LLC Operating Agreement

OPERATING AGREEMENT OF A PROFESSIONAL LIMITED LIABILITY COMPANY

This Limited Liability Company Agreement is made and entered into effective from and after the day of , , by and between , CPA, and , CPA, the "Founding Members," and , CPA, , CPA, , CPA, and , CPA, "Members," all of whom are sometimes hereinafter collectively referred to as "Members," and this Agreement supersedes all prior agreements between the parties hereto, and

W I T N E S S E T H:

The undersigned parties to this Agreement shall engage in the practice of public accounting in the City , State of , United States of America, under the name of , hereinafter referred to as the "Company," and do hereby agree by and between themselves as follows, to-wit:

I. COMPANY NAME AND RATIFICATION OF CERTIFICATE OF FORMATION

1. The name of the Company, , shall continue until changed in accordance with the provisions of this Agreement.

2. The Company name shall belong to, and may be used by, the Company and shall not be sold or disposed of as long as the Company continues in existence. If a Member dies or leaves the Company for any reason, he shall have no interest in the Company name and shall have no right to use the Company name or receive any payment therefor.

3. The surviving Members shall have the right to continue to use the name of any deceased Member in the Company name, and no retired, resigned, or removed Member shall at any time subsequent to his retirement, resignation, or removal use the Company name.

4. The Certificate of Formation which was filed with the Secretary of State of the State of on , and amended , copies of which Certificate and Amendment are attached hereto as Exhibits "A" and "A-1," is hereby ratified, confirmed, approved, and adopted.

II. PURPOSE

The purpose of the Company is to engage in the practice of public accountancy and act as business consultants, with such usual operations as the purchase, ownership and disposition of properties, the maintenance of records, and the conduct of such other activities as are incidental to the business of an accounting firm.

III. DURATION

1. The Company shall continue until it is dissolved as provided in this Agreement or by operation of law. The separation of a Member, whether by reason of death, withdrawal, termination, disability or retirement shall not terminate or dissolve the Company if the business of the Company is continued by the consent of all the remaining Members within ninety (90) days following the occurrence of any such event.

2. The Company shall continue so long as mutually agreeable to the parties hereto. The admission of a new Member shall not dissolve or terminate the Company, but shall result in a continuation of the Company with the new Member included. However, no person may become a Member of the Company without first assenting to and signing this Agreement or an amendment thereto.

IV. INTERNAL MATTERS

1. Each Member agrees to devote his full time to the practice of public accountancy and acting as a business consultant for and on behalf of the Company.

2. Before accepting any project, responsible office in a public or private organization, position as a director, officer or trustee in any public or private organization or other outside activity which will absorb a substantial amount of time or energy, a Member shall discuss the potential engagement with the other Members and shall be entitled to proceed to engage in such outside activity upon approval of the other Members.

3. Each Member who has been a member of the Company (and/or its predecessor, , a general partnership) for less then seven (7) years is entitled to two (2) weeks' vacation in any calendar year. Those Members who have been members of the Company and/or its predecessor for more than seven (7) years are entitled to three (3) weeks' vacation, and those Members who have been a member of the Company and/or its predecessor more than fifteen (15) years are entitled to four (4) weeks' vacation, it being agreed that four (4) weeks' vacation is the maximum that will be allowed to any Member during any calendar year.

4. At each meeting of Members, every Member shall have the right to vote in accordance with the percentage held in the Ownership Capital of the Company, as specified in Section V, Paragraph 9(a), of this Agreement. A quorum for any issue at any meeting shall exist if Members holding (%) of the Ownership Capital are present.

5. In the event a Member desires an interruption of the performance of his services to the Company or its clients, for any reason voluntary with him, his request shall be submitted to and may be approved by the Members, subject to whatever arrangements the Members deem fair to the Member and to the Company, as to both the period of his absence and his compensation during that period.

