EXHIBIT 10.21
OPERATING AGREEMENT
OF
BC RESTAURANTS, LLC
ARTICLE 1 OFFICES
1.1 PRINCIPAL OFFICE.
The principal office of the Company may be located either within or without the
State of California. The Company may have such other offices, either within or
without the State of California, as the Board of Managers or the Chief Manager
may designate, or as the business of the Company may require from time to time.
1.2 REGISTERED OFFICE.
The registered office of the Company required by Section 17057 of the
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Limited Liability Company Act of California (the "Act"), to be
maintained in the State of California may, but need not, be identical with its
principal office. The address of the registered office of the Company may be
changed from time to time by the Board of Managers.
ARTICLE 2 MEMBERS
2.1 REGULAR MEETINGS.
The Board of Managers may, but need not, cause regular meetings of the Members
to be held on an annual or less frequent periodic basis. Such regular meetings
of the Members shall be for the purpose of electing qualified successors for
Managers whose terms have expired or whose terms are indefinite or will expire
within 6 months of such meeting, and for the transaction of any other business
as may come before the meeting. Such regular meetings shall be held on the date
and at the time fixed by the Board of Managers or the Chief Manager, and shall
be at the principal office of the Company or at such place as is designated by
the Board of Managers, the Chief Manager or by written consent of all of the
Members entitled to vote thereat.
2.2 SPECIAL MEETINGS.
(a) CALL. Special meetings of the Members may be called for any purpose
or purposes at any time by the Chief Manager, the Treasurer, two
(2) or more Managers or a Member or Members holding ten percent
(10%) or more of the voting power of all Membership Interests
entitled to vote thereat.
(b) DATE AND PLACE. Special meetings shall be held on the date and at
the time and place fixed by the Chief Manager or the Board of
Managers, except that a special meeting called by or at the demand
of a Member or Members pursuant to Article
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2.2 or 2.3 of this Operating Agreement shall be held in the county
where the executive office of the Company is located.
(c) BUSINESS. The business transacted at any special meeting shall be
limited to the purposes stated in the notice of the meeting. Any
business transacted at a special meeting that is not included in
those stated purposes not be void ab initio, but shall be voidable
by or on behalf of the Company unless all of the Members entitled
to vote thereat have waived notice of the meeting or consented to
such action in accordance with this Operating Agreement.
2.3 DEMAND BY MEMBERS.
If a regular meeting of the Members has not been held during the immediately
preceding fifteen (15) months, any Member or Members holding three percent (3%)
or more of all voting Membership Interests of the Company may demand a regular
meeting of the Members. Any Member or Members holding ten percent (10%) or more
of all voting Membership Interests of the Company may demand a special meeting
of the Members. The demand for a regular or a special meeting by the Members
shall be given in writing to the Chief Manager or the Treasurer or Chair of the
Board of Managers of the Company. Within ten (10) business days after receipt of
such demand, the Board of Managers shall cause a meeting of the Members to be
called and held on notice no later than thirty (30) days after receipt of the
demand, all at the expense of the Company. If the Board of Managers fails to
cause a meeting to be called and held as required by this Article, the Member or
Members making the demand may call the meeting by giving notice as required by
Article 2.4 of this Operating Agreement, all at the expense of the Company.
2.4 NOTICE.
Notice of all meetings of the Members shall be given to every holder of voting
Membership Interests at his or her address as shown in the required records of
the Company, except where (i) the meeting is an adjourned meeting and the date,
time and place of the meeting were announced at the time of adjournment; or (ii)
the following have been mailed by first class mail to a Member at the address in
the limited liability Company required records and returned undeliverable:
(a) Two consecutive annual meeting notices and notice of any special
meetings held during the period between the two annual meetings;
and
(b) All payments of distributions, provided there are at least two sent
during a 12-month period; and
(c) Written notice of the Member's current address has not been
received by the Company.
The notice of a meeting of the Members shall be given at least five (5) business
days before the date of the meeting, and not more than sixty (60) days before
the date of the meeting. The notice shall contain the date, time and place of
the meeting, and any other information required by this Article 2. In the case
of a special meeting, the notice shall contain a statement of the purposes of
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the meeting. The notice may also contain any other information deemed necessary
or desirable by the Board of Managers or by any other person or persons calling
the meeting.
2.5 WAIVER OF NOTICE.
A Member may waive notice of a meeting of the Members. A waiver of notice by a
Member entitled to notice shall be effective whether given before, at or after
the meeting, and whether given in writing, orally or by attendance. Attendance
by a Member at a meeting shall be a waiver of notice of that meeting except
where the Member objects at the beginning of the meeting to the transaction of
business because the meeting is not lawfully called or convened, or objects
before a vote on an item of business because the item may not lawfully be
considered at that meeting and does not participate in the consideration of the
item at that meeting.
2.6 QUORUM.
The holders of a majority of the voting power of the Membership Interests
entitled to vote at a meeting, present in person or by proxy, shall constitute a
quorum for the transaction of business. If a quorum is present when a duly
called or held meeting is convened, the Members present may continue to transact
business until adjournment, even though the withdrawal of a number of Members
originally present leaves less than the proportion or number otherwise required
for a quorum.
2.7 VOTING RECORD DATE.
The Board of Managers may fix a date not more than sixty (60) days before the
date of a meeting of the Members as the date for the determination of the
holders of voting Membership Interests entitled to notice of and to vote at the
meeting. When a date is so fixed, only Members on that date are entitled to
notice of and permitted to vote at that meeting of Members. If no record date is
fixed for the determination of Members entitled to notice of or to vote at a
meeting of Members, the date on which notice of the meeting is mailed shall be
the record date for such determination of Members. When a determination of
Members entitled to vote at any meeting of Members has been made as provided in
this Article, such determination shall apply to any adjournment thereof.
