Fillable Printable Llc Operating Agreement Template

Llc Operating Agreement Template

OPERATING AGREEMENT

COMPANY NAME, LLC

Any securities created by this Operating Agreement have not been registered under the Georgia

Securities Act of 1973, in reliance upon the exemption from registration set forth in Section 10-5-9(13) of

such Act. In addition, any securities created by this Operating Agreement, if any, have not been registered

with the United States Securities and Exchange Commission in reliance upon an exemption from such

registration set forth in the Securities Act of 1993 provided by Section 4(2) thereof, nor have they been

registered under the securities Blue Sky laws of any other jurisdiction. The interests created hereby have

been acquired for investment purposes only and may not be offered for sale, pledged, hypothecated, sold

or transferred except in compliance with the terms and conditions of this Operating Agreement and in a

transaction which is either exempt from registration under such Acts or pursuant to an effective

registration statement under such Acts.

THIS OPERATING AGREEMENT is made and entered into effective the ____ day of

___________ 20__, by the parties who have executed counterparts of this Operating Agreement as

indicated on the signature pages attached.

ARTICLE I. DEFINITIONS

The following terms used in the Operating Agreement shall have the following meanings (unless

otherwise expressly provided herein):

“Adjusted Capital Account Deficit.” The Adjusted Capital Account Deficit of any Member or

Shareholder means, as of any particular date, the deficit balance, if any, in such Member or Shareholder's

capital account as of such date, as determined in the manner provided in Section 8.6 hereof and by then

adjusting such capital account and so determined as follows:

(a) Such capital account shall be increased to reflect any amounts, if any, which such

Member or Shareholder is deemed to be obligated to restore pursuant to Sections 1.704-

2(g)(1) and .704-2(i)(5) of the Regulations.

(b) Such capital account shall be reduced to reflect any items described in Sections 1.704-

1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

Year for purposes of Section 10.6 hereof, then such capital account shall be adjusted to

reflect the tentative allocation to such Member or Shareholder of all amounts that would

be required to be allocated to such Member or Shareholder for Fiscal Year if neither

Section 10.6 nor Section 10.7 were a part of this agreement.

(d) If such Adjusted Capital Account Deficit is being determined as of the last day of a Fiscal

Year for purposes of Section 10.7 hereof, then such capital account shall be adjusted to

reflect the tentative allocation to such Member or Shareholder of all amounts that would

be required to be allocated to such Member or Shareholder for such Fiscal Year if neither

Section 10.6 nor Section 10.7 were a part of this Agreement.

"Affiliate.” With respect to any Person, (i) in the case of an individual, any relative of such

Person, (ii) any officer, director, trustee, partner, member, shareholder, manager, employee or

holder of ten percent (10%) or more of any class of the voting securities of or equity interest in

such Person; (iii) any corporation, partnership, limited liability company, trust or other entity

controlling, controlled by or under common control with such Person; or (iv) any officer, director,

trustee, partner, member, shareholder, manager, employee or holder of ten percent (10 %) or more

of the outstanding voting securities of any corporation, partnership, limited liability company,

trust or other entity controlling, controlled by or under common control with such Person.

“Articles of Organization.” The Articles of Organization of COMPANY NAME, LLC, as filed

with the Secretary of State of Georgia, as the same may be amended from time to time.

"Board.” A two-person board of Members with equal voting rights, shall exist.

“Capital Account.” A capital account maintained in accordance with the rules contained in

Section 1.704-1(b)(2)(iv) of the Regulations, as amended from time to time.

“Capital Contribution.” Any contribution to the capital of the Company in cash or property by a

member or shareholder whenever made.

“Code.” The Internal Revenue Code of 1986, as amended from time to time.

“Company.” COMPANY NAME, LLC, a Georgia limited liability company.

“Company Liability.” Any enforceable debt or obligation for which the Company is liable or

which is secured by any property owned by the Company.

“Distributable Cash.” All cash received by the Company from Company operations, plus any

cash that becomes available from Reserves, less the sum of the following to the extent paid or set aside by

the Company, (i) all principal and interest payments on indebtedness of the Company and all other sums

paid to lenders; (ii) all cash expenditures incurred in the operation of the Company's business; and (iii)

Reserves.

