Limited Liability Company Agreement of RBT Youji, LLC dated February 8, 2016

1.1            Certificate.     On or about February 8, 2016, a Certificate of Formation (“Certificate”) for RBT - Youji, LLC, a limited liability company formed under the laws of the State of Delaware (“Company”), was filed with the office of the Delaware Secretary of State.

 

1.2            Adoption of Agreement.  The Members hereby adopt and approve this Limited Liability Company Agreement for the Company under the Act upon the terms set forth herein.

 

1.3            Supply Agreement.  The Company and Youji have agreed to use their good faith, best efforts to enter into an Exclusive Supply Agreement (“Exclusive Supply Agreement”) promptly following the Effective Date, pursuant to which Youji will agree to sell to the Company and the Company will agree to purchase from Youji certain products listed on Exhibit B-1 hereto. The general form of the Exclusive Supply Agreement is attached hereto as Exhibit B-2, provided that the parties acknowledge that various terms thereof remain in discussion.

 

1.4            Manager Managed.  The Members intend that the Company be manager managed.

 

1.5            Currency.       Unless specifically provided otherwise herein, all references to monetary units shall refer to the currency of the United States of America.

“Act” means the Delaware Limited Liability Company Act, Delaware Code Annotated Title 6, Sections 18-101 through 18-1109, as amended from time to time and any corresponding provisions of succeeding law.

 

“Affiliate” means (i) any individual, partnership, corporation, trust or other entity or association, that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a Person, or that holds a substantial beneficial interest in a Person, or (ii) any relative or spouse of any person who holds a substantial beneficial interest in a Person.  The term “control,” as used above, means, with respect to a corporation or limited liability company, the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the controlled corporation or limited liability company and, with respect to any individual, partnership, trust, other entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity.

 

“Agreement” means this Limited Liability Company Agreement of RBT - Youji, LLC, as amended.

 

“Assignee” means a person who has acquired a beneficial interest in the Company who has not, as of the relevant time, been admitted as a substitute Member in accordance with the requirements of this Agreement.

 

“Bankruptcy”  means, with respect to any Person, any of the following events occurring after the Effective Date:  (a) the filing by such Person for, or its consent to, the appointment of a trustee, receiver, or custodian of such Person’s assets: (b) the entry of an order for relief with respect to such Person in proceedings under the United States Bankruptcy Code, as amended or superseded from time to time; (c) the making by such Person of a general assignment for the benefit of creditors; (d) the entry of an order, judgment, or decree by any court of competent jurisdiction appointing a trustee, receiver, or custodian of the assets of such Person unless the proceedings and the person appointed are dismissed within ninety (90) days; or (e) the failure by such Person generally to pay his or her debts as the debts become due within the meaning of Section 303(h)(1) of the United States Bankruptcy Code, as determined by the Bankruptcy Court, or the admission in writing of such Person of its inability to pay its debts as they become due.

 

“Business” has the meaning set forth in Section 3.5.

 

“Business Day” means any day other than a Saturday, Sunday or a day upon which banking institutions are authorized or required by law or executive order to be closed in the City of San Francisco, California.

 

“Capital Account” means an account initially reflecting the Capital Contribution of a Member which the Company establishes and maintains for such Member pursuant to Section 4.3.

 

“Capital Contribution” means the total value of cash and fair market value of property, as determined by the Manager and the Management Committee contributed to the Company by a Member or the Member’s predecessor in interest.

 

"Capital Transaction" means (i) the sale, lease, exchange, condemnation, casualty or other disposition of the Company’s or Subsidiaries business or capital assets, whether voluntary or involuntary, and (ii) any financing or refinancing of the Company’s or Subsidiaries assets or other Company borrowing; except for credit purchases of goods and services on a current basis and in the ordinary course of business.

 

“Certificate” and “Certificate of Formation” means the Certificate of Formation for the Company, as originally filed with the Delaware Secretary of the State pursuant to Section 18-201 of the Act.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, the provisions of succeeding law, and to the extent applicable, the Treasury Regulations.  A reference to a specific section of the Code refers not only to that specific section but any corresponding provisions of any federal tax statute enacted after the date of this Agreement, as such specific section or corresponding provisions are in effect on the date of application of this Agreement containing such reference.

 

“Company” has the meaning set forth in Section 1.1.

 

“Competing Business” means any of the activities constituting the Business in which any Person or division of any Person may engage within all or any part of the Territory.

 

“Co-Sale Closing” has the meaning set forth in Section 9.5.3.

“Co-Sale Confirmation Notice” has the meaning set forth in Section 9.5.2.

“Co-Sale Eligible Member” has the meaning set forth in Section 9.5.

“Co-Sale Eligible Residual Membership Interest” has the meaning set forth in Section 9.5.

“Co-Sale Notice” has the meaning set forth in Section 9.5.1.

“Co-Sale Residual Interest Deficit” has the meaning set forth in Section 9.5.1.

 “Confidential Information” has the meaning set forth in Section 5.8.3.

 

“Designees” has the meaning set forth in Section 6.2.1(a).

 

“Disposition Closing” has the meaning set forth in Section 10.6.

 

“Disposition Event” means one or more of the following with respect to a Member: the death, Bankruptcy or dissolution (other than dissolution following or in connection with a transfer or assignment by the Member permitted pursuant to ARTICLE IX) of the Member, the occurrence of any other event which terminates the continued Membership of a Member other than pursuant to a transfer or assignment by the Member pursuant to ARTICLE IX.

 

“Distributable Cash” means cash that the Manager and the Management Committee deems available for Distribution to the Members from any source including the net revenues from operations, net proceeds from any sales or other dispositions or refinancing of Company assets, and all principal and interest payments with respect to any note or other obligation received by the Company in connection with sales and other dispositions of Company assets, less any portion used to pay into or establish Working Capital Reserves.

 

“Distribution”, “Distribute” and “Distributed” means the transfer of money or property by the Company to the Members without consideration.