2.8 VOTE BY BALLOT.
Upon the demand of any Member, the vote for Managers, the vote upon any question
before the vote for Managers, or the vote upon any question before the meeting
shall be by ballot.
2.9 ACT OF MEMBERS.
(a) GENERAL. In general, the Members shall take action by the
affirmative vote of the owners of the greater of:
(i) A majority of the voting power of the Membership Interests
present and entitled to vote on that item of business
(proxies without authority on a matter not being considered
for purposes of such matter); or
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(ii) A majority of the voting power that would constitute a
quorum for the transaction of business at the meeting; or
(iii) If the Articles of Organization or any Membership Control
Agreement requires a larger proportion of the voting power
of the Members Interest than is required by this Operating
Agreement for a particular action, then the Articles of
Organization or the Member Control Agreement shall control.
(b) VOTING BY CLASS. In any case where a class or series of Membership
Interests is entitled to vote as a class or series, the matter
being voted upon must receive:
(i) The affirmative vote of the owners of the required
proportion of the Membership Interests of each class or
series present at such meeting, as set forth in Subsection
A. above; or
(ii) The affirmative vote of the owners of the required
proportion of the total outstanding Membership Interests of
all classes or series entitled to vote, as set forth in
Subsection A, above;
unless the Articles of Organization or a Membership Control Agreement requires a
larger proportion.
Unless otherwise stated in the Articles of Organization, a Membership Control
Agreement or in this Operating Agreement, in the case of voting as a class or
series, the minimum percentage of the total voting power of Membership Interests
of the class or series that must be present to constitute a quorum for such vote
shall be equal to the minimum percentage of all Membership Interests entitled to
vote required to be present under Article 2.6 hereof.
2.10 STATEMENT OF MEMBERSHIP INTEREST.
At the request of any Member, the Company shall state in writing the particular
Membership Interest owned by that Member as of the moment the Company makes the
statement. The statement must describe the Member's rights to vote, to share in
profits and losses, and to share in distributions, as well as any assignment of
the Member's economic or governance rights then in effect.
2.11 VOTING POWER.
Except as otherwise set forth in the Articles of Organization or in a Member
voting agreement or Membership Control Agreement, Members have voting power in
proportion to the value of the contributions of the Members as reflected in the
required records. No assignee of the economic rights of any Member shall have
any vote or governance rights unless such assignee is a Member with other
governance rights or complies with the requirements hereof.
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2.12 VOTING RIGHTS.
(a) CLASSES. The total authorized Membership Interests of the Company
shall consist of the following classes:
(i) Class I: Voting participating Membership Interests known as
"Voting Membership Interests," which may be divided into not
more than 1,000 Voting Membership units.
(ii) Class II: Nonvoting participating Membership Interests known
as "Nonvoting Membership Interests," which may be divided
into not more than 1,000 Nonvoting Membership units.
(b) Rights. The Membership Interests will have the following rights:
(i) VOTING RIGHTS. All voting rights shall be vested in the
Voting Membership Interests, and all actions by the Members
of the Company shall be made by the holders of said Voting
Membership Interests. The holders of all Voting Membership
Interests shall have voting rights in direct proportion to
his or her Voting Membership Interests as reflected on the
required records of the Company.
(ii) ECONOMIC RIGHTS. All profits and losses, and all
distributions (including distributions upon liquidation and
termination distributions), of the Company as provided under
California law shall be allocated and paid only to the
holders of Voting and Nonvoting Membership Interests in
direct proportion to his or her percentage of Membership
Interests as reflected in the required records of the
Company, or as otherwise allocated in accordance with any
Membership Control Agreement between the Company and its
Members.
(iii) DISTRIBUTIONS IN KIND. No Member of any class or series of
Membership Interests shall have any right to receive
distributions in kind; provided that any Member may be
required to receive distributions in kind of an amount
similar to the percentage interest of such Member in
distributions of the Company.
(iv) JOINTLY OWNED INTERESTS. Membership Interests owned by two
or more individuals or entities may be voted by any one of
them unless the Company receives written notice from any one
of them denying the authority of that co-owner to vote the
Membership Interests.
(v) ENTITIES. Membership Interests of the Company reflected in
the required records as being held by another domestic or
foreign organization may be voted by the Chief Managers,
Chief Executive Officer, or another legal
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representative of that organization. Membership Interests
under the control of a person in a capacity as a personal
representative, administrator, executor, guardian,
conservator, attorney in fact, trustee in bankruptcy or
receiver may be voted by the person, either in person or by
proxy, without reflecting in the required records those
Membership Interests in the name of the person (provided
there is court authority for such bankruptcy trustee or
receiver). Membership Interests registered in the name of a
trust or any other organization not described herein may be
voted either in person or by proxy by the trustee or legal
representative thereof.
(vi) COMPANY AND SUBSIDIARIES. Membership Interests of the
Company reflected in the required records as being held by
the Company or a subsidiary of the Company shall not be
entitled to vote on any matter. Membership Interests held in
the name of or under the control of the Company or a
subsidiary in a fiduciary capacity shall also not be
entitled to vote on any matter, except to the extent that
the settlor or beneficial owner possesses and exercises a
right to vote or gives the Company binding instructions on
how to vote the Membership Interests.
