LIMITED LIABILITY COMPANY AGREEMENT
OF HORIZON VISION CENTERS, L.L.C.
Organized under the Delaware Limited Liability Company Act (the "Act").
ARTICLE I.
NAME AND LOCATION
Section 1.1. Name. The name of this limited liability company is Horizon
Vision Centers, L.L.C. (the "Company").
Section 1.2. Members. The members of the Company upon the execution of
this Limited Liability Company Agreement (this "Agreement") shall be Prime RVC,
Inc., a Delaware corporation ("Prime"), and those certain persons, other than
Prime, listed on Exhibit A attached hereto ("Other Members"). For purposes of
this Agreement, the "Members" shall include such named members and any new
members admitted pursuant to the terms of this Agreement, but does not include
any person or entity who has ceased to be a member in the Company.
Section 1.3. Principal Office. The principal office of the Company shall be
located in 0000 Xxxxxxx xx Xxxxx Xxx., Xxxxx X-000, Xxxxxx, Xxxxx 00000-0000, or
such other location as may be selected by the Members.
Section 1.4. Registered Agent and Address. The name of the registered agent
and the address of the registered office of the Company as set forth in the
Certificate of Formation of the Company are:
The Corporation Trust Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Section 1.5. Other Offices. Other offices and other facilities for the
transaction of business shall be located at such places as the Managers may from
time to time determine.
ARTICLE II.
MEMBERSHIP
Section 2.1. Members' Interests. The "Membership Interest" of each Member
is set forth on Exhibit A.
Section 2.2. Admission to Membership. The admission of new Members
shall be only by the vote of the Managers pursuant to Section 8.9 hereof. If new
Members are admitted, this Agreement shall be amended to reflect each Member's
revised Membership Interest.
Section 2.3. Property Rights. No Member shall have any right, title, or
interest in any of the property or assets of the Company.
Section 2.4. Liability of Members. No Member of the Company shall be
personally liable for any debts, liabilities, or obligations of the Company,
including under a judgment decree, or order of court except or expressly
provided otherwise in an agreement between the Member and the Company or another
party.
Section 2.5. Transferability of Membership. Except as expressly
provided in this Agreement, Membership Interests in the Company are transferable
only with the unanimous written consent of all Members. If such unanimous
written consent is not obtained when required, the transferee shall be entitled
to receive only the share of profits or other compensation by way of income and
the return of contributions and distributions of available earnings to which the
transferor Member otherwise would be entitled. Notwithstanding the foregoing,
(i) the Membership Interests of any Member may be freely transferred, without
consent, to any entity that is then owned or controlled, directly or indirectly,
by Prime Medical Services, Inc., a Delaware corporation ("PMSI") or its
successor in interest, (ii) the Membership Interests of any Member may be freely
assigned, pledged or otherwise transferred, without consent, to secure any debt,
liability or obligation owed to Prime by the Company, any Member or any entity
affiliated with the Company, (iii) the Membership Interests of any Member may be
freely assigned, pledged or otherwise transferred, without consent, in favor of
the Lender(s) under, or by the Lender(s) as a result of the enforcement of any
security interest arising pursuant to, those certain Credit Facilities (the
"Credit Facilities") of PMSI, and/or any of PMSI's subsidiaries, and (iv) the
pledge by Other Members of its right to receive distributions from the Company
in respect of its Membership Interest shall not be deemed to violate any
provision of this Agreement.
Section 2.6 Special Options to Sell or Acquire Remaining Membership
Interests.
(a) Prohibition on Sale. Other than those permitted transfers
specifically set forth in Section 2.5, each Other Member agrees that it will not
transfer, assign, pledge, hypothecate, or in any way alienate any of its
Membership Interests, or any interest therein, whether voluntarily or by
operation of law, or by gift or otherwise, except in accordance with the
provisions of this Section or Section 2.7, or except pursuant to those certain
Assignment and Security Agreements by and between Prime/BDR Acquisition, L.L.C.,
a Delaware limited liability company ("BDR") or one of its affiliates and each
Other Member (the "Security Agreement"). Any purported transfer in violation of
this Section or Section 2.7 shall be void and ineffectual, and shall not operate
to transfer any interest or title to the purported transferee. Each Other Member
agrees that the Company may, and the Company agrees to, issue stop-transfer
orders, or take any other necessary action, to ensure that the foregoing
provisions of this Section and Section 2.7 are given full effect.