“Economic. Interest.” A Member’s or Economic Interest Owner's share of one or more of the

Company's Net Profits, Net Losses and rights to distributions of the Company's assets pursuant to this

Operating Agreement and the Georgia Act, but shall not include any right to vote on, consent to or

otherwise participate in any decision of the Members.

“Economic Interest Owner.” The owner of an Economic Interest who is not a Member.

“Entity.” Any general partnership, limited partnership, limited liability company, corporation,

joint venture, trust, business trust, cooperative or association or any foreign trust or foreign business

organization.

“Event of Dissociation.” An event defined in Section 14.1.

“First Refusal Notice.” A written notice delivered by a Selling Member to Optionee-Members

informing them of first refusal rights pursuant to Section 12.2(b) hereof.

“Fiscal Year.” The Company's fiscal year, which shall be the calendar year.

“Georgia Act.” The Georgia Limited Liability Company Act at O.C.G.A. § 14-11-100, et seq.

“Initial Capital Contribution.” The initial contribution to the capital of the Company made by a

Member pursuant to this Operating Agreement.

“Interest.” Any interest in the Company, including a Membership Interest, an Economic Interest,

any right to vote or participate in the business of the Company, or any other interest in the Company.

“Majority Interest.” Ownership Percentages of Members which, taken together, constitute a

majority of all Ownership Percentages.

"Majority Vote.” Vote or written consent of Persons holding a majority of the Ownership

Percentages held by all such Persons entitled to vote on or consent to the issue in question. References

herein to "Majority Vote" that are immediately preceded by a reference to a percentage in excess of fifty

percent (50%) (e.g., seventy five percent (75%) Majority Vote) shall mean that number of Membership

Shares of Members which, taken together, equal or exceed such greater percentage of the aggregate of all

then issued and outstanding Membership Shares.

“Member.” Each Person who executes this Operating Agreement or a counterpart thereof as a

Member and each of the Persons who may hereafter become Members as provided in this Operating

Agreement. If a Person is a Member immediately prior to the purchase or other acquisition by such

Person of an Economic Interest, such Person shall have all the rights of a Member with respect to such

purchased or otherwise acquired Interest.

“Membership Interest.” The Membership Shares owned by a Member.

“Membership Unit.” One of up to 10,000,000 Shares of Membership which shall include an

Economic Interest and the right to participate in the management of the business and affairs of the

Company, including the right to vote on, consent to, or otherwise participate in any decision or action of or

by the Members granted pursuant to this Operating Agreement or the Georgia Act the number of

Membership Shares owned by each Member is as reflected on Exhibit A attached hereto and hereby made

a part hereof.

“Net Profits" and “Net Losses.” The Company's taxable income or loss determined in

accordance with Code Section 703(a) for each of its Fiscal Years (for this purpose, all items of income,

gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) will be

included in taxable income or loss); provided, such Net Profits and Net Losses will be computed as if

items of tax-exempt income and nondeductible, non-capital expenditures (under Code Section 705(a)(1)

(B) and 705(a)(2)(B)) were included in the computation of taxable income or loss. If any Member

contributes property to the Company with an initial book value to the Company different from its adjusted

basis for federal income tax purposes to the Company, or if Company property is revalued pursuant to

Section 1.704-1(b)(2)(iv)(f) of the Regulations or as otherwise required by the Regulations, Net Profits

and Net Losses will be computed as if the initial adjusted basis for federal income tax purposes to the

Company of such contributed or revalued property equaled its initial book value to the Company as of the

date of contribution or revaluation. Credits or debits to Capital Accounts due to a revaluation of

Company assets in accordance with Section 1.704-1(b)(2)(iv)(f) of the Regulations, or due to a

distribution of non-cash assets, will be taken into account as gain or loss from the disposition of such

assets for purposes of Article X hereof.

“Offer.” A bona fide offer made by a Person who is not an Eligible Transferee to purchase all, or

any portion of, the Membership Shares of a Member.

"Offsettable Decrease.” Any allocation that unexpectedly causes or increases a deficit in the

Member's Capital Account as of the end of the taxable year to which the allocation relates attributable to

depletion allowances under Section 1.704(b)(2)(iv)(k) of the Regulations, allocations of loss and

deductions under Sections 704(e)(2) or 706 of the Code or under Section 1.751-1 of the Regulations, or

distributions that, as of the end of the year are reasonably expected to be made to the extent they exceed

the offsetting increases to such Member's Capital Account that reasonably are expected.