(vii) SECURITY INTERESTS. The grant of a security interest in a
Membership Interest does not entitle the holders of the
security interest to vote or to exercise any governance
right relating thereto.
2.13 PROXIES.
A Member may not grant any proxy to any person who is an assignee of any
Member's economic rights and who is not also a Member. A Member may otherwise
cast or authorize the casting of a vote by filing a written appointment of a
proxy with a Manager of the Company at or before the meeting at which the
appointment is to be effective. An appointment of a proxy shall be valid if
signed by any representative or other party authorized to vote such Membership
Interest hereunder, and may be authorized by any form of electronic
transmission. Any one of two or more authorized proxies are allowed to vote with
respect to specific instructions and a majority shall be necessary to vote with
respect to any particular item of business where there are no specific
instructions; provided that if the proxies are equally divided, the Membership
Interests must not be voted on that matter. The appointment of a proxy shall be
valid for eleven (11) months unless a longer period is expressly provided in the
appointment; provided that no proxy shall be irrevocable and any purported
irrevocable proxy shall be void, and the Member revoking such proxy shall not be
liable for damages. Proxies may be terminated at will, effective upon filing a
revocation thereof or filing a new proxy with the Company. Proxies shall be
valid until notice of the death or incapacity of the Member is received by a
Manager of the Company.
2.14 ELECTRONIC COMMUNICATIONS.
A conference among Members by any means of communication through which the
Members may simultaneously hear each other during the conference shall
constitute a meeting of the
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Members, if the same notice is given of the conference as would be required by
this Article for a meeting, and if the number of Members participating in the
conference would be sufficient to constitute a quorum at a meeting.
Participation in a meeting by such means shall constitute presence in person at
the meeting, except as provided in Article 2.5 hereof.
2.15 ACTION WITHOUT A MEETING.
An action required or permitted to be taken at a meeting of the Members may be
taken without a meeting by written action signed by a majority of the Members
entitled to vote on that action. The written action shall be effective when it
has been signed by all of those Members, unless a different effective time is
provided in the written action.
2.16 VOTING AND CONTROL AGREEMENTS.
The Members may enter into Member voting agreements and/or Membership Control
Agreements in accordance with the applicable law. To the extent the terms of any
such Member voting agreement or Membership Control Agreement may be in
contradiction of any terms of this Operating Agreement, the terms of such Member
voting agreement or Membership Control Agreement shall be controlling, and the
conflicting terms of this Operating Agreement shall be null and void.
ARTICLE 3 BOARD OF MANAGERS
3.1 MANAGER.
There shall be one class of Managers, each elected by a majority of the Voting
Membership Interest of the Company, without cumulative voting, who shall act
upon the affirmative vote of a majority of all Managers regardless of the number
present at the meeting of the Board of Managers.
3.2 BOARD TO MANAGE.
The business and affairs of the Company shall be managed by or under the
direction of the Board of Managers, subject to the rights of the Members of the
Company as provided in the Articles of Organization, this Operating Agreement,
the Member Control Agreement or otherwise pursuant to the Act. The owners of
Membership Interests entitled to vote for Managers may, by unanimous affirmative
vote, take any action required or permitted to be taken by the Board of
Managers, in which situation the actions shall be deemed accepted by the Board
of Managers, but without liability of the Managers therefor.
3.3 NUMBER.
The number of Managers shall be set from time to time by resolution of the
Members. The Board of Managers may, at any time, increase the number of Managers
up to the maximum number set by resolution of the Members, or may decrease the
number of Managers except that any such decrease shall not result in the removal
of a Manager other than a Manager named by the Board of Managers to fill a
vacancy.
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3.4 QUALIFICATIONS.
Managers shall be natural persons. Managers need not be residents of California
or Members of the Company.
3.5 TERM.
Each Manager shall hold office until his or her successor is elected and has
qualified, or until his or her earlier death, resignation, removal or
disqualification. In no event shall the fixed term of a Manager exceed five (5)
years.
3.6 LIMITATION OF LIABILITY.
A Manager of the Company shall not be personally liable to the Company or its
Members for monetary damages for breach of fiduciary duty as a Manager, except
for liability (a) for any breach of the Manager's duty of loyalty to the Company
or its Members, (b) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (c) under the
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Limited Liability Company Act, or (d) for any transaction from
which the Manager derived an improper personal benefit. If the ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Limited Liability Company Act is amended after this Article 3.6 becomes
effective to authorize action further eliminating or limiting the personal
liability of Managers, then the liability of a Manager of the Company shall be
eliminated or limited to the fullest extent permitted by the ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Limited Liability Company Act, as so amended. Any repeal or modification of this
section by the Members of the Company shall not adversely affect any right or
protection of a Manager of the Company existing at the time of such repeal or
modification.
3.7 REGULAR MEETINGS.
A regular meeting of the Board of Managers shall be held without notice other
than this Article immediately after and at the same place as each regular
meeting of the Members at which Manager are elected. The Board of Managers may
provide, by resolution at a meeting of the Board of Managers, the time and
place, either within or without the State of California, for the holding of
additional regular meetings of the Board of Managers without notice other than
such resolution.
3.8 SPECIAL MEETINGS.
Special meetings of the Board of Managers may be called from time to time by or
at the request of the Chief Manager. The person calling a meeting of the Board
of Managers may fix the date, time and place of the meeting. If the place fixed
for the meeting is other than the principal office of the Company in California,
a majority of the Board of Managers may by twenty four (24) hours notice change
the place of the meeting to another location.
