Operating Agreement

Sample Operating Agreement

EXHIBIT C

LIIVIITED LIABILITY COIVIPANY OPERATING AGREEMENT

OPERATING AGREEMENT OF

_______________________,LLC

A CALIFORNIA LIMITED LIABILITY COMPANY

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS............................................1

"Act".....................................................1

"Affiliate".................................................1

"Agreement"...............................................1

"Articles" .................................................2

"Bankruptcy" ..............................................2

"Capital Account" ..........................................2

"Capital Contribution".......................................2

"Code" ...................................................2

"Company"................................................2

"Company Assets".......................................... 2

"Company Minimum Gain"...................................2

"Corporations Code" ........................................2

"Dissolution Event" .........................................3

"Distributable Cash".........................................3

"Distribution"..............................................3

"Economic Risk of Loss".....................................3

"Jamba Juice" .............................................3

"Fiscal Year" ..............................................3

"License Agreement"........................................3

"Majority In Interest".....................,..................3

"Managing Member" ........................................3

"Member".................................................3

"Member Nonrecourse Debt"..................................3

"Member Nonrecourse Deductions" ............................4

"Membership Interest".......................................4

"Multi-Unit License Agreement"...............................4

"Net Profits" and "Net Losses" ................................4

"Nonrecourse Deductions"....................................4

"Nonrecourse Liability"......,...............................4

"Percentage Interest" ........................................4

"Person" ..................................................5

"Tax Credits" ..............................................5

"Tax Matters Partner"........................................5

"Transfer".................................................5

"Treasury Regulations"......................................5

ARTICLE II ORGANIZATIONAL MATTERS ............................6

2.1 Name.....................................................6

2.2 Term.....................................................6

2.3 Office and Agent...........................................6

2-4 Purpose of Company ........................................6

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2.5 2.6

ARTICLE HI

3.1

3.2 3.3 3.4

3.5

ARTICLE IV

4.1 4.2 4.3 4-4 4.5 4.6

4.7 4.8 4.9

ARTICLE V

5.1 5.2 5.3

ARTICLE VI

ARTICLE VII

7.1

ARTICLE VIU

8.1

ARTICLE IX

9.1 9.2 9.3

9.4

ARTICLE X

Intent.....................................................6

Reimbursement of Expenses of Organization .....................6

CAPITAL CONTRIBUTIONS...............................6

Initial Capital Contributions...................................6

Additional Capital Contributions...............................6

Capita! Accounts ..............................,............7

No Priorities of Members; No Withdrawals of Capital ..............7

No Interest .,..........................................,.. 7

MEMBERS...............................................7

Limited Liability............................................7

Admission of Additional Members .............................7

Members Are Not Agents.....................................1

Meetings of Members; Written Consent .........................7

Transactions between the Company and the Members.............. 8

Performance of Duties; Liability of Members, Managers, and

Officers...................................................8

Company Opportunities......................................8

Competing Activities........................................9

Effect on Multi-Unit License Agreement and License Agreement .....9

GENERAL SUPERVISION AND CONTROL OF MANAGEMENT ..........................................9

Management by Managing Member.............................9

Limitations on Power of Managing Member.......................11

Expenses.................................................12

ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS ........ ...............................13

TRANSFER OF INTERESTS...............................13

Transfer of Interests ........................................13

CONSEQUENCES OF DISSOLUTION EVENTS..............13

Dissolution Event..........................................13

ACCOUNTING, RECORDS, REPORTING BY MEMBERS ... 13

Books and Records.........................................13

Bank Accounts; Invested Funds...............................13

Tax Matters for the Company Handled by Managing Member

and Tax Matters Partner.....................................14

Accounting Matters........................................14

DISSOLUTION AND WINDING UP ........................14

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10.1 Dissolution...............................................14

10-2 Date of Dissolution.........................................15

10.3 Winding Up ..............................................15

10.4 Distributions in Kind .......................................15

10.5 Order of Payment of Liabilities Upon Dissolution.................15

10.6 Compliance With Treasury Regulations..........................15

10.7 Limitations on Payments Made in Dissolution....................15

10.8 Certificate of Cancellation...................................16

10.9 Compensation for Services....................................16

ARTICLE XI INDEMNIFICATION .....................................16

11.1 Indemnification............................................16

11.2 Contract Right; Expenses....................................16

113 Indemnification of Officers and Employees......................16

11.4 Insurance.................................................17

ARTICLEXU MISCELLANEOUS.......................................17

12.1 Amendments..............................................17

12.2 Offset Privilege............................................17

123 Arbitration ...............................................17

12.4 Remedies Cumulative.......................................17

12.5 Notices ..................................................18

12.6 Attorney's Fees............................................18

12.7 Jurisdiction...............................................18

12.8 Complete Agreement.......................................18

12.9 Binding Effect.............................................18

12.10 Section Headings ...........................................18

12-11 Amendments........-.....................................18

12.12 Interpretation .............................................18

12.13 Severability...............................................19

12.14 Multiple Counterparts.......................................19

Exhibits:

Exhibit A Capital Contributions, Addresses and Percentage Interests of Members

Exhibit B Percentage of Profits, Losses and Corresponding Tax Allocations among Members

Exhibit C Spousal Consent

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iii

OPERATING AGREEMENT OF

_______________________________,LLC

A CALIFORNIA LIMITED LIABILITY COMPANY

This Operating Agreement is made as of_______________,_____, by and between Jamba Juice

Company, a California corporation ("Jamba Juice"),___________________, a[n ]_____________, and

___________________, a[n ]_____________, with reference to the following facts:

A. The parties desire to form__________________, LLC (the "Company") as a

limited liability company under the laws of the State of California and, to that end, have filed Articles of Organization for the Company with the California Secretary of State.

B. The parties have entered into a Multi-Unit License Agreement dated________,

C. The parties now desire to adopt an operating agreement to govern their respective

rights and obligations as members and managers of the Company.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt of which is acknowledged, the parties agree that the following shall be the Operating Agreement of the Company.

ARTICLE I DEFINITIONS

When used in this Agreement, the following terms have the following meanings:

"Act" means the Bcverly-KHIea Limited Liability Company Act, codified in the Corporations Code, Section 17000 etseq.

"Affiliate" of a Member or the Managing Member means (a) a Person directly or indirectly (through one or more intermediaries) controlling, controlled by or under common control with that Member orManaging Member; (b) anofficer, director, partner, memberor immediate family member of thatMember or Manager; or (c) a member of the immediate family of an officer, director, partner or member of that Member or Managing Member. For these purposes "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Agreement" means this Operating Agreement of_______________, LLC as originally executed

and as amended from time to time.

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"Articles" means the Articles of Organization of the Company, as originally Filed with the California Secretary of State and as amended from time to time.