(b) Option to Sell. Upon (i) the death, retirement (only if
such Other Member is Xxxxx X. Xxxxx III and Xxxx X. Xxxxx (collectively,
"Xxxxx"), or is a physician and only as defined below), cessation of employment
with the Company (only if such Other Member is Xxxxx), bankruptcy, insolvency,
disability (only if such Other Member is Xxxxx, or is a physician and only as
defined below) or incompetency of an Other Member, (ii) any other involuntary
transfer of any Membership Interest of the Company now or hereafter owned by an
Other Member, or any interest therein (including, without limitation, transfers
of interests upon divorce or death of a spouse of an Other Member, but excluding
any transfers governed by Section 2.7), (iii) relocation of an Other Member's
primary residence (other than that of Xxxxx) outside of a two hundred (200) mile
radius of the center or facility at which such Other Member primarily renders
services, or (iv) if such Other Member is a physician or other practicing
licensed professional, the performance by an Other Member, during any one-month
period, of greater than thirty (30%) of his or her professional medical
activities outside of a two hundred (200) mile radius of the center or facility
primarily utilized by such Other Member on the date of this Agreement; such
Other Member's executor, administrator, trustee, custodian, receiver or other
legal or personal representative (the "Representative"), or such Other Member,
in the case of retirement or departure, shall give written notice of that fact
to the Company. In such event, the Representative or such Other Member shall
have a period of sixty (60) days (the "Put Period") following the date of such
death, retirement, bankruptcy, insolvency, disability, incompetency or
relocation of primary residence or practice, as the case may be, within which
time it may require that the Company purchase (subject to the remaining
provisions of this subsection) all of such Other Member's Membership Interests,
upon the terms and conditions hereinafter set forth, by giving notice of such
election in writing to the Company. The Company may, in its sole discretion,
offer all or a portion of such Membership Interests to the Other Members (other
than the selling Other Member), on a pro rata basis in relation to each eligible
Other Member's percentage ownership of the Company, but any agreement by the
eligible Other Members to purchase all or a portion of such Membership Interests
shall not limit the Company's obligation to purchase within the time frame set
forth in this Section. If the Company has offered all of such Membership
Interests to the Other Members (other than the selling Other Member), and the
eligible Other Members have not committed to purchase all of such Membership
Interests within five (5) days from the date of offer, then the Company may, in
its sole discretion, offer all or a portion of the remaining Membership
Interests to Prime, in which event Prime must participate in such purchase upon
the same terms and conditions as the Company. For purposes of this Agreement,
(x) "disability" shall apply only if the Other Member is a physician and shall
mean any condition which in the reasonable judgment of Prime, would impair such
Other Member's ability to materially perform his or her routine duties for a
period of six (6) months or more, (y) "retirement" shall apply only if such
Other Member is a physician and shall mean the cessation of the routine practice
of medicine (provided that any physician who transfers his or her entire
practice to a licensed medical professional meeting the Company's then current
credentialing program shall not be deemed to have retired for purposes of this
subsection), and (z) "incompetent" shall mean a state of legal incompetence as
declared by a court of valid jurisdiction.
(c) Option to Buy. In the event that the option described in
Section 2.6(b) arises and the Representative or Other Member, as the case may
be, fails to make the election described in Section 2.6(b) within the Put
Period, Prime shall at all times thereafter have the option to purchase all or
any portion of such Other Member's Membership Interests, upon the terms and
conditions hereinafter set forth, by giving written notice of such election in
writing to such other Member's Representative or such Other Member, as the case
may be. In addition, Prime may, in its sole discretion, transfer its purchase
right granted under this subsection (or all or part of the Membership Interests
acquired pursuant to an exercise of its purchase right granted under this
subsection) to the Company or any of the physician Members of the Company.
(d) Purchase Price. The purchase price to be paid pursuant to
this Section shall be paid in immediately available funds at the closing of the
transfer of Membership Interests pursuant to this Section. If the parties do not
otherwise agree within thirty (30) days of the day on which the option to
purchase or sell hereunder is exercised, then Prime shall, at its own expense,
select an appraiser to value the Membership Interests being transferred. If the
Other Member or its Representative does not agree with the value determined by
the appraiser of Prime, such Other Member or its Representative may, at its own
expense, select its own appraiser to value the Membership Interests being
transferred. If the two appraisers cannot agree on the value of the Membership
Interests being transferred, the two appraisers shall mutually select a third
appraiser to value the Membership Interests being transferred, and any valuation
determined by such third appraiser shall be final, binding and conclusive. The
cost of any third appraiser shall be borne by such Other Member.
(e) The closing of any purchase and sale of Membership
Interests pursuant to this Section shall take place at the principal office of
Prime or such other place designated by Prime and the selling Other Member, on
the thirtieth day (or if such thirtieth day is not a business day, the next
business day following the thirtieth day) following the delivery of notice under
either Section 2.6(b) or Section 2.6(c). At such closing, the selling Other
Member shall execute all documents and take such other actions as may be
reasonably necessary to deliver to Prime such Membership Interests, and any
certificates representing same, free and clear of all liens, claims,
encumbrances or restrictions of any kind or nature whatsoever, except those
imposed under the applicable Security Agreement.
Section 2.7 Right of First Refusal.
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(a) If there is no option outstanding under Section 2.6 to
sell or buy all or any portion of the Membership Interest held by a Selling
Other Member (as hereinafter defined) (except in connection with a sale by a
physician of all of his or her practice upon retirement), and any Other Member
intends to voluntarily transfer any portion of its Membership Interests to any
person or entity other than Prime (a "Selling Other Member"), then the Selling
Other Member shall give written notice to Prime stating (i) the intention to
transfer such Membership Interests, (ii) the amount of Membership Interests to
be transferred, (iii) the name, business and residence address of the proposed
transferee, (iv) the nature and amount of the consideration, and (v) the other
terms of the proposed sale.