 

 “Economic Interest” means a Member’s share, or Economic Interest Owner’s share, of the Company’s Taxable Net Income, Taxable Net Loss, and/or Distributions of the Company’s assets pursuant to this Agreement and the Act, but shall not include any other rights of a Member, including, without limitation, the right to vote or participate in the management, or any right to information concerning the business and affairs of the Company.

 

“Economic Interest Owner” means the owner of an Economic Interest (i) who has not been admitted as a Member in accordance with the requirements of this Agreement, or (ii) whose Membership Interest (but not that Member’s Economic Interest) has terminated.

 

“Effective Date” has the meaning set forth in the Preamble hereto.

 

“Exercise Period” has the meaning set forth in Section 9.4.2.

 

“Fiscal Year” means each year ended on December 31, or other fiscal year of the Company.

 

“Former Member” has the meaning set forth in Section 10.1.

 

“Former Member’s Interest” has the meaning set forth in Section 10.1.

 

“GAAP” shall mean those generally accepted accounting principles and practices which are recognized as such by the Financial Accounting Standards Board (or any generally recognized successor), consistently applied, as such principles exist from time to time.

 

“Majority in Interest of the Members” means one or more Percentage Interests of the Members which exceed fifty percent (50%) of the aggregate of all Percentage Interests held by all Members.

 

“Management Committee” initially means a five (5) person committee, unless a different number is authorized in accordance with Section 6.2, and shall comprise such successors and replacements as may be selected from time to time pursuant to Section 6.2.1 of this Agreement.

 

“Manager” means W. John Short and any other Person added as a Manager pursuant hereto and any other Persons who succeed a Manager in that capacity.

 

“Member” means any Person holding Units that has been admitted to the Company as a Member with the approval of the Manager and the Management Committee or is an Assignee who has become a Member in accordance with Article IX, and has not resigned, withdrawn, dissolved, or had its Membership Interest terminated for any other reason.

 

“Membership Interest” means a Member’s entire interest in the Company including the Member’s Economic Interest, the right to vote on or participate in the management, and the right to receive information concerning the business and affairs of the Company.

 

“Non-Competing Business” means any business that is not a Competing Business.

 

“Non-Transferring Member” has the meaning set forth in Section 9.4.

 

“Percentage Interest” means, with respect to each Unit Holder, the product of (a) 100% and (b) the quotient obtained by dividing (i) the number of Units held by a Member by (ii) the total number of Units then outstanding.

 

“Permitted Transfers” has the meaning set forth in Section 9.3.

 

“Person” means any individual, corporation, partnership, association, limited liability company, trust, estate or other entity.

 

“Presenting Member” has the meaning set forth in Section 5.8.2.

 

“Product” means those products described on Exhibit B hereto, including those products that are added to Exhibit B hereto pursuant to the terms of this Agreement.

 

“Purchasing Member” has the meaning set forth in Section 9.4.4.

 

“RBT” has the meaning set forth in the Preamble hereto.

 

“RBT Designees” has the meaning set forth in Section 6.2.1(a).

 

“Regulatory Allocations” has the meaning set forth in Section 8.8.

 

“Remaining Member” has the meaning set forth in Section 10.1.

 

“Remaining Membership Interest” has the meaning set forth in Section 9.5.5.

 

“Residual Membership Interest” has the meaning set forth in Section 9.5.

 

“Right of Co-Sale” has the meaning set forth in Section 9.5.

 

“Rights of First Refusal” has the meaning set forth in Section 9.4.6.

 

“Selling Member” has the meaning set forth in Section 9.5.

 

“Subsidiary” means any Person of which more than Fifty Percent (50%) of the Voting Power is owned or controlled by the Company at any date of determination, either directly or through other Subsidiaries.

 

“Super-Majority in Interest” means one or more Members which hold, in the aggregate, in excess of sixty percent (60%) of the aggregate of all Percentage Interests held by all Members.

 

“Super-Majority of the Management Committee” means four (4) of the five (5) members of the Management Committee.

 

“Taxable Net Income and Taxable Net Loss” means the income, gain, loss, deductions and credits of the Company in the aggregate or separately, as appropriate, determined by certified public accountants for the Company and in accordance with United States generally accepted accounting principles, consistently applied, at the close of each Fiscal Year, reflected on the Company’s information tax return filed for federal income tax purposes.

 

“Territory” means the United States of America, Canada, the United Mexican States and each of their territories.

 

“Transfer” or “Transferred” means any direct or indirect sale, assignment, transfer, conveyance, pledge, hypothecation, or other disposition voluntarily or involuntarily, by operation of law, with or without consideration, or otherwise (including, without limitation, by way of intestacy, will, gift, bankruptcy, receivership, levy, execution, charging order or other similar sale or seizure by legal process) of all or any portion of any Membership Interest. Without limiting the generality of the foregoing, the sale or exchange of at least fifty percent (50%) of the voting stock of a Member, if a Member is a corporation, or the Transfer of an interest or interests of at least fifty percent (50%) in the capital profits of a Member (whether accomplished by the sale or exchange of interests or by the admission of new partners or members), if a Member is a partnership or limited liability company, or the cumulative Transfer of such interests in a Member in a series of related transactions that effectively equal the foregoing (including Transfer of interests followed by the incorporation of a Member and subsequent stock Transfer, or Transfer of stock followed by the liquidation of a Member and subsequent Transfers of interests) will be deemed to constitute a Transfer of the Member’s entire Membership Interest.  Notwithstanding the foregoing, “Transfer” shall not include any grant by RBT of a lien on its interest to the existing RBT lienholders/shareholders or to commercial lenders.

 

“Transferring Member” has the meaning set forth in Section 9.4.

 

“Transferred Membership Interest” has the meaning set forth in Section 9.4.

 

“Transfer Notice” has the meaning set forth in Section 9.4.1.

 

“Units” means a portion of a Membership Interest of a Member.  Each Unit shall represent an equal portion of the total Percentage Interests held by all Members, and the number of Units held by each Member shall be set forth on Exhibit A, as amended from time to time.  Units repurchased or redeemed by the Company shall terminate and no longer exist.

 

“Unit Holder” means a Member owning a Unit.

