Case No. V-N-06-056
2* JUD CIAL DISTRICT COURT OF NEVADA,
COIJNTY OF W ASHOE,
j
 
PLTF: ETREPPID TECH. INfI. PATY: J. Stephen Peek
DEFT: DENNIS M O NTG OM ERY, ETAL. DATY: ltoaald Joka Logar
case No: CV06-00114 Dept. No: 9 ('
2lcrk: G. Bartlett Date: 2/7/06
Exbibit Ne. Party Description M arked Offered Admitted
.
warehouse
,
Amended and Restated
Operating Agreement of 
,
'
'
and Restatcd Operating
Technologies, LI-C.
Assignment of U.S. Origin
Pltft 3/7/02
'
Pltf. 1/24/0
Pltf. 6/12/01
 
.
PLH7: ETREPPID TECH, INC. PATY: .J. Stephen Peek
DEFT: DENNIS M O NTGO M ERY, ETAL. DATY: Ronald John Logar
Case No: CV06-00114 Dept. N o: 9 Clerk: G. Bartlett Date: 2/7/06
Exhibit No. Party Description M arked Offered Admitted
Assignment of U.S. Origin
Pltf. 1/24/02
Pltf 1/24/02
Pltf. 1/24/02
Pltf. 1/24/02
Pltf 3/20/0 l
Pltf. 1/24/02
Pltf. 1/24/02
18 of om ssoy ott and 2/706 o bj. 2/706
Deft. Security Agreement
Critical Care Labomtory
Deft. User guide
.
Deû. Congress lnformation Center
 
.
PLTF: ETREPPID TECH, IN C. PATY: J. Stephen Peek
DEFT: DENN IS M O NTGOM ERY, ETAL. DATY: Ronald John Logar
Case No: CV06-00114 Dept. No: 9 Clerk: G. Bartlett Date: 2/7/06
Exhibit No. Party Ilescription M arked Offered Admitted
-
22 2/7/06 No obj. 2/7/06
efl. of $975,000.29
Pltf. for Hewlett Packard
Copy of United States
Copyright form for Cortex
ource Code for IBM
 
.
r- m = <
 
OPERATING AGREEMENT
'
 
'
.
INTREPID TECHNOLOGIES. LLC
THIS OPERATING AGREEMENT is rmade and entereö into and effedive as of SEPTEMBERZ8, 1998,
by and be-een FRIENDLY CAPITAL M RTNERS, L.P., a Califomia limited partnerahip (TCPILPJ);
WARREN TREPP, ms Tnzstee of THE FREMONT TRUST, DATED MAY 16, 1994, a Nevada reva ble trust
CFREM- O-NT TRUST@I; aad DENNIS MONTGOMERY and BRENDA K. MONTGOMERY, as Co--rrultee:
of th* MONTGOMERY FAMILY TRUGT, a California revocable trust CMONTGOMERY FRUST'). This
D reement is made w111 refefence to the following facts:
STATEMENTS OF FACT:
A. Douplas . Flye, an individual, executedp acknowledged and filed. as the Organizer, Articlqs
of Organization wlth the Nevada SK retafy of Stale on SEPTEMBER 28, 1998. for the forrnation of *INTREPID
TECHNOLOGIES, LLC@ pursuant to ihe applicable proviqions of the NRS (as çletine herein).
B. FCP/LPI FREMONT m OST and MONTGOMERY TRUST, as Members of the LLC (as detined
-
the Manager, and the Membefl, resactively, of the LLC.
NDW, THEREFORE, ln oonside'ration of the foregoing premises @rld the mulual covenants and
çonditions conhined heereiflp and wit: tlw intention of being legally bound hereby, the padies hereto
agree a/ follou ;
DEFINITIONS
G cept aa omerwtse separately depned elsewhere in tlll: e reernent, follcwing are the terfns aad
meaning; as used mrouqhout this Agreement
1.1 'Adiusted Caoital Accourlt Defidte Iœ ans wkh resped t: any Membec the dejcit balAnce.
if any, in such Membe s Caplta Account as of the end of he relevant Fiseal Year, after çlving effed to the
foll4zwïng adju:tments:
1.1.1 lncfease such Capiial Acoount by any amounts Which sucll Member ls Qbligated to
conbibute lo lhe LLC (pursuant to the terms of thls & reement or otherwiqe) chr is deemed to be obligae to
ctmtribute to the LLC pursuant to Regulations Sectlons 1.;04Q(g)(1) and 1.7(14Q(i)(5)' and
1.f .2 Ncxduce such Capital Accourlt by tlle amtmnt of the 1te.111: desclibed in Regulations
Gebe ns 1.7>-1(b)(2)(ll)(4)(4)j (5) and (6).
1.2 fAfflllate' meanv, when used with feference to a specified Person, (i) the Priûdpal of Ke
PerKn. (i) any Peerxpn directly er Inöirpctly controlling, controlled by or under Ommon control wb such
Pelon, (iii) an# Persoq owftlfïg of eontrôlling TEN PERCENT (10%) or more of the ovtstanding voling
Interesl of such Person, and (Iv) any relative or spœse of sud) Persoft .
G'txxm foqMrlreem hec
 
Ju..22. 2000 i:0l?k Lcrlsl's J. Fryg, Eî1. 89.7217 p. 2
Y A w .
'
' 1.3 *AnrAernent* means this Opefaing Agreement of the LLC, as origioally executed and as
amended from time to tirne hereaftef. as the context requirea. Words such as eherein,' ghefeinafteq' *hereto.*
lhereby, and uhereundec, when used with reference tû tbis Agreement, refer to this Agreement as a whole,
1.4 dArticles of Orqanization' means the Adicles of Orgaqization (which includes a desigpation .
of (esldent agent fQr service of process) filed with the Secretary of State of the State of Nevada on
SEPTFMBER 28, 199:, Flllng No. (.1-C-5563-9$, for the purpose of forming the LLC.
1.5 *Available Cash Flow' means. with respect to any Fiso l Year or other period. the sum of a11
cash feceeipts of the Lt.C from any and aII sourraes, Ieso all cash disbursements (tncluding loan repaymenll
capital jmprovefnents and replacemcnls) and a reasonable ajlowance for Resemesv contingencins and
antlcipated obligations as detemjned by the Management Committee.
1.6 'Book Depreciation. means for eac: Flscal Year ot other period, aa amount equal to the
-
income tik purKs- at the b% inning of such year or Qther period, Mbook depreciation* with respect to sucll
asset shafl be an amcunt wlllcà bears the same ratio tc stlch begifm ing Clrlws Asset Valtle as tlle
Depreciation with respeeet to such asset for such year or other period bears to such beginning adjtwted tax
basls. Howeveq if the fedefal inœ me tax Depreciatiœ wlQ1 ruped to such asset fchr stlch year is Vero,' lm k
depredatfon shal be dete> ned with reference to sucll begianing Gross Asset Value using any reasonab e
method selected by the LLC.
1.T œ usiness* or œ uglness of the LLC, means the busîness of tl)e LLC as defined in Sectiofl
2.T hereof.
1.8 *caoital Aceount. of a Member shall have the meaniqg set fo& fn Sedion 3.4 hereof and
shall be determined In accordance witb Section 3.5 hereof.
1.9 *caD'tal Contributionf shall have the meanlng set forth ln Section 3.6.1 hereof.
1.10 *Code* means the Internal Revenue Code of 1986, as arnended. or any corresponding
provision or provlslons of any K cced lng Iaw.
1.11 Xommlttee Mêmberlgp rimans one of three (3) Persons apmintad W the Membem to serve
on the Management Cornmxee puluant to Secton 6.1.4 of thls Agreement The Committee Members ehall
at ad times ud colledively as the Manaqement Committee, which shall be charged with timse powers, dutles
and fespoflsibilities as xt fortb in Article 6 aqd elsewhere In thl: Agreement
1.12 'Denfetlatlorl/ mealti for each Fiscal Year or othêr pûfie , an glnoklnt mtlai tô thb
depredatiO , alntlfoa:tm or oMer oost felxwefy redl#r.bn a apt- ble with fespect to an a% et Ior sucb Rscal
Year or other period.
/.13 'D-ssoltdion' rlw-lns (p when tlsed wb f'eference to fhe LLC, the eadierof (a) tlle date llplm
whlc,h the LLC Is tennlnated under the NRS, of any similaf pfovislon enaded ln Iieu therell or (b) the date
' upon whle me LLC œase: to be : gting concern, and (Ii) when used with reference to any Member, the
earker oflal tf:e date vmn whlc.h there is a Dlssolution of tfle LLC ortb) tl:e date upon which guch Mefnbgr's
endre Interest In the LLC Is terminated W mearls of a distn-bution or serie,s of distn-butions by the LLC to suoh
Member.
'
1.14 *Fconomic lnte- t' means a Person's fiûht to share in the Net Pfusts, Net Lox e: Qr similar
ltetrkl of, artd to œceive distributions from the LLC but does not include any other rights of a Member
ê 1
lntzlndlng, wlthout Ilmltatlon' the rlgllt to Mo% or to palcipate in the management Qf the Buslness and the
 (  J''  G eeiame AGRSEM- - e
e'rreppid (,109
 
t
.
'
'
affaiœ of llle LLC, or, except any information avaikable for iospection by a Member pursuant to NRS 86.241,
any fight to information concerning the Business of the LLC.
1.15 JF-SO I Year means the fiscal year of the LLC. running for the period of JANUARY 1 to and
including DFCFMBER 31 of each calendar yaar.
1.16 ëG'OSS Asset Valuef means, with resped to any amset of the LLCI the asset's adjusted basis
for federal Income tax purposes, except as follows:
1.16, 1 The dn:al Gross Asset Value of an? asset contributed by a Member to the LLC shall
be the gross fair market valtle of such asset, as agreed beiween the LLC and the contributjng Member.
'
gross fair rnarket values, as mutually agreed between the LLC and the affeded Memberts) upon the
occurrenoe of the following events:
1.16.2.1 The acquisition of an additional Interest in the LLC W any n w or existing
Mem* r in exchange for more than a k m/nfmf.s Capital Contribution'
1-16.2.2 n e ditribution by the LLC to a Member of more than a #.q mlnimis amount
of cu h or property as considefation for the acquisition of a1I or a portbn of surh Member's Interest in the LLC
if th@ LLC reasonably determlne.s that such adjustment is necessary or appropriate to Ipflect the relative
ectmomiç @terests of the Members in the LLQ and
.
1 (1,)(: ) jj)(());
1.16.3 The Gross AM etvalue of any LLC arssetdistributed to any Memt)e.r shall ix the gross
falr market value of such asset as mutually agfeed by the LLC and the affected Memberts) on the date of
distribution.
1.16.4 The Gross M set Value ot the LLC assets shali be lncreased (or decreased) to reflect
any adltlstfnents ttl the aIICI:G basis of such auets pqfsuant to Code section 734(b) orcode section 743:),
but Qnly to tbe vxtent latsuc.h adjustrnenks are taken into acoxnt in dalermlnirlg Capital Acctmnl pursklant
Rœtllatbns S* n 1.704d(b)(2Xiv)(m) and Sedion 4.9 hereol provided, however, that Grckss Mset Value
shall not be adjùsted ptlrsuant to this Sedion 1.16.4 to the extent the LLC determines that an adjusbrznt
pursuant to Section 1.16.2 above îs neoessary or appropriate in coqnection .1t11 the transaction that woqld
otherwlse result n an adjustment under thls Sectlon 1.16.4.
lf the Gross M set Vatue of an asset has been determined or adjusted pursuant tn
Sections 1.16.1, 1.16.2 or 1.16.4 above, such Gross M set Value shall thereafter be adjusted by the Book
Depreclation taken Into account *1t11 respqct to such asxt for pulm ses of Kmputng prplts and 10% e.:.
'
above are unable to agree on ttle Grou M setvalue of any asset for purpose: of this R reement' a mutually
ar- ptable appralser qhall be eelde d by them for this pulw x , and Qle value qstablished by stlch appraisal
e all be blnding Qpon Qw LLG and the affected Member.
1.1-/ A uaranteed pavmente ttas tlle meanlng set forth In Sectbn 6.6.2 of this Agreement
1.18 'LLC, or X ornoanve means INTREPiD TECHNOLOGIES, LLC, the Nevada limited-liability
x mpany formed pursuant to the ArtlGles of Organizafon.
œ T r ef xoloReeME -pe
e'rreppid ()1la
 