(b) Prime shall have, and may exercise within sixty (60) days
after receipt of the notice of intent to transfer, an option to purchase all or
any portion of the Membership Interests owned by the Selling Other Member, at
the per unit price and upon the other terms stated in the notice of intent to
transfer. Prime may elect to exercise its option under this Section by
delivering notice thereof to the Selling Other Member. If Prime elects not to
purchase all or any portion of such Membership Interests prior to the expiration
of said sixty (60) day period, the Selling Other Member shall have thirty (30)
days to complete the sale and purchase contemplated in the notice of intent to
transfer, and after such thirty (30) day period, the provisions of this Section
shall apply fully to any such Membership Interests not transferred. The purchase
price pursuant to this Section shall be paid in immediately available funds at
the closing of the transfer pursuant to this Section.
(c) Each Other Member and Prime acknowledge and agree that it
would be impractical to exercise an option to purchase arising pursuant to this
Section whenever the proposed consideration to be received by the Selling Other
Member is other than cash, cash equivalents or an obligation to pay cash by a
person whose credit worthiness and financial status is such that performance of
the payment obligation would be reasonably assured. Therefore, the parties agree
that no transfer shall be permitted and no option shall arise pursuant to this
Section whenever the consideration to be received from the proposed transferee
is other than cash, cash equivalents or an obligation to pay cash by a person
whose credit worthiness and financial status is such that performance of the
payment obligation would be reasonably assured.
(d) The closing of any purchase and sale of Membership
Interests pursuant to this Section shall take place at the principal office of
Prime or such other place designated by Prime and the Selling Other Member, on
the thirtieth day (or if such thirtieth day is not a business day, the next
business day following the thirtieth day) following the delivery of notice of
Prime's election to purchase pursuant to Section 2.7(b). At such closing, the
Selling Other Member shall execute all documents and take such other actions as
may be reasonably necessary to deliver to Prime such Membership Interests, and
any certificates representing same, free and clear of all liens, claims,
encumbrances or restrictions of any kind or nature whatsoever, except those
imposed under the Security Agreement.
Section 2.8 Legend. Any certificate or document representing a Member's
ownership of any Membership Interests, and each certificate or document that may
be issued and delivered by the Company upon transfer of such certificate, shall
contain a legend conspicuously noted in substantially the following form:
THE INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND THEY MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT
TO AN EXEMPTION FROM, OR OTHERWISE IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF SUCH ACT.
IN ADDITION, INTERSTS MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH CERTAIN
CONDITIONS SPECIFIED IN A CERTAIN STOCK PURCHASE AGREEMENT DATED EFFECTIVE AS OF
SEPTEMBER 1, 1999, AND IN THE LIMITED LIABILITY COMPANY AGREEMENT OF THE
COMPANY, A COMPLETE AND CORRECT COPY OF EACH OF WHICH IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED TO THE
HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
Section 2.9. Withdrawal of Members. A Member may not withdraw from the
Company except on the unanimous consent of the remaining Members. The terms of
the Members withdrawal shall be determined by agreement between the remaining
Members and the withdrawing Member.
ARTICLE III.
MEMBERS' MEETINGS
Section 3.1. Time and Place of Meeting. All meetings of the Members
shall be held at such time and at such place within or without the State of
Delaware as shall be determined by the Managers.
Section 3.2. Annual Meetings. In the absence of an earlier meeting at
such time and place as the Managers shall specify, annual meetings of the
Members shall be held at the principal office of the Company during the fifth or
sixth month following the conclusion of the Company's fiscal year on such a date
which is not a legal holiday or weekend, and at such time as shall be designated
by the Managers, and if not designated by the Managers, then as designated by
the President, at which meeting the Members may transact such business as may
properly be brought before the meeting.
Section 3.3. Special Meetings. Special meetings of the Members may be
called at any time by any Member. Business transacted at special meetings shall
be confined to the purposes stated in the notice of the meeting which may
provide, however, for the transaction of other matters as may be properly
brought before the special meeting.
Section 3.4. Notice. Written or printed notice stating the place, day
and hour of any Members' meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten (10) days nor more than sixty (60) days before the date of the meeting,
either personally or by mail, by or at the direction of the person calling the
meeting, to each Member entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered three (3) days after it is deposited in the
United States mail, postage prepaid, to the Member at such Member's address as
it appears on the records of the Company at the time of mailing.
Section 3.5. Quorum. Members present in person or represented by proxy,
holding more than fifty percent (50%) of the total votes which may be cast at
any meeting shall constitute a quorum at all meetings of the Members for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the Members, the Members entitled to vote, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. When any adjourned meeting is reconvened
and a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally noticed. Except
with respect to the matters listed below which require the approval by at least
eighty percent (80%) of the total votes, the Members present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough Members to leave less than
a quorum, if any action taken (other than adjournment) is approved by at least a
majority of the votes required to constitute a quorum.
