OPERATING AGREEMENT
OF
▇▇▇▇.▇▇▇▇, LLC
THIS OPERATING AGREEMENT is entered into and effective as of the 31st day
of January, 1997, by and between PREMIER LASER SYSTEMS, INC., a California
corporation ("PREMIER"), and RSS, LLC, a Kansas limited liability company
("RSS") (collectively referred to as the "MEMBERS").
A. On December 27, 1996, the Members caused a California limited
liability company to be formed pursuant to the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Limited
Liability Company Act (the "ACT") under the name "▇▇▇▇.▇▇▇▇, LLC" (the
"COMPANY") and they now desire to enter into an Operating Agreement, as
defined in Section 17001(ab) of the Act, to delineate their rights and
liabilities as members with each other, to provide for the management of the
business, and to provide for certain other matters, all as permitted under
the Act.
B. In connection with the formation of the Company the Members have
entered into that certain Joint Venture Agreement dated January 31, 1997 (the
"JOINT VENTURE AGREEMENT").
NOW, THEREFORE, THE MEMBERS AGREE AS FOLLOWS:
ARTICLE 1
THE COMPANY
1.1 PRINCIPAL PURPOSE. The principal purpose of the Company shall be to
engage in the business of developing and marketing "outcomes" software and
marketing other products of Premier and in any and all lawful business
activities related or incidental thereto.
1.2 PLACE OF BUSINESS. The principal place of business of the Company
shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, unless changed by
a vote of the Members.
1.3 TERM. The Company commenced on the date when its Articles of
Organization (the "ARTICLES") were filed with the California Secretary of
State as required by the Act and shall continue until terminated as a result
of the dissolution and winding up of the Company in accordance with Article 8
hereof.
ARTICLE 2
MEMBERS; CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS
2.1 INITIAL MEMBERS. The names and addresses of the Members of the
Company, their respective initial capital contributions, and the percentage
which shall be used to determine their respective interests in Company
profits, losses and distributions ("PERCENTAGE INTEREST") are set forth
below. Each Member's acquisition of a membership interest in the Company
shall be effective upon the payment in full in cash of such Member's
respective capital contribution.
Initial Capital Percentage
Member Contribution Interest
------ --------------- ----------
Premier Laser Systems, Inc. certain assets 51%
3 ▇▇▇▇▇▇ contributed
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ pursuant to the
Joint Venture
Agreement, and
valued at
$2,200,000
RSS, LLC certain assets 49%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ pursuant to the
Joint Venture
Agreement, and
valued at
$2,113,725
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2.2 ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) The Board of Managers may determine from time to time that
additional cash is required to permit the Company to carry on its business,
and may therefore request that such additional cash be contributed by the
Members in proportion to their respective Percentage Interests. The
Members shall have the option, but not the obligation, to make such
additional capital contributions at any time during a period of four (4)
months after the determination of the need for such additional cash has
been made. Each Member shall receive a credit to its capital account in
the amount of any additional capital which it contributes to the Company.
Immediately following any such capital contributions, the Percentage
Interests shall be adjusted by the Company to reflect the new relative
proportions of the capital accounts of the Members.
(b) The Board of Managers may also determine, from time to time, that
it is in the best interest of the Company to issue options, warrants, or
other securities representing an equity interest in the Company, on term
authorized by the Board of Managers. Such options, warrants, and other
securities may include terms, among others, providing for their
exercisability or conversion into other interests in the Company upon the
occurrence of future events, including, without limitation, the completion
of a public offering by the Company or by a successor to the Company. In
no event, however, shall said options, warrants, additional securities, or
other securities into which they are convertible or for they are
exercisable provide the holder thereof with voting rights with respect to
the affairs of the Company, except with the express prior written consent
of Premier. The Board of Managers is authorized to cause the Company to
issue options, warrants and other securities in accordance with the
foregoing, without further approval of the Members.
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2.3 OTHER MATTERS.
(a) No interest shall accrue on any capital contributed to the
Company by any Member. Except as otherwise expressly provided herein, no
Member shall be entitled to receive a return of such Member's capital
contributions prior to the dissolution and winding up of the Company.
(b) Except as otherwise expressly provided herein or as may be
mandatory under the Act, no Member shall be entitled to retire, withdraw
from, or dissolve the Company without the consent of all the other Members.