 

“Unreturned RBT Capital Contributions” means, as of any date of determination, the total (but not less than zero) of (i) the Capital Contributions of RBT, less (ii) the aggregate amount of Distributions to RBT in respect of RBT’s Units pursuant to Section 7.2 excluding all minimum tax Distributions to RBT pursuant to Section 7.1.

 

“Unreturned Youji Capital Contributions” means, as of any date of determination, the total (but not less than zero) of (i) the Capital Contributions of Youji, less (ii) the aggregate amount of Distributions to Youji in respect of Youji’s Units pursuant to Section 7.2 excluding all minimum tax Distributions to Youji pursuant to Section 7.1.

 

“Unreturned Capital Contributions” means, as applicable, the Unreturned Youji Capital Contributions and the Unreturned RBT Capital Contributions.

 

“Voting Power” means with respect to any Person, the power to vote for or designate members of the board of directors, management committee, the manager or a similar Person or group, whether exercised by virtue of the record ownership of securities, under a close corporation, a limited liability company agreement, partnership agreement or similar agreement or under an irrevocable proxy.

 

“Working Capital Reserve” means any cash reserve for normal expenses and contingencies maintained by the Manager pursuant to Section 7.4.

 

“Youji” has the meaning set forth in the Preamble hereto.

 

“Youji Designees” has the meaning set forth in Section 6.2.1(a).

 

3.1           Formation.The Members have formed a limited liability company under the Act.  This Agreement controls all rights and obligations of the Members, Economic Interest Owners and Managers, as such, to the fullest extent permitted by law.

 

3.2           Name.  The name of the Company shall be “RBT - Youji, LLC.”  The Company may conduct business under that name or upon compliance with applicable laws, any other name that the Manager, with the approval of the Management Committee, deems appropriate or advisable.  The Company’s name shall be the exclusive property of the Company and no Member shall have any rights in the name or any derivations thereof.

 

3.3           Term.  The term of the Company will commence on the date of the filing of the Certificate and shall terminate as provided under Article XII.

 

3.4           Office and Agent.

 

3.4.1                 Registered Office.  The Company shall continuously maintain a registered agent in the State of Delaware as required by Section 18-104(a)(2) of the Act. The initial registered office of the Company shall be 2711 Centerville Road, Suite 400, Wilmington, DE.  The initial registered agent shall be Corporation Service Company.  The Manager, with consent of the Management Committee, may change the registered office and/or the registered agent at any time and from time to time, as permitted under the Act, upon prior written notice to the Members.

 

3.4.2                 Other Offices.  The principal office of the Company shall be located at RBT’s corporate offices in Scottsdale, Arizona, or such location as the Manager, with the approval of the Management Committee, may determine.  The Company also may have such other offices anywhere within and without the State of Arizona, as the Manager, with approval of the Management Committee, from time to time may determine.

 

3.5           Purpose of the Company.  The purpose of the Company is to (i) purchase for sale, develop, market, sell and otherwise commercialize the Products in the Territory and (ii) take such other activities incidental to the foregoing and not prohibited under the terms of this Agreement or applicable law or regulation (the “Business”).

 

4.1           Initial Capital Contributions.  Contemporaneously with the execution of this Agreement, each Member shall make Capital Contributions as set forth after each Member’s name on Exhibit A attached hereto and receive therefor a number of Units set forth on Exhibit A, which Exhibit A shall be revised to reflect any additional contributions in accordance with Section 4.4.

 

4.2           Percentage Interests.  In exchange for the Capital Contributions set forth in Section 4.1, the Members shall be deemed to have contributed capital and shall receive the Percentage Interests set forth in Exhibit A.

 

4.3           Capital Accounts.  The Company shall establish an individual Capital Account for each Member.  The Company shall determine and maintain each Capital Account in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). Each Member’s Capital Account shall initially be credited with the Capital Contribution made by such Member pursuant to Section 4.1.  If a Member transfers the Member’s Membership Interest in accordance with this Agreement, such Member’s Capital Account shall carry over to the new owner of such Membership Interest pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(1).

 

4.4           Additional Capital Contributions. Except as required by Section 7.5 below, no Member shall have any obligation to make additional Capital Contributions other than the initial Capital Contributions designated on Exhibit A. From time to time, if the Management Committee determines that additional Capital Contributions are necessary or appropriate for the conduct of the Company’s operations, the Manager shall provide written notice (“Contribution Notice”) to each of the Members specifying the required additional Capital Contribution and the number of Units, if any, that the contributing Members will receive in exchange for additional Capital Contributions.  Each of the Members shall have the right, but no obligation, to contribute their portion of such additional Capital Contributions on a pro rata basis in accordance with their Percentage Interests within thirty (30) days following receipt (as determined pursuant to Section 16.4) of the Contribution Notice.  Notwithstanding the foregoing, if RBT expends any amounts to perform any ordinary administrative functions for the Company, Youji shall promptly reimburse RBT for 45% of such amounts.

 

4.5           Return of Capital Contribution.  No time is agreed upon as to when the Capital Contributions of the Members are to be returned or whether the Capital Contributions of the Members will be returned.  The Members shall not have the right to withdraw or demand return of their Capital Contributions nor shall the Members have the right to demand and receive property other than cash in return for their Capital Contributions.

 

4.6           Adjustment upon Grant of Profits Interest.  In connection with the grant of a “profits interest” in the Company as determined pursuant to the applicable provisions of the Code, whether as consideration for the provision of services or the grant of other rights to or for the benefit of the Company by an existing Member acting in a Member capacity, or by a new Member acting in a Member capacity or in anticipation of being a Member, the Company shall increase or decrease the Capital Accounts of the existing Members to reflect a revaluation of Company property (including intangible assets such as goodwill) on the Company's books effective as of the date immediately before the date the grant of the profits interest in the Company occurs.  This provision is intended to comply with Treasury Regulation Section 1.704-1(b)(2)(iv)(f)(5)(iii).  Each of the Members hereby elects to apply this provision whenever there is a grant of a profits interest in the Company.

 

5.1           Members and Units.  Any Membership Interests in the Company shall be represented by Units. The Members shall have the rights of Members as provided herein.