6. New Members may be admitted to the Company upon unanimous approval of the Members.

7. Any one Member, other than the Founding Members, may be expelled, with or without cause, by unanimous vote of the remaining Members, in which event the expelled Member's interest shall be purchased from him as specified in the case of withdrawal; however, in the event of a vote to expel one or more Members the Company may, at its option, elect instead to cease and dissolve the Company, in which event, its affairs will be wound up by negotiation among the Members, or by a division of its assets in proportion to each .

8. A merger of the Company with another shall require a unanimous vote of approval of all of the Members.

9. , is hereby designated as the Chief Executive Officer of the Company, and shall continue as such for a five (5) years period and thereafter, until his successor is designated by a majority vote of the Members at an annual meeting. The Chief Executive Officer shall be charged with the responsibility for the executive management of the Company in accordance with the desires of the Members in line with matters of general policy which are determined by a majority vote of the Members.

10. The Members shall hold an annual meeting during the month of January in each year. Special meetings may be called by the Chief Executive Officer. A quorum at any annual meeting of the Company shall be a majority of the Members. Notice of either the annual or a special meeting shall be given in writing at least five (5) days before the date of the meeting. One of the Members shall be designated as Secretary of the Company and shall keep minutes of each meeting of the Members.

V. FINANCIAL AND ACCOUNTING MATTERS

1. The fiscal year of the Company shall begin January 1 and end the following December 31 in each year.

2. Books and records of the operations of the Company shall be maintained at the main office of the Company located at , , .

3. As soon as possible after the close of the fiscal year, financial statements and income tax returns shall be prepared and a copy thereof forwarded to each Member.

4. The Chief Executive Officer, and other Members if desired, shall be designated to sign checks, drafts and other similar instruments on behalf of the Company.

5. Funds may be borrowed on behalf of the Company and notes or other instruments may be executed relative thereto only upon the signature of the Chief Executive Officer and one other Member.

6. The Members shall determine from time to time what life insurance, if any, shall be carried on the lives of the Members for the benefit of the Company.

7. The Members shall determine from time to time what other insurance the Company shall carry.

8. requirements:

a. The "" contribution required of each Member shall be determined, from time to time, by a vote of the Members.

b. The original contribution of the two Founding Members in the amount of $ each shall be maintained in an amount as agreed to in writing by the Members. In addition, contributed $ on the same basis. The original capital contribution shall bear interest at % per annum until repayment in full.

c. for the conduct of the Company is to be furnished by the Members in the amount designated by the Members, based on the percentages.

d. The of each Member, as of the effective date of this Agreement, is the amount set out after his name in Exhibit "B" attached to this Agreement.

e. Interest shall be paid by the for the use of their contributions at the interest rate agreed on from time to time by the Members.

9. a. Ownership of the fixed assets (hereinafter referred to as "Ownership Capital"), including all furniture, fixtures and equipment are now, and as to fixed assets subsequently purchased or acquired by the Company and related liabilities, shall be, owned by the Members in the following percentages:

..... %

..... %

..... %

..... %

..... %

..... %

TOTAL 100%

b. All other assets, including accounts receivable, work in process and supplies, are now, and as to such assets subsequently purchased and applied and the related liabilities, shall be owned by the Members in the percentages set forth in sub-paragraph "a" above. These assets shall be known as "."

10. Charging for professional services:

a. The Members shall reasonably charge for all professional services rendered by them, generally following the policies of the Company as to fees charged.

b. No salaries, commissions, fees or gratuities of any substantial significance shall be personally accepted, directly or indirectly, by a Member from any client or prospective client of the Company, without the advance express consent of the Chief Executive Officer.