“Officer.” One or more individuals appointed by the Members to whom the Members delegate

specified responsibilities. The Members may, but shall not be required to, create such offices as they deem

appropriate, including, but not limited to, Chief Executive Officer, President, Chief Operating Officer,

Executive Vice President, Senior Vice Presidents, Vice Presidents, Secretary and Treasurer. The Officers

shall have such duties as are assigned to them by the Members from time to time. All Officers shall serve

at the pleasure of the Members and the Members may remove any Officer from office without cause and

any Officer may resign at any time.

“Operating Agreement.” This Operating Agreement as originally executed and as amended from

time to time.

“Option Shares.” Membership Shares, which a person who is not an Eligible Transferee offers

to purchase.

“Optionee-Members.” Members to whom a right of first refusal to purchase a Selling member’s

Membership Shares is granted under Section 12.2(b) hereof.

“Ownership Percentage.” For each Member or Shareholder, the percentage determined at any

given time by dividing the number of shares owned by such Member or Shareholder as of such time by

the total shares as of such time. The Ownership Percentages of the Members are set forth on Exhibit “A”.

For purposes of the provisions hereof relating to actions taken or approval by Members, including voting,

written consents or other approval, only Ownership Percentages held by Member shall be taken into

account.

“Person.” Any individual or Entity, and the heirs, executors, administrators, legal

representatives, successors, and assigns of such “Person” where the context so permits.

“Plan.” On or before December 1st of every year, the Board shall establish a budget plan for the

next fiscal year. The budget shall be detailed and shall include a balance sheet, an income statement and a

cash flow statement by month. In addition to the budget, the Plan shall include a detailed marketing plan,

which shall include product mix, sales projections, forecasts, and future direction for the Company. The

Plan shall be adopted by the Board prior to commencement of the next fiscal year. In the event the Plan is

not adopted in any year, the prior year’s budget shall be used until a new Plan is proposed and adopted.

"Reserves.” Funds set aside and amounts allocated to reserves in amounts determined by the

Members for working capital and to pay taxes, insurance, debt service or other costs or expenses incident

to the ownership or operation of the Company's business.

"Shareholder." Each person who owns a share but is not a Member.

“Transferring Member.” A Member or Economic Interest Owner, who wishes to sell, assign,

pledge, hypothecate or otherwise transfer for consideration or gratuitously all of any portion of his/her/its

Membership Interest or Economic Interest.

“Treasury Regulation” or "Regulations.” The federal income tax regulations, including

temporary regulations, promulgated under the code, as such regulations may be amended from time to

time (including corresponding provisions of succeeding regulations).

“Withdrawing Member.” As defined in Section 14.1.

ARTICLE II. FORMATION OF COMPANY

2.1 Formation. On February 25, 2004, Articles of Organization of COMPANY NAME, LLC were

filed with the Secretary of State of Georgia in accordance with the provisions of the Georgia Act

and the Georgia Business Corporation Code at O.C.G.A. Sections 14-2-101, et seq.

2.2 Name. The name of the company is COMPANY NAME, LLC.

2.3 Principal Place of Business. The principal place of business of the Company within the State of

Georgia is 445 Spring Ridge Drive, Roswell, GA 30076. The Company may locate its place of business

and registered office at any other place or places, as the Members may from time to time deem advisable.

2.4 Registered Office and Registered Agent. The Company's initial registered office shall be 445

Main Street, Roswell, GA 30076. The initial registered agent is Howard Smith. The registered office and

registered agent may be changed from time to time pursuant to the Georgia Act and the applicable rules

promulgated hereunder.

2.5 Term. The term of the Company commenced on the date the Articles of Organization were filed

with the Secretary of State of Georgia and shall continue until the Company is dissolved and its affairs

wound up in accordance with the provisions of this Operating Agreement or the Georgia Act.

ARTICLE III. BUSINESS OF COMPANY

3.1 Permitted Business.

(a) The Company may engage in any lawful business permitted under the Georgia Act or the

laws of any jurisdiction in which the Company may do business, (“Permitted Business”). The Company

shall have the authority to do all things necessary or convenient to accomplish its purpose and operate its

business as provided in this Article III.