2.4 LIABILITY OF MEMBERS; INDEMNITY.
(a) No Member shall be personally liable for the debts, obligations
or liabilities of the Company solely by reason of being a Member. Each
Member shall indemnify and hold the other Members (and, where applicable,
their respective officers, partners, directors and shareholders) harmless
from and against all claims, demands, costs, losses and damages, including,
without limitation, attorneys' fees and expenses (collectively, "LOSSES")
incurred as a result of or in connection with the indemnifying party's
breach (directly or by its agents or other representatives) of any
provision of this Agreement or action outside the scope of this Agreement.
(b) Subject to paragraph (a) above, the Company shall indemnify and
hold each Member (and, where applicable, such Member's respective officers,
partners, directors and shareholders) harmless from and against all Losses
incurred as a result of or in connection with (i) any claim that such
Member is liable for any debt, obligation or liability of the Company or is
directly or indirectly required to make payments in respect thereof or in
connection therewith, and (ii) any act or omission by such Member
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for or on behalf of the Company, unless such act or omission is
unauthorized, contrary to this Agreement, in bad faith or
constitutes gross negligence or fraud.
(c) Each party to be indemnified under paragraph (a) or (b) above
shall give each indemnifying party notice of any Loss subject to the
indemnity within thirty (30) days after the indemnified party has received
actual notice thereof. The indemnifying party shall be entitled to
participate in or direct the defense of any action in connection with the
reported Loss, provided that it employs counsel reasonably satisfactory to
the indemnified party. An indemnifying party shall not be liable to an
indemnified party in respect of settlements effected by the indemnified
party without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld or delayed.
2.5 MEMBERS ARE NOT AGENTS. Pursuant to SECTION 5.1 hereof and the
Articles, the management of the Company is vested in the Board of Managers. The
Members shall have no power to participate in the management of the Company
except as expressly authorized by this Agreement or the Articles and except as
expressly required by the Act. No Member, acting solely in the capacity of a
Member, is an agent of the Company nor does any Member, unless expressly and
duly authorized in writing to do so by the Board of Managers, have any power or
authority to bind or act on behalf of the Company in any way, to pledge its
credit, to execute any instrument on its behalf or to render it liable for any
purpose.
ARTICLE 3
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
3.1 CAPITAL ACCOUNTS. The Company shall establish and maintain a
capital account for each Member, which accounts shall have initial balances
equal to such Member's initial capital contribution. A Member's capital
account shall be increased by the amount of (a) any
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additional capital contributions by, and (b) the income and gain allocated
to, such Member, and shall be decreased by any losses and deductions
allocated, or distributions made, to such Member pursuant to the terms of
this Agreement. It is the intention of the Members that capital accounts be
maintained strictly in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv).
3.2 ALLOCATIONS OF PROFITS AND LOSSES. All profits and losses of the
Company shall be allocated to the Members in accordance with their respective
Percentage Interests.
3.3 DISTRIBUTIONS. Prior to the dissolution of the Company, the Company
shall distribute its funds and other assets to Members at such times and in such
amounts as the Board of Managers determines to be appropriate. Distributions
shall be made to the Members in accordance with their respective Percentage
Interests.
ARTICLE 4
MEETINGS OF MEMBERS
4.1 CALL, NOTICE AND CONDUCT OF MEETINGS. Meetings of the Members, for
any purpose or purposes, may be called by a Member or Members then owning
more than ten percent (10%) of the Percentage Interests in the Company.
Whenever any meeting of the Members is called, written notice thereof shall
be given and the meeting shall otherwise be conducted in accordance with the
provisions of Section 17104 of the Act.
4.2 VOTING BY MEMBERS. At any meeting of Members, every Member shall be
entitled to vote either in person or by proxy executed in writing by such
Member. Except as may otherwise be specifically provided herein, with respect
to any matter at any meeting, or otherwise with respect to any determination or
action required or permitted to be made or taken by the Members under this
Agreement, the affirmative vote of Members then owning more than
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fifty percent (50%) of the Percentage Interests in the Company shall be
sufficient to make such determination or to take such action.
4.3 ACTION WITHOUT A MEETING. Any action which is required or permitted
to be taken at any annual or special meeting of Members, including
determinations under this Agreement, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the Members whose affirmative vote
would otherwise be required for such action at a meeting hereunder. Such action
by written consent shall constitute the act of the Members.
