations set forth in this Section 4.2 (theRegulatory Allocations) are intended to comply with certain requirements of the applicableTreasury Regulations promulgated under Code Section 704(b). It is the intent of the Membersthat, to the extent possible, all Regulatory Allocations shall be offset either with other RegulatoryAllocations or with special allocations of other items of Company income, gain, loss, ordeduction pursuant to this Section 4.2(f). Therefore, notwithstanding any other provision of thisSection 4.2 (other than the Regulatory Allocations), the Company shall make such offsetting


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special allocations of Company income, gain, loss, or deduction in whatever manner the Boardof Managers determines is appropriate so that, after such offsetting allocations are made, eachMembers Capital Account balance is, to the extent possible, equal to the Capital Accountbalance such Member would have had if the Regulatory Allocations were not in this Agreement.

4.3 Distributions of Cash Flow. Except as provided in Section 4.8, the CashFlow of the Company shall be distributed to the Members in the following order:

(a) If at any time after the approval of the Companys third (3rd) yearbusiness plan, the Companys projections reflect excess cash availability after the necessaryprovisions for working capital, debt servicing and capital expenditures (Free Cash Flow), theCompany will distribute at least fifty percent (50%) of Free Cash Flow to SA until such time asSA has received distributions under this Section that are equal to the fair market value of theIntellectual Property contributed by her to the Company, as of the date hereof, which theMembers hereby agree has a value of eight hundred thousand United States dollars(US$800,000.00).

(b) Once SA has received distributions under Section 4.3(a) in the amount ofeight hundred thousand United States dollars (US$800,000.00), the Company will distributeCash Flow in the aggregate amounts as the Board of Managers may determine in proportion tothe Capital Account Balance of each Member.

4.4 Record Dates. All Net Income and Net Loss shall be allocated, and alldistributions shall be made, to the Persons shown on the records of the Company to have beenMembers as of the last day of the taxable year for which the allocation or distribution is to bemade. Notwithstanding the foregoing, unless the Companys taxable year is separated intosegments, if there is a Transfer of a Membership Interest during the taxable year, the Net Incomeand Net Loss shall be allocated between the original Member and the successor on the basis of

the number of days each was a Member during the taxable year; provided, however, theCompanys taxable year shall be segregated into two or more segments in order to account forNet Income, Net Loss, or proceeds attributable to any extraordinary non-recurring items of theCompany.

4.5 Withholding Taxes.(a) Notwithstanding any other provision of this Agreement, each Member

authorizes the Company to withhold and to pay over, or otherwise pay, any withholding or othertaxes payable by the Company or any of its Affiliates (pursuant to the Code or any provision ofthe United States federal, state, local or foreign tax law) with respect to such Member or as a

result of such Members participation in the Company; and if and to the extent that the Companyshall be required to withhold or pay any such withholding or other taxes, such Member shall bedeemed for all purposes of this Agreement to have received a payment from the Company as ofthe time such withholding or other tax is required to be paid, which payment shall be deemed tobe a distribution with respect to such Members interest in the Company. To the extent that suchdeemed distribution to such Member (or any successor to such Member) for any taxable periodexceeds the distributions that such Member would have received for such period but for suchwithholding, such excess shall be treated as an interest-free advance to such Member. Amountsso treated as advanced to any Member shall be repaid by such Member to the Company within


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thirty (30) days after the Company delivers a written request to such Member for suchrepayment; provided, however, that if any such repayment is not made, the Company may(without prejudice to any other rights of the Company) collect such unpaid amounts from anysubsequent Company distributions that otherwise would be made to such Member.

(b) Any withholdings referred to in this Section 4.5 shall be made at themaximum applicable statutory rate under the applicable tax law unless the Members shall havereceived an opinion of counsel or other evidence, satisfactory to the Members, to the effect that alower rate is applicable, or that no withholding is applicable.

(c) If the Company receives a distribution from or in respect of which tax hasbeen withheld, the Company shall be treated as having received cash in an amount equal to theamount of such withheld tax, and each Member shall be treated as having received as adistribution the portion of such amount that is attributable to such Members interest in theCompany as equitably determined by the Members.

4.6 No Restoration of Negative Capital Accounts. No Member shall beobligated to restore a Capital Account with a balance of less than zero.