(b) Nothing herein contained shall be deemed in any way or manner to prohibit, limit, or

restrict the right or freedom of any Member separately and as a separate entity apart from the Company to

conduct any business or activity whatsoever.

ARTICLE IV. NAMES AND ADDRESSES OF MEMBERS

The names and addresses of the Members are set out on Exhibit “A” attached hereto and

incorporated herein.

ARTICLE V. BOARD and MANAGEMENT

5.1 Board Composition .

(a) The Board shall initially consist of two persons, who shall be elected by the Members

(the “Directors”). The Directors shall initially be Howard J. Smith and Robert B. Jones.

(b) The Members may elect to increase the size of the Board and fill any vacancies created

by such increase.

5.2 Removal; Vacancies.

(a) Any Director can be removed by a majority vote of the shares of the Company. Any

vacancy can be filled by a majority vote of the shares of the Company.

(a) Any Director may resign at any time effective upon at least thirty (30) days’ notice to the

LLC.

5.3 Board; General.

The Directors may adopt such procedures as they may deem appropriate to make decisions regarding

investment of the LLC’s capital, budget of the LLC, the election of board seats of all portfolio companies

in which the LLC invests, financings, dispositions of the LLC’s assets and other LLC business. The

Managers will meet with the Board at the Board’s request, at mutually convenient times, to discuss such

matters pertaining to the LLC as the Board may request. Any Director or Manager may participate in a

meeting of the Board by telephone. All actions taken by the Board shall be taken by majority vote at a

meeting of the Board or by written consent of all Directors at that time. Any action required or permitted

to be taken at any meeting of the Board may be taken without a meeting if one or more written consents

to such action shall be signed by all of the Directors. Persons other than the Managers and Directors may

attend meetings of the Board from time to time in the discretion of the Board on such terms as the Board

may require.

5.4 Limitation of Liability of Board

. Except as otherwise provided, no Director of the LLC shall be obligated personally for any debt,

obligation or liability of the LLC or of any other Member, whether arising in contract, tort or otherwise,

solely by reason of being a Director. Except as otherwise provided in the Act, by law or expressly in this

Agreement, no Director shall have any fiduciary or other duty to another Member with respect to the

business and affairs of the LLC, and no Director shall be liable to the LLC or any other Member for

acting in good faith reliance upon the provisions of this Agreement. No Director shall be personally

liable to the LLC or to its Members for acting in good faith reliance upon the provisions of this

Agreement, or for breach of any fiduciary or other duty that does not involve (i) a breach of the duty of

loyalty to the LLC or its Members, (ii) acts or omissions not in good faith or which involve intentional

misconduct or a knowing violation of law; or (iii) a transaction from which the Director derived an

improper personal benefit. The failure of the LLC to observe any formalities or requirements relating to

the exercise of its powers or the management of its business or affairs under this Agreement or the Act

shall not be grounds for making the Directors responsible for any liability of the LLC.

5.5 Managers

(a) Subject to the direction of the Board (as provided herein), the day to day operations of the LLC

shall be managed by or under the direction of one or more managers (the “Managers”) who may exercise

all the powers of the LLC, except as otherwise provided by law or this Agreement. The initial Managers

shall be Howard Smith and Robert B. Jones who shall be the sole Managers of the LLC.

(a) Without limiting the foregoing, the Managers shall have the right and authority:

(i) to manage the business and affairs of the LLC and for this purpose to employ,

retain or appoint any employees, consultants, agents, brokers, professionals or other persons in

any capacity for such compensation and on such terms as he deems necessary or desirable and to

delegate to such persons such of its duties and responsibilities as he shall determine;

(ii) to enter into, execute, deliver, acknowledge, make, modify, supplement or amend

any documents or instruments in the name of the LLC;

(iii) to perform or cause to be performed all of the LLC’s obligations in respect of its

indebtedness and any mortgage, lien or security interest securing such indebtedness; and

(iv) to make elections and prepare and file returns regarding any federal, state or local

tax obligations of the LLC, and to designate a Member to serve as the Tax Matters Partner of the

LLC for purposes of Section 6231(a)(7) of the Code with power to manage and represent the LLC

in any administrative proceeding of the Internal Revenue Service.