"Bankruptcy" of a Member means the institution of any proceedings under any federal or state law for the relief of debtors, including the filing by or against that Member of a voluntary or involuntary case under tlie federal bankruptcy law, which proceedings, if involuntary, are not dismissed within sixty (60) days after their filing; an assignment of the property of that Member for the benefit of creditors; the appointment of a receiver, trustee or conservator of any substantial portion of the assets of that Member, which appointment, if obtained ex parte, is not dismissed within sixty (60) days thereafter; the seizure by a sheriff, receiver, trustee or conservator of any substantial portion of the assets of that Member; tlie failure by that Member generally to pay its debts as they become due within the meaning of Section 303(h)(1) of the United States Bankruptcy Code, as determined by tlie Bankruptcy Court; or that Member's admission in writing of its inability to pay its debts as they become due.

"Capital Account" of a Member means the capital account of that Member determined from the inception of the Company strictly in accordance with the rules set forth in Section 1.704-l(b)(2)(iv) of tlie Treasury Regulations, In the event that assets of the Company other than cash are distributed to a Member in kind, Capital Accounts shall be adjusted for the hypothetical "book" gain or loss that would have been realized by the Company if the distributed assets had been sold for their fair market values in a cash sale (in order to reflect unrealized gain or loss). In the event of the liquidation of the Company, Capital Accounts shall be adjusted for the hypothetical "book" gain or loss that would have been realized by the Company if all Company assets had been sold for their fair market values in a cash sale (in order to reflect unrealized gain or loss).

"Capital Contribution" of a Member, at any particular time, means the amount of money or property or a promissory note or other binding obligation to contribute money or property, which that Member has theretofore contributed to the capital of the Company.

"Code" means the Internal Revenue Code of 1986.

"Company" means_________________, LLC, a California limited liability company.

"Company Assets" means the Company's real property, personal property and other tangible and intangible assets.

"Company Minimum Gain" with respect to any taxable year of the Company means the "partnership minimum gain" of the Company computed strictly in accordance with the principles of Section 1.704-2(d) of the Treasury Regulations.

"Corporations Code" means the California Corporations Code, as amended from time to time. Any references in this Agreement to a specific provision of tlie Corporation Code shall refer to the cited provision, as the same may be subsequently amended from time to time, as well as to any successor provision(s)..

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"Dissolution Event" with respect to any Member means one or more of the following: the death, insanity, permanent disability, withdrawal, Bankruptcy, expulsion, dissolution or occurrence of any other event which terminates the continued membership of that Member in the Company, other than a Transfer of a Member's Membership Interest which is made in accordance with the provisions of Article VII.

"Distributable Cash" at any time means that portion of the cash then on hand or in bank accounts of the Company which the Managing Member, in his or her absolute discretion, deems available for distribution to the Members, taking into account (a) the amount of cash required for the payment of all current expenses, liabilities and obligations of the Company (whether for expense items, capital expenditures, improvements, retirement of indebtedness or otherwise) and (b) the amount of cash necessary to establish prudent reserves for the payment of future capital expenditures, improvements, retirements of indebtedness, operations and contingencies, known or unknown, liquidated or unliquidated, including, but not limited to, liabilities which may be incurred in litigation and liabilities undertaken pursuant to the indemnification provisions of this Agreement.

"Distribution" means the transfer of money or property by the Company to one or more Members without separate consideration.

"Economic Risk of Loss" means the economic risk of loss within the meaning of Section 1.752-2 of the Treasury Regulations.

"Jamba Juice" means Jamba Juice Company, a California corporation, or any permitted successor-in-interest to its entire Membership Interest.

"Fiscal Year" means the Company's fiscal year, which shall be______-________.

"License Agreement" means those certain License Agreements between Jamba Juice (as licensor thereunder) and Company (as licensee thereunder), governing the operation of "Jamba Juice" stores developed by Company pursuant to the Multi-Unit License Agreement, or otherwise.

"Majority In Interest" means Voting Interests which, taken together, exceed fifty percent (50%) of the aggregate of all Voting Interests held by all Members entitled to vote or grant consent with respect to the matter in question.

"ManagingMember" means the manager of the Company duly selected by the Members pursuant

to Section 5.1. The initial Managing Member shall be___________________________until a replacement

is selected by the Members pursuant to Section 5.1.2,

"Member" means each Person who (a) is an initial signatory to this Agreement, has been admitted to the Company as a Member in accordance with the Articles or this Agreement or is a transferee of a Member who has become a Member in accordance with Article VII, and (b) has not suffered a Dissolution Event.

"Member Nonrecourse Debt" means any "partner nonrecourse liability" or "partner nonrecourse debt" under Section 1.704-2(b)(4) of the Treasury Regulations. Subject to the foregoing, it means any

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Company liability to the extent the liability is nonrecourse for purposes of Section 1.1001-2 of the Treasury Regulations, and a Member (or related Person within the meaning of Section 1.752-4(b) of the Treasury Regulations) bears the Economic Risk of Loss under Section 1.752-2 of the Treasury Regulations because, for example, the Member or related Person is the creditor or a guarantor.

"Member Nonrecourse Deductions" means the Company deductions, losses and Code Section 705(a)(2)(B) expenditures, as the case may be (as computed for "book" purposes), that are treated as deductions, losses and expenditures attributable to Member Nonrecourse Debt under Section 1.704-2(i)(2) of the Treasury Regulations.

"Membership Interest" means a Member's total interest as a member of the Company, including that Member's share of the Company's Net Profits, Net Losses, Distributable Cash or other Distributions, its right to inspect the books and records of the Company and its right, to the extent specifically provided in this Agreement, to participate in the business, affairs and management of the Company and to vote or grant consent with respect to matters coming before the Company.

"Multi-Unit License Agreement" means that certain Multi-unit Area License Agreement between Jamba Juice and Company (as "Licensee" therein) which has been executed concurrently herewith, pursuant to which Jamba Juice has granted Company to develop "Jamba Juice" stores (the "Stores") in the development area described therein.

"Net Profits" and "Net Losses" means, for each fiscal period, the net income and net loss, respectively, of the Company determined strictly in accordance with federal income tax principles (including rules governing depreciation and amortization), except that in computing net income or net loss, the "book" value of an asset will be substituted for its adjusted tax basis if the two differ, and the following items shall be excluded from the computation:

(a) any gain, income, deductions or losses specially allocated under Sections 6,1,6-2, 6.3 or Exhibit "C";

(b) any Nonrecourse Deductions; and

"Nonrecourse Deductions" in any fiscal period means the amount of Company deductions that are characterized as "nonrecourse deductions" under Treasury Regulations Section 1.704-2(b) of the Treasury Regulations.

"Nonrecourse Liability" means a liability treated as a "nonrecourse liability" under Sections 1.704-2(b)(3) and 1,752-1 (a)(2) of the Treasury Regulations.

"Percentage Interest" means the percentage interest of a Member set forth opposite the name of that Member in Exhibit A, as such percentage may be adjusted from time to time pursuant to the provisions of this Agreement.