11. Expenses:

a. All general expenses, including salaries, rent, supplies and other items, and all debts, losses and damages which shall be incurred in carrying on the practice of public accountancy by the Company shall be borne in the same proportion as the Members own the assets of the Company and shall be paid out of the gross income prior to the determination of the net income of the Company; in case of a deficiency in income to meet the needs of the Company, said deficiency shall be paid by the Members in the proportion of the Ownership Capital Accounts of the Members.

b. Expenses incurred by a Member in direct conduct of the Company's business shall be reimbursed to him if they are reimbursable under the established policies of the Company.

c. Each of the Members shall furnish and maintain a suitable business automobile.

d. At the Company's expense, each CPA will maintain membership in the American Institute of CPAs and the Society of CPAs, and any other organization designated by the Chief Executive Officer.

e. At the Company's expense, each CPA shall maintain a fully effective license and privilege to practice public accountancy in the State of and any other State required by the Chief Executive Officer.

12. All funds of the Company are to be deposited in its name in such bank account or accounts as shall be designated by the Chief Executive Officer. All withdrawals therefrom are to be made upon checks signed by any Member.

13. The firm books shall be kept on a cash basis and shall be closed and balanced at , the end of the Company's fiscal year; the Members shall, at all times, have access to the Company's books through the office of the .

14. All Members shall, within thirty (30) days after the end of each fiscal year of the Company, sign an Agreed Valuation which will contain the agreed value of the Company for the various purposes mentioned herein during the next fiscal year. Such Agreed Valuation, when signed by all the Members of the Company and filed with this Agreement as Exhibit "C," shall bind the Members, their heirs, successors, and assigns as to the value of the Company.

VI. DISTRIBUTION OF COMPANY INCOME

1. The Members shall draw monthly and quarterly salaries as determined annually by the Members.

2. The remaining net profits or losses of the Company shall be divided annually on the basis of each .

VII. PROSCRIBED AND PROHIBITED CONDUCT

1. Each Member will at all times comply with all the provisions of the Rules of Conduct of the Code of Professional Ethics as adopted by the American Institute of CPAs and the Society of CPAs, and by the statutes, rules and regulations of the State Board of Accountancy covering all professional services that he shall render.

2. No Member shall use the Company's name, credit or property for other than Company purposes or knowingly perform any act by which the interests of the Company shall be imperiled or prejudiced.

3. No Member shall sign or endorse negotiable papers for third persons or become a surety, unless approved by the other Members.

4. Notwithstanding the other provisions of this article:

a. No Member shall acquire or own, either directly or indirectly, any investment in any client for which the Company renders any service, whether or not an opinion is expressed on the financial statements, unless approved by the other Members.

b. No Member shall in any way be connected with a client, either as a promoter, underwriter, trustee, officer, director or employee, except with the specific approval of the other Members.

5. A Member shall not sell, assign, convey, or exchange the whole or any portion of such Member's interest in the Company without the prior written consent of all of the other Members.

VIII. WITHDRAWAL OF MEMBER

1. A Member may withdraw from the Company on December 31 in any year upon delivery to the Company of written notice of such withdrawal at least ninety (90) days prior to that date.

2. Any Member may voluntarily withdraw from the Company, upon consent of all Members, at any time on thirty (30) days' written notice to the other Members.

3. Upon a Member's withdrawal, the Company shall redeem the withdrawing Member's interest in the Company by paying to such withdrawing Member an amount equal to the value of his Current , adjusted for profits, loss, contributions and/or withdrawals, on an accrual basis, as of the date of his withdrawal.

4. It is mutually agreed that the , at the time of withdrawal of any Member, shall evaluate, in writing, for the purposes of the accrual basis of accounting and computing the withdrawing , the accounts receivable and work in progress of the Company, and all Members shall be bound by his written evaluation. If the withdraws, the Members shall designate another Member to make such evaluation.

5. The withdrawing Member hereby agrees that the Company shall reduce any sum due him upon withdrawal by twice the amount of fees earned by the Company during the previous twelve (12) months from each client of the Company that the withdrawing Member takes with him; however, in the event that the amount of the fees earned by the Company during the previous twelve (12) months from each client of the Company that the withdrawing Member takes with him exceeds the value of the withdrawing Member's Ownership Capital Account, as adjusted, on an accrual basis, on the date of withdrawal, then an amount must be refunded or paid to the Company by the withdrawing Member equal to (%) of the excess.