'w-e hw
1.19 'LLC Interestf or @lnterest@ means an owneohip (nterest in tkle LLC, wllich includes the
Em nomic Interest, the right to Vete or participate in the management of the LLC, and the right to Information
ceoncrerning the affairs and Business of the LLC as providej in this Agreement and tlnder tbe NRS.
1.20 MLLC Loans. shatl referto any Ioans, lines of crtxdit or advances made by any Member to the
LLC pufsuant to tbis Agreement, or at a Member's option, without obligatjon to so do. to the extent the LLC
does not have stlfficient resourcea (assez, bcrrowings of othefwise) to meqt its LLC obltgations. Except as
otherwise specified ln this Agreement such LLC Loans shall bear interest at the rate agreed to between the
Member and tlle Management Commlttee.
1.21 ILLC Minimum Gain' means the amotlnt determ ned by computing with resped to each
nonrecourse kabil'ty of the LLC, the amount of gain (of whatever charader). if any, that would be realized by
the LLC if it disposed (in a taxable tcansactioq) of the Property subjed to such Iiability in full satisfaçtion
thereofj and by then aggregatng the amounts so comptlted as set fcdh in Regulatfons Section 1.704-2(d).
4.22 .- *Ma'on'h ln Interesr orrMaiority in Interest of the Members-.means a Member.or Members -. --- -- .
wbose Perœ ntage lnterestts) represent more than FIFIY PERCENT (50%) of the Percentage lnteres? Qf
alI Membeœ.
1.23 *Manaaement Committee. meansr collec*ely, the three (3) Committee Members apminted '
by the MemM rs to manage eie LLC pufsuantto Sectitm 6.1 of this Agreernent acting togetberto manage the
LLC In e nrdanoe witll the terms and conditions of this Agree ent. The Management Committee shall be
charged with those powers. duties and responsibiltties as set forth in Alticle 6 and elsewhere in this
Agreement.
. 1.24 GMan4u@rd means the Person appolnted under Section 6.1 cf this Agreement to manaje the
LLC. The Managershall be charged w101 those powers, duties and responsibilitle.s as setfodh In M icle 6 and
elsewhere In lhis Agreement.
1.25 AMember NonYcourae Debt> has the rfleaning set 60*1 in Regulations Section 1.704-2(b)(4).
1.26 eMember Nonrecourse Debt Mlnimum Gaine means aq amount, with resped to each
Member Nonrecourr.e N bt, equal to the LtC Minimum Gain lhat would result ifsklch Member Nonrecourse
Debtwere treated as a noarecourse liabpity of the LLC. determined in accordance with Regulations Sections
1.704Q(i)(2) and (3).
1.2/ *Mem ber Nonrocourse tteduçtlqnsM tlas the meaning set forth in Regtllations Section
1.7G4Q(1)(2). n e amount of Member Nonrecourse Dedudons with resmd to a Mernber NtmrecourK Debt
fora FIMI Year of the LLG equals the exreeass (if apy) of the net incfease (if any) in tlle amount ol Member
Nonreoourse Debt Minlmum Galn attjbutable to such Membe.r Nonr/- lrse Debt durlng tlvt Fl= 1 Year over
the aggreate a= unt of any dlstrlbulons during that Fkscal Year to the Vember that bears (0r ls ieemed o
bear) the economk loss for :uch Member Nonramurse Debt ttl ttte extent suc.h dkstribution, are from the
s of such Member Nonrecouxe Debt and are alkm ble to an increase In Member Nonrecourse Debt
Minimum Gain attributable to such Member Nonrecourse Debt determlned IR aX ordanœ *1t11 Regulatbns
Secbtlon 1.704-2;)(2).
1.28 *Member means a Person who:
1.2:.1 Has been admltted to the LLC as a member in a= rdanœ with the M des of
Ofganization or this Agreement or an assignee of an lnterest other than an Eccnomio lnterest who has
become a Member pursuant to Sedion 9,3 hereof.
'
1.28.2 Has net re igned, ithdrawn or been expelled as a Member oq if other than an
indMdual. bee.rl dissolved.
1,zr46($::<> OPERAMNG M RCEMENI-PK: <
 
J2h.23. 2026 6:218k * ''NS J. Ff8', Esg. 80.7212 F. 6
Reference to a uMember' shall be to any one of the Members.
1.29 *Montqomqw Trust Contribution Aqrpementw shall have the meaqing set forth in Section
3.3, 1 ()1 thks Agreement.
1.30 MNet Proflttel/ and eNet Lossesteslp mean, fcr each Fiscal Year or otber period, an amount
equal to the LLC'S taxable Incorre or Ioss forslxh year or perlod, determined in accordance with Code sedion
703(a) (for this pufmscs aII Items of income, jain, loss or deductlon fequired to be Stated separately Pursuant
to Code sedion 703(a)(1) shall be incfuded ln taxable income or losslj Wfth tlle fotlowing adjustmenl:
1.3Q.1 Any income of the LLC lhat is eaempt from Federal incame tax aqd nototherwlse taken
into account in œ mputing Net Projts or Net Lnsses shall be added to such ta able income or loss;
1.30,2 Any expendihlre.s of thb LLC described in CYe sectien 705(b)(2)(B) ortreated as Gode
scction 705(bX2)(B) expendilures purvuant to Regulaens Section 1.;04-1(b)(2)(iv)(i) and nototherwi,x uken
. - . . . . . - .
lt1
t; accctlrlt in O mputing Net Profits or Net Lossas shall be subtraded fro.m stlcll tayableinçj'mp-tzr-O ' . . . .
1.3Q,3 Galn orloss resulting frcm any disposiion of Pfoperty with resped towhkh gain or loss
is recognized for Fe eral ipcome tax purposes shall be cornputed by r:fefence to the fair market value Qf the
PlDperly dism sed Qf, notwithA nding that me adjusted tax basis of such Propedy diffefs frofn its fair market
value'
1.30.4 In lietl o depreciation, amoftizatbn, nd other coxst recovely dedtlctitms lakea lnto
armount in comptlting xuch texable inœ me or loss, there shall be taken Into account Depreciation for such
Fiscal Year or other periœ , compklted in accordance with thQ subsecfon herepf entitled gDepreclationx; and
1.30.5 Notwtthstanding any other pfovision of ihis subsection. any items of inc me. gain. Ioss
Qr deductîon which are speciEœ lly allocated shalt not be taten lnto accunt in O mputing Net Profts or Net
L(zsR :. '
1.31 -NRS* means Chapter 86, Sedions 86.011 to 86571, of the Nevada Revised Statutes, as
amended, or any O rresm nding provision or provlsions Qf any succeeding Iaw.
1.32 Y @rcentaqe Interesttslw means the percet% ge lnterest of each Member as set fodh in
EXHIBIT A attachd here* and mede a part of this Agreement.
1.33 'Person* means an individual partnership. Iimite padnee ip. corpocatiorl, trust, estate,
arysoelationf Iimited-llabllls oompany, or olhef enbty , vzhether domestic or forelgn.
1.34 *princioal* means the Person which Is in ultimate cfmtrpl Qf a Member.
1.35 epfpo*d< rneans all orany personal pœpedy and otll*rassets of the LLC, botll tangible anJ
lntangiblel or any podion thereof.
1.36 eReaulationl' means the federal income tax f% tllatiotts promtllgated by the 'rreasury
Depatment underthe Cmde, as such regulations may be amended ffom lifne to Qme. Al referencN herein
lo a Bpedfk sed n of the Regulations shall be deemed also to refer to any corœsm nding provisfons of
succeeding Regulations.
1.37 KReselvesw means funds set aside from œ pital Contribtltiens or gross eeash revenue.s as
M eNes. Guch Resefve.s shall be maintained k) arnounl ly deele aufsclent by the Management
G mmittee for Wûrking capital and the payment of taxes, insucance, debt service, repaio, replacemenY
reneWals, ()r dher C'osh Or exe se. inœ eflt to the Businass of ihe LLC, orin the alternativo, Qle Die lutbn
of the LLC.
2(Y 1'NK$
 