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"Person" means any entity, corporation, company, association,joint venture, joint stock company, partnership, trust, limited liability company, limited liability partnership, real estate investment trust, organization, individual (including personal representatives, executors and heirs of a deceased individual), nation, state, government (including agencies, departments, bureaus, boards, divisions and instrumentalities thereof), trustee, receiver or liquidator.

"Tax Credits" means all credits against income or franchise taxes and credits allowable to Members under state, federal or other tax statutes.

"Tax Matters Partner" means the Member appointed by the Managing Member pursuant to the provisions of Section 9.4 to serve as the "tax matters partner" of the Company for purposes of Sections 6221-6233 of the Code. Initially, the Tax Matters Partner shall be Jamba Juice.

"Transfer" means, with respect to a Membership Interest or any interest therein, the sale, assignment, transfer, disposition, pledge, hypothecation or encumbrance thereof, whether direct or indirect, voluntary, involuntary or by operation of law, and whether or not for value, of (a) all or any part of that Membership Interest or interest therein or (b) a controlling interest in any Person (other than Jamba Juice) which directly or indirectly through one or more intermediaries holds that Membership Interest or interest therein.

"Treasury Regulations" means the regulations of the United States Treasury Department pertaining to the income tax.

"____________" means_____________., an individual, or any permitted successor-in-interest

to his entire Membership Interest

"____________" means_____________, an individual, or any permitted successor-in-interest

to his entire Membership Interest.

References in this Agreement to "Articles," "Sections," "Exhibits" and "Schedules," shall be to the Articles, Sections, Exhibits and Schedules of this Agreement, unless otherwise specifically provided; all Exhibits and Schedules to this Agreement are incorporated herein by reference; any of the terms defined in this Agreement may, unless the context otherwise requires, be used in the singular or the plural and in any gender depending on the reference; the words "herein", "hereof and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and except as otherwise specified in this Agreement, all references in this Agreement (a) to any Person shall be deemed to include such Person's permitted heirs, personal representatives, successors and assigns; and (b) to any agreement, any document or any other written instrument shall be a reference to such agreement, document or instrument together with all exhibits, schedules, attachments and appendices thereto, and in each case as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof; and (c) to any law, statute or regulation shall be deemed references to such law, statute or regulation as the same may be supplemented, amended, consolidated, superseded or modified from time to time,

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ARTICLE II

ORGANIZATIONAL MATTERS

2.1 Name. The name of the Company shall be "____________________, LLC" The

business of the Company may be conducted under that name or, upon compliance with applicable law, under any other name that the Managing Member deems appropriate or advisable.

2-2 Term- The term of the Company's existence commenced upon the filing of its

Articles of Organization with the California Secretary of State on______________, 20___and shall

continue until such time as it is terminated pursuant to Article X.

2.3 Office and Agent, Company shall continuously maintain an office and registered agent in the State of California as required by the Act. The principal office of the Company shall be at

_________________________________________, or at such other place as the Managing Member may

determine from time to time. The Company may also have such offices within and without the State of California as the Managing Member may from time to time determine. The registered agent shall be as stated in the Articles or as otherwise determined by the Managing Member.

2.4 Purpose of Company. The Company's sole purpose shall be to engage in the business of owning and operating retail ".Jamba Juice" stores opened pursuant to the Multi-Unit License Agreement, each of which shall be subject to a separate License Agreement.

2.5 Intent It is the intent of the Members that the Company shall always be operated in a manner consistent with its treatment as a "partnership" for Federal and state income tax purposes. It also is the intent of the Members that the Company not be operated or treated as a "partnership" for purposes of Section 303 of the United States Bankruptcy Code. No Member shall take any action inconsistent with that express intent.

2.6 Reimbursement of Expenses of Organization. The Members hereby authorize the Company to pay its expenses of organization and to reimburse any Person advancing funds for that purpose.

ARTICLE III CAPITAL CONTRIBUTIONS

3.1 Initial Capital Contributions, Concurrently herewith, each Member shall contribute to the Company the monies which are specified in Exhibit A as that Member's initial Capital Contribution.

3.2 Additional Capital Contributions. No Member shall be required to make any additional Capital Contributions not specifically referred to in Section 3.1.

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3.3 Capital Accounts. The Company shall establish and maintain an individual Capital Account for each Member.

3.4 No Priorities of Members: No Withdrawals of Capital. Except as otherwise specified in Article VI and in the Act, no Member shall have a priority over any other Member as to any Distribution, whether by way of return of capital or by way of profits, or as to any allocation of Net Profits or Net Losses, No Member shall have the right to withdraw or reduce its Capital Contributions in the Company except as a result of the dissolution of the Company or as otherwise provided in Section 4.3 or the Act, and no Member shall have the right to demand or receive property other than cash in return for its Capital Contributions.

3.5 No Interest. No Member shall be entitled to receive any interest on its Capital Contributions.

ARTICLE IV

MEMBERS

4.1 Limited Liability. Except as required under the Act or as expressly set forth in this Agreement, no Member shall be personally liable for any debt, obligation or liability of the Company, whether that liability or obligation arises in contract, tort or otherwise.

4.2 Admission of Additional Members. Subject to compliance with the terms of the Multi-Unit License Agreement and License Agreement(s), and with all applicable laws, and the approval of the Managing Member, additional Members may be admitted to the Company from time to time upon such terms and conditions as the Managing Member may determine, and any such additional Members shall be granted Membership Interests and may participate in the management, Distributable Cash, Net Profits, Net Losses, Tax Credits and other Distributions of the Company on such terms as the Managing Member may fix.

4.3 Members AreNot Agents. The management of the Company is vested exclusively in the Managing Member. No Member, acting solely in its capacity as a Member, may be an agent of the Company, nor may any Member, in that capacity, bind or execute any instrument on behalf of the Company without the prior written consent of the Managing Member.

4.4 Meetings of Members: Written Consent. Meetings of the Members shall be held at such times and places within or without the State of California as the Members may fix from time to time, but, in any event, any Member may call a special meetings of the Members upon 10 days prior written notice to the other Members. No annual, regular or special meetings of Members are required, but if such meetings are held, they shall be conducted pursuant to the Act. Members may participate in any meeting through the use of conference telephones or similar communications equipment as long as all Members participating can hear one another. A Member so participating is deemed to be present in person at the meeting. Any action which may be taken by the Members at a meeting may also be taken without a meeting, if a consent in writing setting forth the action so taken is signed by Members having not less than the minimum votes that would be necessary to authorize that action at a meeting of the Members duly called and noticed.

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4.5 Transactions between the Company and the Members. Notwithstanding that it may constitute a conflict of interest:

4.5.1 The Company will pay License Agreement fees, Multi-Unit License Agreement fees, and may purchase inventory, raw materials, services and marketing and advertising services from Jamba Juice without obtaining prior Member approval;

4.5.2 The Managing Member may, and may cause his or her Affiliates to, engage in any other transactions with the Company so long as that transaction is either (a) fair to the Company or (b) approved by the disinterested Members.