 

5.2           Admission of Additional Members.  Other than substitute Members admitted pursuant to Article IX, additional Members may be admitted to the Company, only with the consent of the Manager and the Management Committee as set forth below.  Any additional Members shall obtain Units and Membership Interests and will participate in the management, Taxable Net Income, Taxable Net Losses, and Distributions of the Company on such terms as are set forth herein.  Substitute Members and assignees of Members may be admitted only in accordance with Article IX.  Upon admission of a new or substitute Member, this Agreement shall be amended to set forth the name, Capital Contribution, number of Units and Percentage Interest of the new Member and the new Member shall enter into this Agreement as amended, subject to the following:

 

5.2.1                 Capital Contribution.  Each additional Member shall make a Capital Contribution in such amount and on such terms as the Management Committee determines to be appropriate based upon the needs of the Company, the net value of the Company’s assets, the Company’s financial condition and the benefits anticipated to be realized by the additional Member;

 

5.2.2                 No Deemed Termination.  No Member shall be admitted if the effect of admission would be termination of the Company under Code Section 708(b);

 

5.2.3                 Compliance with Law.  The admission must comply with all applicable state and federal securities and all other applicable laws; and

 

5.2.4                 Agreement.  Each additional Member shall agree to be bound by the terms of this Agreement.

 

5.3           Withdrawals or Resignations.  No Member may withdraw or resign from the Company without the prior written consent of the Management Committee, which consent shall not be unreasonably withheld or delayed.  If a Member withdraws from the Company, the withdrawing Member’s Membership Interest shall immediately terminate and the Member shall retain solely an Economic Interest.  Such withdrawal shall not entitle the withdrawing Member to the return of any of the withdrawing Member’s Capital Contribution.

 

5.4           Payments to Members.  Except (i) as approved in writing by Management Committee, (ii) as specified in this Agreement, (iii) as specified in the Exclusive Supply Agreement or (iv) as otherwise provided in an agreement between the Company and the Member that has been approved by the Management Committee, no Member or Affiliate of a Member is entitled to remuneration for services rendered or goods provided to the Company.  However, the Company shall reimburse RBT for the actual cost of goods and materials used by the Company and for organizational expenses (including, without limitation, legal and accounting fees and costs) incurred to form the Company and prepare the Certificate, this Agreement and the Exclusive Supply Agreement.  If the Company does not have the funds available to so reimburse RBT, then Youji shall promptly pay to RBT 45% of such reimbursable amounts.

 

5.5           Termination of Membership Interest.  Upon (i) any Transfer or attempted Transfer of all or a portion of a Member’s Membership Interest in violation of this Agreement, (ii) the occurrence of a Disposition Event as to such Member that does not result in the dissolution of the Company or (iii) the withdrawal or resignation of a Member in accordance with Section 5.3, the Membership Interest of that Member shall be terminated and thereafter that Member shall be an Economic Interest Owner only unless such Membership Interest is purchased by the Company and/or one or more of the Remaining Members as provided in ARTICLES IX and X.  Each Member acknowledges and agrees that such termination or purchase of a Membership Interest upon the occurrence of any of the foregoing events is not unreasonable under the circumstances existing as of the date hereof.

 

5.6           Loans and Other Transactions with the Company.  With the express prior approval of the Management Committee, a Member may loan money to the Company.  Interest shall be payable on any such loans at competitive rates for loans of similar character and amount, but not to exceed the maximum usury rate permitted for loans as to which no exemption from usury applies.  No such loan shall constitute a Capital Contribution or increase the Percentage Interest of the lending Member unless otherwise expressly provided herein or otherwise agreed by the Management Committee.

 

5.7           Meetings of Members.  Except as required by applicable law, no annual or regular meetings of the Members are required.  However, if meetings are held, then such meetings shall be held in accordance with this Section 5.7 and applicable law.

 

5.7.1                 Place of Meetings.  Meetings of Members shall be held telephonically unless otherwise determined by the Management Committee.

 

5.7.2                 Power to Call Meetings.  Meetings of the Members may be called by the Manager or by any Member holding twenty five percent (25%) or more of the total Units then outstanding, for the purpose of addressing any matters on which the Members may vote.

 

5.7.3                 Notice of Meetings.

 

(a)            Whenever Members are required or permitted to take any action at a meeting, a written notice of the meeting shall be given not less than ten (10) days nor more than sixty (60) days before the date of the meeting to each Member entitled to vote at the meeting; provided that each Member shall be able to waive the notice requirements hereof in whole or part.  The notice shall state the place, date and hour of meeting and the general nature of the business to be transacted at such meeting.  No other business may be transacted at such meeting, unless at least a Majority in Interest of the Members is present at the meeting and approves such other business.

 

(b)            Notice of a Members’ meeting shall be given either personally or by mail or other means of written communication (including by electronic transmission), addressed to the Member at the address of Member appearing on the books of the Company or given by the Member to the Company for the purpose of notice.  The notice or report shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication.

 

(c)            Upon written request to the Manager by any Person(s) entitled to call a meeting of the Members, the Manager shall immediately cause notice to be given to the Members entitled to vote that a meeting will be held at a time requested by the Person(s) calling the meeting, not less than ten (10) days nor more than sixty (60) days after the receipt of the request.  If the notice is not given within five (5) days after the receipt of the request, the Person(s) entitled to call the meeting may give the notice.

 

(d)            When a Members’ meeting is adjourned to another time or place, except as provided in the last sentence of this paragraph, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken.  At the adjourned meeting, the Company may transact any business that may have been transacted at the original meeting.  If the adjournment is for more than forty-five (45) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote at the meeting.

 

5.7.4                 Action without a Meeting.  Any action that may be taken at any meeting of the Members may be taken without a meeting if a written consent setting forth the action so taken is executed and delivered to the Company by Members having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all Members entitled to vote thereon were present and voting.

 

Any Member giving a written consent, or the Member’s proxy holder, may revoke the consent by a writing received by the Company prior to the time that the written consents of Members having the minimum number of votes that would be required to authorize the proposed action have been filed with the Company, but may not do so thereafter.  Such revocation is effective upon its receipt at the office of the Company.