4.7 Compliance with Laws and Regulations. It is the intent of the Membersthat each Members distributive share of Company tax items be determined in accordance withthis Agreement to the fullest extent permitted by Sections 704(b) and 704(c) of the Code.Therefore, notwithstanding anything to the contrary contained herein, if the Company is advised,as a result of the adoption of new or amended regulations pursuant to Code Sections 704(b) and704(c), or the issuance of authorized interpretations, that the allocations provided in thisAgreement are unlikely to be respected for Federal income tax purposes, the Members arehereby granted the power to amend the allocation provisions of this Agreement, on advice ofaccountants and legal counsel, to the minimum extent necessary to cause such allocation

provisions to be respected for Federal income tax purposes.

4.8 Distributions with Respect to Taxes.(a) In the event that for United States Federal, Delaware, or other state income

tax purpose, as applicable, the Members shall include their share of taxable income in theirinformation returns without actually having received such taxable income, then, if the funds areavailable, the Company shall make mandatory pro-rata distributions to the Members for thepayment of taxes in accordance with the following:

(i) the amount distributable with respect to any year shall be equal tothe aggregate amount of United States Federal, Delaware and other state income taxes payableby the Members, as applicable, with respect to the taxable income of the Company allocable tothe Members, assuming, for purposes of determining the amount of such distribution, that eachMember will be taxed on the net amount set forth in the Member's information return at thehighest marginal United States Federal income tax rate for such year, and at the highest marginalDelaware or other state income tax rates applicable to any Member for each such taxable year;and


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(ii) such distributions shall be payable at such time or times and insuch amounts as will enable the Members to avoid penalties and interest otherwise payable onaccount of the failure to pay a sufficient amount of estimated taxes as required by law.

(b) The amount of any Tax Distributions made to a Member underSection 4.8(a) shall be offset against future distributions to which such Member is entitled underSection 4.3 as quickly as possible in such a manner that, immediately after any distribution hasbeen made pursuant to Section 4.3, the cumulative amount of distributions that have actuallybeen received by each Member pursuant to Sections 4.3 and 4.8(a) shall equal (to the extentpossible) the distributions to which such Member would have been entitled if all suchdistributions had been made by the Company in accordance with Section 4.3.

ARTICLE V

MANAGEMENT

5.1 Management.(a) Management by the Board of Managers. The Members hereby agree that

all decisions concerning the management, operation, finances and policy of the Companysbusiness shall be made by a board of managers (the Board of Managers), initially composedof four (4) managers. SA shall have the right to select three (3) managers and SB, JP, PP andMP, by majority of their collective Membership Interests, shall have the right to select the othermanager. The Board of Managers shall have full, complete and exclusive authority, power anddiscretion to manage and control the business, property and affairs of the Company, to make ordelegate all decisions regarding those matters and to perform any and all acts or activitiescustomary or incidental to the management, operation, finances and policy of the Companysbusiness, property or affairs. In the event of any deadlock among the members of the Board ofManagers regarding the Business, or the operations of the Company, the decision of the Majority

Members shall control.

(b) Removal; Vacancies. Each Member agrees to vote all of its MembershipInterests having voting power (and any other Membership Interests over which it exercisesvoting control), for the removal of any manager upon the request of the Persons or Member(s)then entitled to nominate such manager as set forth in Section 5.1(a) above, and for the electionto the Board of Managers of a substitute designated by such Member(s) in accordance with theprovisions hereof. Each Member further agrees to vote all of its Membership Interests havingvoting power (and any other Membership Interests over which it exercises voting control) insuch manner as shall be necessary or appropriate to ensure that any vacancy on the Board ofManagers occurring for any reason shall be filled only in accordance with the provisions of this

Article V.