4.4 TELEPHONIC MEETINGS. Members may participate in and hold meetings by
using conference telephone or similar communications equipment, by means of
which all persons participating in such meeting can hear each other, and
participation in a meeting pursuant to this Section shall constitute presence in
person at such meeting.
ARTICLE 5
MANAGEMENT OF COMPANY
5.1 MANAGEMENT OF THE COMPANY BY BOARD OF MANAGERS.
(a) EXCLUSIVE MANAGEMENT BY BOARD OF MANAGERS. The business,
property and affairs of the Company shall be managed exclusively by the
Board of Managers. Except for situations in which the approval of the
Members is expressly required by the Act, the Articles or this Agreement,
the Managers shall have full, complete and exclusive authority, power, and
discretion to manage and control the business, property and affairs of the
Company, to make all decisions regarding those matters and to perform any
and all other acts or activities customary or incident to the management of
the Company's business, property and affairs.
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(b) MEETINGS OF BOARD OF MANAGERS. Meetings of the Board of Managers
may be called by any Manager. All meetings shall be held upon four (4)
days notice by mail or forty-eight (48) hours notice delivered personally
or by telephone, telegraph or facsimile. A notice need not specify the
purpose of any meeting. Notice of a meeting need not be given to any
Manager who signs a waiver of notice or a consent to holding the meeting
(which waiver or consent need not specify the purpose of the meeting) or an
approval of the minutes thereof, whether before or after the meeting, or
who attends the meeting without protesting, prior to its commencement, the
lack of notice to such Manager. All such waivers, consents and approvals
shall be filed with the Company records or made a part of the minutes of
the meeting. A majority of the Managers present, whether or not a quorum
is present, may adjourn any meeting to another time and place. If the
meeting is adjourned for more than twenty-four (24) hours, notice of any
adjournment shall be given prior to the time of the adjourned meeting to
the Managers who are not present at the time of the adjournment. Meetings
of the Board of Managers may be held at any place within or without the
State of California which has been designated in the notice of the meeting
or at such place as may be approved by the Board of Managers. Managers may
participate in a meeting through use of conference telephone or similar
communications equipment, so long as all Managers participating in such
meeting can hear one another. Participation in a meeting in such manner
constitutes a presence in person at such meeting. A majority of the
authorized number of Managers constitutes a quorum of the Managers for the
transaction of business. Except to the extent that this Agreement
expressly requires the approval of all Managers, every act requiring the
approval of the Managers must be approved by a majority of a quorum of the
Managers, and every act or decision done or made by a majority of the
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Managers present at a meeting duly held at which a quorum is present is the
act of the Board of Managers. A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
Managers, if any action taken is approved by at least a majority of the
required quorum for such meeting.
(c) ACTION WITHOUT A MEETING. Any action required or permitted to be
taken by the Board of Managers may be taken by the Board of Managers
without a meeting, if all of the Managers individually or collectively
consent in writing to such action. Such action by written consent shall
have the same force and effect as a vote of such Managers.
5.2 ELECTION OF MANAGERS.
(a) NUMBER, TERM, AND QUALIFICATIONS. The Company shall have five
(5) Managers. The number of Managers of the Company may be changed only
upon the approval of all the Members, provided that in no instance shall
there be less than one Manager and provided further that if the number of
Managers is reduced from more than one to one, the Articles shall be
amended to so state, and if the number of Managers is increased to more
than one, the Articles shall be amended to delete the statement that the
Company has only one Manager. Unless he resigns or is removed, each
Manager shall hold office until a successor shall have been elected and
qualified. A Manager need not be a Member, an individual, a resident of
the State of California, or a citizen of the United States.
(b) ELECTION. Premier and RSS each shall be entitled to appoint two
Managers to the Board of Managers (the "PREMIER MANAGERS" and "RSS
MANAGERS" respectively). The fifth Manager shall be elected by the
affirmative vote or written
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consent of all Members. The following persons shall be the initial Managers
of the Company:
Premier Manager ▇▇▇▇▇▇ ▇▇▇▇▇▇
Premier Manager ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
RSS Manager ▇▇▇▇▇▇ ▇▇▇▇▇▇
RSS Manager ▇▇▇▇ ▇▇▇▇▇▇▇▇
Elected by Members ______________________
(c) RESIGNATION. Any Manager may resign at any time by giving
written notice to the Members and remaining Managers without prejudice to
the rights, if any, of the Company under any contract to which the Manager
is a party. The resignation of any Manager shall take effect upon receipt
of that notice or at such later time as shall be specified in the notice.