4-6 Performance of Duties; Liability of Members. Managers, and Officers.

4.6.1 No Member or officer shall be liable to the Company or to any other Member for any losses or damages suffered by them, except as the result of fraud, deceit, gross negligence, reckless or intentional misconduct or a knowing violation of law or this Agreement by that Member or officer or as a result of acts from which that Member or officer derives an improper personal benefit. The Members and officers, if any, shall perform their duties in good faith, in a manner they reasonably believe to be in the best interests of the Company and the Members. In performing their duties, die Members and officers shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, of the following persons or groups unless they have knowledge concerning the matter in question that would cause such reliance to be unwarranted and provided that the Members and officers act in good faith and after reasonable inquiry when the need therefor is indicated by the circumstances.

4.6.2 Nothing herein is intended to modify or supersede the terms of the Multi-Unit License Agreement or any License Agreement executed pursuant thereto by and between the Company and Jamba Juice, nor to control or restrict Jamba Juice in the exercise of any of its rights and authority under the Multi-Unit License Agreement or any License Agreement. Nor shall any reference to the rights and obligations of any of the parties hereunder restrict, govern or otherwise alter any of the Company's or any Member's rights or obligations under the terms of the Multi-Unit License Agreement or any License Agreement.

4.7 Company Opportunities.

Except as may otherwise be expressly agreed in writing, and except as otherwise expressly provided in the Muiti-Unit License Agreement or any License Agreement to the contrary, neidier the Managing Member nor any Member shall be required to offer to the Company any opportunity it acquires after the date of this Agreement to pursue a prospective business venture, investment opportunity or economic advantage whether or not that prospective business venture is within the primary purpose of the Company specified in Section 2.4 and the Company would or might reasonably be in a position to take up that prospective business venture in the course of its business. Each Member shall have the right to hold any such prospective project, business venture, investment opportunity or economic advantage for its own account or to recommend the same to Persons other than the Company or the other Members. Without limiting the generality of the foregoing, the Company shall not have any right to obtain, and Jamba Juice

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shall have no obligation to offer to Company, any additional "Jamba Juice" development rights or store license or the right or option to open any additional "Jamba Juice" store, except within the development area in accordance with the terms of the Multi-Unit License Agreement.

4.8 Competing Activities.

Except as may be restricted under the terms of any other Agreement, the Members and their respective officers, directors, shareholders, partners, members, managers, agents, employees and Affiliates may engage or invest in, independently or with others, any business activity of any type or description, including without limitation those that might be the same as or similar to the Company's business and that might be in direct or indirect competition with the Company. Neither the Company nor the other Members shall have the right in or to such other ventures or activities or to the income or proceeds derived therefiom. It is understood and agreed references contained in the Multi-Unit License Agreement and/or any License Agreement to the "Licensee", or any officer, director, shareholder, partner or member of the Licensee is not intended to and shall not refer to or include Jamba Juice, or its officers, directors, or shareholders, notwithstanding Jamba Juice's Membership Interest herein, and no obligation or restriction upon the "Licensee", or any officer, director, shareholder, partner or member of Licensee bind Jamba Juice, or its officers, directors, or shareholders.

4.9 Effect on Multi-Unit License Agreement and License Agreement.

Nothing herein is intended to modify or supersede the terms of the Multi-Unit License Agreement or any License Agreement executed by and between the Licensee and Jamba Juice pursuant thereto, nor to control or restrict Jamba Juice in the exercise of any of its rights and authonty under such agreements. Nor shall any reference to the rights and obligations of any of the parties hereunder restrict, govern or otherwise alter any of the Company's or any Member's rights or obligations under the terms of the Multi-Unit License Agreement or any License Agreement executed pursuant thereto.

ARTICLE V

GENERAL SUPERVISION AND CONTROL OF MANAGEMENT

5.1 Management bv Managing Member. The business and affairs of the Company shall be managed and controlled by Managing Member. Except for situations in which the approval of the Members is specifically required by the Act, the Articles or this Agreement, the Managing Member shall have full, complete and exclusive authority, power and discretion to manage and control the business, property and affairs of the Company, to supervise, direct and control the actions of the officers, if any, of the Company and to perform any and all other actions customary or incident to the management of the Company's business, property and affairs. Within the resources available to the Company, the Managing Member shall control and direct the administration of the business and affairs of the Company in accordance with sound business practice, taking such steps as are necessary or appropriate in its reasonable judgment to conserve and enhance the value and profitability of the Company's business, property and affairs.

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5.1,1 Managing Member Powers. Except as expressly provided in the Articles,

this Agreement, and without limiting the generality of the foregoing, the Managing Member shall have and may exercise the following powers, rights, and authority and obligations on behalf of the Company:

(i) To appoint or remove any officer or employee of the Company and to establish its terms and conditions of employment,

(ii) To select and/or discharge the certified public accountants used by the Company.

(iii) To acquire and take title to real property, personal property and other tangible and intangible assets ("Company Assets") in the name of and on behalf of the Company.

(iv) To deal in and with any of the Company assets, including, but not limited to, the right to subdivide, develop, operate, manage, sell, lease , sublease, or convey title to, and to grant options for, portions of any real property owned by the Company, including any mortgage or leasehold interest or other realty which may be acquired by the Company; to lease or sublease all or portions of the Company Assets; to obtain financing or refinancing of any mortgage or mortgages placed on the Company Assets; to prepay the same in whole or in part; to increase, modify, consolidate or extend any mortgage or mortgages placed on the Company Assets; and to buy, sell, exchange or otherwise acquire, hold, invest in, deal with, manage, develop and operate the Company.

(v) To make payments from Company funds for or on account of contract sums due to be paid by the Company and expenses of the Company as they become due, and otherwise to perform and comply with present and future contracts and obligations of the Company.

(vi) To carry such insurance as the Managing Member may deem advisable, at the expense of the Company.

(vii) To commence or defend litigation with respect to the Company or any assets of the Company as the Managing Member may deem advisable, at the expense of the Company.

(viii) To make, execute, acknowledge and deliver any and ail documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to cany out the powers herein granted.

(ix) To do all such acts and take all such proceedings and execute all such rights and privileges, although not specifically mentioned herein, as the Managing Member may deem necessary to operate Company and carry out its purpose.