(c) Meetings by the Board of Managers. The Company shall not be requiredto hold annual or other periodical meetings of the Board of Managers. Meetings of the Board ofManagers may be held through the use of telephone conference or similar communicationsequipment, so long as all Members participating in such meeting can hear and communicate withone another. Such participation shall be deemed attendance at the meeting. Any action that maybe taken at any meeting of the Board of Managers may be taken without a meeting if a consent inwriting, setting forth the action so taken, is signed by Members having not less than theminimum number of votes that would be necessary to authorize or take that action at a meeting


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in which all the members of the Board of Managers were present and voted. If the Board ofManagers is requested to consent to a matter without a meeting, each manager shall be givenprior written notice of the matter to be voted upon. Any action taken without a meeting shall beeffective when the required minimum number of votes of the Board of Managers have beenreceived. The required quorum of the Board of Managers shall be constituted by the

participation of three (3) managers in each meeting of the Board of Managers. Each managershall have one (1) vote on all matters to be decided by the Board of Managers. All decisions,approvals and other actions of the Board of Managers shall require the vote of three (3) membersof the Board of Managers. Decisions of the Board of Managers made in accordance with thisSection 5.1(c) shall be binding upon the Company and each Member.

(d) Actions on Behalf of Company. Without limiting the generality ofSection 5.1(c), the Board of Managers or any proper designee of the Board of Managers isauthorized and empowered to carry out and implement any and all of the following actions onbehalf of the Company (provided such actions are in conformity with the aforesaidSection 5.1(c)):

(i) engaging personnel, including the officers of the Company, anddoing such other acts and incurring such other expenses on behalf of the Company as it maydeem necessary or advisable in connection with the conduct of the Companys affairs, includingthe determination and payment of distributions to Members, and compensation to the Members(if any), in accordance with this Agreement;

(ii) determining the Companys annual operating budget (theBudget);

(iii) engaging and compensating independent attorneys, accountants,investment advisers, agents or other such Persons as it may deem necessary or advisable;

(iv) opening, maintaining, conducting and closing accounts, includingdepositary, custodial, brokerage, margin, client or discretionary accounts, with banks, brokers,investment advisers, or other Persons, and paying the fees and charges for transactions in suchaccounts;

(v) executing, delivering and performing such other contracts,agreements, and such other undertakings as it may deem necessary or advisable for the conductof the Companys business;

(vi) determining the amount and timing of payment of any bonus to anyPerson;

(vii) amending Schedule I hereto, from time to time, to accurately reflectthe Members and their respective Percentage Interests and Capital Accounts; and

(viii) filing, if advisable, a Code Section 754 election for the Company.

(e) Devotion of Time as Members. Each Member agrees to devote such timeand attention to the Company and its Business as may be reasonably necessary to perform their


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obligations under this Agreement. The Members shall devote to the Company such efforts asthey shall deem reasonably necessary to manage the Business and affairs of the Company, andnone of the Members or the Company shall have any interest or right in or to any other activitiesconducted by the other Members, or to the income or proceeds derived therefrom. Nothingcontained in this Agreement shall preclude any Member from acting as a director, stockholder,

officer, official, consultant or employee of any Person, from receiving compensation for servicesrendered in connection with the foregoing, from acting as a principal or employee of any Personwith whom the Company may contract for services or otherwise, or participating in profitsderived from investments in any such Person, or from investing in any securities or otherproperty for its own account; provided, that such participation or involvement shall not interferewith the performance by such Person of its duties for the Company or its obligations under thisAgreement or any other agreement between such Person and the Company.

(f) Compensation and Reimbursement. The Members shall receive suchcompensation for services rendered to the Company as the Board of Managers shall determine inaccordance with Section 5.1(c) hereof. The Company shall also, subject to any Budget adopted

pursuant to Sections 5.1(c) or 5.1(d), reimburse the Members for reasonable out-of-pocketexpenditures that such Members makes on behalf of the Company, as long as such Memberssubmits substantiating evidence of such expenditures to the Company.

(g) Exculpation. The Members shall not be liable to the Company or anyMember for any claims, costs, expenses, damages or losses arising out of or in connection withthe performance of their duties as Members, or for any act or omission performed or omitted tobe performed by the Members in good faith and pursuant to the authority granted to the Membersunder this Agreement, other than those directly attributable to such Members own grossnegligence or willful misconduct. The Members shall not be liable to any Member for claims,costs, expenses, damages or losses due to circumstances beyond the Members control,including, without limitation, due to the negligence, dishonesty, bad faith or misfeasance of anyemployee, broker or other agent of the Company. Any fiduciary duties of the Members herebyare reduced to the maximum extent permissible under Delaware law.