 

5.7.5                 Proxies.  The use of proxies in connection with this Section 5.7 will be governed in the same manner as in the case of corporations formed under the Delaware General Corporation Law.

 

5.8           Business Activities of Members; Confidentiality.

 

5.8.1                 Non-Competing Business.  The Members and their Affiliates may engage or invest in, independently or with others, any business activity relating to a Non-Competing Business. Neither the Company nor any other Member shall have any right in or to such other ventures or activities or to the income or proceeds derived therefrom.  The Members, as such, shall not be obligated to present any investment opportunity or prospective economic advantage to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by the Company relating to a Non-Competing Business.  Each Member hereby waives any and all rights and claims which it may otherwise have against the other Members and their officers, directors, shareholders, partners, members, managers, agents, employees, and Affiliates as a result of any of such activities.

 

5.8.2                 Competing Business.  No Member, nor any Affiliate of a Member, shall directly or indirectly own, manage, operate, control or participate in the operation of any Competing Business (including without limitation, the sale of Products in the Territory), whether independently or with others, unless expressly approved in writing in advance by the Member(s) other than the Presenting Member (as defined below).  Each Member shall be obligated to present any investment opportunity or prospective economic advantage to the Company relating to a Competing Business (such Member presenting the opportunity on behalf of itself or, as applicable, it Affiliates, the “Presenting Member”).  However, if the Member(s) other than the Presenting Member approves any of such activities in writing, then the Member(s) other than the Presenting Member hereby waives any and all rights and claims which it may otherwise have against the Presenting Member and the Presenting Member’s officers, directors, shareholders, partners, members, managers, agents, employees, and Affiliates as a result of any of such activities.

 

5.8.3                 Confidentiality.  During the term of the Company, Youji, the Youji Designees and all other Youji representatives will receive or gain access to certain non-public information regarding the Company, its Business, or its Subsidiaries, including without limitation, technical information, market and marketing information, tactics, strategies and costs, manufacturing techniques,  processes, costs and technologies, accounting, financial, personnel and planning information, details of banking and other borrowing relationships, customer lists and customer contact information, product formulations, product and component costs and pricing tactics and strategies, supplier names and contact information, employee and consultant or advisor  names, compensation and contact information, raw material purchase costs and contracts, legal information and other intellectual property rights and confidential information proprietary to the Company, its Subsidiaries or RBT (“Confidential Information”). Youji agrees, and any representative of Youji will agree, to hold in confidence and trust and to act in a fiduciary manner with respect to all such Confidential information, except to the extent otherwise required by law and any other applicable regulatory process.  Youji understands and agrees that material nonpublic information regarding the Company or its Subsidiaries may constitute material nonpublic information of RBT, and agrees to comply with all applicable securities laws with regard to its use of such information.

 

5.9           Members Are Not Agents.  The management of the Company is vested in the Manager, the Management Committee and duly appointed officers of the Company. No Member, acting solely in the capacity of a Member, is an agent of the Company nor can any member in such capacity bind or execute any Agreement or instrument on behalf of the Company.

 

6.1           Management of the Company.  Except as otherwise provided in the Certificate or in this Agreement, the business, property and affairs of the Company shall be managed by the Manager, subject to  such assistance, direction, approvals and consents as are required hereunder from the Management Committee and the authority granted to the Company’s officers by the Management Committee.  The Manager, with approval of the Management Committee when required pursuant hereto, but subject to the powers delegated to the Company’s officers, shall have full and complete 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, but in all cases subject to the limitations set forth herein.  The Manager and the Manager’s designees are 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.  Without limiting the generality of the foregoing and subject to the limitations imposed under Section 6.2.4, and Section 6.3 or in other express provisions of this Agreement, any employment agreement between the Manager and the Company that has been approved by the Management Committee or any other required approvals of the Management Committee set forth herein, the Manager 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 of a “manager” described in the Act.

 

6.1.1                 Election of Manager(s), Number, Term, and Qualifications; Vote of Managers.  The Company shall initially have one (1) Manager.  The initial Manager shall be W. John Short.  The number of Managers of the Company shall be fixed from time to time by the affirmative vote or written consent of a Majority in Interest of the Members; provided, that in no instance shall there be less than one (1) Manager and provided further, that if the number of Managers is increased to more than one (1), the Certificate shall be amended to delete the statement that the Company has only one Manager.  Unless a Manager resigns or is removed, the Manager shall hold office until a successor is elected and qualified.  Managers shall be elected by the affirmative vote or written consent of a Majority in Interest of the Members.  A Manager need not be a Member, an individual, a resident of any specific State, or a citizen of the United States.  If there is more than one (1) Manager, the vote of a majority of the Managers shall govern all decisions to be made by the Managers.

 

6.1.2                 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; and, 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.

 

6.1.3                 Removal.  All or any lesser number of Managers may be removed at any time, with or without cause, by the affirmative vote of a Majority in Interest of the Members at a meeting called expressly for that purpose, or by the written consent of a Super-Majority in Interest of the Members.  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.

 

6.2           Management Committee.  The Company shall be managed by the Manager, subject to the approval of the Management Committee to certain decisions specifically required herein.  The Management Committee shall be composed of at least five (5) individuals, or such other greater odd number of individuals as is approved by a Super Majority in Interest of the Members, who may each be Members, Managers or any other Person selected to serve on the Management Committee as provided herein.

 

6.2.1                 Election, Resignation and Removal of Management Committee Members.

 

(a)            Election.  Three (3) members of the Management Committee  shall consist of individuals appointed by RBT (“RBT Designees”).  The initial RBT Designees shall be W. John Short, Dale Belt and Robert Smith.  The remaining two (2) members of the Management Committee shall consist of individuals appointed by Youji (“Youji Designees”, and together with the RBT Designees, the “Designees”).  The initial Youji Designees shall be [____________] and [______________].