5.6 Qualification; Investments

. The Managers must be Members and shall hold office until their death, resignation or removal.

5.7 Reliance by Third Parties

. Any person dealing with the LLC, the Managers or any Member may rely upon a certificate signed by

any Manager as to (i) the identity of any Manager or Member; (ii) any factual matters relevant to the

affairs of the LLC; (iii) the persons who are authorized to execute and deliver any document on behalf of

the LLC; or (iv) any action taken or omitted by the LLC, the Managers or any Member.

5.8 Resignation and Removal.

(a) Any Manager may resign upon at least sixty (30) days’ notice to the Board and the

Managers (unless, in either case, notice is waived by them). The Board may remove any Manager at any

time with or without cause upon five (5) days’ prior written notice to such Manager. The Board may fill

any vacancy left by the resignation or removal of any Manager.

(b) In the event of the voluntary or involuntary termination of any Manager of the LLC, the

terminated Manager shall maintain his Membership Interest

5.9 Compensation

. The Managers shall not receive compensation for their services. The Managers shall be entitled to

reimbursement for out-of-pocket expenses incurred in managing and conducting the business and affairs

of the LLC subject to proper reporting provided by the Managers to the Board.

5.10 Limitation of Liability of Managers

. No Manager shall be obligated personally for any debt, obligation or liability of the LLC or of any

Member, whether arising in contract, tort or otherwise, solely by reason of being or acting as a Manager

of the LLC. No Manager shall be personally liable to the LLC or to its Members for acting in good faith

reliance upon the provisions of this Agreement, or for breach of any fiduciary or other duty that does not

involve (i) a breach of the duty of loyalty to the LLC or its Members, (ii) acts or omissions not in good

faith or which involve intentional misconduct or a knowing violation of law; or (iii) a transaction from

which the Manager derived an improper personal benefit.

5.11 Actions Requiring Prior Approval of the Board

. Notwithstanding anything to the contrary in this Agreement, the Managers shall not take any of the

following actions directly or indirectly without the prior approval of the Board:

(a) make any additional capital calls;

(b) make or agree to make any Investments;

and conditions of any financing;

(d) enter into or effectuate a sale, merger, consolidation, liquidation, or dissolution of the

LLC;

(e) sell, transfer or otherwise dispose of any Investment or all or substantially all of the

assets of the LLC;

(f) elect or appoint any officer of the LLC deemed to be serving as the chief executive

officer of the LLC;

(g) make any change in the compensation payable or to become payable to any Managers of

the LLC;

(h) incur any expenditures that are in the aggregate materially in excess of the aggregate

expenditure amounts set forth in the budgets prepared by the Managers and approved by the Board or

otherwise materially modify such budgets;

(i) elect any person as an officer of or to the board of directors of a company in which the

LLC invests;

(j) enter into any agreement or arrangement with any Manager or Member or family member

or affiliate of any Manager or Member; or

(k) dissolve the LLC pursuant to Section 14.1.

ARTICLE VI. RIGHTS AND OBLIGATIONS OF MEMBERS

6.1 Limitations on Liability. Each Member's, liability shall be limited as set forth in the Georgia

Act.

6.2 No Liability for Company Obligations. No Member will have any personal liability for any

debts or losses of the Company with the exception of any banking lines and or leases that require personal

guarantees accompanying the approval of 100% of the vote from Members.

6.3 List of Members. Upon written request of any Member, the Company shall provide a list

showing the names, addresses and Membership Interest and Economic Interest of all Members and the

other information required by the Georgia Act and maintained pursuant to Section 11.2.

6.4 Approvals of Members. The Members shall have the right, by the 60% Voting Rights of the

Members, (i) to approve the sale, exchange or other disposition of all, or substantially all, of the

Company's assets which is to occur as part of a single transaction or plan within the meaning of Section

14-11-308(b)(3) of the Georgia Act, or (ii) the merger of the Company within the meaning of Section

14-11-308(b)(2) of the Georgia Act. Except as otherwise provided in this Operating Agreement, the other

actions identified in Section 14-11-3508(b) of the Georgia Act may be taken by the Members without any

further consent or approval of the Members. Members may issue stock with 60% voting approval for

stock offerings and will not give voting rights to any manager without 60% approval of members.