Unless otherwise specified in the notice, the acceptance of the resignation
shall not be necessary to make it effective. The resignation of a Manager
who is also a Member shall not affect the Manager's rights as a Member and
shall not constitute a withdrawal of a Member.
(d) REMOVAL. The Premier Managers and the RSS Managers may be
removed only by Premier or RSS, respectively. The fifth Manager may be
removed at any time, with or without cause, by the affirmative vote of all
of the Members at a meeting called expressly for that purpose. Any removal
shall be without prejudice to the rights, if any, of the Manager under any
employment contract and, if the Manager is also a Member, shall not affect
the Manager's rights as a Member or constitute a withdrawal of a Member.
(e) VACANCIES. Any vacancy occurring for any reason with respect to
the Premier Managers or RSS Managers may be filled only by Premier or RSS,
respectively.
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Any vacancy occurring with respect to the fifth Manager may be filled by
the affirmative vote or written consent of all of the Members.
5.3 POWERS OF MANAGERS.
(a) POWERS OF BOARD OF MANAGERS. Without limiting the generality of
SECTION 5.1, but subject to SECTION 5.3(b) and to the express limitations
set forth elsewhere in this Agreement, the Board of Managers shall have all
necessary powers to manage and carry out the purposes, business, property,
and affairs of the Company, including, without limitation, the power to
exercise on behalf and in the name of the Company all of the powers
described in Corporations Code Section 17003.
(b) LIMITATIONS ON POWER OF MANAGERS. Notwithstanding any other
provisions of this Agreement, no debt, liability or expenditure of more
than $100,000 may be contracted or made on behalf of the Company in the
ordinary course of business except by the written consent of all Managers,
and no debt, liability or expenditure of more than $25,000 may be
contracted or made on behalf of the Company outside the ordinary course of
business except with the written consent of all Managers. Additionally,
the Managers shall not have authority hereunder to cause the Company to
engage in the following transactions without first obtaining the
affirmative vote or written consent of all of the Members.
(i) The dissolution of the Company;
(ii) The sale, exchange or other disposition of all, or
substantially all, of the Company's assets occurring as part of a
single transaction or plan, or in multiple transactions over a six (6)
month period, except in the orderly liquidation and winding up of the
business of the Company upon its duly authorized dissolution;
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(iii) The merger of the Company with another business entity;
(iv) The establishment of different classes of Members;
(v) The issuance of any new membership interests in the
Company or options or commitments to issue any such interests, and
(vi) The amendment of the Articles.
5.4 PERFORMANCE OF DUTIES. The Managers shall perform their managerial
duties in good faith, in a manner they reasonably believe to be in the best
interests of the Company and its Members, and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances. A Manager who so performs the duties of Manager
shall not have any liability by reason of being or having been a Manager of the
Company.
In performing their duties, the Managers shall be entitled to rely on
information, opinions, reports, or statements, including financial statements
and other financial data, of the following persons or groups unless they have
knowledge concerning the matter in question that would cause such reliance to be
unwarranted and provided that the Managers act in good faith and after
reasonable inquiry when the need therefor is indicated by the circumstances:
(a) One or more officers, employees or other agents of the Company
whom the Managers reasonably believe to be reliable and competent in the
matters presented;
(b) Any attorney, independent accountant, or other person as to
matters which the Managers reasonably believe to be within such person's
professional or expert competence; or
(c) A committee upon which the Managers do not serve, duly designated
in accordance with a provision of the Articles or this Agreement, as to
matters within its
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designated authority, which committee the Managers reasonably believe to
merit competence.
5.5 DEVOTION OF TIME. The Managers are not obligated to devote all of
their time or business efforts to the affairs of the Company. The Managers
shall devote whatever time, effort, and skill as they deem appropriate for the
operation of the Company.
5.6 TRANSACTIONS BETWEEN THE COMPANY AND THE MANAGERS. Notwithstanding
that it may constitute a conflict of interest, the Managers may, and may cause
their affiliates to, engage in any transaction (including, without limitation,
the purchase, sale, lease, or exchange of any property or the rendering of any
service, or the establishment of any salary, other compensation, or other terms
of employment) with the Company so long as such transaction is not expressly
prohibited by this Agreement and so long as the terms and conditions of such
transaction, on an overall basis, are fair and reasonable to the Company and are
at least as favorable to the Company as those that are generally available from
Persons capable of similarly performing them and in similar transactions between
parties operating at arm's-length.