Section 3.6. Voting. Members shall only be required to vote in
instances or with respect to matters where member voting is required by
applicable law or to the extent expressly contemplated in this Agreement. With
respect to any act or transaction that requires a vote by the Members under
applicable law, the affirmative vote or written consent of not less than three
(3) of the Managers shall also be required in order to approve the act or
transaction, in each instance. Subject to the foregoing, when a quorum is
present at any meeting, the vote of the Members, whether present or represented
by proxy at such meeting, holding more than fifty percent (50%) of the total
votes which may be cast at any meeting shall be the act of the Members, unless
the vote of a different number is required by the Act, the Certificate of
Formation or this Limited Liability Company Agreement. Each Member shall be
entitled to one vote for each percentage point represented by their Membership
Interest. Fractional percentage point interests shall be entitled to a
corresponding fractional vote.
Notwithstanding the foregoing, the following acts and transactions
shall require the affirmative vote of not less than eighty percent (80%) of the
total votes of the Members, represented in person or by proxy:
(a) Unless pursuant to any contractual agreement to which the
Company is a party on the date of adoption of this Agreement, any
issuance of any Membership Interest of the Company (or rights to
acquire Membership Interest, through conversion, exchange, exercise of
options or otherwise);
(b) Unless pursuant to any contractual agreement to which the Company is a
party on the date of this Agreement, any redemption of any Membership Interest
by the Company;
(c) The sale of all or substantially all of the assets of the Company;
(d) Any merger or reorganization of or by the Company;
(e) Liquidation or dissolution of the Company; and
(f) Any amendment to this Agreement or the Company's Certificate of
Formation.
Section 3.7. Proxy. Every proxy must be executed in writing by the
Member or by his duly authorized attorney-in-fact, and shall be filed with the
Secretary of the Company prior to or at the time of the meeting. No proxy shall
be valid after eleven (11) months from the date of its execution unless
otherwise provided therein. Each proxy shall be revocable unless expressly
provided therein to be irrevocable and unless otherwise made irrevocable by law.
Section 3.8. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Members may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the Members entitled to vote with respect to the subject matter
thereof, and such consent shall have the same force and effect as a unanimous
vote of Members.
Section 3.9. Meetings by Conference Telephone. Members may participate
in and hold meetings of Members by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting 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 on the ground that the meeting is not lawfully
called or convened.
ARTICLE IV.
MEMBERSHIP CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions. Capital Accounts shall be
maintained in accordance with Treasury Regulations 1.704-1(b) and -2 and shall
be interpreted and applied in a manner consistent therewith. The Managers shall
have the power to amend this Agreement as may be reasonably necessary to comply
with such regulations. Except for each Member's initial capital contribution
made in connection with the formation of the Company, no capital contributions
shall be required of any Member without the approval of all the Members to raise
additional capital, and only then proportionately as to each Member.
Section 4.2. Deficit Capital Account Balances. Upon liquidation of the
Company, no Member with a deficit balance in his Capital Account shall have any
obligation to restore such deficit balance, or to make any contribution to the
capital of the Company.
Section 4.3. Tax Matters Partner. The Members shall designate one
Member by majority vote to act as the tax matters partner (the "TMP") of the
Company (as defined in the Code), and the TMP is hereby authorized and required
to represent the Company, or designate another person or firm to represent the
Company, (in each case, at the Company's expense) in connection with all
examinations of the Company's affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend Company funds for
professional services and costs associated therewith. The initial TMP shall be
Prime RVC, Inc.. The Members agree to cooperate with the TMP and its designee,
if any, and to do or refrain from doing any or all things reasonably required by
the TMP or its designee, if any, to conduct such proceedings. The Company will
reimburse the TMP and any such designee for all expenses incurred in connection
with its duties as TMP and any costs associated with any administrative or
judicial proceeding with respect to the tax liabilities of the Members.
ARTICLE V.
DISTRIBUTION TO MEMBERS
Section 5.1 Distributions. At the end of each calendar quarter, subject
only to the qualifications and limitations set forth below, the Company shall
distribute its available excess earnings to its members, to be divided among
them in accordance with their Membership Interests. Distributions in kind shall
be made on the basis of agreed value as determined by the Members.
Notwithstanding the foregoing, the Company may not make a distribution to its
Members to the extent that, immediately after giving effect to the distribution,
all liabilities of the Company, other than liabilities to the Members with
respect to their interests and liabilities for which the recourse of creditors
is limited to specified property of the Company, exceed the fair value of the
Company assets; except that the fair value of property that is subject to
liability for which recourse of creditors is limited, shall be included in the
Company assets only to the extent that the fair value of the property exceeds
that liability.
Section 5.2 Right of Set Off. Each of the Other Members and the Company
each agrees that Prime shall have rights of offset against distributions to an
Other Member in respect of any Membership Interests or any other ownership
interest such Other Member may have in the Company, for any and all debts,
obligations or liabilities that such Other Member may have to Prime, including,
without limitation, any liability arising out of or relating to any obligation
arising under such Other Member's or the Company's indemnity obligations under
those certain Stock Purchase Agreements by and between each Other Member, BDR,
and Horizon Vision Centers, Inc., a Delaware corporation (each, a "Stock
Purchase Agreement") or any Transaction Document (as defined in the applicable
Stock Purchase Agreement). Each Other Member hereby authorizes the Company, and
appoints the Company as its attorney in fact, to pay such offset amounts to
Prime and to take all other actions necessary in connection with such payment.