(x) To prepare and submit to the Members, within 30 days after the execution hereof, and thereafter on or before November 1 of each fiscal year, a proposed annual business plan ("Annual Business Plan") an Annual budget ("Budget") for review and approval by the Members. Each such annual Business Plan shall include a narrative section in reasonable detail discussing the material features of the plan, a projection of the financial operations of the Company for the next succeeding fiscal year and

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each quarter thereof, a projection of additional capital anticipated to be required during the next succeeding fiscal year and each quarter thereof, and a narrative section comparing the projected Budget to the prior fiscal year's actual results (to the extent available). If the Members fail to approve an Annual Business Plan or Budget by the commencement of the fiscal year covered by such Annual Business Plan or Budget, the Managing Member is authorized to continue to operate the Business based on the last approved Annual. Business Plan and Budget, plus an increase equivalent to the increase in the Annua! Consumer Price Index.

5.1.2 Election and Term of Managing Member The Managing Member shall be designated by the vote of the Members. The Members shall have the right to change the identity,of the Managing Member at any time and for any reason, by the vote of sixty percent (60%) or more of all Percentage Interests of Members, and the Managing Member so appointed shall serve in that capacity until he or she resigns or is removed by the Members, in their absolute discretion.

5.1.3 Appointment of Officers. The Managing Member may, at his or her discretion, appoint officers of the Company at any time to conduct, or to assist the Managing Member in the conduct of the day-to-day business and affairs of the Company. The officers of the Company may include a President or Chief Executive Officer, one or more Vice Presidents, a Secretary, and a Treasurer. The officers shall serve at the pleasure of the Managing Member subject to all rights, if any, of an officer under any contract of employment Any individual may hold any number of offices. The officers shall exercise such powers and perform such duties as are typically exercised by similarly titled officers in a corporation and as shall be determined from time to time by the Managing Member, but subject in all instances to the supervision and control of the Managing Member Initially, there shall be a President, Vice-President of

Operations, a Secretary and a Treasurer of the Company. _____________shall serve as the Company's

initial President, ____________shall serve as the Company's initial Vice-President of Operations, ____

__________shall serve as the Company's initial Secretary, and ________________shall serve as the

Company's initial Treasurer, subject to all of the foregoing prerogatives of the Managing Member.

5.1.4 Signing Authority of Officers. The officers, if any, shall have such authority to sign checks, instruments and other documents on behalf of the Company as may be delegated to them by the Managing Member.

5.1.5 Acts of Officers as Conclusive Evidence of Authority. Any note, mortgage, deed of trust, evidence of indebtedness, contract, certificate, statement, conveyance or other instrument or obligation in writing, and any assignment or endorsement thereof, executed or entered into between the Company and any other Person, when signed by the President or Chief Executive Officer, any Vice-President or by any Vice-President and any Secretary, or any Treasurer, is not validated as to the Company by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other Person that the signing officers had no authority to execute the same.

5.2 Limitations on Power of Managing Member. The Managing Member's duty of

care in the discharge of its duties to the Company and to the other Members is limited to refraining from engaging in gross negligence, breach of fiduciary duty, intentional misconduct or material breach of this Agreement Notwithstanding any other provisions of this Agreement, however, the Managing Member shall have no power or authority to approve or cause the Company to engage in any of the following, without first obtaining the affirmative vote or written consent of Jamba Juice,

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5.2.1 the sale, exchange or other disposition of all, or substantially all of the Company's assets occurring as part of a single transaction or plan, or in a series of transactions, except in the ordinary course of business or in the orderly liquidation and winding up of the business of the Company upon its duly authorized dissolution;

5.2.2 the merger of the Company with another limited liability company or a corporation, general partnership, limited partnership or other entity;

5.2.3 the making of any capital call upon the Members;

5.2.4 any act which would make it impossible to carry on the ordinary business

of the Company; Section 2.4;

5.2.5 any alteration of the primary purpose of the Company as set forth in

5.2.6 any amendment to the Articles or this Agreement; or

5.2.7 any decision to place the Company into Bankruptcy.

5.2.8 appointing or removing the President or Vice President-Operations of the Company and establishing of his or her terms and conditions of employment;

5.2.9 approval of matters which may be reasonably expected to have a material effect in the goodwill associated with the "Jamba Juice" trademarks used by the Company pursuant to the License Agreements;

5.2.10 approving Annual Budgets prepared for the Company, and all material modifications thereof;

5.2.11 approving Annual Business Plans prepared for the Company, and all modifications thereof;

5.2.12 approval of any loan obtained by the Company on a basis which affords, or purports to afford, full or partial course to the assets of the Members; and

5.2.13 approval of Real Estate sites for store development.

5.2.14 the addition of new Members.

5.3 Expenses. The Company shall reimburse the Members, the Managing Member and their respective Affiliates for all reasonable out-of-pocket costs and expenses incurred by them in connection with the business and affairs of the Company, as well as organizational expenses (including, without limitation, legal and accounting fees and costs) incurred by them to form the Company and to prepare the Articles and this Agreement.

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ARTICLE VI

ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS

Allocations of Net Profits and Net Losses and Distributions shall be made and determined in accordance with the provisions set forth in Exhibit C, which is attached hereto and incorporated herein by reference.

ARTICLE VII

TRANSFER OF INTERESTS

7.1 Transfer of Interests. No Member shall be entitled to Transfer all or any part of

its Membership Interest except with the prior written consent of all other Members, which consent may be given or withheld, conditioned or delayed as the other Members may determine in their sole and absolute discretions. Any attempted Transfer without such prior written consent shall be null and void ab initio, and the transferee shall not become a Member.

ARTICLE VIII

CONSEQUENCES OF DISSOLUTION EVENTS

8.1 Dissolution Event. Upon the occurrence of a Dissolution Event, the Company shall dissolve unless (a) all remaining Members consent in writing within ninety (90) days of the Dissolution Event to the continuation of the business of the Company and (b) agreement is reached within such ninety (90) day period between the Company and the Member (or the heirs or legal representatives of the Member) who suffered the Dissolution Event as to the purchase of that Member's Membership Interest.

ARTICLE IX ACCOUNTING, RECORDS, REPORTING BY MEMBERS

9.1 Books and Records. The books and records of the Company shall be kept, and the financial position and the results of its operations recorded, in accordance with generally accepted accounting principles consistently applied. The books and records of the Company shall reflect all the Company transactions and shall be appropriate and adequate for the Company's business. Each Member and its duly authorized representative shall have complete access to all such books and records at any time.

9.2 Bank Accounts: Invested Funds. AH funds of the Company shall be deposited in such account or accounts of the Company as may be determined by the Managing Member and shall not be commingled with the funds of any other Person. All withdrawals therefrom shall be made upon checks signed by such persons and in such manner as the Managing Member may determine. Temporary surplus

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funds of the Company may be invested in commercial paper, time deposits, short-term government obligations or other investments determined by the Managing Member.

9.3 Tax Matters for the Company Handled by Managing Member and Tax Matters Partner. The Managing Member shall from time to time cause the Company to make such tax elections as it deems to be in the best interests of the Company and the Members. The Tax Matters Partner shall represent the Company (at the Company's expense) in connection with all examinations of the Company's affairs by tax authorities, including resulting judicial and administrative proceedings, and shall expend Company funds for professional services and costs associated therewith. The Tax Matters Partner shall oversee die Company's tax affairs in the overall best interests of the Company. If for any reason the Tax Matters Partner can no longer serve in that capacity, the Managing Member may designate another Member to be Tax Matters Partner.

