Limited Liability Company
Operating Agreement
Books And Records

II. BOOKS, RECORDS AND ACCOUNTING

1. Books and Records. The Company shall maintain complete and accurate books and records of the Comapny's business and affairs as required by the Act and such books and records shall be kept at the Company's Registered Office.

2. Fiscal year, accounting. The Company's fiscal year shall be the calendar year. The particular acounting methods and principals to be followed by the Company shall be selected by the accountant for the Company ("Accountant") who is hereby designated as ACCOUNTANT NAME, ADDRESS, its successor or assigns. The Accountant may be changed by written Notice of the then serving Manager, consented to in writing by at least Two (2) Members.

3. Reports. The Managers shall provide reports concerning the financial condition and results of operation of the Company and the Capital Accounts of the Members to the Members in the time, manner, and form as the Manager determines. Such reports shall be provided at least annually as soon as practible after the end of each calendar year and shall include a statement of each Member's share of profits and other items of income, gain, loss, deduction and credit.

4. Member's Capital Accounts. Separate Capital Accounts for each Member shall be maintained by the Company. Each Member's Capital Account shall reflect the Member's capital contributions and increases for the Member's share of any net income or gain of the Company. Each Member's Capital Account shall also reflect decreases for distributions made to the Member and the Member's share of any losses and deductions of the Company.

  1. Definition of Capital Account. A separarte capital account shall be maintained for each Member or Assignee in accordance with the provisions below ("Capital Account").
  2. Increases in Capital Account. Each Member's Capital Account may be increased by:
    1. The amount of money contributed by the Member to the Company.
    2. The fair market value of property contributed by the Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Code Sec... If any property, other than cash, is contributed to or distributed by the Company, the adjustments to Capital accounts required by Treasury Regulation Sec...)shall be made.
    3. The Member's share of the increase in the tax basis of Company property, if any, arising out of the recapture of any tax credit.
    4. Allocations to the Member of Profit.
    5. Allocations to the Member of income or gain as provided under this agreement, or otherwise by Regulation Sec.....
  3. Decreases in Capital account. Each Member's Capital Account shall be decreased by:
    1. The amount of money distributed to the Member by the Company.
    2. The fair market value of property distributed to the Member by the Company (net of liabilities secured by such distributed property that such Member is considered to assume ortake subject to under Code Sec...
    3. Allocations to the Member of Losses.
    4. Allocations to the Member of deductions, expenses, Nonrecourse Deductions and Net Losses allocated to it pursuant to this Agreement, and the Member's share of Company expenditures which are neither deductible nor properly chargeble to Capital Accounts under Code Sec... or are treated as such expenditures under Treasury Regulation Sec...."NonRecourse Deductions" shall have the meaning set forth in Treasury Regulation Sec....
    5. The Member's share of the decrease in the basis of the Company's property under Code Sec.... arising from the allowance of any tax credit.
  4. Capital Account Transferee. In the event of a permitted sale or exchange of an interest in the Company, the Capital Account of the transferor shall become the Capital Account of the Transferee to the extent it realtes to the transfered Interest in accordance with Regulation Sec....)
  5. Capital Accounts Shall Comply with Code Sec 7049(b)

    The manner in which Capital Accounts are to be maintained pursuant to this Agreement is intended to comply with the requirements of Code Sec. 704(b) and the Regulations thereunder. It is the specific intent of the Members that all such further or different adjustments as may be required pursuant to Code Sec. 704, and any Regulations thereunder be made, so as to cause tha allocations prescribed hereunder to be respected for tax purposes.

    Therefore, if in the opinion of the Accountant (or if the accountant is unable or unwilling to act, the Manager), the manner in which Capital accounts are to be maintained pursuant to this Agreement should be modified to comply with Code Sec. 704 (b) and the Regulations thereunder, then notwithstanding anything to the contrary contained in this Agreement, or any other agreement between the Parties, the method in which Capital Accounts are maintained shall be so modified. However, any change in the manner of maintaining Capital accounts shall not materially alter the economic agreement between or among Members. Each Member hereby appoints the Manager the Tax Matters Member and Agent for the purpose of making any amendment to this Agreement solely for purposes of complying with this provision.

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