The Company agrees to promptly remit any and all such offset amounts to Prime
upon request.
ARTICLE VI.
ALLOCATION OF NET PROFITS AND LOSSES FOR TAX PURPOSES
For accounting and income tax purposes, all items of income, gain,
loss, deduction, and credit of the Company for any taxable year shall be
allocated among the Members in accordance with their respective Membership
Interests, except as agreed by the Members or as may be otherwise required by
the Internal Revenue Code of 1986, as amended.
ARTICLE VII.
DISSOLUTION AND WINDING UP
Section 7.1. Dissolution. Notwithstanding any provision of the Act, the
Company shall be dissolved only upon the first of the following to occur:
(a) Forty (40) years from the date of filing the Certificate of Formation
of the Company;
(b) Written consent of all the then current Members to dissolution;
(c) The bankruptcy of a Member, unless there is at least one
remaining Member and such Member or, if more than one remaining Member,
all remaining Members agree to continue the Company and its business;
or
(d) The sale of all or substantially all of the assets of the Company.
Section 7.2. Winding Up. Unless the Company is continued pursuant to
Section 7.1(c) of this Article VII., in the event of dissolution of the Company,
the Managers (excluding any Manager(s) holding office pursuant to designation by
a Member subject to bankruptcy proceedings) shall wind up the Company's affairs
as soon as reasonably practicable. On the winding up of the Company, the
Managers shall pay and/or transfer the assets of the Company in the following
order:
(a) In discharging liabilities (including loans from Members) and the
expenses of concluding the Company's affairs; and
(b) The balance, if any, shall be divided between the Members in accordance
with the Members' Membership Interests.
ARTICLE VIII.
MANAGERS
Section 8.1. Selection of Managers. Management of the Company shall be
vested in the Managers. Initially, the Company shall have five (5) Managers,
being Xxxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxx X. Xxxxxx ("Xxxxxx"), Xxxxx Xxxxxx
("Xxxxxx"), Xxxx X. Xxxxxx, M.D. ("Xxxxxx"), and Xxxxxxx X. Xxxxxx, M.D.
("Xxxxxx"). A Manager shall serve as a Manager until his or her resignation or
removal pursuant to Section 8.2 or 8.3. Managers need not be residents of the
State of Delaware or Members of the Company.
Section 8.2. Resignations. Each Manager shall have the right to resign
at any time upon written notice of such resignation to the Members. Unless
otherwise specified in such written notice, the resignation shall take effect
upon the receipt thereof, and acceptance of such resignation shall not be
necessary to make same effective.
Section 8.3 Voting Agreement. Each of the parties hereto agrees that it
will vote all of the Membership Interests owned by it in accordance with the
terms of this Section 8.3. Any additional Membership Interests or other
ownership interests of the Company, or the voting rights related thereto,
whether presently existing or created in the future, that may be owned, held, or
subsequently acquired in any manner, legally or beneficially, directly or
indirectly, of record or otherwise, by the parties at any time after the
execution of this Agreement, whether issued incident to any interest split,
dividend, increase in capitalization, recapitalization, merger, consolidation,
exchange, reorganization, or other transaction, shall be subject to the terms of
this Section (all such Membership Interests presently held or controlled,
together with such additional interests, the "Subject Interests"). At each
election of Managers of the Company, the parties and any transferee or assignee
of any Subject Interests from the parties (the "Transferee") shall, in
accordance with the procedure set forth below, vote the Subject Interests as
necessary to elect five (5) persons, designated in accordance with the
procedures below, as Managers of the Company. Three (3) of the Managers (the
"Prime Designees") shall be designated in writing by Prime or its Transferee.
The remaining two (2) Managers (the "Other Member Designees") shall be jointly
designated in writing by the Other Members holding a majority of the aggregate
Membership Interests held by all Other Members. Xxxxxxx, Xxxxxx and Xxxxxx shall
be the initial Prime Designees; Xxxxxx and Xxxxxx shall be the initial Other
Member Designees. For purposes of this Section, the Prime Designees and the
Other Member Designees are sometimes referred to individually as a "Designated
Manager" and collectively as "Designated Managers." During the term of this
Agreement, the parties shall, in accordance with the procedure set forth below,
(i) vote their Subject Interests and use their best efforts in any event to
ensure that the number of Managers which shall constitute all of the Managers of
the Company shall remain at five (5), (ii) vote their Subject Interests in favor
of the removal of a Designated Manager if Prime or a majority in interest of the
Other Members (whichever designated the respective Manager) instruct in writing
that such Designated Manager shall be removed from office and (iii) upon any
removal of a Designated Manager pursuant to (ii) above, vote their Subject
Interests in favor of the election of a replacement Manager designated in
writing by Prime or a majority in interest of the Other Members (whichever
designated the respective Manager). None of the parties to this Agreement shall
approve or authorize the removal of any Designated Manager unless Prime or a
majority in interest of the Other Members (whichever designated the respective
Manager) shall have authorized in writing such Designated Manager's removal. To
the extent that any party or parties entitled to designate a Manager pursuant to
this Section fail to designate a replacement Designated Manager under this
Section, the position vacated shall remain vacant until such time as a new
Manager is designated and elected pursuant to the terms hereof.