J2q.22. 2006 6:0l8k O ''7'ls J. Fryi, ESq. -' hC'/2 S q. I
t
'
1.38 *secretafv of Statev means thQ Secretary of Statê of tha Stte Qf Nevada.
1.39 *vote@ means, exceptwhere superseded W anothersection of this Agreement, of as may be
rm uired underte applicable pr isions of the NRS the Code orappliœ ble Rc ulations thelvunder, the votes
of the Mem%rs, whemerby ballot written consent of a voice vote, wherein each Member shall have and cast
a number of votes equal to tàmt Membe/s Percentage lnterest
ARTICL6 2
INTRODUCTORY MAU ERS
2.1 Formation of the LLC. The parties have formed the LtC pursuant to Eections 86.151 and
86.201.1 of the NRS by executing, acknowledging and filing the Articles of Organization with the Secretary
. . - - - . . .- - - . - . -
Reilanatlon of Ofoanizer.. The padies ta lhis Agreement acknowledge-and agae that . - .
DOUGLAS J. FRYE, an Indtvldual, acted as the organizef of the LLC solely forthe purpose of filing the M icles
of Oqanization wilh the Socretary of State as described herein and that, immediately upon tlle adoption and
execufon of *is Asreefnent by it% Members the ofganizer shall be deemed to have akltomatically = igned,
without notiœ and withotlt liability or obligation Qf any klnd to the LLC or its MembeM. Accordingly. the parties
to thls Agreement hereby acknowledge and affirm a1I actions heretofore taken on behalf of the LLC by said .
organizer.
2.3 Name. The name of the LLC is .INTRFPID TECHNOLOGIES, LLC-' The Members shall
operate the Bualness of the LLC under such name or use such other or qddititmal names as the Members
' may deem nlvnRmnry or desirable provided a I such name of narres shail be in compliance with the NRS and
other applic ble laws.
2.4 Princioal Business Omce. n e LLC shall rnplntain its principa busineess offlce at 685 GARY
COURT, INCUNE VILLAGE, NEVADA 89451, with a mailing address of P,O. BOX 4964, INCLINE VILLAGE.
NW ADA :9450, or any ether Iocatlon as determined from time to tlme by the Management Colnmlttee.
2.5 Resldent Aoent' R/nlstered Office. n e name and address of the LLC'S resident agent upon
whom process may l)e servedl or a notce or demand authorized by law to be setved upon the LLC may be
sefved, is GKL STATUTORY AGENT & FILING SERVICES INC., a Nevada cofporationl whoso street
address in Nevada is 1100 EAST W ILLIAM STREET, SUITE 207. CARSON CITY, NF ADA 89701, and
whose rnallng address js F.O. BOX 3579, CAHSON CITY. NEVADA 89702 n e regisu ofsce of tbe LLC
.
the Secretary of State In the form and maflner required W such ofke.
2,6 Pvaetual Exltence. As set fodh ln tlle Arllcles of Orgaakatfon of the LLC, tlle LLC shall
have Pelm tual exi:tence, until the LLC ls lerminated Qr dlssolvet in aov dance wlth this K reement. The
existenœ of thq LLC xhall m mmence as of the effective date of this Agreement, SEPTEMBER 28, 1998.
2.7 Purpos* and Btlslness of th: LLC. The purpose and buslness of the LLC shall be to
devdop, mtens diseibute, licenr.e and explo: in any rnanner and œn a woddwide bms: that cerzln K ftware
km tedmoY contrilxlted by the Montgofnery Trustto, and n- f-ned by. the LLC pufsuantto the
tefln: and Knditims of aad as ftwre parkularty dezezibed In me Montgomery Tlust Cm tribuKon & reernent
.
tLC may or engqge ln any otherlawfal adivi:e.s whie lhe LLC dee= is neœ sx ry, Incidental to or
demirpblp in cm neclion witb te Business of the LLC.
ZT( ) PEBA EEMENT. Pa& j ql.el)p
- 1m )1
 
J8h,22. 2006 012282 O 'E.n J. Fr8p,ESC. 80,7213 @. @
2.8 Ho lndlvldual Authoritv of a Member or Committee Member. No Memberor Committee
Member, ading alone or with the Manager, any other Committee Member efficer or other non-manager
Membeq shall have the aklthodty to act for, or to untedake or assurne, any obligation, debt, duty or
responsibil'ly on behalr of tlhe LLC.
2.9 T-le to Prooertv In the Name of the LLC. Al Properiy cwnûd by the LLC shall be held and
owned arld conveyance made in me name of the LLC, AIl agreements. dctuments, certificates and other
lnstruments providing for the amuisitfon oromer ism stion of Property of the LLC shall be valid and binding
upon it, except as otherwise plw ided herein. if approved by the Management Committee and executed by
the President of the LLC as provided for herein.
2.10 Malntenance of companv Minute Book: Record Keepin;l D.u-
ti
l . The Manager (or the
Secrelfy, if one is apm inted by the Management Cemmitteel.shafl keep aad maintairl er cavse to be kept
and maintalned a comeny mlnute Nhok to include Ihe M icles of Organization cf the LLC and this M reefrKmt,
and any amendments thereto, and mlnutes of aII meetings (or ctlnsents in Iieu of meetings) of the
MaaagRmept Committee, written consents of the Members, and otber impodaot docvmenl of the LLC.
ARTICLE 3
MEMBERS AND CAPJAL CONTRIBUT IO..NS
3.1 Namq: and Addreeaea of the Members. The initial Members of the LLC are FCP/LP,
FREMONT TRUST and MONTGOMERY TRUST. The complete names and addreyses of the Members of
the LLC are set fOI'M on F-XHIBIT A attached hereto and made a part of thi: Agreement, whdch exhlbit may
be amended or rnodified from titne to time.
3.2 Member Canjul Contrlbutlons. Immediately tollowing the execution of this Agreement, the
Mernbefs shall make or k)e obligated to make the Capital Contributions to tlle LLC as set forth in Section 3.3
bel- . AII Caphl ontributbns of the gembers shall be set forth on EXHIBIT A attached hereto and made
a pad of this N reemenk which exhibit may be amended or modified from time to time. lf the Member Qils
to rnalçe the lnitlal Capttal œ ntrlbutions as specified in Section 3.3wIthIn thlrty (30) days after the effective
date of this Agreenxnt, then that Member's enfre Membemhlp lnterest shall terminate and *at Member shall
lndemnify and hold tl:e LLC and alI of the other Membefs harrnleu from arky loss, cost or expense, including
reasonable attorneys' fees and cosks, caused by the failure to maRe such lnitial Capltal Contribution.
3.3 Pavmentn rms of Membersf Caoital Contribtltitms..
3.3.1 FCPJLP'S capital contribution. FCPA.P shall makeacapital Centdbutkm to Q)/ LLC
ln casll in the mazmum aggregate ax unt of up to Nine Hundred Seventy-Five n ousand Dollars
($975,000.00). of whle Eighty ncusand Dollars ($80.000,00) has IXe,I previœsly advanced by it in
furtheranœ of the LtC's Bqsineqs, and the balance Qf up to Eight Hundred Nlnety-Five ThouO nd Dollars
($895,000.X) shall be contributed and gaid by FCP/LP to the LLC from time to time upal writtep reqklest W
the Management Committee and in aooordance 101 any Approved Budget (as defined in Sedkm .2.3
hereot).
3.3.2 FREMOG TRUST': Caoital Gontributlon. FREMONT 'IRUSTShRII make a ' I
Contrlbution to tlle LkC in cash In the maxlmum aggregate erroqnt of up to n req Hundred Twenly-Five
Thouaand Dcglars (4t325.000.00), of which One Hundred Twenty nousand Dollafs ($120.0Y .0W has been
prevlmlë advanced W lt In ftlrtheranœ of the LLC'S Btlslness, and the balance of up to Two Hundred F&e
Thousand Dollars ($205,000.00) sllall be contributed and paid by FREMONT TRUST to the LLC from time
to time upon wrltten request by the Management Ceommleee and in accordance with any Approved Budget
3.3.3 MQN.BOMERY TRUST'S Capital Contri-butîon. Pursuant to the tefmS and
œ nditions of that r- nin Contribution Agreement dated the same date as Qlis Agreement by and M tween the
 IT I OPG pEaAmNo Aoc Nr -
e reppid 0115
 
Jpq,23. 2006 6:028. .B-''rl12 J. Frïg, ESq' ' 80.7212 F' S
LLC and MONTGOMERY TRUST, as the Contributor (the 'Montpomerv Trust ontributlon Aareement*).
MONTGOMERY TRUST shall make a Gapital Contrtbution to the LLC of the Technology and his Rights (as
those tcrms are more partlculady dew ibed in the Montgomery Trult Contlibutlon Agreement) having an
agreed Initial Gross Asset Value of One Milloq Three Hundred Thousand Dollars ($1,300,Q00.00), which
TechnolY y and Rights shall be contributed concurrentiywil MONTGOMERY TRUSTS admission to me LLC
as a Member.
3.4 Addleonal Canitai Contributlin or Loans to the LLC. Additional Capital Contfibptions may
be ealled for from tirr/ to time by the Management Committee, by written notiœ upon tlle Members ffom tjme
to time (the MAddîttnal Canital Conthbutions') to enable the LLC to Gonduct its Buslness. The written notice
to the Members shall &et forth the amount of dditional Capital Contrfbutlons needed, the date by whidl the
Members shall contribute, which öate shall not be sooner than ten (10) days of recelpt of such notice. Each
Membef shall be required to make such Additional Capital Contributions in proportion to thelr Pec ntage
Interest in the LLC, No Member rnay voluntarily make any Additional Caplv Contributions, and shall not be
required or perm4ted to fnake any make any loaa or cause to be loaned any money or other assets to the
kLC.
3.5 Rlahta W itb Resoect to Canital.
3.5.1 LLC Gaoihl. No Member shall have the right to withdraw or receive any returp of its
Capihl Contribution, and no Capital Contribuùon may be returned iq the form of Property other than cash,
ex ept as specifically prgvided hereln.
'
3.5.2 No lntereet on Canital Gontribut-oas. Exœ pt as expreuly provided for ln this
-
Member to any oompensation for use of the Kntributed capital.
3.5.3 Eetablzllment of Capital Accounts. Aseparate Capital A= untshall i)e em blisiled
and maintained for each Member. For record keeping purposes, eash Member's Capital Account will be
separated Into a contribution aœount and en income (loss) account and will be cminlined a= rding to
geqerilly aoxpted accounting pfindples. Sedions 3.6 and 3.7 below descrlbe the appropriate aco unting
trqatment fpr Kx purpn. of the Capitai Acccunts.
3.5.4 No P:vment of Salaries or Draws. No Member shall receke or be entiled to rele e
any payfnent of mqla'les a'dra'ws with resped to Pus Capital Contribution or ele balance in its Capital Accœ nt
or for services rendered on te alfnf Qle LLC or otherwlse in it3 capacity as a Member of the LLG. except as
expressly provided for in th1 Agreemeot
3.6 General Rul.e for Detennininq Gapltal Accounts. The Capital Acrxqnt of gadl Member
shall be determined as f011:- :
3.6.1 lncmases. The Capill Account Qf a Member shall be Increased by:
3.6.1.1 Sud) Membelas cash cuntributions',
3.6.1.2 n e Grorps Mset Value of proK rty contributed by such Merré*.r (net of
Iiabilities seotlred by such Ontribtlted property that the LLC is considered to assuroe or take subjed tn unde.r
Code slvtflnn 752)'
3.6.1.3 AI Items of LLC incorne and gain (indudiog income and gain exemptfmm taxl
allocated to auch Member pursuant to Artide 4 or other provisions of tIILS Agreementi and
3.6.2 Decreasee. The Capital Account of a Member qhall be decreased by:
XW O W EQu) PFJGTING REEM - Page
eTreppid 0114
 