3.9 NOTICE.
Notice of any special meeting shall be given at least ten (10) business days
prior thereto by written notice mailed to each Manager at his or her business
address or at least five (5) business days prior thereto if delivered personally
or by telegram or overnight delivery service. If mailed,
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such notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon prepaid. If notice be given by telegram
or similar personal overnight delivery, such notice shall be deemed to be
delivered when delivered to the forwarding Company. A Manager may waive notice
of a meeting of the Board of Managers. The notice need not state the purpose of
the meeting.
3.10 WAIVER OF NOTICE.
A waiver of notice by a Manager entitled to notice shall be effective whether
given before, at or after the meeting, and whether given in writing, orally or
by attendance. Attendance by a Manager at a meeting shall be a waiver of notice
of that meeting, except where the Manager objects at the beginning of the
meeting to the transaction of business because the meeting is not lawfully
called or convened and does not participate in the meeting thereafter.
3.11 QUORUM.
A majority of the Managers currently holding office present at a duly called
meeting shall constitute a quorum for the transaction of business. In the
absence of a quorum, a majority of the Managers present may adjourn a meeting
from time to time until a quorum is present. If a quorum is present when a duly
called or held meeting is convened, the Managers present may continue to
transact business until adjournment, even though the withdrawal of a number of
Managers originally present leaves less than the number otherwise required for a
quorum.
3.12 ELECTRONIC COMMUNICATIONS.
A conference among Managers by any means of communication through which the
Managers may simultaneously hear each other during the conference shall
constitute a meeting of the Managers, if the same notice is given of the
conference as would be required by this Article for a meeting, and if the number
of Managers participating in the conference would be sufficient to constitute a
quorum at a meeting. Participation in a meeting by such means shall constitute
presence in person at the meeting.
3.13 PRESUMPTION OF ASSENT.
A Manager who is present at a meeting of the Board of Managers when an action is
approved by the affirmative vote of a majority of the Managers present is
presumed to have assented to the action approved, unless the Manager objects at
the beginning of the meeting to the transaction of business because the meeting
is not lawfully called or convened and does not participate thereafter in the
meeting, or votes against the action at the meeting or is prohibited from voting
on the action due to a conflict of interest.
3.14 ABSENT MANAGER.
A Manager may give advance written consent or opposition to a proposal to be
acted on at a Board of Managers meeting. If the Manager is not present at the
meeting, consent or opposition to a proposal shall not constitute presence for
purposes of determining the existence of a quorum, but consent or opposition
shall be counted as a vote in favor of or against the proposal and shall
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be entered in the minutes or other record of action at the meeting, if the
proposal acted on at the meeting is substantially the same or has substantially
the same effect as the proposal to which the Manager has consented or objected.
3.15 ACTION WITHOUT A MEETING.
(a) WRITTEN ACTION PERMITTED. Any action required or permitted to be
taken at a meeting of the Board of Managers may be taken by written
action signed by all of the Managers. Except as specifically set
forth herein or in any Membership Control Agreement, Members shall
take action by the affirmative vote of a majority of the voting
power of all Membership Interests entitled to vote present (in
person or by proxy) at any meeting of the Members at which a quorum
is present. Any action required or permitted to be taken at a
meeting of the Members may be taken by written action signed by all
of the Members with Membership Interests entitled to vote. Any
written action may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
(b) EFFECTIVE DATE. The written action shall be effective when signed
by the required number of Managers, unless a different effective
time is provided in the written action.
(c) NOTICE TO MANAGER. When written action is permitted to be taken by
less than all Managers, all Managers shall be notified immediately
of its text and effective date. Failure to provide the notice shall
not invalidate the written action. A Manager who does not sign or
consent to the written action shall have no liability for the
action or actions taken thereby.
3.16 RESIGNATION.
A Manager may resign at any time by giving written notice to the Company. The
resignation shall be effective without acceptance when the notice is given to
the Company, unless a later effective time is specified in the notice.
3.17 REMOVAL.
Any one or all of the Managers may be removed at any time, with or without
cause, by the affirmative vote of the holders of power sufficient to elect such
Manager; provided, however, that if the Company has cumulative voting, unless
the entire Board of Managers is removed simultaneously, a Manager shall not be
removed from the Board of Managers if there are cast against removal of the
Manager the votes sufficient to elect the Manager at an election of the entire
Board of Managers under cumulative voting. A Manager may be removed at any time,
with or without cause, by the affirmative vote of a majority of the remaining
Managers present if the Manager was named by the Board of Managers to fill a
vacancy, and the Members have not elected Managers in the interval between the
time of appointment to fill the vacancy and the time
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of removal. Removal of a Manager, whether by Members or Managers, shall be
subject to the provisions of any Membership Control Agreement.
3.18 VACANCIES.
Any vacancy occurring on the Board of Managers resulting from the death,
resignation, removal or disqualification of a Manager may be filled by the
affirmative vote of a majority of the remaining Managers, even though less than
a quorum. Vacancies on the Board of Managers resulting from newly created
Manager positions may be filled by the affirmative vote of a majority of the
Managers serving at the time of the increase. A Manager elected to fill a
vacancy shall hold office until a qualified successor is elected by the Members
at the next regular or special meeting of the Members, or until his or her
earlier death, resignation, removal or disqualification.
3.19 COMPENSATION.
Managers and any Member of any committee of the Company, whether contemplated by
this Operating Agreement or otherwise provided for by resolution of the Board of
Managers, shall receive such compensation as may be determined from time to time
by resolution of the Board of Managers. No such payment shall preclude any
Manager from serving the Company in any other capacity and receiving
compensation therefor.