5.2 Officers. The Board of Managers may appoint officers of the Company,provided, however, that no such appointment, nor any actions of any officers so appointed, shallalter or amend the authority and powers of the Members or the Board of Managers as provided inSection 5.1(c). Any number of offices may be held by the same person. The Members maychoose such officers and agents, as it shall deem necessary, who shall hold their offices for suchterms and shall exercise such powers and perform such duties as shall be determined from timeto time by the Board of Managers. The officers of the Company shall be empowered to carry outthe day-to-day operations of the Company and to implement the actions authorized by the Boardof Managers. Any officer may be removed either with or without cause by the Board ofManagers at any time. Any officer may resign at any time by giving written notice to the Boardof Managers. No officer need be a Member.

5.3 Title to Assets. The Members shall cause all assets of the Company to beheld in the name of the Company.


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ARTICLE VI

MEMBERSHIP, MEETINGS, VOTING

6.1 Members and Voting Rights.(a)

Except as expressly set forth in this Agreement, no Member shall have anyrights or preferences in addition to or different from those possessed by any other Member.

Members shall have the right to vote or grant written consent upon those matters as to which thisAgreement or the Act requires such Member action. Each Member shall vote in proportion to itsPercentage Interest as of the governing record date, determined in accordance with Section 6.2hereof. Unless otherwise provided in this Agreement, no Member shall be prohibited fromvoting merely by reason of the fact that the Member would be voting on a matter of particularinterest to that Member.

(b) Notwithstanding anything to the contrary contained in this Agreement, theprior approval of the Supermajority Members is required to cause the Company to take any of

the following actions:

(i) to authorize a Sale Event;(ii) converting the Company from a limited liability company to

any other type of business organization, including, without limitation, a business organization ina foreign jurisdiction;

(iii) filing bankruptcy or other insolvency proceedings, orapplication to any tribunal for, or consenting to the appointment of, or taking possession by, atrustee, receiver, custodian, liquidator or similar official, with respect to the Company and itsassets; and

(iv) amending the Certificate of Formation or this Agreement.6.2 Record Dates. The record date for determining the Members entitled to

Notice at any meeting or to vote, or entitled to receive any distribution, or to exercise any right inrespect of any other lawful action, shall be the date set by the Board of Managers.

6.3 Membership Certificates. The Company may, but shall not be required, toissue certificates evidencing Membership Interests to Persons who, from time to time, areMembers of the Company; provided, that once such certificates have been issued, they shallcontinue to be issued as necessary to reflect current Membership Interests held by Members.Certificates shall be in such form as may be approved by the Members, and shall bearconspicuous legends evidencing the restrictions on transfer described in, and the purchase rightsof the Company and Members set forth in, Article VIII. All issuances, reissuances, exchangesand other transactions in Units involving Members shall be recorded in a permanent ledger aspart of the books and records of the Company.

6.4 Meetings: Call, Notice and Quorum. The Company shall not be requiredto hold an annual meeting of Members. Special meetings of the Members may be called at anytime by any Member, for the purpose of addressing any matters on which the Members may voteby delivering Notice to the Members. Meetings may be held at the principal executive office of


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the Company or at such other location as may be designated by the Member calling suchmeeting. Following the call of a meeting, the Members shall give Notice of such meeting notless than three (3) or more than sixty (60) days prior to the date of the meeting to all Membersentitled to vote at the meeting. The Notice shall state the place, date, and hour of the meetingand the general nature of business to be transacted. No other business may be transacted at the

meeting. A quorum at any meeting of Members shall consist of Members representing in excessof Fifty One Percent (51%) of all Percentage Interests outstanding as of the record date for suchmeeting, represented in person or by proxy. The Members present at a duly called or heldmeeting at which a quorum is present may continue to transact business until adjournment,notwithstanding the withdrawal of enough Members to leave less than a quorum, if the actiontaken, other than adjournment, is approved by the requisite Percentage Interests as specified inthis Agreement or the Act.

6.5 Adjournment of Meetings. A meeting of Members at which a quorum ispresent may be adjourned to another time or place and any business which might have beentransacted at the original meeting may be transacted at the adjourned meeting. If a quorum is not

present at an original meeting, that meeting may be adjourned by the vote of a majority of thePercentage Interest represented at that meeting either in person or by proxy. Notice of theadjourned meeting need not be given to Members entitled to Notice if the time and place thereofare announced at the meeting at which the adjournment is taken, unless the adjournment is formore than forty-five (45) days, or if, after the adjournment, a new record date is fixed for theadjourned meeting, in which cases Notice of the adjourned meeting shall be given to eachMember of record entitled to vote at the adjourned meeting in the manner provided inSection 6.4.