ARTICLE VII. MEETINGS OF MEMBERS

7.1 Meetings. Meetings of the Members, for any purpose or purposes, may only be called by a

Member or Members holding at least 25% of the Ownership Percentages. Meetings of the Board, for any

purpose or purposes, may be called by any Board Member.

7.2 Place of Meetings. The Persons calling any Members meeting or Board meeting may designate

any place, either within or outside the State of Georgia, as the place of meeting for any meeting of the

Members. If no designation is made, the place of meeting shall be the principal executive office of the

Company in the State of Georgia.

7.3 Notice of Meetings. Written notice stating the place, day and hour of the meeting with respect to

Members or the Board and the purpose or purposes for which the meeting is called shall be delivered not

less than seven (7) nor more than fifty (50) days before the date of the meeting, either personally or by

mail, by or at the direction of the Member or Members calling the meeting, to each Member, as the case

may be, entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered two

calendar days after being deposited in the United States mail, addressed to the Member or Board person at

its address as it appears on the books of the Company, with postage thereon prepaid. Notice provided in

accordance with this Section shall be effective notwithstanding anything in Section 14-11-311 of the

Georgia Act to the contrary.

7.4 Meeting of all Members. If all of the Members or Board persons shall meet at any time and

place, either within or outside of the State of Georgia, and consent to the holding of a meeting at such

time and place, such meeting shall be valid without call or notice, and at such meeting any lawful action

may be taken.

7.5 Record Date. For the purpose of determining Members entitled to notice of or to vote at any

meeting of Members or any adjournment thereof, or Members entitled to receive payment of any

distribution, or in order to make a determination of Members for any other purpose, the date on which

notice of the meeting is mailed or the date on which such distribution is made, as the case may be, shall

be the record date for such determination of Members unless the Members shall otherwise specify another

record date. When a determination of Members entitled to vote at any meeting of Member has been made

as provided in this Section, such determination shall apply to any adjournment thereof.

7.6 Quorum. Members or Board persons, as the case may be, holding a Majority Interest

represented in person or by proxy, shall constitute a quorum at any meeting of Members or Board. In the

absence of a quorum at any such meeting, a majority of the Ownership Percentages so represented may

adjourn the meeting from time to time for a period not to exceed sixty (60) days without further notice.

However, if at the adjournment a new record date is fixed for the adjourned meeting, a notice of the

adjourned meeting shall be given to each Member or Board Person of record entitled to vote at the

meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may

be transacted which might have been transacted at the meeting as originally noticed. The Members

present at a duly organized meeting may continue to transact business until adjournment, notwithstanding

the withdrawal during such meeting of that number of Ownership Percentages whose absence would

cause less than a quorum to be present.

7.7 Manner of Acting. The affirmative majority vote of Members shall be the act of the Members.

Section 14-11-307 of the Georgia Act (relating to conflicting interest transactions) shall not apply in the

case of the Company, and Members who have an interest (economic or otherwise) in the outcome of any

particular matter upon which the Members vote or consent may vote or consent upon any such matter and

their Ownership Percentage, vote or consent, as the case may be, shall be counted in the determination of

whether the requisite matter was approved by the Members.

7.8 Proxies. A Member or Board Person may vote in person or by proxy executed in writing by the

Member or Board Person or by a duly authorized attorney-in-fact. Such written proxy shall be delivered

to the Company.

7.9 Action by Members Without a Meeting. Action required or permitted to be taken by the

Members or Board at a meeting may be taken without a meeting if the action is evidenced by one or more

written consents describing the action taken, signed by the Members or Board Persons entitled to vote and

having the requisite Ownership Percentage required to approve such action. Action taken under this

Section is effective when the Members or Board Persons required to approve such action have signed the

consent, unless the consent specifies a different effective date. The record date for determining Members

entitled to take action without a meeting shall be the date the first member signs a written consent.

7.10 Waiver of Notice. In lieu of any procedures contained in Section 14-11-312 of the Georgia Act,

when any notice is required to be given to any Member or Board Person, a waiver thereof in writing

signed by the person entitled to such notice, whether before, at, or after the time stated therein, shall be

equivalent to the giving of such notice.