 

(b)            Resignation. Any member of the Management Committee may resign at any time by giving written notice to the Manager and the remaining Members of the Management Committee.  The resignation of any member of the Management Committee shall take effect upon receipt of that notice or at such later time as shall be specified in the notice; and, unless otherwise specified in the notice, the acceptance of the resignation shall not be necessary to make it effective. The resignation of a member of the Management Committee who is also a Member shall not affect the resigning member’s rights as a Member and shall not constitute a withdrawal of a Member.

 

(c)            Removal.  The RBT Designees may be removed or replaced only by RBT.  The Youji Designees may be removed or replaced only by Youji.  RBT and Youji may remove their respective designees at any time, with or without cause.  Any removal of a member of the Management Committee that is a Member shall not affect such removed member’s rights as a Member or constitute a withdrawal of a Member.

 

6.2.2                 Meetings of the Management Committee.  The Management Committee shall hold regularly scheduled telephonic meetings at least once each calendar quarter, and participation by telephone shall be arranged for Management Committee members. The Management Committee shall designate the times of these regular meetings.  No notice need be given of regular meetings for which the Management Committee has designated a time.  Special meetings of the Management Committee may be held at any time upon the call of any two (2) members of the Management Committee.  Notice of any special meeting shall be sent to the last known address of each Management Committee member at least five (5) Business Days before the meeting, which notice may be sent electronically.  Notice of the time, place and purpose of such meeting may be waived in writing before or after such meeting, and shall be equivalent to the giving of notice.  Attendance at such meeting, whether by telephone or in person, shall also constitute a waiver of notice thereof, except where a Person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting need be specified in the notice or waiver of notice of such meeting.

 

(a)            A quorum for the transaction of business at a meeting shall require the presence of a majority of the members of the Management Committee and at least one Youji Designee and one RBT Designee.  Except as otherwise provided in this Agreement, the vote or consent of three (3) Management Committee members shall be the act of the Management Committee.

 

(b)            Meetings of the Management Committee shall be held at such location to be determined by the Management Committee, or such meetings may be held telephonically without a physical location.  The Management Committee may appoint from its members (i) a Chairman who shall preside at meetings, and (ii) a Secretary of the meeting.  At least one (1) Management Committee meeting each year shall be held in person.

 

(c)            Anything in this Section 6.2 to the contrary notwithstanding, any action that may be taken at a meeting of the Management Committee may be taken without a meeting if a consent in writing, setting forth the action to be taken, shall be signed by those Persons with the requisite authority to take such action under this Agreement, with at least five (5) Business Days prior notice thereof provided to the members of the Management Committee (or with waiver thereof by the Members) and such consent shall have the same force and effect as a vote duly called and held.  No notice shall be required in connection with the use of a written consent pursuant to this Section 6.2.1 if a Super-Majority of the Management Committee consents to the action.

 

(d)            Meetings may be held by means of conference telephone or similar communications equipment so long as all persons participating in the meeting can hear each other.  Participation in a meeting by means of conference telephone shall constitute presence in person at such meeting, except where a Person participates in the meeting for the express purpose of objecting to the transaction of any business thereat on the ground that the meeting is not lawfully called or convened.

 

6.2.3                 Powers of the Management Committee.  Except as specifically provided herein, the Management Committee shall have no power to cause the Company to do any act, but shall have such approval and other authority as expressly provided hereunder.

 

6.2.4                 Super-Majority Vote of the Management Committee.  Notwithstanding anything to the contrary contained herein, neither the Manager nor any Company officer shall have authority to cause the Company to take, and the Company shall not take, the following actions without first obtaining the affirmative vote or written consent of a Super-Majority of the Management Committee:

 

(a)            Any amendment to this Agreement or the Certificate, unless specifically provided otherwise herein;

 

(b)            The redemption or repurchase of any securities of the Company or its Subsidiaries, except as specifically provided otherwise herein;

 

(c)            Dissolve, liquidate or approve the dissolution or liquidation of the Company or its Subsidiaries; and

 

(d)            Filing any petition in bankruptcy or reorganization or instituting any other type of bankruptcy, reorganization or insolvency proceeding with respect to the Company or any of its Subsidiaries, consenting to the institution of involuntary bankruptcy, reorganization or insolvency proceedings with respect to the Company or any of its Subsidiaries, or the making by the Company or any of its Subsidiaries of a general assignment for the benefit of its creditors.

 

6.3           Consent of Members.  In addition to any other limitations expressly set forth in this Agreement, no Manager or officer shall have the authority to cause the Company to engage in (and the Company shall not engage in) the following transactions without first obtaining the affirmative vote or written consent of at least a Super-Majority in Interest of the Members.

 

6.3.1                 The sale, exchange or other disposition of all, or substantially all, of the Company’s assets other than in the ordinary course of business, except in the orderly liquidation and winding up of the Business of the Company upon its duly authorized dissolution, of the merger of the Company with another entity other than as part of a transaction primarily related to a change of the Company’s jurisdiction;

 

6.3.2                  An alteration of the primary purpose of the Company (see Section 3.5); and

 

6.3.3                  The amendment of this Agreement or the Certificate, except as specifically provided otherwise herein.

 

6.4           Liability of Manager and Management Committee Members; Performance of Duties.  No Manager, member of the Management Committee or officer shall be liable, responsible or accountable to the Company or to any Member for any mistake of fact or judgment, or doing or failing to do any act, or any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of gross negligence, reckless or intentional misconduct committed fraudulently or in bad faith or a knowing violation of law by the Manager, Management Committee member or officer.  In performing their respective duties, the Manager, the Management Committee members and any officers may rely on information obtained from agents or consultants retained by the Company, if the Manager, Management Committee member or officer reasonably and in good faith believes such persons to be reliable and competent as to such matter. Each of the Members acknowledges and agrees that except as provided above or elsewhere in this Agreement, the Manager, and any officers or Members of the Management Committee shall have no fiduciary duties to the Company or the Members.

 

6.5           Devotion of Time.  Except as otherwise provided herein or in any employment agreements, neither the Manager, the Management Committee members, the Members nor the officers of the Company are obligated to devote all or any specified portion of their time or business efforts to the affairs of the Company, but each shall devote appropriate time, effort and skill for the successful operation of the Company.