.
3.6.2. : The amount of cash distributed to such Mernbec .
3.6.2.2 'Fhe Gross Assetvalue of aII actual end deemed distributions orprorherty rnade
to suc,h Member pursuant to this Agreement (net of Iiabllities secured by such distributed propedy that the 
Member is considered to assume or take subject to under Code section 752)',
3.6.2.3 Al1 items of LLC deducton and Ioss allocated to such Member pursuant to
Afticle 4 or other provisions of mis Agreement.
3.7 Special Rules With ResDect to Cap-tal Acconnts.
3.7.1 Time of Adiustment for Caoital Con.tributions. For ptlrposes of compating the
balance in a Member's Capital Account, no credit shall be given for any Capital Centribution which such
Member Is to make bntil such contribtztion is actually lnade. X apital Contribution* refers to the toll anrtlnt
of cash and the Gross Assetvalue (net of Iiabilities) Qf property initially contn-buted to the LLC by that Member
an: any.subK quel.lt contrlbutons ot casll and.the Gross.M set Value (not of Iiabilities) of any-other propefty
subsm uenfy contribtlted to the LLC by that Membeq including Additional Capital Contrlbutions.
3.7.2 Intent to complv W th Yreasul Regulatione. The foregoing provisions of Sedon:
3.5 and 3.6 and the otller provisions of this Agreement relallng to the maintenance of Capital Accounts are
intended to cornply with Regkllations Sectton 1.704-1(b), and qhall be interpreted and applied in a manner
cângistent w101 vudl Regulations Sedion. To the extent such provisions are inconslstent with such
Regulatitms Secln or are incomplete with resped thereto, Capital Acrmunts shall be mainlined In
acc rdance With sueeh Regulations Section.
. -
3.8 Tonsferee's CaDital Account In the event a Member, orthe holder of an Fconomic lnte= t,
transfee an lnterest in acreordance with the terms of thls & reement the transteree shall succeeed to the
Capltal Accœ nt of the transferor to the extent it relates to the tmnsferred lnterest-
3.9 Lim@ations on UabiliW and Obllcation: of th: Membeo .and- .Mantlers. Except for a
MembelY llabk'ty to the LLC for if.s Capb1 Contribubons or for any Iiability afislng aftqr a Member has rightfully
rereeived a retum of capltal pursuant to NRS Secion 86.391. and the right.s of judgment cretitor: tg charge
a Member's Emnomic Interest for c/rtain unsatisùed judgmênts of a Member pursuant to NRS Sectlon
86.401. and unless otherwkse provided for in an agreement signed by a Member or the Manager orcomrfittee
Member to be o arged, no Member, Manager or Committee Member âhalt be indivldually llable under a
judgment, deçree Or ofe r Qf ctld, or In any othef manner. for any debt. obligafon or liebility of the LLC
wbether or not tllat Iiability or obligation arises in contrad or tort No Member shall be required to loan any
hlnds to the LLC, ex-pt as provided for in this Agreement. No Member shall be requlred to make any
contrlbqtlon to the LLG by reason of any negative basance in hIs Capital Aqoxntj n:r qhall any negative
balance in a M embef: Capktal Aem unt Greate any liability on the part of the Member to any thlrd party'.
3.10 No Responsibilitv or Llabilitv for PfeTormatlon Commitm:lltz. In the event any Membef
(orany such Membe/s shareholders, p-lrtners or M liates) has Incurred any indebtedness or obtigation prlor
to the cam lencer*nt of the G tence of the LLC that related to or otherwise effeds the LLCI nelther the LLC
n0r any Other Memb/r sNall have any responsibility of iability foq or with fesped to such indebtednœ : or
Obligation, tlnless assumed by llle LLC ptlrsuant to a wrltten instrument duly sEgned by all Members.
ARTICLE 4
ALLOCATION OF NET PROFITS AND NET LOSSES
4.1 Allocatitm of Net Pcfdsand Net Lo:ses. Except as othefwise provided in this M ide4, Nd
Proft qqd Net 1 n.bmm Qf the LLC ln each Fiscal Year shall be all= ted among the Members as sqt forth ln
Sedicns 4.1.1 and 4.1.2 below.
.
- 1.M 1
 
'
4.1.1 N:t Proflts. Net Pfofits shatl be alloc-ated among the Members as follows:
4.1.1.1 First. Net Proit's shall be allocated among the Members. without dedtiction of
the Guaranteed Payment, in the proportion ia which the Members shared in the Net Los- s until an amount
of cumulative Net Profits has been ailocated equal to the total ef cumulative Net Losses previxsly allocated
to the Members.
4.1.1.2 R ereafter, Ne$ Projts shall be allocated among tlle Members, witboul
deduction of the Gtlaranteed Payment, pro ratn, in acoxdance with their Percentage Interestz.
4.1.2 Allocation of Net Losses: Deduction for Gearantked Pavm ent. Fxcept as
othm wise provlded in this Adicle 4, Net Losses shall be allocated among the Members as follows:
4.1,2.1 First, Net Losses shall be aliocated among the Members, without dedudion
of the Guaranteed Payrnents in the proydion in which the Members shared in the Net Projts tlntil an amount
 .
.
4.1.2.2 Sccond, the full amount of the LLC'S dqdudtfm for the Guaranteed Payment
shall te alloemte , pro cak, between FCP/LP and FREMONT in accordanœ with their Percentage lnterezt:.
4.1.2.3 Third, pro rata, to FCP/LP and FREMONT 'IXUST. iq proportion to their
positive balances. if any, in their respective Capiul Accounts, qntl FCP/LP'S and FREMONT m usrs Capital
Ac= unt balances are feduced to zero.
''
4.1.2.4 Fotlrth, to MONTGOMERY TRUST, in propoftix to ttle msitive balanœ , ifany,
.
the Membeo in lhe ryame proportions as they shnre Net Profits or Net Losses, as the case may be, for the
Fisca Year.
f any Member unexpectedly ieceives any adjustmenk, allocation:
or distributions described in dauses (4)f 5) or (6) of egulatiôns Sedioô 1.704-1(b)(2)(ii)(d)j itelm of LLC
income shall be specialy allecated to such Member in an amount and manner suïcient tcl eliminate the
Adjusted Capifal Acoount Delicit created by such adjustments, allocations or distributions as quic,kjy as
posslble. R ls Section 4.3 is intended to consjtute a @qtlalified 'ncome offset, withln the meanlng of
Regulatbns Sedion 1.704-1(b)(2)(ii)(d)(3).
4.4 Minimum Gain chamebaek. If there is a net docrease In LLC Mlnknum Gain during a Fiscal
Yqaq each Memberwill ix allocated, before any otheralkcation under *% Artide 4, Iterns of lrm me and galn
for xuctl Fiscal Year (and If necessary, subsequent years) in propodion to and to tbe extent of an amotlnt
equal to suoh MemY r's share of the net decrease ln LLG Mintmum Galn determlned in aozordance wlth
Regulations Sectlon 1.7>Q(â)(2). This Sedion 4.4 is intended to œmply withj and shall be Interpreted
O nsistently with, the dmlnlmum cain chameback' provislons of Regulations Sedion 1.70m2(9.
4.5 Member Nonreeourse Debt Mlnimum Ga-lrt Charaeback Notwithstanding any other
provision of tills Attide 4, btlt excegt Section 4.4, if there is a net decrearye in Member Nonrex urse Debt
Mininwm Oain attlibulble to a Member Nonrecourse Debt during any Filtrnl Year of the LLC, each Member
-
Debt detemined in a= hrdanO *11 TfeAsury Regubtions secion 1.704-2:45)1 shall the spe l: allocated
1t*- of LLG inœrrm and gain forsuch year (and, if neoerysary. subsequent yeaa) in an amount equal such
Mere l's share of the netdecrease in Member Nonrecourse DebtMinlmum Gâin attribe ble to such Member
C t . peRvso r.pxe r
eppid 0116
 
.
;
' Norlreœurse Oebt, determined n acOrdance with Regulations Section 1.704-2(i)(4). Allocations pufsuant
to the previouq sentence shall be made in propodion to the respective amounts rm uired to be allocated to
each Member pursuant thereto. The items to be so allocated shall be detefrrlined in accordance w1t/1
Regulations Section 1.704-2(i(4). This Secbon 4.5 is intended to comply with a mlnimufrl gain chargeback
requirement of that Sec:on of the Regulations and shall be lnterpreted consistently therewiK.
4.5 Member Nonrecouoe Deductions, Any Member Nonrecourse Deductions for any Fiscal
Year or other period shall de gpeclally allpo ted to the Member who bears tor is deemed to bear) the
eœ nom ic risk of Ioss with respect to the Member Nonrecourse Debt to whioh sklch Member Nonrecourse
Dedudions ar: adributable in accordance with Regulations Section 1.;04-2(i)(2).
4.7 Speclal Allocations. Any special allocaions of items of Net Pmfitz pueuant ttl Sections 4.4,
4.5 and 4.5 shall te taken into account in compujng subqequent allocations of Net Profds pursuant to Sectilm
4.1. Ao ihat the net amount of any ltems so allocated and the gaia, loss and any other item allocated to each
Mem- f pursuant to Sedion 4.1 shall. to the extent possible, be equal to the net arrtount that would have been
adcm ted to each such Member pursuant to the provisions of this Article 4 if suGh special allocations had not
ox urred,
4.8 Fees to Mem bem of Affiliates. Notwithstanding the provisions of Section 4.1, in the event
that any fees, inteqest, or other amounts paid to any Member or any Affiliate thereof ptlrsuant to this
e reement or any oter agreement between Qle LLC and any Member or AfNiate thereof pcviding for tl)e
payment of such amountr and deduded by the LLC. in reliance on Code section 707(a) and/or Code section
707(c), are diaallowed as dedtlctions to the LLC on its edecal income bax œtum and are ireated as LLC
distributlons, then:
-- 4.8.1 'Ihe Net Pfofits or Net Losse , as the case may be, for the Flseml Year in whlch suc.h
fees, interestp or other amounts were paid shall be increased or decreased, as the case may be, by ihe
amount of such fees, interestf or other amounts that are treated as LLC distributions' and
4.8.2 There shall be allocateö to the Member to whicN (Or to whose Affiliate) sq(;h foes.
Irlterest or omer ampunts were paid, pfior to the altocakms puauanl to Section 4.1, an amount of gress
incorœ forme Fisœ l Year equal to the amount of such fees, interest, or other amound that ar* trqated as LLC
die butions.
4.9 Section 734fc1 AlloM tlon. Any itern of ifc rned gain, Iorw, and de udion wdtil resped to any
property (other than cash) that has beon contributed by a Member to the capital of the LLC and which Is
requlred or permitted to be allocated to such Member for jncome tax purposes unde Code sectlon 7M (c) so
as to 1** Into a= unt the varkatlon between the tax basls of guch properly and IK Gross Asôetvalue at the
time of its x ntributien shall be allocated tn suc.h Member solely for income tax purposqs In the manner s0
fequired œr xrrnted. ln the event the Gross M setvalue of any LLU Property ks adjimed in Rccordance *ith
ryecdon 1.16.2, suixsequent alloœ tbns of iv rne, galn, Ioss and deduction with resped to such P @ball
take Into a= tmt any vaîat'ion between the adjusted basls of such Property for federal lncome tax purp-e.s
and it'i Gross Asset Value ln the same manner as under section 7tM(c) and the Regulatitms promulgated
tbeœunder. Any elections or other dedslons relating to suctl all= tioms shalt be made in any maqner Qot
reasonably reflecis me pntmse and Intention of this &reement R the extent permitted by RegulaGons
Sedton 1.704-1G8(4)(1), aII lterns of irraome, galn Ioss and dedtlction for federal and state tax purposes shall
be allocated in accordanx *11 the Orresptmdlng book Items.
ARTIGLE 5
DISTRIB-U--O-I N.5 OF AVAILABLE CASH FLOW
5.1 Distributions of Avaimo  o vh Flew. Dkqtn-butions from the LLC to Ke Members shall be
made from fme to trne to the extent of Available Cash Pl()w as determlned by tbe Managernent Commlttee.
Q%kY TO A@4t<U C
l 22M) PEM G AGREEMENT - P+ 4 el
N 1+ l
 