A transaction between the Managers and/or their affiliates, on the one
hand, and the Company, on the other hand, shall be conclusively determined to
constitute a transaction on terms and conditions, on an overall basis, fair and
reasonable to the Company and at least as favorable to the Company as those
generally available in a similar transaction between parties operating at arm's-
length if the Members having no interest in such transaction (other than their
interests as Members) affirmatively vote or consent in writing to approve the
transaction. Notwithstanding the foregoing, the Managers shall not have any
obligation, in connection with any such transaction between the Company and the
Managers or an affiliate of the Managers, to seek the consent of the Members.
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5.7 PAYMENTS TO MANAGERS. Except as specified in the Joint Venture
Agreement or other agreement between the parties, the Managers and their
affiliates shall receive only the following payments:
(a) MANAGEMENT FEE. The Company shall pay the Managers a monthly fee
for services in connection with the management of the Company in the amount
of $__________. Such fee may be changed from time to time only by the
affirmative vote or written consent of all of the Members, and no Manager
shall be prevented from receiving any fee because the Manager is also a
Member of the Company.
(b) SERVICES PERFORMED BY MANAGERS OR AFFILIATES. The Company shall
pay the Managers or affiliates of the Managers for services rendered or
goods provided to the Company to the extent that the Managers are not
required to render such services or goods themselves without charge to the
Company, and to the extent that the fees paid to such Managers or
affiliates do not exceed the fees that would be payable to an independent
responsible third party that is willing to perform such services or provide
such goods.
5.8 APPOINTMENT OF OFFICERS. The Board of Managers may appoint officers
at any time. The officers of the Company, if deemed necessary by the Board of
Managers, may include a chairman, president, vice president, secretary, and
chief financial officer. The officers shall serve at the pleasure of the Board
of Managers, subject to all rights, if any, of an officer under any contract of
employment. Any individual may hold any number of offices. No officer need be
a resident of the State of California or citizen of the United States. If a
Manager is not an individual, such Manager's officers may serve as officers of
the Company if elected by the Board of Managers. The officers shall exercise
such powers and perform such duties as shall be determined from time to time by
the Board of Managers.
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5.9 SIGNING AUTHORITY OF MANAGER/OFFICERS. Subject to SECTION 5.3(b) and
any restrictions imposed by the Members or the Board of Managers, any Manager
(or officer if authorized by the Board of Managers), acting alone, is authorized
to endorse checks, drafts, and other evidences of indebtedness made payable to
the order of the Company, but only for the purpose of deposit into the Company's
accounts. All checks, drafts, and other instruments obligating the Company to
pay money in an amount of less than $5,000 may be signed by any one Manager (or
authorized officer), acting alone. All checks, drafts, and other instruments
obligating the Company to pay money in an amount of $5,000 or more must be
signed on behalf of the Company by any two Managers (or authorized officers)
acting together. Any two Managers (or authorized officers) acting together,
shall be authorized to sign contracts and obligations on behalf of the Company.
Notwithstanding the above, however, when the signature of two managers is
required, this Section 5.9 is not satisfied if the only two managers signing the
document are both RSS Managers or both Premier Managers.
5.10 REGULATORY MATTERS. The Board of Managers shall keep each Member
apprised of all developments relating to federal, state or local regulatory
matters affecting the Company's business, including but not limited to inquiries
made by, or correspondence received from or directed to, any regulatory agency.
Notwithstanding any power or authority granted to the Board of Managers herein,
the Board of Managers shall follow Premier's direction in connection with all
such regulatory matters unless such direction would result in a violation of the
law and any Member or Manager presents a legal opinion from counsel to that
effect.
5.11 LIMITED LIABILITY. No person who is a Manager and/or officer of the
Company shall be personally liable under any judgment of a court, or in any
other manner, for any debt, obligation, or liability of the Company, whether
that liability or obligation arises in contract, tort, or otherwise, solely by
reason of being a Manager and/or officer of the Company. A
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Manager or officer shall not be liable to the Company or to any Member for
any loss or damage sustained by the Company or any Member, unless the loss or
damage shall have been the result of fraud, deceit, gross negligence,
reckless or intentional misconduct, or a knowing violation of law by the
Manager or officer.