ARTICLE 4 COMMITTEES
4.1 GENERALLY.
By resolution approved by the affirmative vote of a majority of the Managers
holding office may establish committees having the authority of the Board of
Managers in the management of the business of the Company to the extent provided
in the resolution; provided that no committee may exercise any function of the
Board of Managers requiring the approval of more than a majority of the Managers
unless such committee is established and appointed by the required percentage of
Managers and its actions are approved by such required percentage. Committees
other than special litigation committees shall be subject at all times to the
direction and control of the Board of Managers.
4.2 MEMBERSHIP.
A committee shall consist of one or more natural persons, who need not be
Managers, appointed by affirmative vote necessary for the establishment of the
committee under Article 4.1 hereof.
4.3 QUORUM.
A majority of the Members of the committee present at a meeting shall constitute
a quorum for the transaction of business, unless a larger or smaller proportion
or number is required or provided in a resolution establishing the committee.
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4.4 PROCEDURE.
The provisions of Articles 3.6 through 3.19 of this Operating Agreement shall
apply to committees and Members of committees to the same extent as those
Articles apply to the Board of Managers and officers. Any action required or
permitted to be taken at a committee meeting may be taken by a written action
signed collectively, or individually in counterparts, by all Members of such
committee.
4.5 MINUTES.
Minutes, if any, of committee meetings shall be made available upon request to
Members of the committee and to any Manager.
ARTICLE 5 OFFICERS
5.1 NUMBER.
The officers of the Company shall include one or more natural persons or
entities who shall be designated Chief Manager and Treasurer, each of which
positions shall be elected by the Board of Managers. None of the officers need
be Members of the Board of the Company. The Board of Managers also may, in its
discretion, elect one or more other officers who may be designated a secretary
or any other office (the number thereof to be determined by the Board of
Managers). Any two or more offices may be held by the same person. Except as
otherwise prohibited, any officer may delegate any or all of the powers or
duties of such officer to other persons.
5.2 ELECTION AND TERM OF OFFICE.
The officers of the Company shall be elected by the Board of Managers. In the
absence of an election or appointment of officers by the Board of Managers, the
person or persons exercising the principal functions of the Chief Manager or the
Treasurer shall be deemed to have been elected to those positions. Each officer
shall hold his or her position until his or her successor is elected and has
qualified, or until his or her earlier death, resignation, removal or
disqualification. The election or appointment of a person as an officer or agent
shall not, of itself, create contract rights.
5.3 RESIGNATION.
An officer may resign at any time by giving written notice to the Company. The
resignation shall be effective without acceptance when the notice is given to
the Company, unless a later effective date is specified in the notice.
5.4 REMOVAL.
An officer may be removed at any time, with or without cause, by a resolution
approved by the affirmative vote of a majority of the Managers, subject to the
provisions of any Membership Control Agreements.
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5.5 VACANCY.
A vacancy in any position because of death, resignation, removal,
disqualification or other cause may, or in the case of a vacancy in the position
of Chief Manager or Treasurer shall, be filled by the Board of Managers for the
unexpired portion of the term.
5.6 CHIEF MANAGER.
Except as otherwise determined by the Board of Managers, the Chief Manager will
be the Chief Executive Officer of the Company and s/he shall:
(a) Have general active management of the business of the Company;
(b) When present, and in the absence of a Chair of the Board, preside
at all meetings of the Board of Managers and of the Members;
(c) See that all orders and resolutions of the Board of Managers are
carried into effect;
(d) Be an ex officio Member of all standing committees;
(e) Sign and deliver in the name of the Company any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of
the Company, except in cases in which the authority to sign and
deliver is required by law to be exercised by another person or is
expressly delegated by the Articles of Organization or this
Operating Agreement or by the Board of Managers to some other
Manager or agent of the Company; and
(f) Perform other duties prescribed by the Board of Managers.
5.7 TREASURER.
The Treasurer shall be the chief financial officer of the Company and shall:
(a) Keep accurate financial records for the Company;
(b) Deposit all moneys, drafts and checks in the name of and to the
credit of the Company in the banks and depositories designated by
the Board of Managers;
(c) Endorse for deposit all notes, checks and drafts received by the
Company as ordered by the Board of Managers, making proper vouchers
therefor;
(d) Disburse corporate funds and issue checks and drafts in the name of
the Company, as ordered by the Board of Managers;
Operating Agreement 13
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(e) Render to the Board of Managers and the Chief Manager, whenever
requested, an account of all transactions by the Treasurer and of
the financial condition of the Company;
(f) Perform other duties prescribed by the Board of Managers or by the
Chief Manager; and
(g) If required by the Board of Managers, give a bond for the faithful
discharge of his or her duties in such sum and with such surety or
sureties as the Board of Managers shall determine.
5.8 SECRETARY.
The Secretary, if any, shall:
(a) Maintain records of and, whenever necessary, certify all
proceedings of the Board of Managers and the Members;
(b) See that all notices are duly given in accordance with the
provisions of this Operating Agreement or as required by law;
(c) Maintain and be custodian of the required records of the Company
and of the seal of the Company, if any; and
(d) Perform other duties prescribed by the Board of Managers or by the
Chief Manager.
5.9 OTHER OFFICERS.
In the absence of the Chief Manager or in the event of his or her death,
inability or refusal to act, any other officer designated by the Board of
Managers, (or in the event there be more than one other officer, the officers in
the order designated at the time of their election, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the Chief Manager, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Chief Manager.