'
,
provlsions shall be made for aII known feasonable
obigations and liabiltties of the LLCI whether or nut such obligations and Iiabilitiees are due or contingent
r
,
the amount of which can be
.
5.2 riority and Manner of Bistributions to Members. AI distributions of Available Caih Flow
shall be rnade W tlle LLC pro rat.a to the Members in accordance with their appliœble Percentage Interests
as of the tme of such disbibution.
5.3 Tax Distrlbutlons. F-xcept as othefwise may be pruhibited by any agreements between the
ttC and its lendezs, wimin ninety (99) days aftef the ccmclusion of each Fiscal Year, the Management
Committee slmll determine and pflwide written notice to he Members of the amotlnt (the rrax Liabilitv
Shordall Amount*), if any, by which (a) the ggregate federal and state lx liability (if any) incurred by tlle
Members with fesped to the net income of the LLC for such preceding Fiscal Year (which tax Iiability shall
be determined by applying the highest effective individual tax rates then in effed for tile Fiscal Year ln
itl tlpp), exceeds (M) the aggregate dlstribtltjon: of Available Cash Flow made by the LLC with resped to
such Fiscal Year (including apy distributio s made to the Members with respect to the tnal fiscal quarter of
such Fiscal Yearl. The Management Cotwnittee shall use aë reasonable efforts to caklse the LLC todistribute
the Tax Liabillty Shortfall Amotlnt to Qle Members in the tfme and manner required hereunderf including, but
not Iirfited to, bzrr- ing on belmlfof lhe LLC suffkient funts to enable the LLC to disbibute such Tax Liability
Shortfall Amount. Eaceh such distribudon shall be made to the Membefs as soon as practicable aoer such
ftlnds are available. It is the objedke of the Members that while the nx Uability Shordall Amount *ilI be
determined at the end of each Fiscal Year to the extent possible and subject to th/ forcoing, dltribtltlons
will be made in respect thorcof on a quadedy basis to facplitate the Members' ability to make quadedy
.
' ' contemplatd above, final adjustments shall be made to reflec't the adual resull of sucil Fiscal Year.
Alm cke 6
MANAGEMENT OF THE LLC
6.1 Manageœent of the LLC. Subjed to the pmvlslnns of the NRS, the M ides of Organlation
and to any Iimitqtions set forth in this Agreement (as may be amendczd from tilne to time) relatlng to edons
required to be approved by lhe Members, the Business and affai 's of the LLC shall be managd , and a1I '
Company mwers shap bevested in the Managenxnt Cofnmlttea The day to-day operae ns of the LLC shall
be implemented by one (I) Manager designated or appointed pursuant to Sectifm 6.1.1 below, who shall
coflduc.t the Business in arvvardance with and subjed to the policies, procedures, docisiorus and diredives of
the Management Committe ,
6,1.1 Deslonation of ''Manaaer'e. The Manager of the LLC shall lnltially be DENNIS
MONTOOMERY, an lndlvldual, or hls successor as appolnte W the Management Commlttee pursuant to
Section 6.1.2 bebw.
6.1.2 Ekction of Suooessor Manaqer. Upon ttte Managq/: reslgnato fr?m offio or
removal fmm ofjoe by the Management Cemmittee. a successor Manager shall be apminted W the
Managernent Committee.
6.1.3 Subordlnate G ficerw. The Management Ceommittee may, ln iks discretkm, appdnt
a p- ident. secretafy, a chîef srkandal omcer, and su& other d9:x1.s of the LLC as tile Buslnv of the ttC
may requlre, each of whom se ll hold otsœ forsuch pejod, have such authority and peffofm such dufes as
'
e-t Commlttee. The Management Cofnmitto shall conslst of three (3)
Committee Members. Each of FCP/LP
,
i as they
xppjd ()118
 
' 2 N
.> e . .L
' ' are Members. shall appoint one (1) Committee Meznber. Fach Member may appoint one or more altemates
forthe Committee Membeo apm inted by it 
Aa alternate shall have all the powelY of the Committee Member
in his absenœ or inability to serve. Each Committee Member may vote by detivering his proxy to another
Ctynmittee Member. Each Member shall have the power to remove any Committee Member appointed by
it by delivering writen noùce of stlch removal to such Committee Member and to the other Committee
Members. Vacancies on the Management Committee shall be filled by the Member who appolnted the
Commi%ee Member previously holding the position which is then vacant.
6.1.5 Manaqement Committee C'halrman. The Managemeflt Committee shall have a
chairman (lhe *chalnnan*), who shall be one of the Committee Membeo designated by a majority of the
Committee Memlyers. The Chaimmn initially shall be WARREN TREPP, an individual, or his successor as
appointed by the Management Commlttee in accordance wittl thls section 6.1.5. The Ctlakman shail (i)
preaide at Management Committee meetings'
 (iij have the authority to execute and deliver on behalf of and
in the name of me LLC any agreements, contracts
.
cotes, fnodge es, qvidenœ of indebtedness, certificates,
statementsl conveyances or other instruments in writicg. and any assignmgnt or endorsement thereofk and
(iii) eyorçiye 4uch rlghts or perform stah duties as are otherwise provided in this Agreement of as may be
approved from ime to time by the Management Committee. The Chairman may (IfIIy be removed from office
by R maxrity of the Committee Membefs. ln the event the Chairman resigns or is rernoved, a majofity of the
Committee Members shall eled a replacement Chairman.
.
tio
n of Powers and Duties. n e Management Committge may by wrltten
resolutbn from 1= to tirte delegate any of its ptywerl tg the Manager, the Chairman. oflicers, employees of
a Mem- r, or to Rny omer PefBon. Sur.h delegaion ot powers may include, but not be Iimited to, the authority
to execute and deltver on bellalf of and in the name of tlle LLC any agreements, X ntracts, rotes, moftgages,
evidence of indebtedness, certiicates, statements, conveyances or other Instrufnents in writingl and any
..
6.1./ Mananement Corumittee Meetinqs. '
6.1.7.1 The Management Cofwnittee shall meel at Ieast onc: each qtladef In lncline
Wlage, Nevada, or sklch other times or places as the Chaifman shall determine (unses: stlch medng shall
be watved by alI Committee Membefs) or op the call of the Chairman or the Manager. Such rneeiings shall
be called upon at least ten (1Q) days priorwrttten noice, exreept in the case of an emqrgency, ln which evept
such a meetlngmay t2 called upoc prior notice as the Chalrman dee1115 appropnqate, but in no event 1er,s man
fody-eight (48) hours. An agenda for each meeting shali be prepared In adyance by the Chalrman or me
Manager, as the case may be, and circulated to the Committee Membee. Appawal Qf the Management
Cm mittee shall require a majo:ty In number of me Commlttee Members. 'Ihe Mae ernent Cornrnittee may
ad without a Ineeting lf (i) tl e actlon Kken is approved in wridng by the number of Commlttee Mernbers
neca= ly * kke :vcb aden, and (i( written noiice of suob adion ls glven to Q e Commlttee Members wI)Q
d d net pfovide sklch written çonsent. Wdtten mlnutes of all tneeùngs shall be maiptained, and the mintltes
fof each meeticg shall be approved at a subx quent meetng of the Management Committee.
6,1.7.2 The Management Ceommittee rnay adopt wbato er nlle: and prnzwM ures
relitlng to itç activities as it may deem appropriate, provided that such rules aqd proœ tlres shall not be
in= sistentwith orviolate me pfw isbn: of thls Agreemem arld PI/VIM thatsucll rule,s and fegulions sball
permlt meetlngs W telephone, video conferencing or the like gnd qhall permit Cimmlttee Members to
partidihate in meetinm by teleptlone or vldeo confefence G the ike or W wfitten proxy, arid stlch pa ' ' Yn .
shall be deemed attendanm for purw ses of determlnlng Whether a qA rum Is present
6.2 Powem. Dutm @nd Responvibilities of the Manauement corrtna Xee. n e Management
 '
Iimitation, the genenl pcwers and duies of management typlcally vested in the boal'd of diredofl and the
 
Cmrnmittee shall ifzlude, withoklt limitation, the tllowing:
tm AK2 pMl FERANG AG EF
MENT - l>A> 13
 
'
'
6,2,1 The authorization. negotiatlon. execubcn and delkefy on behatf of Me LLC of any and
alI cntracts or agreements, verbal or writtenj having a coqtract value or obligation amount in excex ()f Fifty
n ousand Dollarl ($5Q,000.00), whicb are necessafy or appropfiate for Me develogmont or exploitaion of the
Technology or are in fudherance of me Business of the LL , including, but ot Iimited to but expreessly subjed
to the limitadons requiring Mernber approval pursuant to Section 6.4.4 hereof, contracts or agree ents
between the LLC and/ori/ M liates (x any omer Person to pfovide me LLC wilh gcods or selvices of any kind
in which tl:e LtC or its Manager may bave an actual or potential ceonflid of interu t, and including any
amendmenE or fnodifications thereto, or renewals or terminaticms thereof.
6.2.2 The approval, execution, delivery and performance on behalf of the LLC of the
Montgomery Trust C'oqtributilm & reement, and amendments or rnodiscatlons tbereto.
6.2.3 'rhe approval of deolled llne-item budgets forthe operation of the LLC and iks Business
or for the development Qrexploitation of the Technology, and any amendments, modificatlons, supplemenl
or renewals mereto. Eacb such budget (and any amendments thereto frcfrl ùme to time), aqer approvaj by
th
 