9.4 Accounting Matters. All decisions as to accounting matters shall be made by the Managing Member.

ARTICLE X

DISSOLUTION AND WINDING UP

10.1 Dissolution. The Company shall be dissolved, its assets disposed of and its affairs wound up upon the first to occur of the following:

(a) the expiration of the term of the Company specified in the Articles, if any, or any other event of dissolution specified in the Articles;

(b) the entry of a decree of judicial dissolution pursuant to Section 17351 of the Corporations Code;

(d) the occurrence of a Dissolution Event, if all remaining Members fail to consent in accordance with Section 8.1 to continue the business of the Company within ninety (90) days after the occurrence of that event;

(e) the sale of all or substantially all of the assets of the Company;

(f) termination of the Multi-Unit License Agreement and all License Agreements executed thereto;

(g) the Company's Bankruptcy; or

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(h) the occurrence of an event which makes it unlawful for the business of the Company to be continued.

10.2 Date of Dissolution. Upon dissolution of the Company, the Managing Member shall cause a Certificate of Dissolution to be filed with the California Secretary of State.

10.3 Winding Up. Upon the occurrence of any event specified in Section 10.1, the Company shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors. The Managing Member shall be responsible for overseeing the winding up and liquidation of the Company, shall take full account of the liabilities and assets of the Company, shall cause its assets either to be sold or distributed, as they may determine, and shall cause the proceeds therefrom, to the extent sufficient, to be applied and distributed as provided in Section 10.5-The Persons winding up the affairs of the Company shall give written notice of the commencement of winding up by mail to all known creditors and claimants whose addresses appear on the records of the Company.

i 0.4 Distributions in Kind. Any non-cash asset distributed to one or more Members shall first be valued at its fair market value to determine the Met Profit or Net Loss that would have resulted if that asset had been sold for that value, the Net Profit orNet Loss shall then be allocated pursuant to Article VI, and the Members' Capital Accounts shall be adjusted to reflect those al locations. The amount distributed and charged to the Capital Account of each Member receiving an interest in the distributed asset shall be the fair market value of the interest (net of any liability secured by the asset that the Member assumes or takes subject to). The fair market value of that asset shall be determined by the Managing Member.

10.5 Order of Payment of Liabilities Upon Dissolution.

10.5-1 Liquidating Distributions. After determining that all known debts and liabilities of the Company, including, without limitation, debts and liabilities to Members who are creditors of the Company, have been paid or adequately provided for, the remaining assets shall promptly be distributed to the Members in accordance with their positive Capital Account balances, after taking into account income and loss allocations for the Company's taxable year during which the liquidation occurs.

10.5.2 No Liability. No Member shall have any liability to the Company, any Member or any creditor of the Company on account of any deficit balance in its Capital Account.

10.6 Compliance With Treasury Regulations. All payments to the Members upon the winding up and dissolution of the Company shall be strictly in accordance with the positive Capital Account balance limitation and other requirements of Section 1.704-l(b)(2)(ii)(d) of the Treasury Regulations,

10.7 Limitations on Payments Made in Dissolution. Except as otherwise specifically provided in this Agreement, each Member shall be entitled to look only to the assets of the Company for the return of that Member's positive Capital Account balance and shall have no recourse for its Capital Contributions and/or share of Net Profits (upon dissolution or otherwise) against the Managing Member or any other Member.

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10.8 Certificate of Cancellation. Upon completion of the winding up of the Company's affairs, the Managing Member shall cause a Certificate of Cancellation to be filed with the California Secretary of State.

10.9 Compensation for Services. The Persons winding up the affairs of the Company shall be entitled to reasonable compensation from the Company for their services.

ARTICLE XI INDEMNIFICATION

11.1 Indemnification. The Company shall indemnify and hold harmless each of the Members and Managing Member, and each of their respective officers, directors, shareholders, partners, members, trustees, beneficiaries, employees, agents, heirs, assigns, successors-in-interest and Affiliates, (collectively, "Indemnified Persons") from and against any and all losses, damages, liabilities and expenses, (including costs and reasonable attorneys' fees), judgments, fines, settlements and other amounts (collectively "Liabilities") reasonably incurred by any such Indemnified Person in connection with the defense or disposition of any action, suit or other proceeding, whether civil, criminal, administrative or investigative and whetlier threatened, pending or completed (collectively a "Proceeding"), in which any such Indemnified Person may be involved or with which any such Indemnified Person may be threatened, with respect to or arising out of any act performed by the Indemnified Person or any omission or failure to act if (a) the performance of the act or the omission or failure was done in good faith and within the scope of the authority conferred upon the Indemnified Person by this Agreement or by the Act, except for acts of willful misconduct, gross negligence or reckless disregard of duty, or acts which constitute a material breach of this Agreement or from which such Indemnified Person derived an improper personal benefit, or (b) a court of competent jurisdiction determines upon application that, in view of all of the circumstances, the Indemnified Person is fairly and reasonably entitled to indemnification from the Company for such Liabilities as such court may deem proper. The Company's indemnification obligations hereunder shall apply not only with respect to any Proceeding brought by the Company or a Member but also with respect to any Proceeding brought by a third party.

11.2 Contract Right: Expenses. The right to indemnification conferred in this Article XI shall be a contract right and shall include the right to require the Company to advance the expenses incurred by the Indemnified Person in defending any such Proceeding in advance of its final disposition; provided, however, that, if the Act so requires, the payment of such expenses in advance of the final disposition of a Proceeding shall be made only upon receipt by the Company of an undertaking, by or on behalf of the indemnified Person, to repay all amounts so advanced if it shall ultimately be determined that such Person is not entitled to be indemnified under this Article XI or otherwise.

113 Indemnification of Officers and Employees. The Company may, to the extent authorized from time to time by the Managing Member, grant rights to indemnification and to advancement of expenses to any officer, employee or agent of the Company to the fullest extent of the provisions of this Article XI widi respect to the indemnification and advancement of expenses of Members and Managing Member of the Company.

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11.4 Insurance. The Company may purchase and maintain insurance on behalf of any Person who is or was an agent of the Company against any liability asserted against that Person and incurred by that Person in any such capacity or arising out of that Person's status as an agent, whether or not the Company would have the power to indemnify that Person against liability under the provisions of Section 11.1 or under applicable law.

ARTICLE XII

MISCELLANEOUS

12.1 Amendments. No amendment to this Agreement may be made without compliance with Section 5.2.5. All amendments to this Agreement must be in writing.

12.2 Offset Privilege. Any monetary obligation owing from the Company to any Member or the Managing Member may be offset by the Company against any monetary obligation then owing from that Member or the Managing Member to the Company.