 

6.6           Competing Activities by Management Committee Members.  Subject to Section 5.8 hereof, the Designees and their agents and Affiliates may not engage or invest in, independently or with others, any Competing Business, and the Designees shall be obligated to present any investment opportunity or prospective economic advantage, each with respect to a Competing Business, to the Company.

 

6.7           Transactions between the Company and the Managers.  Notwithstanding that it may constitute a conflict of interest, a Manager may, and may cause his, her or its 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, the Management Committee approved the transaction and 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.  Each of the Members hereby approves the Exclusive Supply Agreement.

 

6.8           Payments to Managers.  Except as specified in this Agreement, no Manager, Management Committee member or Affiliate thereof is entitled to remuneration for services rendered or goods provided to the Company other than pursuant to the Exclusive Supply Agreement.

 

6.9           Acts of Manager as Conclusive Evidence of Authority.  Any note, mortgage, evidence of indebtedness, contract, certificate, statement, conveyance, or other instrument in writing, and any assignment or endorsement thereof, executed or entered into between the Company and any other Person, when signed by a Manager and any officer designated with signatory authority by the Management Committee is not invalidated as to the Company by any lack of authority of the signing party in the absence of actual knowledge on the part of the other Person that the signing party had no authority to execute the same.

 

6.10        Limited Liability.  No person who is a Manager or officer or both a Manager and officer of the Company or a member of the Management Committee 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, officer or Management Committee member.

 

6.11         Membership Interests of and Voting by Manager.  Except as otherwise provided in this Agreement, Membership Interests held by the Manager as a Member shall entitle the Manager to all the rights of a Member, including without limitation the voting rights of a Member and the rights of an Economic Interest Owner.

 

6.12        Officers of the Company.  The Manager, with approval of the Management Committee, may designate one or more individuals as officers of the Company, who shall have such titles and exercise and perform such powers and duties as shall be assigned to them from time to time by the Manager. Officers need not be Members, Managers or residents of any specific State.

 

6.12.1               Term.   Any officer may be removed by the Manager or Management Committee  at any time, with or without cause.  Each officer shall hold office until his or her successor shall be duly designated and shall qualify or until the earlier of the officer’s death, resignation or removal.  Any number of offices may be held by the same Person.  The salaries or other compensation, if any, of the officers and agents of the Company shall be fixed by the Manager, with approval of the Management Committee.

 

6.12.2              Initial Officers.  The Manager hereby appoints, and the Management Committee approves, the following officers of the Company, who shall be subject to removal as provided in this Section 6.12:  (i) W. John Short, President, (ii) Dale Belt, Secretary and Treasurer, and (iii) Robert Smith, Vice President-Technical Services.

 

6.12.3  Powers and Duties of Officers. The Chief Executive Officer, President, if any, and Vice Presidents shall have such powers and shall perform such duties as shall have been assigned to them from time to time by the Manager. The Secretary shall give, or cause to be given, notice of all meetings, and all other notices required by law or by this Agreement. The Secretary shall record all the proceedings of the meetings in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him or her from time to time by the Manager. The Treasurer shall have the custody of all funds, securities, evidences of indebtedness and other valuable documents of the Company. The Treasurer shall receive and give or cause to be given receipts and acquaintances for moneys paid in on account of the Company and shall pay out of the funds on hand all just debts of the Company of whatever nature upon maturity of the same. The Treasurer shall enter or cause to be entered in books of the Company to be kept for that purpose full and accurate accounts of all moneys received and paid out on account of the Company, and whenever required by Manager or the Management Committee, the Treasurer shall render a statement of the Company’s cash accounts. The Treasurer shall keep or cause to be kept such other books as will show a true record of the expenses, losses, gains, assets and liabilities of the Company. Without limitation upon the foregoing, the Treasurer shall perform such other duties as may be assigned to him from time to time by the Manager. If the Company has a Chief Financial Officer, the Chief Financial Officer shall be the Treasurer.

 

6.13        RBT Reimbursement for Shared Employees.  If any RBT employee is required to perform services for the Company pursuant to the terms of this Agreement, then the Company shall promptly reimburse RBT for each such employee for an amount equal to the product of (i) the percent of time that a RBT is required to provide services to the Company and (ii) the amount of base salary and related payroll taxes and benefits paid by RBT to such RBT employee.  The provisions of this Section 6.13 shall in no event require the approval of the Manager or the Management Committee.

 

7.1           Tax Liabilities.  Subject to any limitations contained elsewhere in this Agreement, the Company shall make minimum quarterly cash Distributions of Distributable Cash pursuant to Section 7.2 to each Member in an amount of cash equal to forty percent (40%) of the Taxable Net Income allocated to that Member with respect to each tax year of the Company; provided that unless otherwise approved by the Management Committee, no such Distributions shall be made to the extent that the Company will maintain less than $250,000 of cash after such Distributions.

 

7.2           Discretionary Distribution of Distributable Cash.  Subject to applicable law and any limitations contained elsewhere in this Agreement, the Manager shall Distribute all or a portion of Distributable Cash to the Members at such time or times as the Management Committee may designate; provided that Distributions upon dissolution of the Company shall be made in accordance with Section 12.3.  Except as otherwise provided in Section 12.3 with respect to Distributions upon dissolution and liquidation, Distributions of Distributable Cash shall be made in the following priority:

 

7.2.1                 Capital Transaction.  Any amounts Distributed with regard to a Capital Transaction shall be made as follows::

 

(a)            Preference.  First, to the Members to the extent of, and in proportion to, their Unreturned Capital Contributions; and

 

(b)            Percentage Interests.  Next, to the Members in proportion to their Percentage Interests.

 

7.2.2                 Not a Capital Transaction.  Any amounts Distributed other than with regard to a Capital Transaction shall be made to the Members in proportion to their Percentage Interests.

 

7.3           No Restoration of Deficit Capital Account Balance.  No Member or Manager shall be obligated to contribute to the Company to restore a deficit in that Member’s Capital Account balance.  No Member shall be obligated to contribute to the Company to allow a return of capital to any other Member.