Q Mgnggqment Gpmmitteg, shpll be referre: to herein as an eAporoved Budaet*
6.2.4 Subjed to the Approved Budgets, borowing funds from any lender to operate or
malnKin the Busine orfor any dher pumose whidl is in furlherance of the Buliness of the LLC, omer man
tode payabl- in the ordinary course of business' to issue evldence,s nf Icdebtednems in connecion terewith'
to feinance, increase tho a= unt of, modify, amend pr change the terms of, or extend the time for the
pay= nt of, any lôdebtednes.s or obligation of the LLC' and to secure any indebtedneu or obligation of the
LLC W mortgaje, pledge. granting a security intrest in or other lien on the LLC'S assetl.
6.2.5 R e appointment and termination of oïcers, hiring and sling of employees, or lhe
. engagementof œ ntraclors/ gubcontradors, consutanl, expec and Qtiler Pelx ns necessary or apgopliate
to carry out the Busiherns of the LLC, inclqding the selection and engagement of an independent cerified
public accounting 51r1: and legal ôounsel for the LLC, and to approve the terms of any such appointment,
employrnent or engagement, dncluding approval of bhe terms and payment of compeflsation.
6.2.6 n e approval of the amount and iming for requesl for additional aclvances on
FCWLP'S and FREMONT RUST'S Capita Contributlons pursuant to Sedion: 3.3.1 and 3.3.2 tlereof as
required by the LLC to contintle the development or exploitation of the Technology Qr to othetwise ctmdud
its gusiness in accoxlance with any Approved Budget
6.2.7 n e approo l ofthe arnount and dming of any Additbpal Capital Contributions required
by the LLG to condud 1f.s Ruslness, Inclu4lng, without Iimitation. al capiml rm ulred to be expended with
re:ped to the Technology.
6.28 Subjed to the approval by the Member: pursuant to Section 6.4.2 below, the çale,
Ii-nse, Ieav , rental, assignment transferor other dispositipn Qf a1I Qr any materlal part of the assets Qf *e
LLC, includirig me Tedmdogy and any patent rights mereto, whether as a single tranu dlon or a serie.s of
transactlons as pad of a plan. .
6.2.9 Any material decisions relatng to the test markd ng, manufadure. distribuion,
Iicensuro or explobtion of the Te nology.
6.3 Powere. ntltleg *nd Resoonsibilities of the M.nacerxn e Manager slmll be charged with
tl'e rlgtll, dutles and mwefs as specsed In thts & reement, subjed to tbe Iimvtiop: set folth In this Artide
6 and elsewhere in thls Agreement. The Manager shall have responsibllity fe oondvding Qle dartoday
operations of the Buslness and the LLG and fOC implementing the declslolu and dire ves of the Manage- nt
Peommlttee in connedion therewith, subjed to the superviskm, dlfedion artd Ontro of tbe Management
Comm>
j alzaxt repp
N fm ll
 
'
'
' The Manager shatl have the generul powers and dutles of management typically vested in the
office of a chief operadng ofjcef of a cofm ration. Subject to the provisions and Iimildona get f01-1)1 in Sedions
6.2 and 6.4 hereof, the Manager shall have responsibility for the following matters (listed by way of example
and not in Itmitation thereoj and shall have the authority on behalf of and in the name of the LLC to do or
perform, of cause to be done or iledormed, such acts or lhings and to oegutiate, exectlto, acknowledge and
deliver a I agreemenw, dx uments and instruments ln connection therewith:
6.3.1 Prepare, execute and hle on behalf of the LLC all applications (including patent
applications), kcenses, permii, registraions, and consents, and to otherwise communicate and deal with any
and ad gW emmenral agencie.s having jurisdictbn over, or in any way affec:ng, the Tecbnology, the Business
or any pad therx f,
6.3.2 Makeerdinaly and nece-ssafyexpenditures and incuf reasonable obligatlons necerxsary
forthe condud of tile acfvities of the LLC'S Business, all in accordance with and subjectto Approved Btldge/.
6.3.3 Authofize. negotiate, .execute and deliver on behalf of the LLC any and aII contrac?
or agreements, verbal or written. having a contfact value or obligation afnount of less than Fifty Thotlsand
Dollars ($5Q,X 0,00), whlch the Manager deems are necessaly or appfopriate for the development or
exploitatiôn of tile-réchnolœ y, orare in furtherance of the Business, includingt but not limited 1, but expreKly
subpd  to the limitaions requiring Member appfoval pursuant to Sedion 6.4.4 * 10w. contf'acts or agreenxntg
between the LLC and/or f. Afsliate: or any other Pefson to provide me LLC with goods or services of any
'
amendments or modiflcatlons thereto. or renewals or terminatlons thereof.
'
Managelrentcommittee pursuant tp Secton 6.2.8 above, the sale, Iiœnse, Iease, rental. assignmentd transfer
or other iisposltlon of aIl or any materia part of the assets of the LLC, Includlng the Te& nology and any
patent fights thereto, whether as a sinqle transaczion or a series of resated transactions as part of a plân.
6.3.5 To confess a judgment agalnst the LLC, or approve the filing of or settiement of any
ciaims, Induding Iitsation matters, for or against the LLC, of less than Fifty Tnousand Dollars ($50,000.00).
6.3.6 Execute and deliver bcmös and Indemnitjes by or On behalf of the LLC a: may be
required for the ownershlp and/or sale of any LLC Property, as expressty direded to do so on a case by case
basis by th@ Management Committee.
6.3.7 To purdlase rlability and omer lnsurance to proted the Technology. th* LtC Properly.
and Business of the LLC.
6.3.8 ne Manager, subject to the reasOable approval of the Managemeqt (70r1111**, shall .
l* rltedmlcal engineers, pœ famme.rs and ote rœ mptltertechniclans to develop orexpzitthe Te fola.:Jy.
6.3.9 Fmm Erne to Kme, amend EXHIBIT A to this Agreemenl to reflecet any change In the
Informatim A iakzd therein. and pfepare, exeœ te and hIe a Celtiùcate of Amendfnent or Corredilm to the
A111c1% of Organizatlon to relled any change or m rredion in tlle LLC, 11 Manager, Members, pfincim l oflice,
registered agent or the Iatest date u& n which the LLC may be dîsscdlved.
6.3.19 Prea re, execute and jIe on behalf of the LLC the Annual Ust of Managers, Membem
and &qentwlttl the :ecretary of State and to pay afl filing fees therefor.
. 6.3.11 M direoted ftpm Nrne to time by the Managempnt Committee, to Invest the funds of
'
Induding rtu ley market funds, priorto the expenditure of suc.h m plkl in connedion witll Bu#neess ppqrafons
.) espxyw RccusT-eagejj a
 
Jiâ,22. 2006 6Jûô?1 .l-.'''n J. Frïs. ESI. hû'7213 ' 17
'- 6.3.12 If the Manager deems it necessafy oç appfrpriale, tc? adopt a Coqjpany seal, circtpar
in foan ccm aining the words ''INTREPID TEGHNOLOGIES, LkC,.' together with the date of formation ctf the
LLC, and such other information as shall be appropriate for banklng aûd other Business purposes.
6.3,13 Maintain a minute book to indude the Artictes of Ofgankation of the LLC, this
Agreement and any amendments or supplements hereto and thq minutes of meetings (or consents In Iieu
of meetings) of the Management Cornmitteet written consents of the Me bers. and other impoe nt
documents of the LLC.
6.4 Llmltatlons on- .-tbo-Management comm..ittep and Manaoer. Neither the Management
Committs.e nor the Manager shall have the authority to do any of the following without the pfior unanlmous
Vote of aIl of the Membefs:
6.4,1 Except for the Iimited authorily zf the Manager to amend EXHIBIT A hefeto and the
.
. .
Artldesof Ofgantzation. in whcle or ln part, lncluding any increase in the number of Committqe Membqfs of
tlle LLC puouant to Section 6.1 above.
6.4.2 Sell, Iicense, Ieases rent, tfansfeq assign Qr Qtherwise dispose of al1 or substantiaW
aIl of tlle assets of the LLC, including the Technology or any gatent rights thereto, whether ln a slngle '
D nsaction Qr a series of related tfnnsactiong as pad of a plan.
6.4.3 Approve the Transfer of a Member's lntere%t (except for the Tmnsfer of up to 10% of
a Member's Sclmomic lnterest ptlrsuant to Secticrl 9.1,3 ttereot).
' '
6.4.4 Apprlwe any transaotion involving the pqymeat of compensatbn by the LLG to a
Member or an Affiliate of a Member klnlen ptherwise expru sly authorized and approved pursuant to this
Agreement
6.4.5 Any meler, consolidation, divestiture or dîssolution and winding up of the Business
and affalrs of the LL .
6.4.6 Any material changp in the character of the Btlsiness of the LLC.
6.4,7 The admisston of new or substitute Members to the LLC.
6.4.8 Any ad in contzavention of this Agreetnentor any valid amendmeqt hereto the Articles
of O/anizatlon or any amendment thereof.
6.4.9 Knowingly pedorm any act (other than ôny ad required by this Agreemont or by kw
or an ad Kken in goe faithl which would at the time of such ad, subjed any Member of ihe LLC tœ any
persmal liability In any jurlsdlctlon.
6.5 rlme Devoted tp Manaoement Unleu an altemaEve schedule is determined from KIY to
tl(Y by the Managea nt Commilte to be In me best lnterests of the LLC afld its Members. Qle Mana-plY
m sl be exdusive to the LCand h sh vo an alof s fulKr aôd a n and
efrorts to e e Bqslrless alld a@airs of the LLC dudng Ivasonable btls4ness hx rs. n e Manager D'IaF be
reqqifpd to travel frpm time to tirne ln furthetance of his duEes and responsibilities hereunder. Tho Manager
agfeet * prw ide hia sefvices in a manner conslstent with the X licles of the LLC as may l)e adopte fKm
ti- to time by the Management Com ittee.
6.5 M anacer's Restrldlon on. lndeoqndent Actlvitles: Acreement N 1 to Compate. R e '
Managerand h: Ao ates agree thas during the term of thise reement none of them slhqll mmpete wlth the
LLQ whether fof their own a= unt and/or for the'account of othqrs, Individually, jolntly with others, Qr as
xk op c l USATNG
MENT-P. . 1:
e'rteppid 0122
> $.e 1
 
' '
part of any other limited Iiability company, Iimited padnership, genel'al padnership, joint venture, comoration
or other entity, by: (i) devqloging, Iicensing or exploiting in any mannef any software programs or other
technole y which is competidve with the Technology or the Busineas of the LLC, clr provlding any services
or supplies which are encompassed within the definition of the *Business'' of the LLC as set forth in this
Agreement' (ii) purcàasing or otbefwise acquiring, owning, holding, opecaling, managing, investing in or
otherwise dism sing of a Illle business of the LLC'S Business and interesg therein of any kind or nature; or
(iii) otherwise engaging in any or a1I aspects of a Ilke business of Qle LLCS Business. n e Manager's or his
Affiliates' padicipation in any of the activities restricted by this pafugraph shall be deemed a breach of the
Manager's duties hereunder.
6.6 Comoengatlon and Reimbursement. The LLC shall pay the following compensation and
reimbursefrent for serviryu rendered to or on behalf of the LLC. or suçh olher salary and benerts as shall be
hereafter approved from time to time by the Management Commitiee:
6.6.1 Expense Reimbllrsoments. The LLC Shall reimburse the Manager and/or any
Gommitte Member, Members or their Affiliates for any expense paid by them on behalf of the LLC. that ls
to be properly bome by the LLC, as pfovided for in an Approved Budget ()r as othefwise approved from time
to time by the Management G mmittee.
6.6,2 compensation of the Maflaner' Guaonteed Pavment ln consideration for his *11-
time, exdusive servkes to the LLG, the Manager of the LLC shal receive, in eddition to any reimbuflement
for costs as provlded for in Section 6.6.1 above, a Guafacteed Payment (as that term is defined in sedioo
;07(c) of the Code) in the aggregate amount of Eleven Thousand Dollafs ($11,000.0W per month payable
on the first (1st) day of each calendar month commencing as cf October 1, 1998. and terminating on
-
paid to tbe Manager for his servioes rnay be adjusted, renewed or ierminated by the Management Committee '
from time to time.
6.7 Reatrictions on Distribptions. No distfibution to the LLC'S Members ls Valid unless such
distribtldon has been approved elther immediately before or Immediately after apprpval by the Management
œ mmittee.
.
at any feasfmable time to insped and ceopy arl books. records and documents ol every klnd, and b) insped '
the pllyslo l pcp rties of the LLC and also ôf its subsidiae Iimited liability companies, domcstic or foreign.
$tIcI1 Insm dion by the Managerorany Committee Member may be rnade in person or by agent ûr âttorrley
and Indudes the rfght to copy and obtaln abstrads.
6.9 Fumishlnp LLC Information. The Manager may release stlch informaion œ nœ ming the
Buslnc s and operations of the U.C to such sourcas as is customaly or required by law or by rule or
rpgulatilm or order of any regulatery body.
6-10 Authonw o 8ettle-w'tll IRS. If there are more Qmn one hundre (1X ) Menzers of the LLC,
the *-l-ax Matteo Mananer (as appointed in Section 1Q.4 *10w) shall have the Rutlority to enter Into R
- - *H -
.
rrvmtwRh the Intfnal Revem e Service on behalf of tlwse Member: having 1e,% than a ONE PERCENT
(1*) inteœst kl me prorlts of the LLC, except where a Member files a sltementwith the IRS, in accordance
wlth applicable Treasury regula ons, stadng thatthe Tax Matters Manager has no sklch atlthorlty te act on tlvt
Membe/s behalt M y Member filing sue.h a statement with the IRS shall notify the Manager thereof wlthin
thirty (30) days of such filing.
C- TD AKl ) PERATIO . .
 