5.12 INDEMNIFICATION OF MANAGER; INSURANCE. The Company shall, to the
fullest extent permitted by applicable law from time to time, indemnify, save
harmless, and pay all judgments and claims against any Manager or officer
relating to any liability or damage incurred by reason of any act performed or
omitted to be performed by such Manager or officer in connection with the
business of the Company, including attorneys' fees incurred by the Manager or
officer in connection with the defense of any action based on any such act or
omission, which attorneys' fees may be paid as incurred; provided, however, that
a Manager or officer shall not be indemnified from any liability for fraud, bad
faith, willful misconduct or violation of the terms of this Agreement. The
Company shall obtain and maintain product liability and directors' and officers'
insurance in amounts and with insurance companies satisfactory to Premier.
ARTICLE 6
TRANSFERS OF INTERESTS
6.1 LIMITATION ON TRANSFER. Except as otherwise expressly provided
below, a Member shall not sell, assign, mortgage, pledge or otherwise
transfer (collectively, "TRANSFER") all or any part of such Member's
membership interest in the Company, nor shall any Member suffer or permit any
third party to Transfer such Member's membership interest in the Company,
without the prior written consent of all Members, which consent may be
withheld for any reason or for no reason; and any purported Transfer of a
Member's membership interest in the Company without such prior consent shall
be void and of no effect against the Company, any
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other Member, any creditor of the Company, or any claimant against the
Company. If the required prior consent to any such Transfer is obtained as
above provided, the transferee shall be admitted to the Company as a
substituted Member provided that the following conditions are complied with:
(a) The other Members shall approve of the form and content of the
instrument of assignment;
(b) The transferring Member and such transferee shall execute and
acknowledge such other instrument or instruments as the other Members may
deem necessary or desirable to effectuate such admission;
(c) Such transferee shall in writing accept, adopt and agree to be
bound by all of the terms and provisions of this Agreement; and
(d) The transferring Member or such transferee shall pay or agree to
pay, as the other Members may determine, all reasonable expenses connected
with such admission, including, but not limited to, legal fees and costs.
The giving of such consent in any one or more instances shall not limit or waive
the need for such consent in any other or subsequent instances.
6.2 PERMITTED TRANSFERS. The foregoing notwithstanding, the restrictions
of this ARTICLE 6 shall not apply to:
(a) A Transfer of a Member's membership interest in the Company by
will or by intestacy, or by a Transfer to a trustee or trustees of a trust
revocable by the Member and under which the Member has a significant
beneficial interest, or to a Member's immediate family (defined as the
husband, wife, adult child, father, mother or adult grandchild of the
Member, trustees for any of the foregoing, or trustees for minor lineal
issue of the Member); or
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(b) A Transfer of a membership interest in the Company held by a
Member which is a corporation, partnership, trust or other entity which
Transfer is a result of the dissolution or termination of such entity;
provided, however, that before any such transferee shall be admitted to the
Company as a substituted Member, such transferee must in writing accept, adopt
and agree to be bound by all of the terms and provisions of this Agreement.
6.3 ASSIGNEE. An assignee who has acquired a beneficial interest in this
Company from a Member but who has not become a substituted Member in accordance
with the provisions of SECTIONS 6.1 OR 6.2 above shall have no right to require
any information on account of Company transactions, to inspect the Company
books, or to vote on any of the matters to which the transferor Member would be
entitled to vote pursuant to this Agreement. An Assignee shall be entitled to
only receive the share of distributions to which such transferor Member would
otherwise be entitled.
6.4 RIGHT OF FIRST REFUSAL. Each time a Member proposes to transfer all
or any part of its membership interest (or as required by operation of law or
other involuntary transfer to do so) other than pursuant to SECTION 6.2, such
Member shall first offer such membership interest to the Company and the
non-transferring Members in accordance with the following provisions:
(a) Such Member shall deliver a written notice ("OPTION NOTICE") to
the Company and the other Members stating such Member's bona fide intention
to transfer such membership interest, the membership interest to be
transferred, the purchase price and terms of payment for which the Member
proposes to transfer such membership interest and the name and address of
the proposed transferee.
