Fillable California Llc Operating Agreement Template (Page 12 of 16) in pdf

Any Member may commence a mediation proceeding by serving written notice thereof to the other

Members, by mail or otherwise, designating the issue(s) to be mediated and the specific provisions of

this Agreement under which such issue(s) and dispute arose. The initiating party shall simultaneously

file two copies of the notice with the AAA, along with a copy of this Agreement. A Member may

withdraw from the Member Dispute by signing an agreement to be bound by the results of the

mediation, to the extent the mediation results are accepted by the other Members as provided herein.

A Member who withdraws shall have no further right to participate in the Member Dispute.

The Members shall select one neutral third party AAA mediator (the "Mediator") with expertise in

the area that is in dispute. If a Mediator has not been selected within five (5) business days thereafter,

then a Mediator shall be selected by the AAA in accordance with the Commercial Mediation Rules of

the AAA.

The Mediator shall schedule sessions, as necessary, for the presentation by all Members of their

respective positions, which, at the option of the Mediator, may be heard by the Mediator jointly or in

private, without any other members present. The mediation proceeding shall be held in the city that

is the company’s principal place of business or such other place as agreed by the Mediator and all of

the Members. The Members may submit to the Mediator, no later than ten (10) business days prior

to the first scheduled session, a brief memorandum in support of their position.

The Mediator shall make written recommendations for settlement in respect of the dispute, including

apportionment of the mediator’s fee, within ten (10) business days of the last scheduled session. If

any Member involved is not satisfied with the recommendation for settlement, he may commence an

arbitration proceeding.

11.3 Arbitration. Arbitration proceedings shall be conducted under the Rules of

Commercial Arbitration of the AAA (the "Rules"). A Member may withdraw from the Member

Dispute by signing an agreement to be bound by the results of the arbitration. A Member who

withdraws shall have no further right to participate in the Member Dispute.

The arbitration panel shall consist of one arbitrator. The Members shall select one neutral third party

AAA arbitrator (the "Arbitrator") with expertise in the area that is in dispute. If an Arbitrator has not

been selected within five (5) business days thereafter, then an Arbitrator shall be selected by the AAA

in accordance with the Commercial Arbitration Rules of the AAA. The arbitration proceeding shall be

held in the city that is the company’s principal place of business or such other place as agreed by the

Arbitrator and all of the Members. Any arbitrator who is selected shall disclose promptly to the AAA

and to both parties any financial or personal interest the arbitrator may have in the result of the

arbitration and/or any other prior or current relationship, or expected or discussed future relationship,

with the Members or their representatives. The arbitrator shall promptly conduct proceedings to

resolve the dispute in question pursuant to the then existing Rules. To the extent any provisions of the

Rules conflict with any provision of this Section, the provisions of this Section shall control.

In any final award and/or order, the arbitrator shall apportion all the costs (other than attorney's fees

which shall be borne by the party incurring such fees) incurred in conducting the arbitration in

accordance with what the arbitrator deems just and equitable under the circumstances.

Discovery shall not be permitted in such arbitration except as allowed by the rules of arbitration, or

as otherwise agreed to by all the parties of the Member Dispute. Notwithstanding, the Members

agree to make available to one another and to the arbitrator, for inspection and photocopying, all

documents, books and records, if determined by the arbitration panel to be relevant to the dispute,

and by making available to one another and to the arbitration panel personnel directly or indirectly

under their control, for testimony during hearings if determined by the arbitration panel to be

relevant to the dispute. The Members agree, unless undue hardship exists, to conduct arbitration

hearings to the greatest extent possible on consecutive business days and to strictly observe time

periods established by the Rules or by the arbitrator for the submission of evidence and of briefs.

California Llc Operating Agreement Template Page 12

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