Upon delivery of any written notice designating or removing one or more
Manager pursuant to this Section, the parties hereto and any Transferee shall
either (i) sign a written consent, prepared for execution by the Members of the
Company in accordance with this Agreement, which consent elects or removes the
Manager(s) designated in writing to be elected or removed in accordance with
this Section or (ii) at any annual or special Members meeting at which
Manager(s) are to be elected or removed, vote in favor of the election or
removal of the Manager(s) designated in writing to be elected or removed in
accordance with this Section. If necessary to fix the total number of Managers
at five (5), the parties hereto shall either (i) sign such written consents
prepared for execution by the Members of the Company in accordance with this
Agreement or (ii) at any annual or special Members meeting, vote in favor of
such motions; which consents or motions propose to fix the total number of
Manager at five (5).
Each of the parties hereto agrees to take such actions, and
execute such documents, agreements or instruments (including, without
limitation, consents amending this Agreement), as may be necessary, due to
changes in the law or otherwise, to ensure that the provisions of this Section
8.3 are given full effect.
Section 8.4. General Powers. The business of the Company shall be
managed by its Managers, which may, by the vote or written consent in accordance
with this Agreement, exercise any and all powers of the Company and do any and
all such lawful acts and things as are not by the Act, the Certificate of
Formation or this Limited Liability Company Agreement directed or required to be
exercised or done by the Members, including, but not limited to, contracting for
or incurring on behalf of the Company debts, liabilities and other obligations,
without the consent of any other person, except as otherwise provided herein.
Section 8.5. Place of Meetings. The Managers of the Company may hold their
meetings, both regular and special, either within or without the State of
Delaware.
Section 8.6. Annual Meetings. The annual meeting of the Managers shall
be held without further notice immediately following the annual meeting of the
Members, and at the same place, unless by unanimous consent of the Managers that
such time or place shall be changed.
Section 8.7. Regular Meetings. Regular meetings of the Managers may be
held upon at least ten (10) days notice, but no more frequently than once each
month, at such time and place as shall from time to time be determined by the
Managers. No regular meeting or any action taken thereat shall be held void or
invalid if such notice is not given to any Manager that (i) was in attendance at
a meeting of the Managers which fixed the time, date and place of such regular
meeting of the Managers; or (ii) waives notice of the regular meeting; or (iii)
attends the regular meeting in person or by telephone conference call; or (iv)
executes a consent to action taken at the meeting after having received the
minutes of such regular meeting.
Section 8.8. Special Meetings. Special meetings of the Managers may be
called by any Manager on seven (7) days notice to each Manager, with such notice
to be given personally, by mail or by telecopy, telegraph or mailgram.
Section 8.9. Quorum and Voting. At all meetings of the Managers the
presence of at least a majority of the number of Managers shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the
affirmative vote of at least a majority of the Managers present at any meeting
at which there is a quorum shall be the act of the Managers, except as may be
otherwise specifically provided by the Act, the Certificate of Formation or this
Agreement. If a quorum shall not be present at any meeting of Managers, the
Managers present there may adjourn the meeting from time to time without notice
other than announcement at the meeting, until a quorum shall be present.
Section 8.10. Committees. The Managers may, by resolution passed by
eighty percent (80%) of the Managers, designate committees, each committee to
consist of two or more Managers (at least one of which must be a Manager
designee of Prime and one of which must be a Manager designee of Other Members),
which committees shall have such power and authority and shall perform such
functions as may be provided in such resolution. Such committee or committees
shall have such name or names as may be designated by the Managers and shall
keep regular minutes of their proceedings and report the same to the Managers
when required.
8.11 Expenses and Compensation.
-------------------------
(a) The Managers shall be allowed and paid all reasonable and necessary
expenses incurred in attending any meeting of the Managers. In determining
whether specific items of expense are reasonable in amount, the Managers may
from time to time establish policies as the type of airline travel and hotel
accommodations for which reimbursement of expenses will be paid by the Company.
(b) The Managers may fix the compensation of Managers for services to
the Company as Managers, as members of a committee, or in any other capacity.
Provided, however, that Managers shall not receive compensation for their
services as Managers except as authorized and approved at a meeting of the
Members at which at least two-third (2/3) of the total votes shall be in
attendance, and only with the affirmative vote and approval at such meeting of
at least a majority of the Members.
Section 8.12. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Managers or of any committee
designated by the Managers may be taken without a meeting if written consent,
setting forth the action so taken, is signed by all the Managers or of such
committee, and such consent shall have the same force and effect as a unanimous
vote at a meeting.
