Fillable California Llc Operating Agreement Template (Page 3 of 16) in pdf

Section 2.7 New Members. The Voting Members may issue additional Voting Capital or

Nonvoting Capital and thereby admit a new Member or Members, as the case may be, to the

Company, only if such new Member (i) is approved unanimously by the Voting Members; (ii) delivers

to the Company his required capital contribution; (iii) agrees in writing to be bound by the terms of

this Agreement by becoming a party hereto; and (iv) delivers such additional documentation as the

Voting Members shall reasonably require to so admit such new Member to the Company.

Upon the admission of a new Member or Members, as the case may be, to the Company, the capital

accounts of Members, and the calculations that are based on the capital accounts, shall be adjusted

appropriately.

ARTICLE III

CAPITAL ACCOUNTS

3.1 Initial Capital Contributions. Each original Member to this Agreement shall make an

initial Capital Contribution to the Company in accordance with Exhibit A, at the time of each

Member's execution of this Agreement.

3.2 Capital Accounts. A separate capital account shall be maintained for each Member’s

ownership interest in Class A Voting Capital (the "Voting Capital Account") and Class B Nonvoting

Capital (the "Nonvoting Capital Account").

The capital account of each Member shall be increased by (i) the amount of any cash and the fair

market value of any property contributed to the Company by such Member (net of any liability

secured by such contributed property that the Company is considered to assume or take subject to),

(ii) the amount of income or profits allocated to such Member.

The capital account or accounts of each Member shall be reduced by (i) the amount of any cash and the

fair market value of any 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 on account of his

ownership interest), (ii) the amount of expenses or loss allocated to the Member. If any property other

than cash is distributed to a Member, the Capital Accounts of the Members shall be adjusted as if the

property had instead been sold by the Company for a price equal to its fair market value and the proceeds

distributed.

Guaranteed Payments (“Guaranteed Payments”) for salary, wages, fees, payments on loans, rents,

etc., may be made to the Members. Guaranteed Payments shall not be deemed to be distributions to

the Members on account of their Ownership Interests, and shall not be charged to the Members’

capital accounts.

No Member shall be obligated to restore any negative balance in his Capital Account. No Member

shall be compensated for any positive balance in his Capital Account except as otherwise expressly

provided herein. The foregoing provisions and the other provisions of this Agreement relating to the

maintenance of Capital Accounts are intended to comply with the provisions of Regulations Section

1.704-1(b)(2) and shall be interpreted and applied in a manner consistent with such Regulations. The

Members agree that the initial Capital Accounts of the Members on the date hereof are as set forth in

Exhibit A.

3.3 Additional Contributions. If, at any time or times hereafter, the Voting Members

shall determine that additional capital is required by the Company, the Voting Members shall

determine the amount of such additional capital and the anticipated time such additional capital

will be required; whether such additional capital shall be provided by the Members by way of

additional Capital Contributions or by way of loans from Members; whether additional Capital

Contributions, if any, shall be of in the form of Class A Voting Capital or Class B Nonvoting

Capital. No Member shall be obligated, at any time, to guarantee or otherwise assume or become

California Llc Operating Agreement Template Page 3

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