5.10 ASSISTANT OFFICERS.
In the event of the absence or disability of any designated officer, secretary,
or treasurer, the assistants to such positions shall succeed to the powers and
duties of the absent officer in the order in which they are elected or as
otherwise prescribed by the Board of Managers until the principal officer shall
resume his or her duties or a replacement is elected by the Board of Managers.
The assistant officers shall exercise such other powers and duties as may be
delegated to them from time to time by the Board of Managers, but they shall be
subordinate to the principal officer they are designated to assist. If requested
by the Board of Managers, the assistant treasurers shall give bonds for the
faithful discharge of their duties in such sums and with sureties as the Board
of Managers shall determine.
Operating Agreement 14
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5.11 CHAIR OF THE BOARD.
A Chair of the Board of Managers may be elected by the Board of Managers. He or
she shall, when present, preside at all meetings of the Board of Managers and of
the Members, and shall perform such duties as shall be prescribed by the Board
of Managers.
5.12 COMPENSATION.
The compensation of the officers shall be fixed from time to time by the Board
of Managers and no officer shall be prevented from receiving such compensation
by reason of the fact that he or she is also a Manager of the Company. The Board
of Managers may authorize and empower the Chief Manager or any officer of the
Company to fix the salaries of all officers of the Company who are not Managers
of the Company.
ARTICLE 6 INDEMNIFICATION
The Company shall indemnify any person who is or was a Manager, officer,
committee Member or employee of the Company, in accordance with and to the
fullest extent provided by the provisions of the Act. In consideration of such
right of indemnification, the Company shall have the right to appoint counsel of
its choosing in any action brought against any such Manager, officer, committee
Member or employee to protect the interest of the Company.
ARTICLE 7 MEMBERSHIP INTERESTS AND THEIR TRANSFER
7.1 LIMITATIONS BY OTHER AGREEMENTS.
The provisions of this Article are limited in their entirety by the provisions
of the Articles of Organization, any Membership Control Agreement or Member
voting agreement, or the mandatory provisions of the Act thereof, and any
provision of this Article in contradiction with any such article, agreement or
law shall be null and void.
Any issuance of any Membership Interest of the Company or any options, warrants,
Membership rights, convertible debentures or similar securities shall require
the affirmative vote of a majority of the Board of Managers of the Company, and
such action shall be necessary to accept contributions, make contribution
agreements or make contribution allowance agreements in accordance with the Act.
7.2 TRANSFER OF MEMBERSHIP INTERESTS RESTRICTED.
A Member may assign the Member's full Membership Interest only by assigning all
of the Member's governance rights coupled with a simultaneous assignment to the
same assignee of all of the Member's economic rights. A Member's economic rights
and governance rights are assignable, in whole or in part, only as provided in
this Article and after compliance with the provisions hereof. Any Member may
assign his or her Membership Interests freely to any
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Member or non-Member, except as otherwise provided in this Operating Agreement,
the Articles of Organization or any Membership Control Agreement.
7.3 TRANSFER OF MEMBERSHIP INTERESTS.
Transfer of Membership Interests of the Company shall be made only in the
required records of the Company by the record holder thereof or by his or her
legal representative who shall furnish proper evidence of authority to transfer
and compliance with the provisions of this Article. The person in whose name
Membership Interests stand in the required records of the Company shall be
deemed by the Company to be the owner thereof for all purposes unless a
different beneficial owner shall have been designated pursuant to this Operating
Agreement.
7.4 INDEBTEDNESS OF MEMBERS.
The Company shall have a first lien on all Membership Interests and upon all
distributions declared upon the same for any indebtedness of the respective
holders thereof to the Company. No Membership Interest or the economic or
governance rights therein shall be considered a certified security, uncertified
security, chattel paper, instrument or account under California Law; but each
Membership Interest, economic right and governance right shall be deemed a
general intangible.
7.5 TRANSFER AGENT AND REGISTRAR.
The Board of Managers may appoint one or more transfer agents, transfer clerks,
or registrars to maintain the required records of the Company and may require
any statements which may be used to describe any Membership Interests to bear
the signature or signatures of any of them; provided that no such statement
shall be a negotiable instrument and no such statement may serve as a vehicle by
which the transfer of any Membership Interest may be effected.
7.6 ASSIGNMENT OF ECONOMIC RIGHTS PERMITTED.
Except as provided in this Article, a Member's economic rights are transferable
in whole or in part.
(a) RESTRICTIONS OF ASSIGNMENT OF MEMBERSHIP INTERESTS. A restriction
on the assignment of Membership Interests or any part thereof may
be imposed in the Articles of Organization or by an agreement among
or other written action by Members or among them and the Company. A
restriction is not binding with respect to Membership Interests
reflected in the required records before the adoption of the
restriction, unless the owners of those Membership Interests are
parties to the agreement or voted in favor of the restriction.
(b) NOTICE IN REQUIRED RECORDS. A written restriction on the assignment
of economic rights that is not manifestly unreasonable under the
circumstances and is noted conspicuously in the required records
may be enforced against the owner of the restricted economic rights
or a successor or transferee of the owner including a pledgee or a
legal representative. Unless noted conspicuously in the required
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records, a restriction, even though permitted by this Article, is
ineffective against a person without knowledge of the restriction.
7.7 EFFECT OF ASSIGNMENT OF ECONOMIC RIGHTS.
An authorized assignment of a Member's economic rights entitles the assignee to
receive, to the extent assigned, only the share of profits and losses and the
distributions to which the assignor would otherwise be entitled. An assignment
of a Member's economic rights does not dissolve the Company and does not entitle
or empower the assignee to become a Member, to exercise any governance rights,
to receive any notices from the Company, or to cause dissolution. The assignment
of economic rights may not allow the assignee to control the assignor Member's
exercise of governance rights.
