M. MAXIPIG Note that the paragraph numbers do not have periods encoded, so that periods must be hand-entered. The profit allocation provisions need work, to provide for the possibility of varying membership interests in the course of a tax year. Operating Agreement Of THE GUINEA PIG COMPANY LLC A Colorado Limited Liability Company Effective as of January 1, 1995 Table of Contents Article 1. Formation of Company 1 1.1. Recognition of Organization of Company. 1 1.2. Name. 1 1.3. Places of Business. 1 1.4. Registered Offices and Registered Agents. 1 Article 2. Purposes of Company 1 Article 3. Rights and Duties of Members 2 3.1. Management. 2 3.2. Certain Authority of Members; Limits on Others' Power. 2 3.3. Restrictions on Authority of Members. 3 3.4. Conflicting Interest Transactions. 3 3.5. Bank Accounts. 4 3.6. Indemnity of Members and Agents. 4 3.7. Compensation of Members. 4 3.8. Right to Rely on Certificates of Managers. 4 3.9. Member's Liability. 4 3.10. Members Have No Exclusive Duty to Company. 5 3.11. Company Documents. 5 3.12. Economic Priority. 6 Article 4. Meetings and Actions of Members, Etc. 6 4.1. Regular Meeting. 6 4.2. Special Meetings. 6 4.3. Place of Meetings. 6 4.4. Notice of Meetings. 6 4.5. Meetings of All Members. 6 4.6. Record Date. 6 4.7. Waiver of Notice. 6 4.8. Proxies. 7 4.9. Manner of Acting at a Meeting. 7 4.10. Action by Members Without a Meeting. 7 Article 5. Contributions to the Company and Capital Accounts 7 5.1. Application of Article to Economic Interest Owners. 7 5.2. Members' Initial Capital Contributions. 7 5.3. Additional Capital Contributions 7 5.4. Capital Accounts. 7 5.5. No Obligation to Restore Negative or Deficit Balances. 8 5.6. No Interest on Capital Contributions; No Right to Return of Capital Contributions. 8 5.7. Loans to Company. 8 Article 6. Allocations, Income Tax, Distributions, Elections, and Reports 9 6.1. Application of Article to Economic Interest Owners. 9 6.2. Allocations of Net Profits and Net Losses. 9 6.3. Special Allocations to Capital Accounts and Certain Other Income Tax Allocations. 9 6.4. Distributions. 11 6.5 Accounting Principles and Elections. 12 6.6. Accounting Period. 12 6.7. Returns. 12 Article 7. Mergers and Other Transactions 12 7.1. Merger or Consolidation. 12 7.2. Membership Interest Exchange. 12 7.3. Equality of Treatment. 13 7.4. Transfer of All Assets. 13 7.5. No Dissenter's Rights. 13 Article 8. Restrictions on Transferability 13 8.1. General. 13 8.2. Encumbrances. 13 8.3. First Right of Refusal on Transfer. 14 8.4. Gifts to Certain Persons. 16 8.5. Documentation of Sale or Gift. 16 8.6. Effective Date of Sale or Gift. 17 8.7. Transferring Party's Indemnity Obligation. 17 8.8. Transferee Not Member in Absence of Members' Consent. 17 Article 9. Additional Members 17 9.1. Admission of Additional Members. 17 9.2. Documentation of Admission. 17 9.3. Effective Date of Admission. 18 9.4. No Retroactive Allocations. 18 9.5. Modification of Allocations. 18 Article 10. Dissociation, Dissolution, and Termination 19 10.1. Dissociation. 19 10.2. Application of Remainder of Article to Economic Interest Owners. 19 10.3. Dissolution. 19 10.4. Effect of Filing of Statement of Intent to Dissolve. 20 10.5. Winding Up, Liquidation, and Distribution of Assets. 20 10.6. Articles of Dissolution. 21 10.7. Certificate of Dissolution. 21 Article 11. Definitions 21 Article 12. Miscellaneous Provisions 27 12.1. Notices. 27 12.2. Application of Colorado Law. 27 12.3. Waiver of Action for Partition. 27 12.4. Amendments. 28 12.5. Execution of Additional Instruments. 28 12.6. Headings and Pronouns. 28 12.7. Waivers. 28 12.8. Rights and Remedies Cumulative. 28 12.9. Severability. 28 12.10. Heirs, Successors, and Assigns. 28 12.11. No Third Party Beneficiaries; No Rights in Creditors. 29 12.12. Rule Against Perpetuities. 29 12.13. Investment Representations. 29 12.14. Other Representations and Warranties. 30 12.15. Counterparts. 32 Operating Agreement Of The Guinea Pig Company LLC This Operating Agreement (this "Operating Agreement") is made and entered into as of the first day of January 1995 by and among The Guinea Pig Company LLC (the "Company"), a Colorado limited liability company, the initial Members identified in the next sentence, and such other Persons as may hereafter be admitted as Members. The initial Members are L. Littlepig, M. Middlepig, and M. Maxipig; their addresses and initial Capital Contributions are as stated in Schedule A attached to this Operating Agreement. Certain terms used in this Operating Agreement are defined in Article . The parties agree as follows: Article . Formation of Company . Recognition of Organization of Company. The Company was organized as a Colorado limited liability company upon the filing of the Articles of Organization by the Colorado Secretary of State, effective as of the date of the Articles of Organization. . Name. The name of the Company is as stated in the first paragraph of this Operating Agreement. . Places of Business. The Company may locate its business at such place or places as the Members may from time to time deem advisable. . Registered Offices and Registered Agents. The Company's initial registered office in the State of Colorado shall be at the office of its registered agent at 621 Seventeenth Street, Suite 1515, Denver, Colorado 80293-1501, and the name of its initial registered agent at such address shall be Anthony van Westrum. The registered office or registered agent, or both, in the State of Colorado may be changed from time to time by filing the address of the new registered office or the name of the new registered agent, as the case may be, with the Colorado Secretary of State pursuant to the Colorado Act. The Company shall appoint registered agents and maintain registered offices in other jurisdictions as may be required by law. Article . Purposes of Company The purposes of the Company shall be to accomplish the lawful businesses and activities that the Members determine shall be pursued by the Company. Article . Rights and Duties of Members . Management. The business and affairs of the Company shall be managed by its Members. Each Member shall be entitled to participate in that management to the extent of the Member's Member Votes. Except for cases in which a different measure of approval of the Members is expressly required by this Operating Agreement or by non-waivable provisions of applicable law, a decision made by Members by a Majority Vote of All the Members shall be the decision of the Members and no action shall be taken by any Member or Members on behalf of the Company unless the action is authorized by this Operating Agreement, has been authorized by a Majority Vote of All the Members, or is inherent in or reasonably implied by authority granted by this Operating Agreement or by Members holding a majority of all of the Member Votes. Procedures regarding the taking of action by the Members are set forth in Article . . Certain Authority of Members; Limits on Others' Power. Subject to, but without limiting the generality of, Section , the Members shall have authority, on behalf of the Company: To execute and deliver, on behalf of the Company all instruments and documents, including checks; drafts; notes and other negotiable instruments; mortgages or deeds of trust; security agreements; financing statements; documents providing for the acquisition, mortgage or disposition of the Company's property; assignments; bills of sale; leases; partnership agreements, operating agreements of other limited liability companies; and any other instruments or documents necessary, in the opinion of the Members, to the business and affairs of the Company; To acquire property from any Person as the Members may determine. The fact that a Member is directly or indirectly affiliated or connected with any Person shall not prohibit the Members from dealing with that Person; To borrow money from banks, other lending institutions, Members, or Affiliates of Members on such terms as the Members deem appropriate, and, in connection therewith, to hypothecate, encumber, and grant security interests in the assets of the Company to secure repayment of the borrowed sums. To transfer all or substantially all of the assets of the Company, with or without an undertaking by the transferee to assume any liability of the Company, whether as part of a single transaction or otherwise, so long as such transfer is not in violation of, or a cause of a default under, any material agreement to which the Company may be bound; To enter into any and all other agreements on behalf of the Company, with any other Person for any purpose, in such forms as the Members may approve; To employ accountants, legal counsel, and others to perform services for the Company, and employees and other agents to act for the Company, to delegate to such Persons such authority as the Members may themselves have to act on behalf of the Company, and to compensate such Persons from Company funds; and To perform all other acts as the Members may deem to be necessary or appropriate in the conduct of the Company's business and affairs. Unless authorized to do so by this Operating Agreement or by the Members, no attorney-in-fact, employee, or other agent of the Company, other than a Member, shall have any power or authority to bind the Company in any way, to pledge its credit or to render it liable pecuniarily for any purpose. Without limiting the generality of the foregoing, no debt shall be contracted or liability incurred by or on behalf of the Company except as determined by the Members, or, to the extent permitted under the Colorado Act, by agents or employees of the Company expressly authorized by the Members to contract such debt or incur such liability; . Restrictions on Authority of Members. No Member, alone or with other Members, shall have the authority to do any of the following acts without the unanimous approval of all of the Members: Perform any act in contravention of this Operating Agreement; Knowingly perform any act that would cause the Company to conduct business in a state which has not enacted legislation which permits the Company to transact business in the state as a foreign limited liability company with limited liability for its Members; or Cause the Company to admit any additional Members other than pursuant to Article hereof. . Conflicting Interest Transactions. As used in this Section , "conflicting interest transaction" means any of the following: A loan or other assistance by the Company to a Member or to a Related Entity; A guaranty by the Company of an obligation of a Member or of an obligation of a Related Entity; or A contract or transaction between the Company and a Member or between the Company and a Related Entity. As used in this Section , "Related Entity" means, with respect to a Member, an Entity that is an Affiliate of the Member or in which the Member is a director, officer, partner, or trustee of, or holds a similar position, or has a financial interest No conflicting interest transaction shall be void or voidable or be enjoined, set aside, or give rise to an award of damages or other sanctions in a proceeding by the Company or by any Member, directly or by or in the right of the Company, solely because the conflicting interest transaction involves a Member or a Related Entity or solely because the Member participates in vote of the Members with respect to such conflicting interest transaction, or solely because the Member's vote is counted for such purpose, if: The material facts as to the Member's relationship or interest and as to the conflicting interest transaction are disclosed or are known to the Members and the Members in good faith authorize, approve, or ratify the conflicting interest transaction by a Majority Vote of the Remaining Members; or The conflicting interest transaction is fair as to the Company as of the time it is undertaken by, or becomes binding upon, the Company. . Bank Accounts. The Company may from time to time open bank accounts, with such signatories thereon as the Members may determine. . Indemnity of Members and Agents. Without limiting any other obligation of the Company to any Member, the Company shall indemnify each Member with respect to, and make advances for, the payments made, personal liabilities incurred, and expenses incurred by the Member in the ordinary and proper conduct of the Company's business and affairs (including the winding up thereof) or the preservation of the Company's business or property, to the maximum extent indemnification and advances are permitted under Section 7-80-410 of the Colorado Act. The Company may indemnify its employees and other agents who are not Members to the fullest extent permitted by law