6.6 Waiver of Notice. The transactions of any meeting of Members, howevercalled and noticed, and wherever held, shall be as valid as though consummated at a meetingduly held after regular call and notice, if a quorum is present at that meeting, either in person orby proxy, and if, either before or after the meeting, each of the persons entitled to vote, notpresent in person or by proxy, signs either a written waiver of notice, a consent to the holding ofthe meeting, or an approval of the minutes of the meeting. Attendance of a Member at a meetingshall constitute waiver of notice, except when that Member objects, at the beginning of themeeting, to the transaction of any business on the ground that the meeting was not lawfullycalled or convened. Attendance at a meeting is not a waiver of any right to object to theconsideration of matters required to be described in the notice of the meeting and not soincluded, if the objection is expressly made at the meeting.

6.7 Proxies. At all meetings of Members, a Member may vote in person or byproxy, which must be in writing. Such proxy shall be filed with the Members before or at thetime of the meeting, and may be filed by electronic mail or facsimile transmission to theMembers at the principal office of the Company or such other address as may be given by theMembers to the Members for such purposes.

6.8 Participation in Meetings by Telephone Conference. Members mayparticipate in a meeting through use of telephone conference or similar communicationsequipment, so long as all Members participating in such meeting can hear and communicate withone another. Such participation shall be deemed attendance at the meeting.


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6.9 Action by Members Without a Meeting. Any action that may be taken atany meeting of the Members may be taken without a meeting if a consent in writing, setting forththe action so taken, is signed by Members having not less than the minimum number of votesthat would be necessary to authorize or take that action at a meeting at which all Membersentitled to vote thereon were present and voted. If the Members are requested to consent to a

matter without a meeting, each Member shall be given Notice of the matter to be voted upon inthe manner described in Section 6.4. Any action taken without a meeting shall be effective whenthe required minimum number of votes have been received. Prompt Notice of the action takenshall be given to all Members who have not consented to the action.

6.10 No Withdrawal. Except as otherwise provided in this Agreement, noMember may withdraw from the Company without the prior written consent of the MajorityMembers, which consent may be withheld, conditioned or delayed for any reason whatsoever.

6.11 Restriction on Members Authority. No Member is an agent of theCompany solely by virtue of being a Member, and no Member has the authority to act for or bind

the Company or any other Member solely by virtue of being a Member.

ARTICLE VII

ACCOUNTING AND FINANCIAL REPORTING

7.1 Accounts and Accounting. Proper and complete books of account of theCompanys business, in which each Company transaction shall be fully and accurately entered,shall be kept at the Companys principal executive office, and at such other locations as theMembers shall determine from time to time.

7.2 Accounting. The financial statements of the Company shall be prepared ina form which is appropriate and adequate for the Companys business and for carrying out theprovisions of this Agreement. The annual accounting period of the Company shall be its taxableyear. The Companys taxable year shall be selected by the Members, subject to the requirementsof the Code.

7.3 Records. At all times during the term of existence of the Company, andbeyond that term if the Members deems it necessary, the Members shall keep or cause to be keptthe books of account referred to in Section 7.1, together with:

(a) True and complete information regarding the status of the business andfinancial condition of the Company;

(b) A copy of the Certificate of Formation and all amendments thereto;(c) Copies of the Companys Federal, state, and local income tax or

information returns and reports, if any, for each of the Companys taxable years;

(d) A current list of the name and last known business, residence or mailingaddress of each Member and Members;


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(e) A copy of this Agreement and the Certificate of Formation and allamendments thereto, together with executed copies of any written powers of attorney pursuant towhich this Agreement and the Certificate of Formation and all amendments thereto have beenexecuted; and

(f)

True and complete information regarding the amount of CapitalContributions in the form of cash and a description and statement of the agreed value of anyother Capital Contributions of each Member and which each Member has agreed to contribute inthe future, and the date on which each became a Member.

7.4 Members Rights to Records.(a) Upon the request of any Member, for purposes reasonably related to the

interest of such Member, the Members shall cause to be promptly delivered to such Member, atthe expense of such Member, a copy of the information required to be maintained pursuant toSection 7.3.