ARTICLE 8 CONTRIBUTIONS AND DISTRIBUTIONS
8.1 POWER TO MAKE DISTRIBUTIONS.
Except as specifically provided in the Articles of Organization, any Membership
Control Agreement or this Operating Agreement to the contrary, the Board of
Managers may authorize, and cause the Company to make, a distribution only if
the Board of Managers determines, in accordance with California law, that the
Company will be able to pay its debts in the ordinary course of business after
making the distribution and the Board of Managers does not know before the
distribution is made that the determination was or has become erroneous. Such
determination shall be made as of the earlier of the date of cessation of
Membership or due date of payment (including the date debt is incurred) for a
redemption, or the authorization (if paid within 120 days) or the date of
payment (if after 120 days). For purposes of this Article, "distribution" means
a direct or indirect transfer of money or other property, other than Membership
Interests of the Company, with or without consideration, or an incurrence or
issuance of indebtedness by the Company to or for the benefit of its Members in
respect of its Membership Interests. A distribution may be in the form of an
operating distribution or a distribution in liquidation, or as consideration for
the purchase, redemption or other acquisition of the Company's Membership
Interests or otherwise.
8.2 RELIANCE.
For purposes of Article 8.1 and all other provisions of this Agreement, a
Manager, in good faith, is entitled to rely on information, opinions, reports,
or statements, including financial statements and other financial data, in each
case prepared or presented by:
(a) One or more Managers or employees of the Company whom the Managers
reasonably believes to be reliable and competent in the matters
presented; or
(b) Counsel, public accountants, or other persons as to matters that
the Manager reasonably believes are within the person's
professional or expert competence; or
Operating Agreement 17
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(c) A committee of the Board of Managers upon which the Manager does
not serve, duly established in accordance with Article IV hereof,
as to matters within its designated authority, if the Manager
reasonably believes the committee to merit confidence; provided
(d) If the determination is made on the basis of financial information,
it is prepared in accordance with accounting methods, or a fair
valuation or other method, reasonable in the circumstances.
8.3 ALLOCATIONS AND DISTRIBUTIONS IN KIND.
Except as authorized in the Articles of Organization or any Membership Control
Agreement, distributions must be allocated in proportion to the value of the
contributions of the Members as reflected in the required records. Except as
provided in the Articles of Organization or any Membership Control Agreement, a
Member, regardless of the nature of the Member's contribution, has no right to
demand and receive any distribution in any form other than cash. Except as
provided in the Articles of Organization or any Membership Control Agreement, a
Member may not be compelled to accept a distribution of any asset in kind from
the Company to an extent greater than the percentage in which the Member shares
in distributions from the Company.
8.4 LIABILITY FOR ILLEGAL DISTRIBUTIONS.
(a) MEMBERS. A Member who receives a distribution made in violation of
the Articles of Organization, this Operating Agreement or any
Membership Control Agreement is liable (if timely action is brought
within two (2) years of the date of distribution) to the Company,
its receiver or other person winding up its affairs, or a Manager
as provided by law, but only to the extent that the distribution
received by the Member exceeded the amount that properly could have
been paid under said provisions of California statutes.
(b) MANAGERS. A Manager shall only be liable for an improper
distribution if
(i) The Manager is present at a meeting and fails to vote
against, or who consents in writing to, a distribution made
in violation of law or a restriction contained in the
Articles of Organization, this Operating Agreement or a
Membership Control Agreement;
(ii) The Manager fails to comply with the standard of conduct
provided by law; and
(iii) Action relating to such liability is commenced within two
(2) years of the date of distribution.
Under such circumstances, the Manager is liable to the Company jointly and
severally with all other Manager so liable and to other Manager, but only to the
extent that the distribution
Operating Agreement 18
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exceeded the amount that properly could have been paid. In any such situation, a
Manager shall be entitled to pro-rata contribution from similarly situated
Managers and pro rata contribution from each Member receiving such distribution.
ARTICLE 9 FINANCIAL AND PROPERTY MANAGEMENT
9.1 FISCAL YEAR.
The fiscal year of the Company shall be determined from time to time by the
Board of Managers.
9.2 AUDIT OF BOOKS AND ACCOUNTS.
The books and accounts of the Company may, but need not, be audited at such
times as may be ordered by the Board of Managers.
9.3 CONTRACTS.
The Board of Managers or such Manager or person to whom such power shall be
delegated by the Board of Managers by resolution may, except as otherwise
provided in any agreement, authorize any Manager, agent or employee, either by
name or by designation of their respective offices, positions or classes, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the Company, and such authority may be general or confined to
specific instances, and unless so authorized, no Manager, agent or employee
shall have any power or authority to bind the Company by any contract or
engagement, or to pledge its credit, or to render it liable pecuniarily for any
purpose or in any amount.
9.4 CHECKS.
All checks, drafts, or other orders for the payment of money, notes, or other
evidences of indebtedness issued in the name of the Company shall be signed by
the Chief Manager and/or such other Manager or Managers, agent or agents of the
Company and in such manner as shall from time to time be determined by
resolution of the Board of Managers.
9.5 DEPOSITS.
All funds of the Company not otherwise employed may be deposited from time to
time to the credit of the Company in such banks, trust companies, market funds
or other depositories as the Board of Managers may select.