Section 8.13. Meetings by Conference Telephone. Managers or members of
any committee designated by the Managers may participate in and hold a meeting
of the Managers or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting 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 on the ground that the meeting is not lawfully
called or convened.
Section 8.14. Liability of Managers. No Manager of the Company shall be
personally liable for any debts, liabilities, or obligations of the Company,
including under a judgment, decree, or order of the court.
Section 8.15. Specific Power of Managers. The Managers shall have the
authority to enter into and execute all documents in relation to the formation
of the Company including, but not limited to, issuance of the Certificate of
Formation and this Limited Liability Company Agreement.
ARTICLE IX.
NOTICES
Section 9.1. Form of Notice. Whenever under the provisions of the Act,
the Certificate of Formation or this Limited Liability Company Agreement notice
is required to be given to any Manager or Member, and no provision is made as to
how such notice shall be given, notice shall not be construed to mean personal
notice only, but any such notice may also be given in writing, by mail, postage
prepaid, addressed to such Manager or Member at such address as appears on the
books of the Company, or by telecopy, telegraph or mailgram. Any notice required
or permitted to be given by mail shall be deemed to be given three (3) days
after it is deposited, postage prepaid, in the United States mail as aforesaid.
Section 9.2. Waiver. Whenever any notice is required to be given to any
Manager or Member of the Company under the provision of the Act, the Certificate
of Formation or this Limited Liability Company Agreement, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether signed
before or after the time stated in such waiver, shall be deemed equivalent to
the giving of such notice.
ARTICLE X.
OFFICERS
Any Manager may also serve as an officer of the Company. The Managers
may designate one or more persons who are not Managers of the Company to serve
as officers and may designate the titles of all officers. The initial officers
of the Company shall be: Xxx Xxxxxxx, Chairman of the Board; Xxxxx X. Xxxxx,
President; Xxxxx Xxxxxx, Vice President and Treasurer; Xxxxxx Xxxxxxxx, Vice
President, Secretary and Chief Financial Officer; and Xxxx Xxxxxx, Vice
President. Unless otherwise provided in a resolution of the Members or Managers
the officers of the Company shall have the powers designated with respect to
such offices under the Delaware Limited Liability Company Act, and any successor
statute, as amended from time-to-time.
ARTICLE XI.
INDEMNITY
Section 11.1. Indemnification. The Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, any appeal in such an action, suit
or proceeding and any inquiry or investigation that could lead to such an
action, suit or proceeding (whether or not by or in the right of the Company),
by reason of the fact that such person is or was a manager, officer, employee or
agent of the Company or is or was serving at the request of the Company as a
director, manager, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another company, employee benefit plan, other
enterprise, or other entity, against all judgments, penalties (including excise
and similar taxes), fines, settlements and reasonable expenses (including
attorneys' fees and court costs) actually and reasonably incurred by him in
connection with such action, suit or proceeding to the fullest extent permitted
by any applicable law, and such indemnity shall inure to the benefit of the
heirs, executors and administrators of any such person so indemnified pursuant
to this Article XI. The right to indemnification under this Article XI shall be
a contract right and shall not be deemed exclusive of any other right to which
those seeking indemnification may be entitled under any law, bylaw, agreement,
vote of members or disinterested managers or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. Any repeal or amendment of this Article XI by the Managers (pursuant to
Section 8.9 hereof) or by changes in applicable law shall, to the extent
permitted by applicable law, be prospective only, and shall not adversely affect
the indemnification of any person who may be indemnified at the time of such
repeal or amendment.
Section 11.2. Indemnification Not Exclusive. The rights of
indemnification and reimbursement provided for in this Article XI shall not be
deemed exclusive of any other rights to which any such Manager, officer,
employee or agent may be entitled under the Certificate of Formation, this
Limited Liability Company Agreement, agreement or vote of Members, or as a
matter of law or otherwise.
Section 11.3. Other Indemnification Clauses. Notwithstanding the
foregoing, this Article XI shall not be construed to contradict the
indemnification provisions of those certain Stock Purchase Agreements and
related transaction documents, dated as of September 1, 1999 (the "Transaction
Documents"), by and between Prime/BDR Acquisition, LLC, a Delaware limited
liability company and certain of the shareholders of Horizon Vision Centers,
Inc., a Nevada corporation, nor any contractual agreement between the parties
thereto. Notwithstanding anything contained herein, this Article XI shall be
ineffectual and shall not permit or require indemnification for all, or any,
losses, costs, liabilities, claims or expenses arising, directly or indirectly,
from any action or omission permitting or requiring indemnification under the
Transaction Documents nor any other contractual agreement between the parties
thereto; and in no event may any indemnity be allowed under this Agreement or
pursuant to any provision of the Act for an amount paid or payable pursuant to
the indemnification provisions of the Transaction Documents.
ARTICLE XII.
MISCELLANEOUS
Section 12.1. Fiscal Year. The fiscal year of the Company shall be the
calendar year.