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(b) Within thirty (30) days after receipt of the Option Notice, the
Company shall have the right, but not the obligation, to elect to purchase
all or any part of the membership interest upon the price and terms of
payment designated in the Option Notice. If the Option Notice provides for
the payment of non-cash consideration, the Company may elect to pay the
consideration in cash equal to the good faith estimate of the present fair
market value of the non-cash consideration offered as determined by the
Board of Managers. If the Company exercises such right within such thirty
(30) day period, the Board of Managers shall give written notice of that
fact to the transferring and non-transferring Members.
(c) If the Company fails to elect to purchase the entire membership
interest proposed to be transferred within the thirty (30) day period
described in SECTION 6.4(b), the non-transferring Members shall have the
right, but not the obligation, to elect to purchase any remaining share of
such membership interest upon the price and terms of payment designated in
the Option Notice. If the Option Notice provides for the payment of
non-cash consideration, such purchasing Members each may elect to pay the
consideration in cash equal to the good faith estimate of the present fair
market value of the non-cash consideration offered as determined by the
Board of Managers. Within sixty (60) days after receipt of the Option
Notice, each non-transferring Member shall notify the Board of Managers in
writing of his desire to purchase a portion of the membership interest
proposed to be so transferred. The failure of any Member to submit a
notice within the applicable period shall constitute an election on the
part of that Member not to purchase any of the membership interest which
may be so transferred. Each Member so electing to purchase shall be
entitled to purchase a portion of such membership interest in the same
proportion that the Percentage Interest of such Member
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bears to the aggregate of the Percentage Interests of all of the Members
electing to so purchase the membership interest being transferred. In the
event any Member elects to purchase none or less than all of his pro rata
share of such membership interest, then the other Members can elect to
purchase more than their pro rata share.
(d) If the Company and the other Members elect to purchase or obtain
all of the membership interest designated in the Option Notice, then the
closing of such purchase shall occur within ninety (90) days after receipt
of such notice and the transferring Member, the Company and/or the other
Members shall execute such documents and instruments and make such
deliveries as may be reasonably required to consummate such purchase.
(e) If the Company and the other Members elect not to purchase or
obtain, or default in their obligation to purchase or obtain, all of the
membership interest designated in the Option Notice, then the transferring
Member shall not be obligated hereunder to sell to the Company and the
other Members any portion of the membership interest proposed to be
transferred, but instead may proceed with the transfer described in the
Option Notice, providing such transfer is completed within thirty (30) days
after the expiration of the Company's and the other Members' right to
purchase such membership interest, is made on terms no less favorable to
the transferring Member than as designated in the Option Notice, and
complies with SECTION 6.1 relating to unanimous consent of Members. If
such membership interest is not so transferred, the transferring Member
must give notice in accordance with this Section prior to any other or
subsequent transfer of such membership interest.
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ARTICLE 7
DISSOCIATION OF A MEMBER
7.1 DISSOCIATION. A Member shall cease to be a Member upon the
occurrence of any of the following events:
(a) the death of the Member;
(b) the retirement or withdrawal of the Member;
(c) the bankruptcy of the Member; and
(d) if the Member is an entity other than a natural person, the
dissolution, termination or commencement of winding up of the Member.
7.1 RIGHTS OF DISSOCIATING MEMBER. If any Member dissociates from the
Company prior to the latest date on which the Company is to dissolve as
specified in its Articles of Organization:
(a) If the dissociation causes a dissolution and winding up of the
Company under ARTICLE 8 hereof, the Member (or his or her estate) shall be
entitled to participate in the winding up of the Company as would any other
Member, except that if the dissociation is the result of the retirement,
withdrawal or bankruptcy of the Member (and for this purpose, the
revocation of any Member which is a revocable trust shall be deemed to be
the withdrawal of such Member), any distributions to which the dissociating
Member would have been entitled shall be reduced by any damages sustained
by the Company as a result of the dissolution and winding up; and
(b) If the dissociation does not cause a dissolution and winding up
of the Company under ARTICLE 8 hereof, the business of the Company shall
continue without interruption and without any break in continuity, and the
other Members shall continue to conduct the business of the Company under
the terms of this Agreement with any
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successor or transferee of such former Member who shall be bound by the
provisions of this Agreement, but who shall not be entitled to participate
in the management or affairs of the Company or to exercise any rights of
a Member unless such successor or transferee has been admitted as a
substituted Member of the Company in accordance with the provisions of
ARTICLE 6 hereof.