 

7.4           Maintenance of Working Capital Reserve.  The Management Committee, may set aside out of net cash from operations and cash from capital transactions a Working Capital Reserve for repayment of any Company indebtedness, for operating expenses and for the replacement or preservation of any Company asset.  Any portion of such Working Capital Reserve that the Management Committee deems unnecessary for the prudent conduct of Company business may be Distributed to the Members in accordance with this ARTICLE VII.

 

7.5           Limitations on Distributions.  No cash or property shall be distributed to a Member to the extent that the Distribution is prohibited by Section 18-607 of the Act.  Any Member who receives a distribution from the Company, all or a portion of which is determined to have been prohibited by Section 18-607 of the Act, shall, within thirty (30) days following notice, return such prohibited portion of the distribution to the Company.

 

8.1           Taxable Net Income.  Except as otherwise provided in Section 8.2 or Section 8.3, Taxable Net Income shall be allocated to the Members in accordance with each Member’s Percentage Interest.

 

8.2           Taxable Net Loss.  Except as provided in this Section 8.2 or Section 8.3, Taxable Net Loss shall be allocated to the Members in accordance with each Member’s Percentage Interest.  Notwithstanding the previous sentence, loss allocations to a Member shall be made only to the extent that such loss allocations will not create a deficit Capital Account balance for that Member in excess of an amount, if any, equal to such Member’s share of Company minimum gain, as such term is used in Treasury Regulations Section 1.704-2(g)(2), that would be realized on a foreclosure of the Company’s property.  Any loss not allocated to a Member because of the foregoing provision shall be allocated to the other Members (to the extent the other Members are not limited in respect of the allocation of losses under this Section 8.2).  Any Taxable Net Loss reallocated under this Section 8.2 shall be taken into account in computing subsequent allocations of Taxable Net Income and Losses pursuant to this Article VIII, so that the net amount of any item so allocated and the Taxable Net Income and Losses allocated to each Member pursuant to this Article VIII, to the extent possible, shall be equal to the net amount that would have been allocated to each such Member pursuant to this Article VIII if no reallocation of Taxable Net Losses had occurred under this Article VIII.

 

8.3           Special Allocations.

 

8.3.1  Minimum Gain Chargeback. Notwithstanding Section 8.1 and Sections 8.2, if there is a net decrease in Company minimum gain, as such term is used in Treasury Regulations Section 1.704-2(g)(2), during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, in subsequent Fiscal Years) in an amount equal to the portion of such Member’s share of the net decrease in Company minimum gain that is allocable to the disposition of Company property subject to a nonrecourse liability, which share of such net decrease shall be determined in accordance with Treasury Regulations Section 1.704-2(g)(2). Allocations pursuant to this Section 8.3.1 shall be made in proportion to the amounts required to be allocated to each Member under this Section 8.3.1. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). This Section 8.3.1 is intended to comply with the minimum gain chargeback requirement contained in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

 

8.3.2                 Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt.  Notwithstanding Section 8.1 and Section 8.2 of this Agreement, if there is a net decrease in Company minimum gain attributable to a Member nonrecourse debt, during any fiscal year, each Member who has a share of the Company minimum gain attributable to such Member nonrecourse debt (which share shall be determined in accordance with Treasury Regulations Section 1.704-2(i)(5)) shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, in subsequent fiscal years) in an amount equal to that portion of such Member’s share of the net decrease in Company minimum gain attributable to such Member nonrecourse debt that is allocable to the disposition of Company property subject to such Member nonrecourse debt (which share of such net decrease shall be determined in accordance with Treasury Regulations Section 1.704-2(i)(5)).  Allocations pursuant to this Section 8.3.2 shall be made in proportion to the amounts required to be allocated to each Member under this Article VIII.  The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(i)(4).  This Section 8.3.2 is intended to comply with the minimum gain chargeback requirement contained in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

8.3.3                 Nonrecourse Deductions.  Notwithstanding Section 8.3.2, any nonrecourse deductions (as defined in Treasury Regulations Section 1.704-2(b)(1)) for any fiscal year or other period shall be specially allocated to the Members in proportion to their Percentage Interests.

 

8.3.4                 Member Nonrecourse Deductions.  Notwithstanding Section 8.3.2, those items of Company loss, deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to Member nonrecourse debt for any fiscal year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member nonrecourse debt to which such items are attributable in accordance with Treasury Regulations Section 1.704-2(i).

 

8.3.5                Qualified Income Offset.  Notwithstanding Section 8.2 if a Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), or any other event creates a deficit balance in such Member’s Capital Account in excess of such Member’s share of Company minimum gain, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate such excess deficit balance as quickly as possible.  Any special allocations of items of income and gain pursuant to this Section 8.3.5 shall be taken into account in computing subsequent allocations of income and gain pursuant to this Article VIII, so that the net amount of any item so allocated and the income, gain, and losses allocated to each Member pursuant to this Section 8.3.5 to the extent possible, shall be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of this Article VIII if such unexpected adjustments, allocations, or distributions had not occurred.

 

MEMBERS
RICEBRAN TECHNOLOGIES,
a California corporation
By:	/s/ W. John Short
	W. John Short, Chief Executive Officer

Address:	6720 North Scottsdale Rd., Suite 390
	Scottsdale, AZ  85253
Facsimile:	(480) 315-8275

By:	/s/ Arvind Narula
	Arvind Narula
Title:	Director

Address:	Youji Company Limited
	Unit 21, 5/F, Kowloon Bay Industrial Centre,
	15 Wang Hoi Road, Kowloon, HONG KONG
	Tel: +852 2759 1213
	Fax: +852 2759 1215

/s/ W. John Short
W. John Short

Address:	6720 North Scottsdale Rd., Suite 390
	Scottsdale, AZ  85253

	Member	Total Initial Capital Contributions
	RBT
	Youji

	Member	Units	Percentage Interest
	RBT	5,500	55%
	Youji	4,500	45%
	Total	10,000	100%

	Member	Initial Capital Accounts (as of Effective Date)
	RBT
	Youji