Section 12.2. Records. At the expense of the Company, the Managers shall
maintain records and accounts of all operations of the Company. At a minimum,
the Company shall keep at its principal place of business the following records:
(a) A current list of the name and last known mailing address and
Membership Interest of each Member;
(b) A current list of the full name and business or residence address of
each Manager;
(c) A copy of the Certificate of Formation and Limited
Liability Company Agreement of the Company, and all amendments thereto,
together with executed copies of any powers of attorney;
(d) Copies of the Federal, state, and local income tax returns and reports
for the Company's six most recent tax years; and
(e) Correct and complete books and records of account of the Company
maintained using the accrual method of accounting.
Section 12.3. Seal. The Company may by resolution of the Managers adopt
and have a seal, and said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or in any manner reproduced. Any officer of the
Company shall have authority to affix the seal to any document requiring it.
Section 12.4. Agents. Every Manager and Officer is an agent of the Company
for the purpose of the business. The act of a Manager or Officer, including the
execution in the name of the Company of any instrument for carrying on in the
usual way the business of the Company, binds the Company.
Section 12.5. Checks. All checks, drafts and orders for the payment of
money, notes and other evidences of indebtedness issued in the name of the
Company shall be signed by such officer, officers, agent or agents of the
Company and in such manner as shall from time to time be determined by
resolution of the Managers. In the absence of such determination by the Mangers,
such instruments shall be signed by the Treasurer or the Secretary and
countersigned by the President or a Vice President of the Company, if the
Company has such officers.
Section 12.6. Deposits. All funds of the Company shall be deposited from
time to time to the credit of the Company in such banks, trust companies or
other depositories as the Managers may select.
Section 12.7. Annual Statement. The Managers shall present at each annual
meeting a full and clear statement of the business and condition of the Company.
Section 12.8. Financial Statements. As soon as practicable after the
end of each fiscal year of the Company, a balance sheet as at the end of such
fiscal year, and a profit and loss statement for the period ended, shall be
distributed to the Members, along with such tax information (including all
information returns) as may be necessary for the preparation of each Member of
its Federal, state and local income tax returns. The balance sheet and profit
and loss statement referred to in the previous sentence may be as shown on the
Company's federal income tax return.
Section 12.9. Binding Arbitration. Any controversy between the parties
regarding this Agreement and any claims arising out of this Agreement or its
breach shall be submitted to arbitration by either party. The arbitration
proceedings shall be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration shall
be conducted in Dallas, Texas and the arbitrator shall have the right to award
actual damages and attorney fees and costs, but shall not have the right to
award punitive, exemplary or consequential damages against either party.
Section 12.10. Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument. Any party hereto may
execute this Agreement by signing any one counterpart.
ARTICLE XIII.
AMENDMENTS
Section 13.1. Amendments. This Agreement may be altered, amended or
repealed and a new limited liability company agreement may be adopted, only in
accordance with the provisions of Section 8.9, but otherwise at any regular
meeting or at any special meeting called for that purpose, or by execution of a
written consent in accordance with the provisions of Section 3.8.
Section 13.2. When Limited Liability Company Agreement Silent. It is
expressly recognized that when the Limited Liability Company Agreement is silent
or in conflict with the requirements of the Act as to the manner of performing
any Company function, the provisions of the Act shall control.
Signature Page Follows
S-3
049999.0999 AUSTIN 181503 v9
SIGNATURE PAGE TO
LIMITED LIABILITY COMPANY AGREEMENT
IN WITNESS WHEREOF, the undersigned Members hereby adopt this Limited
Liability Company Agreement as the Limited Liability Company Agreement of the
Company, effective as of the 1st day of April, 2000.
PRIME: PRIME RVC, INC.
By:
Printed Name:
Title:
OTHER MEMBERS:
Xxxxx X. Xxxxx III
Xxxx X. Xxxxx
XXXX XXXXXX XXXXXXX, M.D. FAMILY
REVOCABLE TRUST DATED
FEBRUARY 8, 1991
By:
Xxxx Xxxxxx Xxxxxxx, M.D., Trustee
Xxxxxxxxx X. Xxx, M.D.
TRUST AGREEMENT DATED APRIL 12,
1989
By:
Xxxx X. Xxxxxx, M.D., Trustee
D. Xxxxx Xxxx, M.D.
Carellyn X. Xxxx
Xxxxxxx X. Xxxxxxx, M.D.
SEVERIN FAMILY TRUST
By:
Xxxxxxx X. Xxxxxxx, M.D., Trustee
XXXXXXX AND XXXXXX XXXXXX
FAMILY TRUST
By:
Xxxxxxx X. Xxxxxx, M.D., Trustee
Xxxxxxx Xxxxxxxx, M.D.
Xxxxx X. Xxxxxx
MEDICAL VISION TECHNOLOGY PROFIT SHARING PLAN, FOR
THE BENEFIT OF XXXXXXX XXXXXXXX, M.D.
By: ________________________________
Xxxxxxx Xxxxxxxx, M.D., Trustee
A-1
049999.0999 AUSTIN 181503 v10
EXHIBIT A
OWNERSHIP INTERESTS
Name Ownership Percentage
Prime RVC, Inc. 60.00%
TOTAL 100.00%
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