9.6 VOTING SECURITIES HELD BY COMPANY.
The Chief Manager, or other agent designated by the Board of Managers or Chief
Manager, shall have full power and authority on behalf of the Company to attend,
act and vote at any meeting of security holders of other companies in which this
Company may hold securities. At such meeting, the Chief Manager, or such other
agent, shall possess and exercise any and all rights and powers incident to the
ownership of such securities which the Company might possess and exercise.
Operating Agreement 19
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9.7 LOANS.
No loans shall be contracted on behalf of this Company, and no negotiable papers
shall be issued in its name, unless and except as authorized by vote of the
Board of Managers or by such Manager, agent, employee or other person to whom
such power shall be delegated by the Board of Managers by resolution.
9.8 REQUIRED RECORDS.
The Company shall keep at its principal executive office, or at another place or
places within the United States determined by the Board of Managers, by any
storage technique deemed reasonable, the following, which shall be the required
records of the Company:
(a) A current list of the full name and last-known business, residence
or mailing address of each Member, Manager, and officer;
(b) A current list of the full name and last-known business, residence
or mailing address of each assignee of economic rights and a
description of the rights assigned;
(c) A copy of the Articles of Organization and all amendments to the
Articles;
(d) Copies of any currently effective written Operating Agreement;
(e) Copies of the Company's federal, state and local income tax returns
and reports, if any, for the three most recent years;
(f) Financial statements required by California Law;
(g) Records of all proceedings of Members for the last three years;
(h) Records of all proceedings of the Board of Managers for the last
three years;
(i) Reports made to Members generally within the last three years;
(j) Copies of any and all currently effective Membership Control
Agreements;
(k) A statement of all contributions accepted, including for each
contribution:
(i) The identity of the Member to whom the contribution relates;
(ii) The class or series of Membership Interest to which the
contribution pertains;
(iii) The amount of cash accepted by the Company or promised to be
paid to the Company;
Operating Agreement 20
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(iv) A description of any services rendered to or for the benefit
of the Company or promised to be rendered to or for the
benefit of the Company; and
(v) The value accorded to:
(aa) Any other property transferred or promised to be
transferred to the Company; and
(bb) Any services rendered to or for the benefit of the
Company or promised to be rendered to or for the benefit of
the Company;
(l) A statement of all contribution agreements, including for each
contribution agreement:
(i) The identity of the would-be contributor;
(ii) The class or series to which the future contribution
pertains; and
(iii) As to each future contribution to be made, the same
information as outlined above;
(m) A statement of all contribution allowance agreements, including for
each contribution allowance agreement, the information listed in
(12) above.
(n) An explanation of any restatement of value relating to capital
contributions or capital accounts.
(o) Any written consents obtained from Members relating to the items
set forth herein;
(p) A copy of agreements, contracts, or other arrangements or portions
of them relating to the establishment of classes or series of
Membership interests.
9.9 RIGHT TO INSPECT.
Each Member of the Company has an absolute right, upon written demand, to
examine and copy, in person or by a legal representative, at any reasonable
time, all documents referred to in Article 9.8 and all other documents upon
showing a proper purpose. For purposes of this Article, a "proper purpose" is
one reasonably related to the person's interest as a Member of the Company.
ARTICLE 10 LIMITED LIABILITY COMPANY SEAL
The Company shall have no seal unless otherwise authorized by resolution of the
Board of Managers.
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ARTICLE 11 SPECIAL LIMITED LIABILITY COMPANY PROVISIONS
11.1 TRANSFER OF GOVERNANCE RIGHTS.
Subject to any Membership Control Agreement, any Member may transfer his or her
Membership Interests in the Company, or any right to vote or receive financial
benefits under such Membership Interests, freely to any Member or non-Member.
11.2 EVENTS CAUSING DISSOLUTION.
The occurrence of one or more events listed in Section 17350(d) of the Act shall
not dissolve the Company.
ARTICLE 12 AMENDMENT
Except as specifically provided in the Articles of Organization or the
Membership Control Agreement to the contrary, this Operating Agreement may be
amended or repealed, and a new Operating Agreement may be adopted by the Board
of Managers or by the Members, except that the Board of Managers shall not
adopt, amend or repeal any provision fixing the number, term, qualifications,
election, removal or appointment of Manager nor the number of Members
constituting a quorum or the required vote of Members for any action.
ARTICLE 13 GOVERNING LAW
The Company has been formed under and pursuant to the provisions of the Act. All
references in this Operating Agreement to the Act shall mean and include such
title as currently enacted or hereafter amended, and any corresponding provision
hereafter in effect. This Operating Agreement will be governed by the laws of
California.
ARTICLE 14 MEMBERS CONTROL AGREEMENT
14.1 MEMBERS CONTROL AGREEMENT.
The Members Control Agreement attached hereto entered into and executed by all
of the Members of the Company on the date of this Agreement is incorporated
herein by reference.
14.2 CONFLICTS.
If the terms of this Operating Agreement or the Articles of Organization
conflict with any terms of the Members Control Agreement, then the provisions of
the Members Control Agreement will govern as provided for in Articles 1.2 of the
Members Control Agreement. The definitions contained in the Members Control
Agreement will be applicable in all respects to this Operating Agreement.
Operating Agreement 22
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CERTIFICATION OF OPERATING AGREEMENT
The undersigned hereby certify that the foregoing Operating Agreement was
adopted pursuant to a Written Action of the Board of Managers effective as of
the 3rd day of January, 2003.
By
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Member of Board of Managers
By
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Member of Board of Managers
Operating Agreement 23
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