'
,
'
;
 
DEFAULTS
7.1 Default. n e following shall Onstitute an event of default under his Agreement (a *Defaulr),
and, where applicable, the Member (Incluting the Manager or a Committee Member) causing such a Defautt '
shall be deemed the Dqfaultlnq Member' and the Member or Members who have not othefwise defaulted
sh ll be deemed the *Nondefaultlno Member@)
T.1.1 Failure to Pav Obllpatjons er Additional Canital Contributions. Failtlre by any
Member in the payment of any financlal obligation cr Additional Capital Contrlbutkm to the LLC which
continues for a pedod of seven @) days after written notice to sucll Defatllting Memberj or failure in the
Performance of any of the otheragfeements orobligadons ctmtalned in *is Agreerrxmt if aaid failure continues
for a period of thirty (30) days after notice to such Defaulting Memberi provided. however, no Default shall be
deemed to have ocourred If (i) such Defauldng Nembe/s failure of peermance is curable, and (ii) if such
- . . .
. .
withln-thlrty (30) days aftec notice, but the allegedly Defaulting Member has œlwnenced to cure such Defuult
. within the 30..day period and thereafter diligently proceeds to cure such Default.
7.1.2 Trxlnvfvrln Vlolation of Acreement. Any purportedorattempted Tfansferlas definvd
In Section 9.1.2 bel- ) by any Member in violation of Article 9 hereof at any time dtlling the existence of the
LLC.
7.2 Remedies fer Default. Upon the ocœrrence of a Default hereundec tbe Nondefanlling
Members shall have the f011* % choiœ of remedies, none of whictl shall be exdusive or In any way Iimit the
Nondefaulting Membefs frofn seeking any other remedy they may have in law or in m vity:
7.2,1 Rem vdv for Default Under Section 7.1.4 of thls Agreement. In fhe event of a
' Default described in Section 7.1.1 above, the Nondefaulting Member shall have the right (but not the
obligation) to rnake an Addifonal Capital Contributionls) to tlle LLC or to lend to the LLC the amountts) thet
should have been œ ntributed by Qw Defaultng Member. M y such amount so loaned shall accrue lnterest
flxed on the date of the Ioan at a yr annum Iute TWELVE PERCENT (12%)1 or the rnaxlmum rate of interest
permitted by Iaw, whlchever is Iess, which Intefest shall acorue and shall be adjtlsted based upcm the Yre-
going rate and be compounded on each first (1sl) day Qf each rnontb durlng the term of the loan. Any
arrounts sp lmaned, together w101 lnterest thereon as aforesaid, shall be irflmedktqly due and payabe from
the Defaultifïg Merfe r to the Nondefaultirig Member, M Iong as the amount so Ioaned and int/reit thelw n
r4mains tlnpald, any distribution to which the Defauldng Member would ethe- ise be entitled under this
N reement sllall be pald to tl'e Nondefaulting Member and applied in repayment of the amounts so Ioaned,
with any sudl Nyment applied hrst to attorneys' feea. œsts and expenses (if any); then to interest then
aœ rued; thqn to thq belalwe in redkrtbn of the pfincipal arrmunt until the Nondefaulting Mqmber has bW n
repald aIl arfxxlnts so Ioaned to tbe LLC to cure sudl Default lncludlng all accrued interestx fees arld costs
as provided for herein.
7.2.2 Other Remedles. In the event of arly Default under this Agreement, lnduding a
Default under Section 7.1.1. above, and so long as such default remalns unmlred, the Nondefaulting Member
may. but shall not be ebllgated tel do any or alI of the following' .
7.2.2.1 Use any LLC asset., including, but not llmlted to amourlts otlelwir,e
distributable to fhe Defaulting Member. to A:filnfy the Defaulting Member': flnanoial or other oblig tions, in
orderthat lhe Nondefaultlng Mem- r need not contribute additional fundg to vatisfy the worklng O pital and
opeeational requirernents of the LLC.
7.2.2.2 Pursue any and aII righl lo reœver damages and aI1 ot- r remedies available
In I:W and equity.
e'rreppid 0,124
 
:
.
w y . ...
'' 7.2..3 Terminate the LLC. by written notice tothe Defaulting Memberat any tiqx prior
to the Default O ing cured.
7.2.2.4 Manage and conduct the Business and operations of the LLC. without any
padicipationd consent or approval of the Defaulting Mqmber or i? represenltion on the Management
Committee whic.h would omefwise be requlred puauant to this Agreement.
ARTICLE 8
M. BER:' MEETINGS: ACTIONS WI-DIOUT MEETINGS
8.1 Meetinas. The Members shall not be required to hokl any rcvlar, annual or special rneelings
in order to approve any action of the LLC as required by thls Agreement or the NRS.
8.2 Aetions W ithout a-
Meetlna.
'
8.2.1 Any adion reqkiring epproval of the Members pursvant to this M reement may be
approved without the cndud of a meeting and wlthout prlor nojce lfa we en cansent setting 11rt11 the action
or actions so taken. is signed by Members bolding, kl the aggregate, a MaXKN in Interest or more of the
Members. unless a grvater ote is required under, or a Iesservote is provided for In, this Agreement or the
NRS.
8.2.2 Unless the unaqimous wrtten (xpcyent Qf the Members has been given, notlce of any
such adic approved by 1- than aI1 of the Members shall be given to those Members who did not N rtkipate
In clr approve of suçh aditm within ten (10) days follcwing the approval thereof.
8.2.3 Any Member gklng a written rm sent may fw oke tile consent by glving written notice
to the LLC prior to the time thatwritten conx nts of tM Mernbers holding, in the aggregate, the Vote requlred
to atlthorize ttle pmposed action have been sled with the LLC. Suc,h revocation is effective only upon its
receipt by lbe LLC.
6.3 Excluglon of Vote. 1f, puœuant to the NRS or thq tefms of thl: R reement a Member is not
enftled to Vote on a specirlc maoer, then such Member's number of Votes stlall not be considered for
purposes of detarmgnipg whemer approval by Vote of the Members has been obtained in relpect of such
specific matter.
ARTICL.E 9
RESTRICTIONS ON TM NSFER OF LLC INTERESTS:
ADMISSION AND SU ON OF NEW MEMBERS
9.1 Transfef oe A%itlnment of Member's lnteu t SIINO Y tlle pm isicns of Adicle 11 of this
AgreementI the lnterest of eacb Mernber afi lhe Eœ nomlc lntqrest of a Peer:on who ls not a Member
constitute-s the personal property of the Mem- r of Ectm mic Interest holder. No Member or Eo nomic
Interest holder has any Interest In the Property of Qle LLC.
9.1.1 A Membe/s lnterest or an Eoonornio Interest may only be Qpnafefred or ao igned In
strict a= rdance with OIY Agfeernent
9.1.2 N0 trdnsfer, hype ecation, enoufnbcanœ of v igna nt (a q-ransfee) ofa Mefn-r's
lnterest In the LLC will be valid tlnleGs unanlmously appfuved by the Membersl other than te Member
prom sing lo dlsy se oflh lnterest lf leo than unanlnotls O nsent of the Membefsl otller than the Member
prolv yed to dispxoof IY Intere tdoe.s notapprove Qo lhpsfer, thetransfefee ofthe Memte s tnterestse ll
: ) PE G ABREEMENT - Pee
 
Jih.2S. 2205 6:û5?k r F' J. Frys, ESI. hû'7213 F' 21
G ''- '
'
'
not have any rtght to padicipate in the management of the Business and affairs of the LLC or to become a
Member of tbe LLC.
9.1 .3 A Transfer ol up to ten pefcef t (10*/1) of a Member's Economic Intere-st may be done
an Economic Interest shall not have any right to parjcipate in the management of the Husiness and affairs
of the LLC or to become a Member. Notwithstanding the Ioregoing, any Tfansfer by a Member of an
Economic Interest in excess of 10% skall be deemed a Transferof such Membe/s LLC Interest and shall be
subfect to Section 9.1.2 above.
9 2 Void Transfers, Any Tr'ansfer of an Iqterest which does not satisfy the requirements of
Sedion 9.1.2 above shall be null arid void, and the tmnsferring Member shall oontjnue to be a Member of the
LLC aDd to be obligated under each and every proklsion of this Agreement
.
unanilnous Vote of aIl of the Members.
9.3.1 The amotmt Qf Capltal Gontribution which must be rnade by a new Member shall be
determined W the Vote of a11 exising Membefs.
9.3.2 A new Member shap not i)e deemed admit'ed jnto the LLC until tlle Capital Contbutjon
rm uired of sueeh Person shall have been made afld stlqh Pelx n has become a party to this Agreement by
'
'
9 4 Substitution of Members. Subjet to the provisions of Article 11 hereof, a Person may be
stlbsttuted as a Member and admi:ed to the LLC, succeeding to alI of the rights of any Membec upon the
' death of a Memberor upon the valid Transfer of a Mem- r's Interest in a= fdanc.e with Section 9.1.2 above.
n e substltuted Member.shali hw e qII the rights and powers and shall be subject to all the restrictions and
Iiabilites of the transferrlng Membec exoept that the substltutlon of the transferee Member shall rlot release
the bansferring Member from Ilabllity to the LLC pufx ant ttl NRS Section 85.351. No substituted Member
shall be deemed adrnitted into lbe LLC until such substituted Member has become a pa* to mis Agreement
by exectlting and delivefing to the Management Committeo q counterpad e nature page to this Agreemeot,
acknY edging bis acceptance Qf, and agreeing to be eund W, the terrné and O ndltlons of thls M reement.
ARTICLE 1û
ADMINISTRATION AND ACCOUNNNG MAU ERS
10.1 Maintenance of Booe and Records. The LLG shall cause boolçs and recoro of the LLC
to be maintained In accordance with genefally zvvwpled accotmting prlnciples, and shall give repods tn the
Members in acecordanœ w141 prudent business practices and the NRS. n ere shall be Rept at tlle prindpal
business ofra of the LLC as well as gtthe registered omce of tl)e LLG spedfied in Seeetion 2.5 (# dlfferent),
@ny informae requlred to be INAiA inGI W the LLC pursuantto NRS Sedion 86.241. as Bmendd frem Nme
to ime.
10.2 Anntlal Accountinn. Woin one hundred twenty (120) days afterthe cloe.e of each Fkscal Year
Qf t* ttc, the LkC ehal pfpvlde to the Members a11 iqformation peçesr'ary for them to O mplete fedeml and
state tax returns.
10.3 lnsnection and Audit Riqbts. Each Member, at its own expense, has the right. upon
reearm able feques't and for purN es reasonably relatd to the Snterest of that Member, * lnsped and côpy
dudng lermal btlslness hours any of ti'le LLC 17t* and records requifed to l)e maintained in accordaa with
Section 10.1 atm e. Gudl rlght may be exerdsed W the Memberor hat Merrlbecs agent or attorney. Any
Cr TVD A ECl * ) AT G EEENI . eage
e'freppid 0126
 