7.11 Meeting by Telephone. In lieu of any procedures contained in Section 14-11-310(b)(3) of the

Georgia Act, Members or Board Persons may also meet by conference telephone call if all Members or

Board Persons can hear one another on such call and the requisite notice is given or waived.

ARTICLE V111. CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS

8.1 Members’ Capital Contributions. Each Member shall contribute the amount set forth next to

such Member's name on Exhibit "A" hereto as the Member's Initial Capital Contribution.

8.2 Purpose. Additional Capital Contributions shall be made only if funds in excess of those

available from operation of the Permitted Business or from the capital of, or borrowing by, the Company

are required to meet the costs of any Operating Deficit for which an Additional Capital Contribution has

been Approved by the Members by a (100%) Majority Vote.

8.3 Advances. By unanimous agreement, the Members can make Advances to the Company in lieu

of additional Capital Contributions. Advances made by the Members shall not result in any adjustments

in the respective Capital Accounts or Membership Interests of the Members and shall be repayable upon

such terms as the Members shall approve.

8.4 Sale or Dissolution -In the event of a sale, dissolution, or merger, funds received in excess of

Members Capital Accounts, after all debts are satisfied, will be distributed to Members and Shareholders

as a percentage of the total shares owned.

8.5 Failure to Contribute. In the event that any Member fails or refuses to make an Additional

Capital Contribution (or, if all Members agree, an Advance in lieu thereof) within the time specified, such

Member shall be a Defaulting Member, and the Non-defaulting Members shall have the right, but not the

obligation, to (i) make an Advance to the Company in the amount of the Additional Capital Contribution

not made as described above, which Advance shall bear interest from the date of funding until repayment

thereof at the rate of ten percent (10%) per annum and shall be repaid, principal and accrued interest,

from either (a) Net Cash Flow (and to the extent such Advance is repaid from Net Cash Flow, such shall

be repaid prior to any distribution of cash to the Defaulting Member but following the payment of the

preferential payment to the Non-defaulting Venturer), (b) extraordinary receipts (and to the extent such

Advance is repaid from extraordinary receipts, such shall be repaid as a liability of the Member, and the

Members shall be deemed to have Approved such repayment), or (c) a combination of Net Cash Flow and

extraordinary receipts, to the extent of the earlier availability thereof; or (ii) a further Additional Capital

Contribution, which further Additional Capital Contribution shall (1) increase the Membership Interest of

the Non-defaulting Members proportionately and (2) decrease the Membership Interest of the Defaulting

Member by a like amount.

8.6 Maintenance of Capital Accounts. The Company shall establish and maintain Capital Accounts

for each Member and Shareholder. Capital Accounts shall be increased by (1) the amount of any money

actually contributed by the Member or Shareholder to the capital of the Company and (2) the Member and

Shareholder's share of Net Profits and of any separately allocated items of income or gain except

adjustments of the Code (including any gain and income from unrealized income with respect to accounts

receivable allocated to the Member or Shareholder to reflect the difference between the book value and

tax basis of assets contributed by the Member or Shareholder). Each Member and Shareholder's Capital

Account shall be decreased by (1) the amount of any money distributed to the Member or Shareholder by

the Company, (2) the fair market value of any property distributed to the Member or Shareholder (net of

liabilities of the Company assumed by the Member or Shareholder or subject to which the Member or

Shareholder takes such Property within the meaning of Section 752 of the Code), and (3) the Member and

Shareholder's share of Net Losses and of any separately allocated items of deduction or loss (including

any loss or deduction allocated to the Member or Shareholder to reflect the difference between the book

value and tax basis of assets contributed by the Member or Shareholder).

8.7 Distribution of Assets. If the Company at any time distributes any of its assets-in-kind to any

Member or Shareholder, the Capital Account of each Member or Shareholder shall be adjusted to account

for that Member or Shareholder's allocable share (as determined under Article X below) of the Net Profits

or Net losses that would have been realized by the Company had it sold the assets that were distributed at

their respective fair market values immediately prior to their distribution.

8.8 Compliance with Section 704(b) of the Code. The provisions of this Article VIII as they relate

to the maintenance of Capital Accounts are intended, and shall be construed, and, if necessary, modified

to cause the allocations of profits, losses, income, gain and credit pursuant to Article X to have substantial

economic effect under the Regulations promulgated under Section 704(b) of the code, in light of the