or to any lesser extent, as the Members may determine. . Compensation of Members. No Member shall be entitled to compensation for services rendered to the Company except as may be determined from time to time by a Majority Vote of the Remaining Members. . Right to Rely on Certificates of Managers. Any Person dealing with the Company may rely, without duty of further inquiry, upon a certificate signed by any Member as to: The identity of any Member; The existence or nonexistence of any fact or facts which constitute a condition precedent to acts by any Member or which are in any other manner germane to the business or affairs of the Company; The identity and authority of Persons who are authorized to act for, or to execute or deliver any instrument or document on behalf of, the Company, and the scope of such authority; or Any other matter whatsoever involving the Company or any Member. . Member's Liability. No Member shall be liable under any judgment, decree, or order of a court, or in any other manner, for any debt, obligation, or liability of the Company. No Member shall be liable to the Company or to any Member for any loss or damage sustained by the Company or by any Member, unless the loss or damage is the result of fraud, deceit, gross negligence, willful misconduct, breach of this Operating Agreement or a wrongful taking by the Manager. It is expressly recognized that no Member guarantees, in any way, the return of any Member's Capital Contribution, a profit for any Member from the operations of the Company, or any distribution from the Company. . Members Have No Exclusive Duty to Company. No Member shall be required to manage the Company as a sole and exclusive function. Any Member may have other business interests and may engage in other activities in addition to those relating to the Company. Neither the Company nor any Member shall have any right, by virtue of this Operating Agreement, to share or participate in such other interests or activities of any Member or to the income or proceeds derived therefrom. . Company Documents. The Recordkeeper shall maintain and preserve, until at least five years after the dissolution of the Company and longer if necessary and appropriate in connection with the winding up of its business and affairs, all accounts, books, and other Company documents which are reasonably necessary as a record of its business and affairs, in which shall be entered fully and accurately all transactions and other matters relating to the Company's business in such detail and completeness as is customary and usual for businesses of the type engaged in by the Company. Such documents shall be maintained at the principal executive office of the Company. Without limiting the generality of Section , the Recordkeeper shall maintain and preserve the following: A current list of the full name and last-known business, residence, or mailing address of each Member and of each Economic Interest Owner, both past and present; A copy of the Articles of Organization and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed; A copy of this Operating Agreement, including Schedule A, as in effect from time to time, Copies of all writings, if any, other than this Operating Agreement, which obligate a Member to contribute cash, property or services to the Company, and copies of all writings compromising the obligation of any member to contribute cash, property, or services to the Company; Minutes of every meeting of the Members and copies of all written consents by which Members take action; Copies of the Company's Federal, state, and local income tax returns and reports, if any, for the three most recent years; Copies of all financial statements of the Company for the three most recent years; and Records and accounts of all operations and expenditures of the Company. Upon request, each Member and Economic Interest Owner shall have the right to inspect and copy such Company documents, at the requesting Member's and Economic Interest Owner's expense; provided, however, that access to any such documents may be restricted as the Members determine in order to preserve intellectual property of the Company from misuse. . Economic Priority. Except as may be provided in this Operating Agreement, no Member or Economic Interest Owner shall have priority over any other Member or Economic Interest Owner, whether as to Net Profits, Net Losses, distributions, or other economic matters; provided, however, that this Section shall not apply to loans (as distinguished from Capital Contributions) which a Member has made to the Company. Article . Meetings and Actions of Members, Etc. . Regular Meeting. Members need not have annual or other regular meetings. . Special Meetings. Special meetings of the Members, for any purpose or purposes, may be called by any Member. . Place of Meetings. The Members may designate any place as the place for any meeting of the Members. If no designation is made, the place of meeting shall be the principal executive office of the Company. . Notice of Meetings. Except as provided in Section , written or oral notice stating the place, day, and hour of the meeting and the purpose or purposes for which the meeting is called shall be delivered not less than one nor more than thirty days before the date of the meeting, as provided in Section . . Meetings of All Members. If all of the Members shall meet at any time and place 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 lawful action may be taken. . Record Date. For the purpose of determining who are Members entitled to notice of or to vote with respect to any matter that is presented to the Members for decision, or who are Members entitled to receive payment of any distribution, the date on which notice of the meeting is first given to any Member, or the date on which the resolution declaring such distribution is adopted, as the case may be, shall be the record date for such determination. For the purpose of determining who are Members entitled to take any other action or for any other purpose, the Members may fix a date (which may not be prior to the date and time of the action for which the determination is made nor more than seventy days thereafter) as the record date for the determination. A determination of who are Members entitled to be given notice of or to vote at a meeting of Members is effective for any adjournment of the meeting unless the Members fix a new record date, which they shall do if the meeting is adjourned to a date more than one hundred twenty days after the date fixed for the original meeting. . Waiver of Notice. When any notice is required to be given to any Member, 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. . Proxies. At all meetings of Members a Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. Such proxy shall be filed with the Recordkeeper before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. . Manner of Acting at a Meeting. A Majority Vote of All the Members shall be the act of the Members at a meeting, unless a different requirement is expressed by any other provision of this Operating Agreement. Note: Both the standard and alternative provisions for action by consent set forth below violate 7-80-711 of the Colorado LLC Act; it does not permit action by consent with less than unanimity. . Action by Members Without a Meeting. Members may take action without a meeting if Members having not less than the minimum number of Member Votes that would be necessary to authorize or take such action consent to such action in writing; provided, however, that no such consent shall be effective unless and until notice that the consent has been obtained has been given to each Member. ALT . Action by Members Without a Meeting. Members may take action without a meeting if- the number of Members that would be necessary to take such action at a meeting at which all Members were present and voted sign writings consenting to such action in writings; and if such writings are signed by less than all of the Members, notice that consent to the action has been obtained, specifying the action consented to, has been given to all of the Members who have not signed writings consenting to the action. It is the intention of this Section that the writings on which the action is taken fairly describe the same action, but the writings need not be exact counterparts. The writings on which the action is taken shall be delivered to the Recordkeeper for filing with the Company records, but such deliverance shall not be a condition to the effectiveness of the action. Action taken under this Section shall effective when the requirements therefor specified above in this Section have been satisfied or, if a later date is specified in the consent, at such later date; provided, however, that the action may be effective at such earlier date as may be agreed to by all of the Members. Article . Contributions to the Company and Capital Accounts . Application of Article to Economic Interest Owners. The provisions of this Article shall apply to Economic Interest Owners as if they were "Members," to their Economic Interests in the Company as if those Economic Interests were "Membership Interests"; provided, however, that the foregoing shall not entitle any Economic Interest Owner to vote or otherwise to give or withhold consent, agreement, or approval with respect to any matter on which a Member may vote or give or withhold consent, agreement, or approval. . Members' Initial Capital Contributions. Each Member shall contribute to the Capital of the Company such amount as is set forth in Schedule A as the Member's initial Capital Contribution. . Additional Capital Contributions. Except as set forth in Section , no Member shall be required to make any Capital Contribution. Each Member may, at any time (referred to as the "time of the contribution"), make additional Capital Contributions if and to the extent the Member so desires; provided, however, that, at the time of the contribution and within thirty days thereafter, all other Members shall be given the opportunity to make additional Capital Contributions so that the proportions of the Members' Capital Interests immediately after the contributions are made are the same as they were immediately prior to the time of contribution; and provided, further, that any Member may choose to make a smaller additional Capital Contribution, or to make no additional Capital Contribution, at the time of contribution. . Capital Accounts. A separate Capital Account shall be maintained for each Member. Each Member's Capital Account shall be increased by the amount of money contributed by the Member to the Company; 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 Section 752 of the Code); each allocation to the Member of Net Profits; each item in the nature of income or gain which is specially allocated to the Member pursuant to Section , , , , , or ; and each allocation to the Member of income described in Section 705(a)(1)(B) of the Code. Each Member's Capital Account shall be decreased by the amount of money distributed to the Member by the Company; the fair market value of property distributed to the Member by the Company (net of liabilities secured by such distributed property that the Member is considered to assume or take subject to under Section 752 of the Code); each allocation to the Member of expenditures described in Section 705(a)(2)(B) of the Code; each item in the nature of deduction or loss that is specially allocated to the Member pursuant to Section , , , , , , or ); and allocations to the Capital Account of the Member of Net Losses. In the event of a permitted transfer of a Membership Interest or an Economic Interest in the Company, the Capital Account of the transferor shall become the Capital Account of the transferee to the extent it relates to the transferred Membership Interest or Economic Interest in accordance with Section 1.704-1(b)(2)(iv) of the Treasury Regulations. The manner in which Capital Accounts are to be maintained pursuant to this Section is intended to comply with the requirements of Section 704(b) of the Code and the Treasury Regulations promulgated thereunder. If in the opinion of the Company's accountants the manner in which Capital Accounts are to be maintained pursuant to the preceding provisions of this Section should be modified in order to comply with Section 704(b) of the Code and the Treasury Regulations thereunder, then, notwithstanding anything to the contrary contained in the preceding provisions of this Section or in Section , upon a Majority Vote of all of the Members the method in which Capital Accounts are maintained shall be so modified; provided, however, that no change in the manner of maintaining