ARTICLE 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 EVENTS CAUSING DISSOLUTION. The Company shall be dissolved
and wound up upon the first to occur of any of the following events:
(a) The latest date on which the Company is to dissolve as specified
in its Articles of Organization;
(b) The election by Members then owning more than fifty percent (50%)
of the Percentage Interests in the Company to dissolve the Company;
(c) The death, retirement, withdrawal, bankruptcy or expulsion of a
Member unless, within ninety (90) days after the occurrence of such event,
other Members then owning more than fifty percent (50%) of the Percentage
Interests in the Company vote to continue the Company business, in which
event the business shall continue without interruption and without any
break in continuity;
(d) The entry of a decree of dissolution; or
(e) Any event which causes there to be only one Member.
8.2 WINDING UP. Upon dissolution of the Company, the Company shall wind
up its affairs promptly, in accordance with the direction of the Board of
Managers (or such other person elected by the Members to perform such duties).
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8.3 LIQUIDATING DISTRIBUTIONS. Any monies or property (other than money)
then held by the Company shall be applied or distributed in one or more
installments in the following order of priority:
(a) First, to the payment and discharge of all of the Company's debts
and liabilities, other than debts to Members and transferable debts secured
by Company property;
(b) Second, to the payment and discharge of any loans or advances
made by Members to the Company and all expenses, including attorneys' fees,
incurred by the Members in connection with the winding up and liquidation
of the Company; then
(c) The balance, if any, to the Members in accordance with the
positive balances in their respective capital accounts after giving effect
to all contributions, distributions and allocations for all periods.
If the Board of Managers so determines, a pro rata portion of the distributions
that would otherwise be made to the Members pursuant to this SECTION 8.3 may be:
(i) distributed to a trust established for the benefit of
the Members for the purpose of liquidating Company assets, collecting
amounts owed to the Company, and paying any contingent or unforeseen
liabilities or obligations of the Company. The assets of any such
trust shall be distributed to the Members from time to time in the
same proportions as the amount distributed to such trust by the
Company would otherwise have been distributed to the Members pursuant
to this Agreement;
(ii) withheld to provide a reasonable reserve for Company
liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment
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obligations owed the Company, provided that such withheld amounts
shall be distributed to the Members as soon as practicable.
ARTICLE 9
MISCELLANEOUS
9.1 NOTICES. Notices given under this Agreement shall be in writing and
shall either be served personally or delivered by first class registered or
certified, return receipt requested U.S. mail, postage prepaid. Notices may
also effectively be given by transmittal over electronic transmitting devices
such as Telex, facsimile or telecopy machine, if the party to whom the notice
is being sent has such a device in its office, provided a complete copy of
any notice so transmitted shall also be mailed in the same manner as required
for a mailed notice. Notices shall be deemed received at the earlier of
actual receipt or three (3) days following deposit in U.S. mail, postage
prepaid. Notices shall be directed to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and to the Members at the addresses shown
in SECTION 2.1 hereof, provided that a Member may change such Member's
address for notice by giving written notice to all other Members in
accordance with this Section.
9.2 CAPTIONS. Any titles or captions of Articles or Sections contained in
this Agreement are for convenience only and shall not be deemed part of the
context of this Agreement.
9.3 SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.
9.4 GENDER; NUMBER. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identification of the individual
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or entity may require. The use of the singular includes the plural, and the
use of the plural includes the singular, wherever the context thereof may
require.
9.5 SUCCESSORS. Except as otherwise herein provided, this Agreement shall
be binding upon and inure to the benefit of the parties hereto, their heirs,
executors, administrators, successors and all individuals or entities hereafter
having or holding an interest in the Company, whether as assignees, substituted
Members, or otherwise.
9.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
understanding between the parties and supersedes any prior understandings and
agreements between them respecting the within subject matter. No amendment,
alteration or modification of this Agreement shall be binding unless in writing
and signed by all of the Members.
9.7 COUNTERPART EXECUTION. This Agreement may be executed in any number
of counterparts with the same effect as if all of the Members had signed the
same document. All counterparts shall be construed together and shall
constitute one agreement.
9.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California and, unless expressly or by
necessary implication contravened by any provision hereof, the provisions of the
Act shall apply.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the day
and year first above written.
PREMIER LASER SYSTEMS, INC.,
a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
RSS, LLC, a Kansas
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its: President
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