(b) Each Member has the right, upon reasonable Notice, for purposesreasonably related to the interests of such a Member, to inspect and copy during normal businesshours any of the records required by Section 7.3.

7.5 Financial Reports; Budget. In connection with its management of the day-to-day operations of the Company, the Members shall, among other things:

(a) Within 120 days after the end of each Fiscal Year, deliver to the Membersannual audited financial statements for the Company;

(b) Send, or cause to be sent, in writing to each Member within 90 days afterthe end of each Fiscal Year the information reasonably necessary for each Member to completefederal and state income tax or information returns, and a copy of the Companys federal, state,and local income tax or information returns for such Fiscal Year.

7.6 Tax Matters Member. SA shall act as Tax Matters Member of theCompany pursuant to section 6231(a)(7) of the Code.

ARTICLE VIII

WITHDRAWAL OF MEMBERS;

TRANSFERS OF MEMBERSHIP INTERESTS; PREEMPTION

8.1 Transfer and Assignment of Interests. Subject to the requirements of thisArticle VIII, a Member may only Transfer all or any part of its Membership Interest upon and nonew Members may be admitted to the Company without the prior written approval of the Boardof Managers, which approval may be withheld, conditioned or delayed for any reason and for noreason. The vote of the Members shall not be required to admit a new Member. After theconsummation of any Transfer of any part of a Members Membership Interest, the MembershipInterest so transferred shall continue to be subject to the terms and provisions of this Agreementand any further Transfers shall be required to comply with all the terms and provisions of this


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Agreement. Any voluntary Transfer in violation of the provisions of this Article VIII shall bevoid ab initio.

8.2 Further Restrictions on Transfer of Interests. In addition to otherrestrictions contained in this Agreement, no Member shall Transfer all or any part of its

Membership Interest: (i) without compliance with all federal and state securities laws to theextent applicable; and (ii) unless the transferor pays all expenses reasonably incurred by theCompany, including reasonable attorneys fees and costs, in connection with the Transfer.

8.3 Permitted Transfers. Notwithstanding the provisions of Sections 8.1, 8.5and 8.6, so long as the transferring Member retains sole voting rights with respect to thetransferred Membership Interest, the economic interest of the Membership Interest of anyMember may be transferred, with or without consideration, subject to compliance withSection 8.1, and without the prior consent of the Board of Managers, to (i) an inter vivos trust forestate planning purposes, (ii) a spouse or any lineal descendant of a Member, and with respect toa Member that is a trust, the spouse or lineal descendant of its trustor, or (iii) an Affiliate of such

Member, provided, however, that no such Permitted Transfer shall alter, limit or amend theobligations of such Member as provided in this Agreement.

8.4 Effective Date of Permitted Transfers. Any Permitted Transfer of all orany portion of a Members Membership Interest shall be effective on the day following the dateupon which the requirement of Section 8.2 has been satisfied. The Member that is a party to theTransfer shall provide all other Members with written notice of such Transfer as promptly aspossible after the requirements of Section 8.2 have been met, as well as any such documents asreasonably requested by the other Members upon such request. Any Transferee of all or anyportion of a Members Membership Interest shall be subject to the terms and provisions of thisAgreement.

8.5 Right of First Refusal.(a) Prior to any Member (the Offeror) Transferring all or part of its

Membership Interest (the Offered Interest) to any Person or group of Persons, other than in aPermitted Transfer, the Offeror must receive a Bona Fide Offer. Upon receipt of a Bona FideOffer, the Offeror shall deliver a written notice (the Company Right of First Refusal Notice)to the Members, which shall include a copy of the Bona Fide Offer, and shall set forth allrelevant information regarding such proposed Transfer, including but not limited to, (a) theidentity and address of the proposed Transferee, (b) the Percentage Interest associated with suchOffered Interest, (c) the form and amount of consideration to be paid by such proposedTransferee for such Offered Interest, (d) all other terms and conditions of such proposedTransfer, including but not limited to representations and warranties to be given to the proposedTransferee and similar provisions, and (e) if such an agreement has been prepared, the form ofagreement pursuant to which such Transfer is to be made, together with all ancillary documentsreferred to in such agreement.