Capital Accounts shall be made which materially alters the economic agreement among the Members and Economic Interest Owners without the unanimous vote of all of the Members. Provision for payment and distribution of liquidation proceeds is made in Section . . No Obligation to Restore Negative or Deficit Balances. Except as otherwise provided in Section or Section or in the Colorado Act, no Member or Economic Interest Owner shall have any liability to restore all or any portion of a negative or deficit balance in the Member's or Economic Interest Owner's Capital Account, and the negative or deficit balance of the Member's Capital Account shall not be considered a debt owed by the Member to the Company or to any other Person for any purpose whatsoever. This provision shall apply, without limitation, to a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations. . No Interest on Capital Contributions; No Right to Return of Capital Contributions. No Member shall be entitled to interest on the Member's Capital Contribution. No Member shall be entitled to a return of the Member's Capital Contribution, as such, but only to such distributions as are provided for in this Operating Agreement. . Loans to Company. Nothing in this Operating Agreement shall prevent any Member from making secured or unsecured loans to the Company by agreement with the Company; provided, however, that Section shall apply with respect to any such loan. Article . Allocations, Income Tax, Distributions, Elections, and Reports . Application of Article to Economic Interest Owners. The provisions of this Article shall apply to Economic Interest Owners as if they were "Members," to their Economic Interests in the Company as if those Economic Interests were "Membership Interests"; provided, however, that the foregoing shall not entitle any Economic Interest Owner to vote or otherwise to give or withhold consent, agreement, or approval with respect to any matter on which a Member may vote or give or withhold consent, agreement, or approval. . Allocations of Net Profits and Net Losses. The Net Profits or Net Losses of the Company for each fiscal year shall be allocated to the Members in the respective proportions stated on Schedule A; provided, however, that it is recognized that a Member may transfer some or all of the Member's share of Net Profits and Net Losses to another Person or Persons pursuant to other provisions of this Operating Agreement. A Member's share of distributions is determined based upon the Member's share of Net Profits and Net Losses, as provided in Section . . Special Allocations to Capital Accounts and Certain Other Income Tax Allocations. Notwithstanding Section hereof: In the event any Member unexpectedly receives any adjustment, allocation, or distribution described in Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Treasury Regulations, which create or increase a Deficit Capital Account of the Member, then items of Company income and gain (consisting of a pro rata portion of each item of Company income, including gross income and gain for such year and, if necessary, for subsequent years) shall be specially allocated to the Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Deficit Capital Account so created as quickly as possible. It is the intent that this Section be interpreted to comply with the alternate test for economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations. In the event any Member would have a Deficit Capital Account at the end of any Company taxable year which is in excess of the sum of any amount that the Member is treated as being obligated to restore to the Company under Section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations and the Member's share of minimum gain as defined in Section 1.704-2(g)(1) of the Treasury Regulations (which is also treated as an obligation to restore in accordance with Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations), the Capital Account of the Member shall be specially credited with items of Membership income (including gross income) and gain in the amount of such excess as quickly as possible. Notwithstanding any other provision of this Section , if there is a net decrease in the Company's minimum gain as defined in Treasury Regulation Section 1.704- 2(d) during a taxable year of the Company, then the Capital Account of each Member shall be allocated items of income (including gross income) and gain for such year (and if necessary for subsequent years) equal to that Member's share of the net decrease in Company minimum gain. This Section is intended to comply with the minimum gain chargeback requirement of Section 1.704-2 of the Treasury Regulations and shall be interpreted consistently therewith. If, in any taxable year in which the Company has a net decrease in the Company's minimum gain, the minimum gain chargeback requirement would cause a distortion in the economic arrangement among the Members and it is not expected that the Company shall have sufficient other income to correct that distortion, the Members may in their discretion (and shall, if requested to do so by any Member) seek to have the Internal Revenue Service waive the minimum gain chargeback requirement in accordance with Treasury Regulation Section 1.704-2(f)(4). Items of Company loss, deduction, and expenditure described in Section 705(a)(2)(B) of the Code which are attributable to nonrecourse debt of the Company and are characterized as partner (herein Member) nonrecourse deductions under Section 1.704-2(i) of the Treasury Regulations shall be allocated to the Members' Capital Accounts in accordance with Section 1.704-2(i) of the Treasury Regulations. Beginning in the first taxable year in which there are allocations of "nonrecourse deductions" (as described in Section 1.704-2(b) of the Treasury Regulations), such nonrecourse deductions shall be allocated to the Members for any period in the same manner as Net Profits or Net Losses is allocated for such period. In accordance with Section 704(c)(1)(A) of the Code and Section 1.704-1(b)(2)(i)(iv) of the Treasury Regulations, if a Member contributes property with a fair market value that differs from its adjusted basis at the time of contribution, income, gain, loss, and deductions with respect to the property shall, solely for Federal income tax purposes and not for Capital Account purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company and its fair market value at the time of contribution. Pursuant to Section 704(c)(1)(B) of the Code, if any contributed property is distributed by the Company, other than to the Member who contributed the property, within five years of the contribution of the property to the Company, then, except as provided in Section 704(c)(2) of the Code, the contributing Member shall, solely for Federal income tax purposes and not for Capital Account purposes, be treated as recognizing gain or loss from the sale of such property, at the time of such distribution, in an amount equal to the gain or loss that would have been allocated to the contributing Member under Section 704(c)(1)(A) of the Code if the property had been sold at its fair market value at the time of the distribution. In the case of any distribution by the Company to a Member or Economic Interest Owner, the Member or Economic Interest Owner shall, solely for Federal income tax purposes and not for Capital Account purposes, be treated as recognizing gain in an amount equal to the lesser of: the excess (if any) of the fair market value of the property (other than money) received in the distribution over the adjusted basis of the Member's Membership Interest or Economic Interest Owner's Economic Interest in the Company immediately before the distribution, reduced (but not below zero) by the amount of money received in the distribution, or the Net Precontribution Gain (as defined in Section 737(b) of the Code) of the Member or Economic Interest Owner. The Net Precontribution Gain means the net gain (if any) which would have been recognized by the distributee Member or Economic Interest Owner under Section 704(c)(1)(B) of the Code if all property which had been contributed to the Company within five years of the distribution, and is held by the Company immediately before the distribution, had been distributed by the Company to another Member or Economic Interest Owner. If any portion of the property distributed consists of property which had been contributed by the distributee Member or Economic Interest Owner to the Company, then such property shall not be taken into account under this Section and shall not be taken into account in determining the amount of the Net Precontribution Gain. If the property distributed consists of an interest in an Entity, the preceding sentence shall not apply to the extent that the value of such interest is attributable to the property contributed to such Entity after such interest had been contributed to the Company. All recapture of income tax deductions resulting from sale or disposition of Company property shall be allocated to the Member or Members to whom the deduction that gave rise to such recapture was allocated hereunder, to the extent that the Member or Members are allocated any gain from the sale or other disposition of such property. Any credit or charge to the Capital Accounts of the Members pursuant to Section , , , , or shall be taken into account in computing subsequent allocations of profits and losses pursuant to Section , so that the net amount of any items charged or credited to Capital Accounts pursuant to Section , , , , , or shall, to the extent possible, be equal to the net amount that would have been allocated to the Capital Account of each Member pursuant to the provisions of this Article if the special allocations required by Section , , , , or had not occurred. . Distributions. Subject to Section , and subject to the effects of transfers of rights to receive distributions made in accordance with the terms and conditions of this Operating Agreement but without transfer of associated rights in Net Profits and Net Losses, all distributions shall be made to the Members and Economic Interest Owners pro rata in proportion to the respective rights of the Members and Economic Interest Owners in Net Profits and Net Losses as determined pursuant to Section as of the record date of such distribution. Except as provided in Section , all distributions shall be made at such times as may be determined by the Members. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to a Member or Economic Interest Owner from the Company shall be treated nevertheless as amounts that have been distributed to the Member or Economic Interest Owner pursuant to this Section . The Company may offset damages for breach of this Operating Agreement by a Member or Economic Interest Owner against the amount otherwise distributable to the Member or Economic Interest Owner. A Member shall not receive a distribution from the Company to the extent that, after giving effect to the distribution, all liabilities of the Company would exceed the fair value of the Company's assets. A Member who receives any distribution from the Company is liable to the Company with respect thereto only to the extent provided by the Colorado Act. Regardless of the nature of any Member's Capital Contribution, a Member or Economic Interest Owner has only the right to demand and receive cash with respect to any distribution to which the Member or Economic Interest Owner is entitled. A Member or Economic Interest Owner may not be compelled to accept a distribution of any asset in kind from the Company to the extent that the percentage of the asset distributed to the Member or Economic Interest Owner exceeds a percentage of that asset which is equal to the percentage in which the Member or Economic Interest Owner shares in distributions from the Company. Accounting Principles and Elections. The profits and losses of the Company for "book purposes"shall be determined in accordance with accounting principles applied on a consistent basis using the accrual method of accounting. All elections, including the election of tax accounting methods (which may vary from book accounting methods), permitted to be made by the Company under Federal or state laws shall be made by a Majority Vote of All the Members. . Accounting Period. Unless and until otherwise determined by a Majority Vote of All the Members, the Company's accounting period shall be the calendar year. . Returns. Unless the task is delegated to another Person by the Members, the Recordkeeper shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all other tax returns deemed necessary in each jurisdiction in which the Company does