6. Any sum so due the withdrawing Member shall be paid to him by the Company, or any sum so due the Company by the withdrawing Member shall be paid by the withdrawing Member, in the number of monthly payments listed in the following formula opposite the amount due, to-wit:

AMOUNT / MONTHLY PAYMENTS

12

24

36

48

60

84

IX. INCAPACITY OF MEMBER

1. A Member who, upon advice of a physician, is unable to perform his normal duties because of illness or accident shall continue to receive his full salary for the first full six months of such incapacity. Should the period of disability extend longer than six months, the disabled Member shall receive (%) of his salary during the next six months of disability, at which time the salary shall be discontinued. At the end of twelve months of disability, the disabled Member will be entitled to the same proportionate part of the value of the Company as set out in the most recent annual Agreed Valuation of the Company, less distributions (other than salary) made to the disabled Member during the twelve months of disability.

2. Any sum so due the disabled Member shall be paid to him by the Company in the number of monthly payments listed in the following formula opposite the amount due, to-wit:

AMOUNT / MONTHLY PAYMENTS

12

24

36

48

60

84

X. DEATH OF MEMBER

1. The death of a Member shall terminate all his interest in the Company, its property and assets. The Company shall redeem said Member's interest in the Company by paying cash to his estate as follows:

a. As soon as received by the Company, an amount equal to all insurance proceeds payable to the Company as a result of the death of said Member; and

b. The same proportionate part of the value of the Company as set out in the most recent annual Agreed Valuation of the Company, less distributions (other than salary) made to the deceased Member during the current calendar year, and further reduced by insurance proceeds paid under the provisions of this Section X, Paragraph 1 (a), above.

2. After payment of said amount equal to said insurance proceeds, any remaining sum due the deceased Member shall be paid to his personal representative by the Company in the number of monthly payments listed in the following formula opposite the amount due, to-wit:

AMOUNT / MONTHLY PAYMENTS

12

24

36

48

60

84

Provided, however, after commencing such monthly payments, the Company may, at any time, make a lump sum payment to said personal representative of the entire balance due the deceased Member.

XI. RETIREMENT

1. A Member shall retire at the end of the calendar year in which he attains the age of sixty-five (65), unless two-thirds (2/3) of the Members agree to extend the time of retirement for one (1) year and, on an annual basis, one additional year at a time; provided, however, retirement shall not be extended beyond the end of the fiscal year in which said Member attains seventy (70) years of age.

2. A Member may voluntarily retire at the end of any month after his sixtieth (60th) birthday provided he notifies the Company of his intended retirement at least one (1) year before the desired retirement date, and, provided further, his retirement benefits, as computed hereunder, are reduced by Five Percent (5%) for each year of retirement prior to his sixty-fifth (65th) birthday.

3. At the request of a retired Member and with approval of the Members, a retired or withdrawn Member may render services to the Company, or in its behalf, to any of its clients, and the retired Member shall be separately compensated for those services at the rate of Forty Percent (40%) of the regular rate charged for the services of the retired Member. This compensation shall be in addition to any other income that may be distributable to him.

4. The retirement of a Member will terminate all his interest in the Company, its property and assets. The Company shall redeem said Member's interest in the Company by paying in cash to the retired Member, or his estate, the proportionate part of the value of the Company set out in the most recent annual Agreed Valuation of the Company, less distributions (other than salary) made to the retired Member during the current calendar year; this amount shall be deemed to be the retired Member's portion of the profits of the Company set out in Section VI, Paragraph 2, hereof.

5. Any sum so due the retired Member shall be paid to him by the Company in the number of monthly payments listed in the following formula opposite the amount due, to-wit:

AMOUNT / MONTHLY PAYMENTS

12

24

36

48

84

Provided, however, after commencing such monthly payments, the Company may, at any time, make a lump sum payment to the retired Member of the entire balance due the retired Member.