(b) The Company shall have the right, but not the obligation (the CompanyRight of First Refusal Option), to purchase all or any portion of the Offered Interest at thePurchase Price. The Company may exercise its Company Right of First Refusal Option only byproviding written notice thereof (the Company Right of First Refusal Exercise Notice) to


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the Offeror within sixty (60) days after its receipt of the Company Right of First Refusal Notice(the Company Right of First Refusal Option Period); provided, however, that if thePurchase Price consists of, or includes, non-cash consideration, (i) the fair market value of suchnon-cash consideration shall be determined pursuant to Section 8.5(e), (ii) the Company Right ofFirst Refusal Option Period shall not commence until the fair market value of such non-cash

consideration has been so determined, and (iii) the Company shall have the right to pay theOfferor a cash amount equal to the fair market value of such non-cash consideration in lieu ofdelivering such non-cash consideration. In the event that the Company elects to exercise theCompany Right of First Refusal Option, and, subject to the limitations of Section 8.5(d), isentitled to purchase such Offered Interest, the Company shall pay the Offeror the Purchase Priceon or before the later of (y) (A) if the Company exercises its Company Right of First RefusalOption to purchase all of the Offered Interest, forty five (45) days after the delivery of theCompany Right of First Refusal Exercise Notice to the Offeror, or (B) if the Company purchasesonly a portion of the Offered Interest, fifteen (15) days after the expiration of the Member Rightof First Refusal Option Period, and (z) such other date as expressly set forth in the CompanyRight of First Refusal Notice.

(c) In the event the Company does not elect to purchase all of the OfferedInterest pursuant to the Company Right of First Refusal Option, the Offeror shall deliver to eachof the Remaining Members (i) a copy of the Company Right of First Refusal Notice and anyother updated information relating to the information contained in the Company Right of FirstRefusal Notice (including, if applicable, the fair market value of any non-cash considerationoffered in the Bona Fide Offer as determined in accordance with Section 8.5(e)), (ii) a statementof the portion of the Offered Interest, expressed as a percentage of all the Membership Interests,that the Company elected to purchase pursuant to Section 8.5(b) (if any), and (c) a statement ofthe Remaining Offered Interest, expressed as a percentage of all the Membership Interests(collectively, the Member Right of First Refusal Notice). Each Remaining Member shallhave the right, but not the obligation (the Member Right of First Refusal Option), topurchase its Allocated Portion of the Remaining Offered Interest at the purchase price (or cashamount equal to the fair market value thereof as determined by Section 8.5(e)) set forth in theCompany Right of First Refusal Notice. Each Remaining Member may exercise its MemberRight of First Refusal Option by providing notice thereof (which notice shall include themaximum portion of such Remaining Offered Interest that such Remaining Member desires topurchase) (the Member Right of First Refusal Exercise Notice) to the Offeror within thirty(30) days after its receipt of the Member Right of First Refusal Notice (the Member Right ofFirst Refusal Option Period). In the event that any Remaining Member elects to exercise itsMember Right of First Refusal Option, and, subject to the limitations of Section 8.5(d), isentitled to purchase its Allocated Portion, such Remaining Member shall pay the Offeror thepurchase price of its Allocated Portion on or before the later of (y) fifteen (15) days after theexpiration of the Member Right of First Refusal Option Period, and (z) such other date asexpressly set forth in the Member Right of First Refusal Notice.

(d) In the event that the Company and the Remaining Members elect not topurchase (in the aggregate) all of the Offered Interest pursuant to Section 8.5(b) and 8.5(c), theCompany and the Remaining Members shall have no right to purchase any of the OfferedInterest pursuant to this Section 8.5, and the Offeror shall have the right, but not the obligation,subject to compliance with Section 8.1, Section 8.2 and Section 8.6, to Transfer all of theOffered Interest to the proposed Transferee, for the purchase price and upon the terms and


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conditions set forth in the Member Right of First Refusal Notice, which right shall be exercisablefor a period of sixty (60) days immediately following the expiration of the Member Right of FirstRefusal Option Period. If the Transfer is not consummated within such period in the mannerdescribed above, then the Offeror shall continue to hold the Offered Interest subject to theprovisions of this Agreement and the provisions of this Article VIII must be satisfied de novo

before the Offeror can Transfer the Offered Interest.