business. Copies of such returns, or pertinent information therefrom, shall be furnished to the Members within a reasonable time after the end of the Company's fiscal year. Article . Mergers and Other Transactions . Merger or Consolidation. The Company may merge with or be consolidated into another limited liability company pursuant to applicable law and a plan therefor adopted by a Majority Vote of All of the Members. Such plan shall set forth the following: The name of each Entity that will be a party to the merger or consolidation and the name of the Entity surviving the merger or consolidation; The terms and conditions of the merger or consolidation; The manner and basis of converting the Membership Interests and Economic Interests of the Company into shares, obligations, or other securities of the surviving or any other Entity or into money or other property in whole or part or, if the Company is to be the surviving Entity, the manner and basis of converting shares, obligations, or other securities of the constituent Entities into Membership Interests or into money or other property in whole or in part; Such other provisions relating to the merger or consolidation as may be deemed necessary or appropriate, including amendments to the Articles of Organization or this Operating Agreement. Notice of adoption of the plan shall be given to each Member and each Economic Interest Owner prior to the effectuation of the merger or consolidation, but failure to give such notice to an Economic Interest Owner shall not affect the validity of the plan or the effectiveness of the merger or consolidation. . Membership Interest Exchange. Each Member and each Economic Interest Owner shall exchange all Membership Interests and all Economic Interests in accordance with a plan therefor adopted by a Majority Vote of All of the Members. Such plan shall set forth the following: The terms and conditions of the exchange; The manner and basis of converting the Membership Interests and Economic Interests of the Company into shares, obligations, or other securities of the surviving or any other Entity or into money or other property in whole or part; Such other provisions relating to the exchange as may be deemed necessary or appropriate, including amendments to the Articles of Organization or this Operating Agreement. Notice of adoption of the plan shall be given to each Member and each Economic Interest Owner prior to the effectuation of the exchange, but failure to give such notice to an Economic Interest Owner shall not affect the validity of the plan or the effectiveness of the exchange. . Equality of Treatment. All Membership Interests and all Economic Interests shall be treated-proportionately and pro tanto-equally under any plan for merger, consolidation, or exchange adopted pursuant to the foregoing sections of this Article . . Transfer of All Assets. Provision for the transfer of all or substantially all of the assets of the Company is made in Section . . No Dissenter's Rights. No Person dissenting to any merger, consolidation, Membership Interest or Economic Interest exchange, or transfer of assets shall have any right of appraisal and sale or other right analogous to "dissenters' rights" in the corporate context. Article . Restrictions on Transferability . General. No Member shall have the right to transfer any part of the Member's Membership Interest other than all or any part of the Economic Interest, and transfers of such Economic Interests shall be subject to the following provisions of this Section . Except as otherwise specifically provided in this Article , neither a Member nor an Economic Interest Owner shall have the right to sell or gift all or any part of its Economic Interest. Each Member and Economic Interest Owner hereby acknowledges the reasonableness of the restrictions on sale and gift of Membership Interests and Economic Interests imposed by this Operating Agreement, in view of the Company purposes and the relationship of the Members and Economic Interest Owners, and agrees that such restrictions shall be specifically enforceable. Special provisions relating to security interests and other encumbrances are set forth in Section . . Encumbrances. In the event that any Member or Economic Interest Owner voluntarily grants a security interest in, or otherwise encumbers, any portion of its Economic Interest as security for repayment of a liability, such hypothecation shall not be a "sale" or "gift" but shall be made pursuant to an agreement, in form and content reasonably satisfactory to a Majority Vote of the Remaining Members, by which the secured Person agrees to be bound by the terms and conditions of this Article . Prior to granting the security interest or encumbrance, the hypothecating Member or Economic Interest Owner shall notify the Members of the intention to grant the security interest or encumbrance and shall, at their request, provide them with complete copies of the secured Person's agreement contemplated by the preceding sentence, in order that their approval of the form and content of the agreement can be given. Except as may be otherwise specifically provided in such agreement upon the vote of a Majority Vote of the Remaining Members, a foreclosure of such security interest or encumbrance shall constitute a "sale" for purposes of this Article , the Person purchasing or proposing to purchase in foreclosure shall be deemed to be the "Transferee" as that term is used in this Article , and the "nature and amount of the consideration proposed to be paid" by the Transferee, as that phrase is used in this Article , shall be cash in an amount equal to the lesser of the aggregate amount of the security interest or encumbrance or the fair value of the Economic Interest as such fair value is reasonably determined by a Majority Vote of the Remaining Members. The involuntary encumbrance of an Economic Interest shall be deemed to be a "sale" for purposes of this Article , the encumbering party shall be deemed to be the "Transferee" as that term is used in this Article , and the "nature and amount of the consideration proposed to be paid" by the Transferee, as that phrase is used in this Article , shall be cash in an amount equal to the lesser of the aggregate amount of the encumbrance or the fair value of the Economic Interest as such fair value is reasonably determined by a Majority Vote of the Remaining Members. . First Right of Refusal on Transfer. A Transferring Party who desires to transfer all or any portion of the Transferring Party's Economic Interest to a Person (herein a "Transferee") shall, if the transfer is to be a sale, obtain an offer of purchase from such Person and shall give to the remaining Members a notice (the "Transfer Notice") as provided for below in this Section . The Transfer Notice shall state the following: The name and address of the Transferring Party. The nature and extent of the Economic Interest proposed to be Transferred (the "Subject Interest"). The name and address of the Transferee and the names and addresses of all Persons whom the Transferee represents in such proposed transfer. The nature and amount of the consideration, if any, proposed to be paid by the Transferee for the Subject Interest or, if it be the case, that the proposed transfer is a gift. Although the Transfer Notice shall fully describe the nature and amount of all consideration proposed to be paid by the Transferee for the Subject Interest, only that portion thereof that is payable in United States dollars, or that is an obligation, subject only to the passage of time, to pay dollars, or that is in cancellation of a binding obligation to pay dollars shall be deemed to be a part of the "Offer Price" for the Subject Interest within the meaning of that term as it is used in this Section . A transfer in consideration of a cancellation of a binding obligation to pay dollars shall be deemed to be transfer in consideration of an amount of dollars equal to the amount of the obligation that is to be cancelled. A gift shall be deemed to be a transfer in consideration of zero dollars. The terms and conditions for the payment of the proposed consideration. That the Transferring Party offers (herein, the "Subject Offer") the Subject Interest for sale to the remaining Members under this Section , at the Offer Price. If it is the case, that the Subject Offer is conditioned upon all or some stated portion of the Subject Interest being purchased by the remaining Members collectively. The Transferring Party shall, on the date the Transfer Notice is given, deposit, or cause the Transferee to deposit, with the Company, in certified funds made payable to the order of the Company, an amount equal to the lesser of $50,000 or ten percent of the Offer Price, but in any event not less than $500. Such deposit (the "Deposit") shall be for the purpose of evidencing the good faith nature of the proposal to transfer the Subject Interest to the Transferee. The Deposit shall be subject to the following: The Deposit shall be retained by the Company free of all claims of the Transferring Party, the Transferee, the remaining Members, and any other Person in the event the remaining Members collectively do not accept the Subject Offer for any portion of the Subject Interest and the Transferring Party does not thereafter transfer to the Transferee all of the Subject Interest under the conditions set forth in Sections and . In all other events, the Deposit shall be returned (in cash, by the Company's check, or in such other manner as the Company may reasonably determine) to the Transferring Party, free of all claims of the Company and the remaining Members, upon the expiration of one hundred five days after the Transfer Notice is given. The Company may commingle the Deposit with its other funds during the period it holds the Deposit under this Operating Agreement and shall be entitled to retain, in all events, all interest and other earnings upon the Deposit free of all claims. Within sixty days after the date the Transfer Notice is given, any remaining Member may accept the Subject Offer by agreeing to purchase all or a portion of the Subject Interest at the Offer Price and, at the remaining Member's option, either for cash or on the terms and conditions proposed for the purchase by the Transferee as stated in the Transfer Notice. Such acceptance shall be given, if at all, by giving a notice to the Transferring Party and to the other Members stating the portion of the Subject Interest that the remaining Member agrees to purchase pursuant to the Subject Offer and stating whether the purchase will be for cash or on the terms and conditions proposed for the purchase by the Transferee. If the remaining Members collectively accept the Subject Offer for more than the total of the Subject Interest, the Subject Interest shall be allotted among the remaining Members in accordance with their respective Member Votes, repeated in successive applications until each remaining Member has been allotted the portion of Subject Interest for which the remaining Member has accepted the Subject Offer or until none of the Subject Interest remains to be allotted. If the Transferring Party has conditioned the Subject Offer upon the purchase of all or a stated portion of the Subject Interest, as stated in the Transfer Notice, and the remaining Members collectively have not accepted the Subject Offer, pursuant to Section , by agreeing to purchase a portion of the Subject Interest that equals or exceeds the portion required to be purchased pursuant to the Transferring Party's condition, then the Transferring Party shall have the option either- To proceed with the sales of the Subject Interest to the remaining Members in the respective portions for which they have accepted the Subject Offer and sell all or any part of the balance of the Subject Interest to the Transferee, pursuant to Section ; or To reject the acceptances of the remaining Members for failure to meet the Transferring Party's condition and retain all of the Subject Interest without sale to any Person. Subject to Section , if the remaining Members do not accept the Subject Offer for all of the Subject Interest pursuant to the preceding provisions of this Section , the Transferring Party may sell to the Transferee any or all of the Subject Interest that is not to be purchased by the remaining Members or the Company pursuant to such preceding provisions; provided, however, that such sale to the Transferee shall be void unless: Such sale is consummated within one hundred days after the date the Transfer Notice is given, or such longer period as may be agreed by a Majority Vote of the Remaining Members; and Such sale is consummated on the terms and conditions, and