. -
.
- ' Membef may require a review and/or audit Qf the books
,records and reports of the LLC. The detefmination
,
LLC, in the absence of ffaud or gross negligence
,
shall be jnal and binding upon tlle LLC and aI1 of the
Membel's '
10.4 Tax Matters l-lalliled bv Mananqr. The Management Committee shall designate a Pemon
to be Qle Lkc's Vax Matters Manaaee (deined as q-rax Maders Partner in Code sedion 6231) te represent
the LLC (at the LLC'S expense) in connection with a1I examinations of the LLC'S affairs by tax aithorities,
induding resuëng judicial and administrajve proceedings, and to e-xpend LLC funds for professional serviœs
anö ixmtry auoclateö terewith. In its capacity as Gax Malters Manager
y
e the designated PeMon shall
.
fBank Accoilntq: Authorlzed Slnnatodes. The Management Committee
shall authoce tlhe establishment of one or mofe dem sitofy acczmnts In Nevada and elsewhere for the Iunds
 
.
checksi dfafts, and other lnstrumenE obtigating tlle tLc to pay money up to a maxlmum afnount olTwenty-
Five Thousand Dllars ($25,000.00), including Instrumen? payable to the Managef or other Persons
,
000.00. whether as a slngle
clv k of a sefie.s of checks. shall require thejolnt signatures of the Manager and a Person designated from
time to time by the Management Committee,
C..a. t181ar1c> on hand may be invested W the Management Corrkmioee on behalfof the LLC
.
-'
,
offieaer or any other Person.
10.6 Federal Income-Tax Electloqs. The Management Cornmittee on behalf of the LLC may make
a1I eledions for federal income tax purposes, including but not limited to the following:
10.6.1 Ent- Classificatlon E
Iectlon. As a domestic eligible enfrty, the Management
Comrnlttee shall ca se me LLC to electto be clasaified as a partneahip forfedet'al tax purpose
s W Ning Form
8832. Entity Glasstflcation Electitm, wittl the tnteraal Revenue Sefviœ ifl the time aqd mancer prererlbed W
the appliœ ble regtlladons. n e elu on for such classifo tion shall be effedke as of the effective date of thls
& feement
10.6.2 Dge of Accelerated Depreciation Methods. 'ro the extent permitted by ajpliœble
Iaw and regulations, Q1e LLC may elcxd to use an ac-celemted depreciation method on any depreclable unit
of the qs-ts of the W c.
1:.6.3 Accogotlno Method. For gnanclal reporjng purx ses
,
the boolfs arld rece s of the
LLC sball be kept ()n the CASH METHOD OF ACCOUNTING applied in a K nslstent tnanlYr and shall elelt
.
1Q.6.4 Obllaatiofl: of Members to Reoort Allocatlons. 'I'M Membeœ are aware QI th@
income tax m pœ quences of the alG ations made by this Agreemem Rnd hereby agree to be bound by the
provislons of this Sprfnn 10.6 ip rem rting melr shares of the LLC income afld Ioss for income tax purposes.
10.6.5 Tax Year, The Manage- nt Corrznitk.ke wll cause the LLC to adopt the CALENDM
YEAR as its lxable year.
10.6.6 Oiher Flx tlon:. n e Management Committee shall have the right in its sole
diKretipn at any time to make or not to puke such other electiona Rs are authorted er permitted by any Iaw
or regula:on for inxrne tax purposes (including, bUt not llmited *)1 any eledion gnder M ons 734. 743 and
. M) ERATNQ RK - Page
 
'
' 54 of the Code to atjust the basis of the Property of the LLC in thq event of a Tfansfer of alI or pad of the
Interest of any Member). Notwithstanding the above, no kember, nor the LLC shall ake an election to be
excluded from the appliœ tion ot Sulxhapter ( of the Coda orany sfmllar pœvision: oï state Iaw,
ARTICLE 11
PURGHASE OPTION: MEMBFRS' RIGHT OF FIR-T REFUSAL
11.1 LLC': Purchase Option. Upon the occurrence of any ûne of the foll- lng events (a
Uriaqerina Evenf) with resped to a Membec the LLC shail havq the option to pue ase a11, but not Iess than
all, of the LLC Interest of such Member (the Fsclling Member*) at th@ price and on the terms as set forth in
Section 11.3 below:
11.1.1 The lntended sale, lransfer, encumbmnce or hypothecation of a Member's LLC
Interest
11.1 2 The withdrawal of a Member from the LLC'
11.1.3 The death of an indivkual Membec
11.1.4 n e bankruptcy of a Membeq
1 1.1.5 Thi winding up and dissolufon of an entity Membeq or
11.1.6 The merger or othor reorgaplation Qf an entlty Membef in whlch th* entity Mee er
Is not the stlrviving entty,
Each Member agrees to promptly give written notlce to the LLC of a Triggering Event Ihe LLC
shall have the option to purchase all, but not less than al1 of the LLC lnterest of the Selling Member, which
lt may exefcise only by givln: written notice to Selling Member on or before the thlrtieth (30th) day following
reoelpt by the LLC of the Selling Membef's notice. Upon the giving of the notte, the LLC shall be obligated
to purchase h: LLC lntefest of Ke Selling Member. subjed to the pfovisions of this Agreqmept lf t114 LK
does not exerclœ its opton to purchase all, but not less than a1l, Qf tbe Sdling Member?s LLC Intefest, the LLC
shall, on or belofe thefiftil (5th) day following te end of the l%-day period deKribed above, glve written noti-
to tbe remalnlng Membefs that the LLC lnterest has not eleded tû pue ase tl'ke Selling Member's Interest
f 1.2 Remalnllm Membera' Plzmbase Option. Um n recelpt of me nou holn 1h/ LLC dese d
In Geotion 11.1 above, each remaining Member shall have the option to purchu e the Selling Mernb'r's
Interest In the tame propoftbn as that Rember's lnterest bears to aII the Vembers ryo tledng tû purdlase
the LLC Interest A remaining Member rnay ei rclse hIs option only by glving written notlce to LLC on er
before the thlrtieth (30th) day following receipt of the LLC': notlce. Each rem ining Member notdeiring to
pge ase any/f (he Seldrlg Member's LLC Irlterestsllall gke written llotlœ tnereof to me LLC durirlg the =-4rrm
30-day period. lf all or any Qf lhe LLC Interest of the Selling Member i: nol purchased by the renalnirig
Membeo, then, subject to the unanimous approval of the remaining Members pursuant to Artizle 9 hereof.
fhe Selpng Member may sell hIs lnterest to a Onafide thktmarty purchaser on the priM and terms ret flxth
in Section 11.3 bel- . For thls purpose. the Selling Member shall provide the LLC and the remainirlg
Members wftll such infofmation regarding the third-pqdy ptlfch% e.r as they may reasonably reqflest lf Ke
remainlng Members do not unanimously apprcve the purchmser and the sale and trafïsfer of the Solling
. Member's lntereat to suc.h jurchaseer, then the Seljng Member shall remain a Memter and shall œntintle to
be obligated as a Member In accordanœ with Sedion 9.2 hereof. .
11.3 Purûbase Price and Pavment Terms. Tbe purchase price for the LLC Interest purstlant to
Eections 11.1 and 11.2 ahwe sluall be lhe fair market value of ihe Intereqt as mutually agreed between the
Selling Member apd the remainin: Membefs (the *purchase PrIc@*). lf ihe Selling Member and the remainiflg
WWe ) FfM NG AGEEMERT- eage
e'freppid 0128
 
'
* w
Members cannot mutually agree on the Purchase Price wfthin thirty (30) days after the date of qotice as
specified in Section 11.1 or 1 1.2, as the case may bed then the Purchese Price for the Setling Mernber's
Interest shall be determined by arbitration as set forth below.
Within ten (10) days after the expifvatfon of the 30-day pedod described above, the Selling
Member and the remaining Memberz shall e.11 ::11 name one (1) afbitrator. The disputed valuations of the LLC
Interest and tl)e Purchase Price determined by the Selîing Member and the remaining Members shall be
submitte lo llle arbisatof. The afbitrator shall then determine whether the Selling Member or the fertmingng
Members' Ptlrchase Price is m re refkctke of the fair market value of the LLC and the LLC Interest. The
arbitrator must seled the valuation and Purchase Price submitted by either the Selling Member or the
remaining Members. N0 other value may be determined. The decision of the arbitrator %hall ihe vakd and
binding on a1l parties, and judgment fnay be entered thereon in any court of competentjurisdidion. Ttle party
or padies whose valuation is p
.
p.t 'accepted shall pay aIl of the fees, costs and other expenses incurred in
connection with the determination.
TERMINATIQN AND. DISSOLUTION.
12.1 Diasolution. Pursuantto NRS Secion K .491, the LLC shall be dlssolved upon the occurrence
of any of the following events:
12.1 .1 The uqanimous wrltten consent of aIl the Members; or
-
al1 t)f tlle asseta ef the LLC, incltlding the Teohnology or any patent rigllts thereto. whether oœ urring in a
single tr/nsad on or a series of relateG transadions as part of a plan.
12.2 continuation and Condud of Business After Dissolution. Upon tlle occurremce of any
disMlutim event spc ified in Sectiml 12, 1 ahwe, tl- LLC aball œ ase to carry on 11 Bklslnou, euzpt Insofar
as may b. necessary for the winding tlp d Its Buslness. n e LLC shall continue as q O mpany for the
pqrpose of p