(e) Non-cash Consideration(i) In the event that the consideration offered by a proposed

Transferee consists, in whole or in part, of non-cash consideration, the fair market value of suchnon-cash consideration shall be determined by the Offeror in its good faith reasonable discretion,and shall be set forth in the Company Right of First Refusal Notice. If the Company, based uponits good faith reasonable belief, objects to such fair market value determination within ten (10)days after delivery to it of the Company Right of First Refusal Notice, the fair market value ofsuch non-cash consideration shall be determined in writing by a duly qualified appraiser having a

minimum of five (5) years of experience in making similar appraisals (a Qualified Appraiser)mutually agreed to by the Offeror and the Members. If the Offeror and the Members are unableto agree as to a single Qualified Appraiser, then each of the Offeror and the Members shallappoint one (1) Qualified Appraiser, and the two (2) Qualified Appraisers so appointed shallappoint a third (3rd) Qualified Appraiser. Each Qualified Appraiser appointed hereunder shallprepare and deliver to each of the Offeror and the Company a written appraisal of the fair marketvalue of the non-cash consideration as of the date of the Company Right of First Refusal Notice,and the fair market value of such non-cash consideration shall be equal to the average of the two(2) written appraisals closest in value. The Offeror shall be responsible for all appraisal feesincurred in determining the fair market value of any non-cash consideration hereunder.

(ii) The Company and each Member hereby acknowledge thattime is of the essence with respect to the determination of any non-cash consideration pursuant tothis Section 8.5(e), and hereby agree to cooperate fully with the other parties, and take allnecessary and advisable actions, in order to facilitate the determination of such fair market valuein an expeditious and timely basis, including without limitation, by executing additionalinstruments, documents and agreements as may be reasonably necessary to facilitate thedetermination of such fair market value.

8.6 Drag Along Rights. In the event that one or more Offeror(s) that aredeemed individually or in the aggregate the Majority Members entertains a Bona Fide Offer tosell the Membership Interests held at such time by such Offeror from a proposed Transferee thatis not controlled by any of the Members and that is also willing to buy the Membership Interestsof all the remaining Members, each of the other Members hereby agrees, if requested by suchOfferor in connection with such Offerors acceptance of the Bona Fide Offer, to transfer forvalue to such proposed Transferee the Membership Interests held by such Member(s) in themanner and on the terms set forth in this Section 8.6 (a Drag Along Sale). The number ofMembership Interests to be sold by each Member shall be equal to the Percentage Interests heldby such Member in the Company.

(a) Drag Along Notice. The Offeror shall cause the Bona Fide Offer and allof the terms thereof to be reduced to writing and shall promptly notify the Members and the


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Company as to whether or not the Offeror intends to exercise its Drag Along Sale rights (suchnotice, the Drag Along Notice) in connection with such Bona Fide Offer. The Drag AlongNotice shall be accompanied by a true copy of the Bona Fide Offer (which shall identify theproposed Transferee and all relevant information in connection therewith). If the Offeror intendsto effect the Drag Along Sale referred to in the Drag Along Notice on substantially the terms set

forth in such notice, each Member shall be bound and obligated to transfer the MembershipInterests subject to such Drag Along Sale as calculated in accordance with this Section 8.6 on thesame terms and conditions as the Offeror with respect to each type of Membership Interest sold.

(b) Drag Along Sale Closing. Within ten (10) calendar days after the date ofthe Drag Along Notice, the Offeror shall promptly notify each Member of the PercentageInterests held by such Member that will be included in the Drag Along Sale and of the date onwhich the Drag Along Sale will be consummated, which date shall be no later than the earlier of(i) thirty (30) calendar days after the date of the Drag Along Notice; (ii) thirty (30) calendar daysafter the execution by the Offeror of the sale of its Membership Interests; and (iii) the satisfactionof any governmental approval or filing requirements, if any. Each Member may effect itsparticipation in such Drag Along Sale hereunder by delivery to the proposed Transferee, or to theOfferor for delivery to the proposed Transferee, of one or more instruments or certificates,properly endorsed for transfer, representing the Membership Interests it is obligated to sellpursuant hereto. At the time of consummation of the Drag Along Sale, the proposed

Documents

ABC LLC Operating Agreement_Complex