for the consideration, specified in the Transfer Notice, or on terms and conditions that are less advantageous to the Transferee, or for a greater Offer Price, than are specified in the Transfer Notice. If the Transferee is not a Member, then, upon consummation of the sale of the Subject Interest to the Transferee, the Transferee shall be deemed to be an Economic Interest Owner. . Gifts to Certain Persons. Subject to Section , a Gifting Party may gift all or any portion of the Member's Economic Interest without regard to Section ; provided, however, that the Transferee complies with Section and Section , and provided, further, that the Transferee is either the Gifting Party's spouse, former spouse, or lineal descendent (including adopted children). No such gift shall be made to an individual who is under twenty-five years of age at the time of the gift but such gift may be made to a trust established to hold the gifted interest for the benefit of the individual until the individual attains the age of twenty-five years or such greater age as may be provided in the trust. . Documentation of Sale or Gift. In the event of a sale or a gift of a Transferring Party's Economic Interest in the Company, as a condition to recognition of the effectiveness-as against the Company and the remaining Members-of such sale or gift, the remaining Members may require the Transferring Party and the Transferee to execute, acknowledge, and deliver to the Company and the remaining Members such instruments of transfer, assignment, and assumption and such other certificates, representations, and documents, and to perform such other acts, as the remaining Members may reasonably deem necessary or desirable to: constitute the Transferee as an Economic Interest Owner; confirm that the Transferee, desiring to acquire an Economic Interest in the Company has agreed to be subject to and bound by all of the terms and conditions of the Articles of Organization and this Operating Agreement that are applicable to the Transferee as an Economic Interest Owner; preserve the Company after the completion of such sale or gift under the laws of each jurisdiction in which the Company is organized, qualified, or does business; maintain the status of the Company as a partnership for Federal tax purposes; and assure compliance with applicable state and Federal laws, including securities laws. . Effective Date of Sale or Gift. Any sale or gift of an Economic Interest in compliance with this Article shall be deemed effective as against the Company and the remaining Members as of the last day of the calendar month in which the last of the following events occurs: the remaining Members' consent thereto is given, unless no such consent is required pursuant to Section ; the Transferring Party and Transferee comply with Section with respect to all requirements that have been fixed by the remaining Members pursuant to that section within thirty days after the remaining Members have notice of completion of the sale or gift; or the date comes that was specified by the Transferring Party, in a notice given to the Recordkeeper (or to another Member if the Recordkeeper is the Transferring Party) as the effective date of the sale or gift. Notwithstanding anything to the contrary contained in this Operating Agreement, and without limiting any other condition for effectiveness of any transfer, no transfer of an Economic Interest shall be effective as against the Company and the remaining Members unless and until written notice (including the name and address of the proposed Transferee and the date of such transfer) has been provided to the Company and the other Members. . Transferring Party's Indemnity Obligation. Each Transferring Party hereby indemnifies the Company and the remaining Members against any and all loss, damage, and expense (including attorneys' and other professionals' fees incurred in applying and enforcing the provisions of this Operating Agreement and including tax liabilities or loss of tax benefits) resulting directly or indirectly because of any transfer or purported transfer in violation of this Operating Agreement. . Transferee Not Member in Absence of Members' Consent. Notwithstanding anything contained in this Operating Agreement to the contrary (including Section ), if the Transferee is not a Member immediately prior to the sale or gift, then the Transferee shall be merely an Economic Interest Owner and shall not become a Member, and shall have no right to participate in the management of the business or affairs of the Company, unless and until the Transferee is admitted to membership pursuant to Article . Article . Additional Members . Admission of Additional Members. Any Person may, upon a Majority Vote of All the Members, be admitted as a Member in the Company by the issuance by the Company of Membership Interests for such consideration as is approved a Majority Vote of All the Members; provided, however, that, if the Person is a Transferee of Economic Interests from a Member or Members holding a majority of all of the Member Votes, then that Person's admission as a Member shall require, in addition to a Majority Vote of All the Members, the affirmative vote of at least one Member who was not among the transferors of such Economic Interests. . Documentation of Admission. As a condition to the admission of a Person as a Member, the remaining Members may require the Person, and any Member or other transferring Party from which the Person is acquiring any Economic Interest, to execute, acknowledge, and deliver to the Company and the remaining Members such instruments of transfer, assignment, and assumption and such other certificates, representations, and documents, and to perform such other acts, as the remaining Members may reasonably deem necessary or desirable to: constitute the Transferee as a Member; confirm that the Transferee, desiring to be admitted as a Member, has agreed to be subject to and bound by all of the terms and conditions of the Articles of Organization and this Operating Agreement that are applicable to Members; preserve the Company after the completion of such sale or gift under the laws of each jurisdiction in which the Company is organized, qualified, or does business; maintain the status of the Company as a partnership for Federal tax purposes; and assure compliance with applicable state and Federal laws, including securities laws. . Effective Date of Admission. Unless otherwise agreed by a Majority Vote of the Remaining Members, the admission of a Person as a Member shall be deemed effective as against the Company and the Members as of the last day of the calendar month in which the last of the following events occurs: the vote required therefor under Section is obtained; or the Person being admitted as a Member and the Member or Transferring Party, if any, transferring a Membership Interest or Economic Interest to that Person comply with Section with respect to all requirements that have been fixed by the Members pursuant to that section. . No Retroactive Allocations. No new Member shall be entitled, upon admission as a Member, to any retroactive allocation of losses, income, or deduction incurred by the Company; provided, however, that the Members may, in their discretion, either close the Company books (as though the Company's tax year had ended) at the time a new Member is admitted or make pro rata allocations of loss, income, and deductions to the new Member for that portion of the Company's tax year in which the new Member was admitted in accordance with the provisions of Section 706(d) of the Code and the Treasury Regulations promulgated thereunder. . Modification of Allocations. Notwithstanding Section requiring unanimity for amendments to this Operating Agreement, the allocation of Net Profits and Net Losses pursuant to Section and Schedule A may be modified upon a Majority Vote of All the Members (excluding the newly admitted Member) in connection with the issuance by the Company of Membership Interests in the admission of a new Member. Such modification will necessarily modify the Member Votes held by each Member, pursuant to Section . Article . Dissociation, Dissolution, and Termination . Dissociation. Except as expressly permitted in this Operating Agreement, a Member shall not voluntarily Dissociate. The remedy for breach of this Section shall be monetary damages only and not specific performance, and such damages may be offset against distributions by the Company to which the Dissociating Member would otherwise be entitled, pursuant to Section . Unless otherwise approved by a Majority in Interest of the Nondissociating Members, a Dissociating Member, regardless of whether the Member's Dissociation was voluntary, shall be entitled to receive only those distributions to which the Dissociating Member would have been entitled had the Dissociating Member remained a Member and only at such times as such distributions would have been made had the Dissociating Member remained a Member. Except as otherwise expressly provided herein, a Dissociating Member shall become an Economic Interest Owner. . Application of Remainder of Article to Economic Interest Owners. The provisions of the following sections of this Article shall apply to Economic Interest Owners, as if they were "Members," to their Economic Interests in the Company, as if those Economic Interests were "Membership Interests"; provided, however, that the foregoing shall not entitle any Economic Interest Owner to vote or otherwise to give or withhold consent, agreement, or approval with respect to any matter on which a Member may vote or give or withhold consent, agreement, or approval. . Dissolution. The Company shall be dissolved upon the occurrence of either of the following events: the unanimous written agreement of all Members that it shall be dissolved; or the Dissociation of a Member, unless the business of the Company is continued by the vote of a Majority in Interest of the Nondissociating Members given within ninety days after the Dissociation, and, in the event there is only one remaining Member, that Member admits another Person to membership in the Company within ninety days after the Dissociation. As soon as possible following the occurrence of any of the events specified Section effecting the dissolution of the Company, an appropriate representative of the Company shall execute a statement of intent to dissolve in a form that complies with the requirements of the Colorado Act and deliver the same to the Colorado Secretary of State for filing pursuant to the Colorado Act. If a Member who is an individual dies or a court of competent jurisdiction adjudges the Member to be incompetent to manage the Member's person or property, the Member's executor, administrator, guardian, conservator, or other legal representative ("successor") may exercise all of the Member's rights for the purpose of settling the estate or administering property of the Member, provided, however, that, except to the extent required by applicable law, the successor shall not be considered a Member and shall have no right to vote or to give or withhold consent, agreement, or approval with respect to any matter on which a Member might vote or give or withhold consent, agreement, or approval. . Effect of Filing of Statement of Intent to Dissolve. Upon the filing by the Colorado Secretary of State of the Company's statement of intent to dissolve, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until a certificate of dissolution has been issued by the Secretary of State or until such separate existence is terminated in connection with judicial dissolution or liquidation of the Company. . Winding Up, Liquidation, and Distribution of Assets. Upon dissolution of the Company, an accounting shall be made of the accounts of the Company and of the Company's assets, liabilities, and operations, from the date of the last previous accounting until the date of dissolution. The Members may cause such accounting to be made by independent accountants and shall cause such accounting to be made by independent accountants upon the request of any Member. Upon dissolution of the Company, the Members shall immediately proceed to wind up the business and affairs of the Company. In winding up the business and affairs of the Company, the Members shall- Sell or otherwise liquidate all of the Company's assets as promptly as practicable (except to the extent the Members may determine to distribute assets to the Members in kind, it being recognized that any in-kind distribution is subject to Section ); Allocate the profits or losses resulting from such sales to the Members' Capital Accounts in accordance with the provisions of this Operating