6. In the event of the death of the retired Member during the payment period set out in Paragraph 5 above, the proceeds of the Company's life insurance policies, payable as a result of the death of said retired Member, will be paid to the Company; in no event will the insurance proceeds be payable to the estate of a retired Member.

7. In addition to the foregoing payments, upon the retirement of , , or , such retiring Member shall be paid his Capital contribution plus interest at the rate of (%) per annum from , with equal payments to be made monthly over a 10-year period, with the first payment to be made on or before the 10th day of the month following such retirement and subsequent payments to be made on or before the 10th day of each succeeding month.

XII. DISSOLUTION

1. This Company may be terminated and dissolved at any time by mutual agreement of the Members or upon written notice to the other Members by Members owning three-fourths (3/4) of the .

2. In the event of dissolution of the Company, no further professional services shall be rendered in the Company's name and no further business transacted for the Company except action necessary for concluding its affairs, the distribution or liquidation of its assets, and the distribution of proceeds. Maintenance of offices to effectuate or facilitate concluding the Company affairs shall not be construed to involve a continuation of the Company. Prior to the effective date of the termination of the Company, the Members shall agree upon the assignment of every uncompleted professional service to one or another of the Members on such terms as shall be agreeable to the clients involved and the Members to whom such matters are assigned; and the rendition of professional services from the effective date of the dissolution shall henceforth be by such individuals and other accounting firms, if any, in which they may respectively become members.

3. The business affairs of the Company, in the event of the dissolution of the Company, shall be wound up and liquidated as promptly as business circumstances and orderly business practices will permit. After payment is made of expenses incurred, the net assets and the proceeds of the liquidation shall be applied in the following order:

a. To the payment of the debts and liabilities of the Company owing to the creditors other than Members, and the expenses of liquidation.

b. To the payment of debts and liabilities owing to the Members other than for (i) capital, (ii) profits, and (iii) any unmatured installments yet to be paid on account of the death, permanent disability, retirement, or withdrawal of a Member.

c. To the repayment to each of the Members of his capital contributions to the Company.

d. To the payment to Members of all remaining net assets and proceeds, if any.

XIII. INDEMNIFICATION

1. To the extent not prohibited by applicable law, each Member shall be indemnified by the Company against any and all claims and liabilities to which he has or shall become subject by reason of being or having been a Member of the Company, or by reason of any action alleged to have been taken, omitted, or neglected by him as a Member; and the Company shall reimburse each such person for all legal expenses reasonably incurred by him in connection with any such claim or liability, provided, however, that no such person shall be indemnified against, or be reimbursed for any expense incurred in connection with, any claim or liability arising out of his own willful misconduct, gross negligence, or sexual harassment.

2. The amount paid to any Member by way of indemnification shall not exceed his actual, reasonable, and necessary expenses incurred in connection with the matter involved.

3. The right of indemnification hereinabove provided for shall not be exclusive of any rights to which any Member may otherwise be entitled by law.

XIV. MISCELLANEOUS

1. Each Member shall punctually pay and satisfy all his present and future private debts and engagements, and shall indemnify the other Members, their heirs, executors, or administrators, and the Company from such debts and from all actions, proceedings, damages and expenses on account thereof.

2. This Limited Liability Company Agreement supersedes all prior Articles of Partnership and Addenda thereto.

WITNESS our signatures on the day and date first mentioned hereinabove.

EXHIBIT "A"

OWNERSHIP CAPITAL ACCOUNTS AS OF

27% $ $

27% $ $

13% $ $

11% - 0 - $

11% - 0 - $

11% - 0 - $

* This contribution bears interest at 10% per annum.

** This capital contribution will be increased or decreased, as appropriate, by the profits, losses, contributions, and withdrawals on the accrual basis.

EXHIBIT "B"

AGREED VALUATION AS OF

EXHIBIT "C"