12.3 Arbitration.

(a) General. In the event of any dispute, claim or controversy among the parties arising out of or relating to this Agreement or the Articles whether in contract, tort, equity or otherwise, and whether relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement or the Articles, such dispute, claim or controversy shall be resolved by and through an arbitration proceeding to be conducted under the auspices and the commercial arbitration rules of the American Arbitration Association (or any like organization successor thereto), then in effect, at San Francisco, California. The arbitrability of the dispute, claim or controversy shall likewise be determined in the arbitration. The arbitration proceeding shall be conducted in as expedited a manner as is then permitted by the commercial arbitration rules (formal or informal) of the American Arbitration Association. Both the foregoing agreement of the parties to arbitrate any and all such disputes, claims and controversies, and the results, determinations, findings, judgments and/or awards rendered through any such arbitration shall be final and binding on the parties and may be specifically enforced by legal proceedings in any court of competent jurisdiction.

(b) Governing Law. The arbitrator(s) shall follow any applicable federal law and California state law (with respect to all matters of substantive law) in rendering an award.

(c) Costs of Arbitration. The cost of the arbitration proceeding and any proceeding in court to confirm or to vacate any arbitration award, as applicable (including, without limitation, each party's attorneys' fees and costs), shall be borne by the unsuccessful party or, at the discretion of the arbitrators), may be prorated between the parties in such proportion as the arbitrator(s) determines to be equitable and shall be awarded as part of the arbitrator's award.

12.4 Remedies Cumulative. Except as otherwise provided herein, the remedies under this Agreement are cumulative and shall not exclude any other remedies to which any Person may be lawfully entitled.

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12.5 Notices. Any notice to be given to the Company or any Member in connection with this Agreement must be in writing and will be deemed to have been given and received when delivered to the address specified by the party to receive the notice by courier or other means of personal service, when received if sent by facsimile, or three (3) days after deposit of the notice by first class mail, postage prepaid, or certified mail, return receipt requested. Any such notice must be given to the Company at its principal place of business, and to any Member at the address specified in Exhibit A, Any party may, at any time by giving five (5) days' prior written notice to the other parties, designate any other address as the new address to which notice must be given.

12.6 Attorney's Fees. In the event that any dispute between the Company and/or the Members should result in litigation or arbitration, the prevailing party in that dispute shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys' fees and expenses, subject, however to the provisions of Section 123(c).

12.7 Jurisdiction. Each Member consents to the exclusive jurisdiction of the state and federal courts sitting in San Francisco, California in any action on a claim arising out of, under or in connection with this Agreement or the transactions contemplated by this Agreement, provided such claim is not required to be arbitrated pursuant to Section 12.3. Each Member further agrees that personal jurisdiction over it may be effected by service of process by registered or certified mail addressed as provided in Section 12.5 and that when so made shall be as if served upon it personally.

12.8 Complete Agreement. This Agreement and the Articles constitute the complete and exclusive statement of agreement among the Members with respect to their respective subject matters and supersede all prior written and oral agreements or statements by and among the Members. No representation, statement, condition or warranty not contained in this Agreement or the Articles shall be binding on the Members or have any force or effect whatsoever. To the extent that any provision of the Articles conflicts with any provision of this Agreement, the Articles shall control.

12.9 Binding Effect. Subject to the provisions of this Agreement relating to Transferability, this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors and assigns.

12.10 Section Headings. All Section headings are inserted only for convenience of reference and are not to be considered in the interpretation or construction of any provision of this Agreement.

12.11 Amendments. This Agreement may not be amended, modified or altered except by a written instrument executed by all parties hereto.

12.12 Interpretation, In the event any claim is made by any Member relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular Member or that Member's counsel,

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12.13 Severability. If any provision of this Agreement or the application of that provision to any person or circumstance shall be held invalid, the remainder of this Agreement or the application of that provision to persons or circumstances other than those to which it is held invalid shall not be affected.

12.14 Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

IN WITNESS WHEREOF, all of the Members and the Managing Member of ___________________________, a California limited liability company, have executed this Agreement,

effective as of the date first written above.

MEMBER:

Jamba Juice Company, a California corporation

By:______________________________

Title:____________________________

By:____________,________________

Title:

, an individual

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EXHIBIT A

CAPITAL CONTRIBUTIONS, ADDRESSES AND PERCENTAGE INTERESTS

OF MEMBERS AS OF

____________,20_

Member's Member's Capital Percentage Member's Name Member's Address Contribution Interest

Jamba Juice Company 1700 17th Street

San Francisco, CA 94103

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EXHIBIT B

PERCENTAGE OF PROFITS, LOSSES AND CORRESPONDING TAX ALLOCATIONS AMONG MEMBERS AS OF ___________,20

Member's Name Member's Share of Profits/Losses

Jamba Juice Company __%

_____________ _%

losAneelw IGG90 v4,99W9OO00l 21

EXHIBIT C

6.1 Minimum Gain Chargeback. In the event that there is a net decrease in the Company Minimum Gain during any taxable year, the minimum gain chargeback described in Sections 1.7Q4-2(f) and (g) of the Treasury Regulations shall apply.

6.2 Member Minimum Gain Chargeback. If during any taxable year there is a net decrease in Member Nonrecourse Debt minimum gain, any Member with a share of that Member Nonrecourse Debt minimum gain (determined under Section 1.704-2('Q(5) of the Treasury Regulations) as of the beginning of the year must be allocated items of income and gain for the year (and, if necessary, for succeeding years) equal to that Member's share of the net decrease in the Member Nonrecourse Debt minimum gain in accordance with Section 1.704-2(1) of the Treasury Regulations.

6.3 Qualified Income Offset. Any Member who unexpectedly receives an adjustment, allocation or Distribution described in subparagraphs (4), (5) or (6) of Section 1.704-1 (b)(2)(ii)(d) of the Treasury Regulations, which adjustment, allocation or distribution creates or increases a deficit balance in that Member's Capital Account, shall be allocated items of "book" income and gain in an amount and manner sufficient to eliminate the deficit balance in that Member's Capital Account so created or increased as quickly as possible. Allocations under this Section 6.3 shall be comprised of a pro rata portion of each item of Member income (including gross income) and gain for the year, and "book" income and gain shall be determined by reference to values set forth on the books of the Company in accordance with the principles of Section 1.6. For purposes of this Section 63, Capital Accounts shall be adjusted hypothetically as provided for in Sections 1.704-1 (b)(2)(ii)(d) and I.704-l(b)(4)(iv)(f) of the Treasury Regulations. The Members intend that the provisions of this Section 6.3 will constitute a "qualified income offset" as described in Section 1.704-l(b)(2Xii)(d)ofthe Treasury Regulations. The Treasury Regulations shall control in the case of any conflict between the Treasury Regulations and this Section 6.3.