Agreement; Discharge all liabilities of the Company (including liabilities to Members who are also creditors, to the extent otherwise permitted by law) other than liabilities to Members for distributions, and establish such reserves as the Members deem reasonable to provide for contingent liabilities of the Company (for purposes of determining the Capital Accounts of the Members, the amounts of such Reserves shall be deemed to be an expense of the Company); and Distribute the remaining assets in accordance with the following: If any assets of the Company are to be distributed in kind, the net fair market value of such assets as of the date of dissolution shall be determined by independent appraisal or by agreement of the Members. Such assets shall be deemed to have been sold as of the date of dissolution for their fair market value, and the Capital Accounts of the Members shall be adjusted pursuant to the provisions of Section and Article of this Operating Agreement to reflect such deemed sale. The positive balance (if any) of each Member's Capital Account (as determined after taking into account all Capital Account adjustments for the Company's taxable year during which the liquidation occurs) shall be distributed to the Members, either in cash or in kind, as determined by the Members, with any assets distributed in kind being valued for this purpose at their net fair market value. Any such distributions to the Members in respect of their Capital Accounts shall be made in accordance with the time requirements set forth in Section 1.704- 1(b)(2)(ii)(b)(2) of the Treasury Regulations. In connection with liquidation, the Company may offset damages for breach of this Operating Agreement by a Member against the amount otherwise distributable to the Member, pursuant to Section . The provisions of Section , which eliminates any liability of a Member or Economic Interest Owner to restore any portion of a deficit balance in the Member's or Economic Interest Owner's Capital Account, apply to deficit balances in Capital Accounts upon liquidation of the Company. When all debts, liabilities, and obligations of the Company have been paid and discharged or adequate provisions have been made therefor and when all of the remaining property and assets have been distributed to the Members, the Company shall be deemed terminated. The Members shall comply with all applicable laws pertaining to the winding up of the business and affairs of the Company and the distribution of its assets. . Articles of Dissolution. When all debts, liabilities, and obligations have been paid and discharged or adequate provisions have been made therefor and all of the remaining property and assets have been distributed to the Members, articles of dissolution shall be executed in duplicate and verified by the Person signing the articles, which articles shall set forth the information required by the Colorado Act. Duplicate originals of such articles of dissolution shall be delivered to the Colorado Secretary of State. . Certificate of Dissolution. Upon the issuance of the certificate of dissolution, the existence of the Company shall cease, except for the purpose of suits, other proceedings, and appropriate action as provided in the Colorado Act. The Member shall have authority to distribute any Company property discovered after dissolution, convey real estate, and take such other action as may be necessary on behalf of an in the name of the Company. Article . Definitions The following terms used in this Operating Agreement have the meanings ascribed to them in this Article : . "Articles of Organization" means the Articles of Organization of the Company as filed with the Secretary of State of Colorado on December 28, 1994, as the same may be amended from time to time. . "Affiliate" means, with respect to any Person (such Person being referred to in this Section as the "Target Person"), any Person directly or indirectly controlling, controlled by, or under common control with the Target Person, any Person owning, of record or beneficially, ten percent or more of the outstanding voting interests of the Target Person, unless another Person owns, beneficially, a larger percentage of the outstanding voting interests of the Target Person, any Person who is a director, officer, partner, or trustee of, or is in a similar capacity with respect to, the Target Person, or any Person who is a director, officer, partner, or trustee of, or is in a similar capacity with respect to, or is holder of ten percent or more of the voting interests of, any Person described in clauses (a) through (c) of this sentence. For purposes of this definition, the term "controls," "is controlled by," or "is under common control with" shall refer to the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Target Person, whether through the ownership of voting securities, by contract, or otherwise. . "Capital Account"of a Member, as of any given date, means the Capital Contribution to the Company by the Member as adjusted to the date in question pursuant to Article . . "Capital Contribution" means any contribution, whenever made, by a Member to the capital of the Company, whether in cash or property. Whether a payment of cash or a transfer of property is a contribution to the capital of the Company, and, therefore, a Capital Contribution, shall be determined by the agreement between the Member making the payment or transfer and the other Members acting by a Majority Vote of the Remaining Members. . "Capital Interest" means the proportion that a Member's positive Capital Account balance, if any, bears to the aggregate Capital Accounts of all Members whose Capital Accounts have positive balances, as such proportion may change from time to time. Negative Capital Account balances are disregarded in the determination of "Capital Interests." . "Code" means the Internal Revenue Code of 1986 or corresponding provisions of superseding Federal revenue laws. . "Colorado Act" means the Colorado Limited Liability Company Act or any act that supersedes the Colorado Limited Liability Company Act, as the same may be amended from time to time. . "Company" is defined in the first paragraph of this Operating Agreement. . "Deficit Capital Account" means, with respect to any Member, the deficit balance, if any, in the Member's Capital Account as of the end of the taxable year, after giving effect to the following adjustments: Credit to such Capital Account of all amounts which the Member is treated as being obligated to restore under Section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations, as well as any addition thereto pursuant to the next to last sentence of Sections 1.704-2(g)(1) and (i)(5) of the Treasury Regulations, after taking into account thereunder any changes during such year in partnership minimum gain (as determined in accordance with Section 1.704- 2(d) of the Treasury Regulations) and in the minimum gain attributable to any partner nonrecourse debt (as determined under Section 1.704-2(i)(3) of the Treasury Regulations); and Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations. This definition of Deficit Capital Account is intended to comply with the provision of Treasury Regulations Sections 1.704- 1(b)(2)(ii)(d) and 1.704-2, and is to be interpreted consistently with those provisions. . "Depreciation" means, with respect to each asset, for each fiscal year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to the asset for such fiscal year; provided, however, that, if the Gross Asset Value of the asset differs from its adjusted basis for Federal income tax purposes at the beginning of such fiscal year, "Depreciation" shall be an amount which bears the same ratio to such beginning Gross Asset Value as the Federal income tax depreciation, amortization, or other cost recovery deduction for such fiscal year bears to such beginning adjusted tax basis; and provided, further, that, if the adjusted basis for Federal income tax purposes of an asset at the beginning of such fiscal year is zero, "Depreciation" shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Members. . "Dissociating Member" means a Person who has been a Member but who Dissociates. The term is used in each case with reference to a specific Dissociation and does not refer to Persons who have previously Dissociated, or who may subsequently Dissociate, in Dissociations other than the specific one under consideration. . "Dissociation" refers to the death, resignation, bankruptcy, or dissolution of a Member or the occurrence of any other event (other than the termination of the Company) which terminates the continued membership of a Member in the Company. Dissociation is subject to restriction pursuant to Section . . "Economic Interest" means a Member's or Economic Interest Owner's share, if any, of the Company's Net Profits and Net Losses and distributions of the Company's assets pursuant to this Operating Agreement and the Colorado Act, but "Economic Interest" shall not include any right to participate in the management of the business or affairs of the Company or any right to vote with Members upon any matter upon which a vote of the Members is taken. . "Economic Interest Owner" means the owner of an Economic Interest who is not a Member. . "Entity" means any legally recognized Person other than an individual. . "Fiscal Year" means the Company's fiscal year, which shall be the calendar year. . "Gift" and its derivatives means gift, bequeath, or otherwise transfer for no consideration, whether or not by operation of law, except in the case of bankruptcy . "Gifting Party" means any Member or Economic Interest Owner who gifts all or any part of its Membership Interest or Economic Interest. . "Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for Federal income tax purposes; provided, however, that: The initial Gross Asset Value of an asset contributed by a Member to the Company shall be the gross fair market value of the asset at the time of such contribution, as determined by the contributing Member and a Majority Vote of the Remaining Members; provided, however, that the initial Gross Asset Values of the assets (other than cash) contributed to the Company pursuant to Section hereof shall be as set forth in Schedule A. The Gross Asset Values of all assets shall be adjusted to equal their respective gross fair market values, as determined by the Members, as of the following times: the acquisition of an interest (as that term is used in Regulations Section 1.704-1(b)(2)(iv)(f)(5)(i)) by a new or existing Member in exchange for more than a de minimis contribution of property (including money); the distribution by the Company to a Member of more than a de minimis amount of property as consideration for a Membership Interest or Economic Interest; and the liquidation of the Company within the meaning of Regulations Section 1.704- 1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (1) and (2) of this Section shall be made only if the Members reasonably determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company; The Gross Asset Value of an asset distributed to a Member shall be adjusted to equal the gross fair market value of the asset on the date of distribution as determined by the distributee and a Majority Vote of the Remaining Members, and The Gross Asset Values of assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), Section (relating to the definition of Net Profits and Net Losses), and Section ; provided, however, that Gross Asset Values shall not be adjusted pursuant to this definition to the extent the Members determine that an adjustment pursuant to Section is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this Section . If the Gross Asset Value of an asset has been determined or adjusted pursuant to Section , , or , then such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Profits and Net Losses. . "Majority Vote of All the Members" means the affirmative vote of Members holding a majority of all of the Member Votes. This term is distinct from the term "Majority Vote of the Remaining Members," which is defined in Section . . "Majority in Interest of the Nondissociating Members" means Members (other than the Dissociating Member) holding a majority of the Capital Interests (determined, however, by disregarding the Capital Interest of the Dissociating Member) and a majority of the profits allocable to the Members (determined, however, by disregarding the profits allocable to the Dissociating Member) based on any reasonable estimate of profits from the date of the Dissociation of the Dissociating Member to the projected termination of the Company, taking into account present and future allocations of profits under this Operating Agreement as in effect at that time. A "Majority in Interest of the Nondissociating Members" is not determined with any reference to Member Votes. . "Majority Vote of the Remaining Members" means a vote by Members-other than the contributing Member, transferring Member, or other particular Member who is the subject of the specific occasion to which the provision, in which the phrase is used, is to be applied-holding a majority of the Member Votes held by all of the Members other than that contributing Member, transferring Member, or other particular Member. . "Member" means each Person who is named as an initial Member in the first paragraph of this Operating Agreement and each other Person who is admitted as a Member pursuant to the terms and conditions of this Operating Agreement; provided, however, that, unless the context otherwise requires, the term "Member" shall not include any such Person from and after the time that Person Dissociates from the Company. . "Membership Interest" means a Member's entire interest in the Company including the Member's Economic Interest, Member Votes, and such other rights and privileges that the Member may enjoy by being a Member. If a Member acquires an Economic Interest from another Person, or if a Person who has acquired an Economic Interest subsequently is admitted as a Member, the Member's Membership Interest shall include all rights associated with such Economic Interest, notwithstanding that the Economic Interest Owner from whom the Economic Interest was acquired may not have been a Member. . "Member Vote" refers to the right that a Member has to vote (the term "vote" is defined in Section ) on matters that are presented to the Members for decision. Each Member shall have one "Member Vote" for each one percentage point of the Member's share in Net Profits and Net Losses as allocated pursuant to Section and a fraction of a "Member Vote" for each fraction of a percentage point of such share; provided, however, that, in the event a Member (the "first Member") transfers any portion of the Member's Economic Interest to another Person, the first Member's Member Votes shall not be affected by such transfer unless and until the transferred portion of the Economic Interest is acquired or held by another Member (the "second Member"), at which time the Member Vote, if any, that is associated with the transferred portion shall become the Member Vote of the second Member and no longer that of the first Member. A Member may be denied participation in a particular vote pursuant to the application of the provisions of Section or Section . The number of Member Votes which each Member is entitled to cast shall be reflected on Schedule A. . "Net Profits" and "Net Losses" means for each taxable year of the Company an amount equal to the Company's net taxable income or loss for such year as determined for Federal income tax purposes (including separately stated items) in accordance with the accounting method and rules used by the Company and in accordance with Section 703 of the Code, subject to the following provisions: Any item of income, gain, loss, or deduction allocated to Members pursuant to Section shall not be taken into account in computing Net Profits or Net Losses; Any income of the Company that is exempt from Federal income tax and is not otherwise taken into account in computing Net Profits and Net Losses pursuant to this definition shall be added to such net taxable income or loss; Any expenditure of the Company described in Section 705(a)(2)(B) of the Code and not otherwise taken into account in computing Net Profits and Net Losses shall be subtracted from such net taxable income or loss; In the event the Gross Asset Value of an asset is adjusted pursuant to Section or , the amount of such adjustment shall be taken into account, as gain or loss from the disposition of such asset, in computing Net Profits or Net Losses; Gain or loss resulting from the disposition of an asset with respect to which gain or loss is recognized for Federal income tax purposes shall be computed with reference to the Gross Asset Value of the asset, notwithstanding that the adjusted tax basis of the asset differs from its Gross Asset Value; In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account, in computing Net Profits or Net Losses, Depreciation for such fiscal year; and To the extent an adjustment to the adjusted tax basis of an asset pursuant to Section 734(b) of the Code or Section 743(b) of the Code is required pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Membership Interest or Economic Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Profits or Net Losses. . "Operating Agreement" means this Operating Agreement, as amended from time to time. . "Person" means an individual or Entity and shall include the heirs, executors, administrators, legal representatives, successors, and assigns of a "Person" where the context permits or requires. . "Recordkeeper" means the Person appointed by the Members to keep the books and records of the Company and to perform the other duties specified in this Operating Agreement as duties of the Recordkeeper. . "Sale" and its derivatives means transfer for consideration. . "Schedule A" means Schedule A to this Operating Agreement reflecting matters such as Members' identities, share of Net Profits and Net Losses, and Member Votes, which schedule bears the most recent date and is signed by a Member or Members holding a majority of all of the Member Votes. Schedule A is prima facie evidence of the agreement of the parties hereto with respect to the matters reflected therein, but it is recognized that, through inadvertence or otherwise, Schedule A may not be modified from time to time as required to reflect the parties' agreement, or as circumstances, change, and, accordingly, any party to this Operating Agreement may, by a preponderance of the evidence, show that Schedule A is not an accurate reflection of the parties' agreement. . "Selling Party" means any Member or Economic Interest Owner who sells all or any portion of its Membership Interest or Economic Interest. . "Subject Interest" is defined in Section . . "Transfer" includes sale, gift, bequest, assignment, and all other modes of transfer but does not include the mere creation of a security interest or encumbrance. The foreclosure of a security interest or encumbrance is a "transfer." . "Transferee" is defined in Section . . "Transferring Party" shall mean either a Selling Party or a Gifting Party. . "Treasury Regulations" shall include temporary and final regulations promulgated under the Code that are in effect as of the date of the filing of the Articles of Organization and the corresponding sections of any regulations subsequently promulgated that amend or supersede such regulations. The term "Treasury Regulations" shall also include regulations that have been proposed by the Internal Revenue Service under the Code at or prior to the date of the filing of the Articles of Organization, and have not been withdrawn at or prior to such date, as well as the corresponding provisions of any regulations subsequently promulgated that, amend or supersede such proposed regulations. . "Vote" includes consent, approval, and agreement, as the context may permit. Article . Miscellaneous Provisions . Notices. Each notice and other communication under or with respect to this Operating Agreement (including instruments tendered as full satisfaction of debts and other communications concerning disputed debts) shall be in writing (including by telegraph, telex, telecopier, and other available communication facilities providing written copy to the recipient Person) and shall be effective when actually delivered to the Person to which it is directed or when deposited in the United States mail at a time when the postal service is not experiencing a strike or other disruption in service and no such strike or disruption is publicly expected within a seven day period following such deposit, postage prepaid, addressed to the Person to which it is directed, to the attention of the individual, and at the address, provided for that Person in Schedule A (or if that Person is the Company, to the attention of the Recordkeeper at 210 South Third Street, P.O. Box I, Laramie, Wyoming 82070-0920) or to the attention of such other individual, or at such other address, as that Person may designate by notice (such individual being referred to as the "Notice Individual" and such address being referred to as the "Notice Address"); provided that any notice that is directed to any Economic Interest Owner may be given as if to the Member from whom the Economic Interest Owner received, directly or indirectly, the Economic Interest. Delivery of a notice or other communication to a Person, if made at the Notice Address, shall be to an individual whom the noticing or communicating Person reasonably believes is likely to transmit the notice or communication to the Notice Individual; provided, however, that delivery by a commercial carrier shall be presumed to have been to such an individual. Delivery of a notice or other communication to a Person at a place other than the Notice Address shall be only to the Notice Individual. A stamped receipt issued by a United States post office for registered mail shall be presumptive evidence of deposit in the United States mail, and a receipt signed by a responsible Person for the recipient Person or a delivery confirmation from a commercial messenger or courier shall be presumptive evidence of actual delivery. . Application of Colorado Law. This Operating Agreement shall be construed as though prepared by all of the parties hereto. This Operating Agreement, and the performances of the parties hereunder, shall be governed by the laws of the State of Colorado without giving effect to the principles of conflicts of laws that would otherwise provide for the application of the substantive law of another jurisdiction. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Operating Agreement must be brought against a party in the courts of the State of Colorado or the State of Wyoming or, if it has or can obtain jurisdiction, in the United States District Court for either such state, and each party hereto hereby consents for that party and the party's successors to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in this section may be served on any party anywhere in the world and may also be served upon any party in the manner provided above for giving notices to a party under this Operating Agreement. . Waiver of Action for Partition. Each Member and Economic Interest Owner irrevocably waives any right that it may have to maintain any action for partition with respect to the property of the Company; provided, however, that this provision shall not apply to any asset that is distributed in kind to any Member or Economic Interest Owner. . Amendments. This Operating Agreement may be amended from time to time by the affirmative vote of at least two Members holding, in the agregate, a majority of all of the Member Votes held by all of the Members. Provision is made elsewhere in this Operating Agreement for modifications of Schedule A in connection with the admission of additional Members and transfers of Membership Interests and Economic Interests, and this Section does not supersede such provisions. The Articles of Organization may be amended from time to time by the affirmative vote of at least two Members holding, in the agregate, a majority of all of the Member Votes held by all of the Members. . Execution of Additional Instruments. Each Member hereby agrees to execute such other and further statements of interest and holdings, designations, powers of attorney, and other instruments necessary or appropriate to comply with any laws, rules or regulations. . Headings and Pronouns. Headings and captions contained in this Operating Agreement are solely for the convenience of the parties and are not to be considered in interpreting or construing this Operating Agreement or the parties' rights, remedies, and obligations hereunder. The words "herein," "hereof," and "hereunder," when used in this Operating Agreement, refer to this Operating Agreement in its entirety. The word "include" and its derivatives mean by way of example and not by way of exclusion or limitation. Words in the singular include the plural and words in the plural include the singular, according to the requirements of the context. Words importing a gender include all genders. . Waivers. No party shall be deemed to have waived any right or remedy under or with respect to this Operating Agreement unless such waiver is expressed in a writing signed by such party. No waiver of any right or remedy under