6-4 Allocation of Net Profits. The Net Profits for each fiscal period of the Company shall be allocated to the Members in accordance with the following order of priority:

(a) first, to those Members with negative Capital Accounts, among them in proportion to the ratio of the negative balances in their Capital Accounts, until no Member has a negative Capital Account;

(b) second, to those Members whose Capital Contributions are in excess of their Capital Accounts, among them in accordance with the ratio of these excesses, until all of these excesses have been eliminated; and

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6.5 Allocation of Net Losses.

(a) Net Losses and Nonrecourse Deductions for each fiscal period of the Company shall be allocated to the Members in accordance with the percentages set forth in Exhibit B; and

(b) after the allocations of Net Losses and Nonrecourse Deductions, Member Nonrecourse Deductions shall be allocated among the Members as required in Section 1 704-2(i)( 1) of the Treasury Regulations in accordance with the manner in which the Member or Members bear the burden of an Economic Risk of Loss corresponding to the Member Nonrecourse Deductions.

6.6 Distribution of Assets bv the Company. Subject to applicable law and any limitations contained elsewhere in this Agreement, the Managing Member may elect from time to time to distribute Distributable Cash to the Members, which Distributions shall be in the following order of priority:

(a) first, to the Members in proportion to their unreturned Capital Contributions until each Member has recovered its Capital Contributions; and

(b) Second, to the Members in accordance with the percentages set forth in Exhibit B.

6.7 Allocation of Net Profits and Losses and Distributions in Respect of a Transferred Interest. If any Membership Interest is Transfened or is increased or decreased by reason of the admission of a new Member or otherwise during any Fiscal Year, each item of income, gain, loss, deduction or credit of the Company for that Fiscal Year shall be assigned pro rata to each day in the particular period of that Fiscal Year to which such item is attributable (i.e., the day on or during which it is accrued or otherwise incurred) and the amount of each item so assigned to any such day shall be allocated to the Member based upon that Member's respective Membership Interest at the close of that day. Notwithstanding any provision above to the contrary, gain or loss of the Company realized in connection with a sale or other disposition of any of the assets of the Company shall be allocated solely to the parties owning Membership Interests as of the date that sale or other disposition occurs.

6.8 Tax Allocation Matters.

6.8.1 Contributed or Revalued Property. In determining each Member's allocable share of the taxable income or loss of the Company, depreciation, depletion, amortization and gain or loss with respect to any contributed property, or with respect to revalued property where the Company's property is revalued pursuant to Paragraph (b)(2)(iv)(/) of Section 1.704-1 of the Treasury Regulations, shall be allocated to the Members in the manner (as to revaluations, in the same manner as) provided in Section 704(c) of the Code. The allocation shall take into account, to the full extent required or permitted by the Code, the difference between the adjusted basis of the property to the

LosAiiecIcs 16690 v4. 9999900001

Member contributing it and the fair market value of the property determined by the Members at the time of its contribution or revaluation, as the case may be. The Company shall apply Section 704(c)(1)(A) by using the "traditional method" as set forth in Section 1.704-3(b) of the Treasury Regulations.

6.8-2 RecaptureItems, lntheeventthatthe Company has taxable income that is characterized as ordinary income under the recapture provisions of the Code, each Member's distributive share of taxable gain or loss from the sale of Company assets (to the extent possible) shall include a proportionate share of this recapture income equal to that Member's share of prior cumulative depreciation deductions with respect to the assets which gave rise to the recapture income.

6.9 Order of Application.

To the extent that any allocation, Distribution or adjustment specified in any of the preceding Sections of this Article VI affects the results of any other allocation, Distribution or adjustment required herein, the allocations, Distributions and adjustments specified in the following Sections shall be made in the priority listed:

(a)	Section 6.5,
(b)	Section 6.1,
W	Section 6.2.
(d)	' Section 6.3-
(e)	Section 6.5(a).
(0	Section 6.5(b).
(g)	Section 6.4.
(h)	Section 10-3.

These provisions shall be applied as if all Distributions and allocations were made at the end of the Company's Fiscal Year. Where any provision depends on the Capita! Account of any Member, mat Capital Account shall be determined after the operation of all preceding provisions for the Fiscal Year.

6.10 Allocation of Liabilities. Each Member's interest in Company profits for purposes of determining that Member's share of the Nonrecourse Liabilities of the Company, as used in Section 1.752-3(a) of the Treasury Regulations, shall be equal to that Member's Percentage Interest.

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6.11 Form of Distribution. No Member, regardless of the nature of its Capital Contribution, has the right to demand and receive any Distribution from the Company in any form other than money. "No Member may be compelled to accept from the Company a Distribution of any asset in kind in lieu of a proportionate Distribution of money being made to other Member(s), and except upon a dissolution and the winding up of the Company, no Member may be compelled to accept a Distribution of any asset in kind.

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SPOUSAL CONSENT

Each of the undersigned acknowledges as follows:

(a) The undersigned has read the foregoing Operating Agreement (the "Agreement"), understands the contents of the Agreement and is aware that by the provisions of the Agreement, the undersigned's spouse agrees to certain restrictions and requirements relating to the sale or other Transfer of his/her Membership Interest, including the undersigned's community property interest therein (if any). THE UNDERSIGNED HAS THE RIGHT TO CONSULT WITH COUNSEL OF HIS OR HER CHOOS1MG IN CONNECTION WITH THIS SPOUSAL CONSENT AND HE OR SHE HAS HAD AMPLE OPPORTUNITY TO DO SO. IF THE UNDERSIGNED HAS NOT CONSULTED WITH COUNSEL IN CONNECTION HEREWITH, THE UNDERSIGNED HAS KNOWINGLY AND WILLINGLY ELECTED NOT TO DO SO.

(b) The undersigned (1) consents to any such restrictions and requirements, (2) agrees that the undersigned's spouse shall have the sole and exclusive management power with respect to the Membership Interest subject to the Agreement, and (3) agrees that the undersigned will not effect or attempt to effect any sale or other Transfer of such Membership Interest, or of any interest therein,

(c) Should the spouse of the undersigned die and bequeath to the undersigned any interest in tlie Membership Interest covered by the Agreement in such a manner that no probate is required with respect thereto, or should the applicable probate laws relating to the community property interest (if any) of the undersigned in the Membership Interest provide, upon the death of tlie undersigned's spouse, that the undersigned is entitled to a portion of the Membership Interest without such portion being subject to probate, or should the undersigned acquire any interest in the Membership Interest during the undersigned's spouse's life by reason of any agreement, court order, judgment or decree, or for any other reason whatsoever, then the undersigned further agrees that the undersigned shall perform all of the obligations of the undersigned's deceased spouse imposed thereunder.

(d) The undeisigned shall perform any further acts and execute and deliver any further documents or procure any court orders which may be reasonably necessary to carry out the provisions of this Spousal Consent.

Name:___

Spouse of

Name:___

Spouse of

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