or with respect to this Operating Agreement by a party on any occasion or in any circumstance shall be deemed to be a waiver of any other right or remedy on that occasion or in that circumstance nor a waiver of the same or of any other right or remedy on any other occasion or in any other circumstance. . Rights and Remedies Cumulative. The rights and remedies provided by this Operating Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. . Severability. If any provision in this Operating Agreement is held to be invalid or unenforceable on any occasion or in any circumstance, such holding shall not be deemed to render the provision invalid or unenforceable on any other occasion or in any other circumstance nor to render any other provision hereof invalid or unenforceable, and to that extent the provisions of this Operating Agreement are severable; provided, however, that this provision shall not preclude a court of competent jurisdiction from refusing so to sever any provision if severance would be inequitable to one or more of the parties. . Heirs, Successors, and Assigns. Each and all of the covenants, terms, provisions, and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Operating Agreement, their respective heirs, legal representatives, successors, and assigns. No assignment of this Operating Agreement or of any right or obligation hereunder shall relieve the assignor of the assignor's obligations hereunder without the written consent of the other parties. . No Third Party Beneficiaries; No Rights in Creditors. This Operating Agreement creates no rights benefitting third Persons and no third Person shall have any right to enforce any provision hereof, except as may be specifically provided herein. Without limiting the generality of the preceding sentence, none of the provisions of this Operating Agreement shall be for the benefit of or enforceable by any creditor of the Company. . Rule Against Perpetuities. The parties hereto intend that the Rule Against Perpetuities (and any similar rule of law) not be applicable to any provision of this Operating Agreement. However, notwithstanding anything to the contrary in this Operating Agreement, if any provision in this Operating Agreement would be invalid or unenforceable because of the Rule Against Perpetuities or any similar rule of law but for this Section the parties hereto hereby agree that any future interest which is created pursuant to said provision shall cease if it is not vested within twenty-one years after the death of the last survivor of the group composed of the initial Members and their issue who are living on the effective date of this Operating Agreement. . Investment Representations. The Members and Economic Interest Owners understand- that no Membership Interest or Economic Interest has been registered under the Securities Act of 1933, the Colorado Securities Act, or any other state securities laws (collectively, the "Securities Acts") because of the Company's reliance upon exemptions from the registrations requirements of the Securities Acts; that the Company has relied upon the fact that the Membership Interests and Economic Interests are to be held by each Member for investment; and that exemption from registrations under the Securities Acts would not be available if the Membership Interests and Economic Interests were acquired by a Member or Economic Interest Owner with a view to distribution. Accordingly, each Member and Economic Interest Owner hereby confirms to the Company that the Member or Economic Interest Owner is acquiring the Membership Interest or Economic Interest for the Member's or Economic Interest Owner's own account, for investment, and not with a view to the resale or distribution thereof. Each Member and Economic Interest Owner agrees not to hypothecate or transfer or offer to hypothecate or transfer any portion of the Membership Interests or Economic Interests unless there is an effective registration or other qualification relating thereto under the Securities Act of 1933 and under all applicable state securities laws or unless the holder of Membership Interests or Economic Interests delivers to the Company an opinion of counsel, reasonably satisfactory to a Majority Vote of the Remaining Members, that such registration or other qualification under such Act and applicable state securities laws is not required in connection with such hypothecation, transfer, or offer. Each Member and Economic Interest Owner understands that the Company is under no obligation to register any Membership Interest or Economic Interest or to assist the Member or Economic Interest Owner in complying with any exemption from registration under the Securities Acts if the Member or Economic Interest Owner should, at a later date, wish to dispose of the Membership Interest or Economic Interest. Furthermore, each Member realizes that the Membership Interests and Economic Interests are unlikely to qualify for disposition under Rule 144 of the Securities and Exchange Commission unless the Member is not an "affiliate" of the Company and the Membership Interest or Economic Interest has been beneficially owned and fully paid for by the Member or Economic Interest Owner for at least three years. Prior to acquiring any Membership Interests or Economic Interest, each Member and Economic Interest Owner has made an investigation of the Company and its business and has had made available to the Member or Economic Interest Owner all information with respect thereto which the Member or Economic Interest Owner needed to make an informed decision to acquire the Membership Interest or Economic Interest. Each Member and Economic Interest Owner considers itself to be a Person possessing experience and sophistication as an investor which are adequate for the evaluation of the merits and risks of the Member's or Economic Interest Owner's investment in the Membership Interest or Economic Interest. . Other Representations and Warranties. As of the date the Member becomes a Member, each Member represents and warrants that: Due Incorporation or Formation; Authorization of Agreement. If the Member purports to be an Entity, the Member is duly existing as an Entity and in good standing under the laws of the jurisdiction of its formation and has the power and authority, as an Entity, to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. The Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. The Member has the power and authority as an Entity to execute and deliver this Operating Agreement and to perform its obligations hereunder, and its execution, delivery, and performance of this Operating Agreement has been duly authorized by all necessary action. Valid Obligation. This Operating Agreement constitutes the legal, valid, and binding obligation of the Member. No Conflict with Restrictions; No Default. Neither the execution, delivery, and performance of this Operating Agreement nor the consummation by the Member of the transactions contemplated hereby shall conflict with, violate, or result in a breach of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator, applicable to the Member or any of its Affiliates; shall conflict with, violate, result in a breach of, or constitute a default under any of the terms, conditions, or provisions of the articles of incorporation, bylaws, partnership agreement or operating agreement (if any) of the Member or any of its Affiliates or of any material agreement or instrument to which the Member or any of its Affiliates is a party or by which the Member, or any of its Affiliates is or may be bound or to which any of its material properties or assets is subject; shall conflict with, violate, result in a breach of, constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, mortgage, lease agreement, or instrument to which the Member or any of its Affiliates is a party or by which the Member or any of its Affiliates is or may be bound; or shall result in the creation or imposition of any lien upon any of the material properties or assets of the Member or any of its Affiliates. Government Authorizations. Any registration, declaration, or filing with, or consent, approval, license, permit, or other authorization or order by, any government or regulatory authority, domestic or foreign, that is required in connection with the valid execution, delivery, acceptance, and performance by the Member under this Operating Agreement or the consummation by the Member of any transaction contemplated hereby has been completed, made, or obtained on or before the effective date of this Operating Agreement. Litigation. There are no actions, suits, proceedings, or investigations pending or, to the knowledge of the Member or any of its Affiliates, threatened against or affecting the Member or any of its Affiliates or any of their properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation, could lead to any action, suit, or proceeding, which if adversely determined could) reasonably be expected to materially impair the Member's ability to perform its obligations under this Operating Agreement or to have a material adverse effect on the consolidated financial condition of the Member; and the Member or any of its Affiliates has not received any currently effective notice of any default, and the Member or any of its Affiliates is not in default, under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair the Member's ability to perform its obligations under this Operating Agreement or to have a material adverse effect on the consolidated financial condition of the Member. Investment Company Act; Public Utility Holding Company Act. Neither the Member nor any of its Affiliates is, nor shall the Company as a result of the Member holding an Interest be, an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940. Neither the Member nor any of its Affiliates is, nor shall the Company as a result of the Member holding an Interest be, a "holding company," "an affiliate of a holding company," or a "subsidiary of a holding company," as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. Confidentiality. Except as contemplated hereby or required by a court of competent authority, each Member shall keep confidential and shall not disclose to others and shall use its reasonable efforts to prevent its Affiliates and any of its, or its Affiliates', present or former employees, agents, and representatives from disclosing to others without the prior written consent of the Members any information which- pertains to this Operating Agreement, any negotiations pertaining thereto, any of the transactions contemplated hereby, or the business of the Company; or pertains to confidential or proprietary information of any Member or the Company or which any Member has labeled in writing as confidential or proprietary; provided, however, that the Company may disclose to its Affiliates' employees, agents, and representatives any information made available to the Member. No Member shall use, and each Member shall use its best efforts to prevent any Affiliate of the Member from using, any information which pertains to this Operating Agreement, any negotiations pertaining hereto, any of the transactions contemplated hereby, or the business of the Company; or pertains to the confidential or proprietary information of any Member or the Company or which any Member has labeled in writing as confidential or proprietary, except in connection with the transactions contemplated hereby.] . Counterparts. This Operating Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. Certificate The undersigned, being The Guinea Pig Company LLC and all of the initial Members of The Guinea Pig Company LLC, hereby agree, acknowledge, and certify that the foregoing Operating Agreement constitutes the Operating Agreement of The Guinea Pig Company LLC adopted by the Members as of the date first stated in the Operating Agreement. The Guinea Pig Company LLC By: A Member Initial Members: L. LITTLEPIG M. MIDDLEPIG M. MAXIPIG Schedule A to The Guinea Pig Company LLC Operating Agreement Member-Name and Address Initial Capital Contribution Initial Share of Total CapitalShare of Net Profits and Net LossesNumber of Member Votes L. Littlepig123 Hometown St.Hometown, CO$_________________ %________ %________ votes M. Middlepig456 Downroad St.Hometown, CO$_________________ %________ %________ votes M. Maxipig789 Elswhere Ln.Workplace, CO $________ ________ % ________ % ________ votes * * * * * * * * * *The undersigned, being Members holding at least a majority of all the Member Votes, certify that the foregoing Schedule A is accurate and in effect as of the date first stated on the Operating Agreement to which it is attached. L. LITTLEPIG M. MIDDLEPIG OPERATNG.LLC