8 % Return Llc Operating Agreement Sample Certificate

8 % Return Llc

Mission Statement:

The mission of 8% Return LLC is to give the small investor an opportunity to participate in the financial returns of real estate without a large capital investment and without the headaches of tenants and repairs.

Offering:

8% Return is offering partial interest in a single family, residential rental property with a projected return of 8 % or greater, long term appreciation, and tax benefits that come with rental property.

How it works:

The property is purchased ahead of time by Harold Stone and renovated and rented before the company acquires it. A limited liability company is formed to hold residential rental property. The cost of the property to the LLC is the acquisition cost of the residential property. The company will issue shares. These shares will sell for $1000 per share, with a five share minimum purchase. No shares will be sold until the property is purchased by the LLC, and then only for the acquisition cost of the property.

Example:

The current offering is a single-family home located at 8 Greenleaf, Nampa. It is a three-bedroom, one bath home. The purchase price of the home was $35,313. Repairs and marketing costs were $14,928. The total acquisition cost was $50,241. Mr. Stone's compensation for creating the LLC and finding the home is 20% or 10 shares, bringing the total number of shares to 60. Fifty of the shares will be sold at $1000 each. Your minimum investment is $5000.

The three-bedroom house rents for $635 per month with a total gross income of $7,620 per year. Expenses are approximately 36% (management, repairs, taxes, insurance, and vacancies). This leaves a net income of $4,896 per year. Dividing the net income by 60 leaves $81 per share per year or an 8%+ return. All profits will be distributed to the members on a quarterly basis. The house will be sold in approximately ten years and the proceeds will be distributed to share holders of the LLC, and the LLC will be closed.

How safe is your money investment?:

A physical property secures your share. It is a tangible asset, insured against fire, disaster, and flood. Mr. Stone has been investing in single-family homes for over 20 years. If the home did not produce an 8% return, he would not buy it.

Mr. Stone receives 20% of the residential property shares. You must receive a 6% or better quarterly return on your investment before he receives anything for his shares. He is a licensed and bonded contractor. The LLC documents are prepared by an attorney and registered in the state of Idaho. A certified public accountant prepares the LLC's tax forms. Members will receive a K1 for their personal tax returns. When the property is sold, you receive your thousand dollars per share before Mr. Stone receives anything for his 20%.

Can you sell your shares?:

Yes, your shares are a tradable commodity, however, there is not a ready market for limited liability corporation shares (units). You should buy the shares for the long term and for the excellent yield, not for the liquidity. The residential property will be sold in 8 to 12 years and the proceeds distributed to the shareholders (members) and the limited liability company dissolved. Guarantees: There are no guarantees but Mr. Stone will not receive any money from his 20% portion, unless there is a 6% or better profit distributed to the members each quarter. When the property is sold, the investor will receive his initial $1000 per share before Mr. Stone receives a dime from the sale of the property. (Proceeds of the sale will be distributed equally among shareholders.) All expenses for the acquisition of the property will be available online to the shareholders as will all monthly expenses. If at any time shareholders are unhappy with Mr. Stone's performance, he can be voted out of management at the annual meeting with a 50% vote.

Summary:

The company makes its money by buying a single-family home, renting the home, and distributing the profit to the shareholders.

All dividends will be paid quarterly. There will be a reserve set aside for repairs and vacancies, but there will be no retained earnings. All profits will be distributed to shareholders (members). The home will be sold within 8 to 12 years of purchase. All proceeds from the sale will be divided among the shareholders.

The number of shares will be computed by adding the acquisition cost of the home plus 20%. This figure will be divided by 1000. The shares will be $1000 per share. The minimum investment will be $5,000. For example, a home with an acquisition cost of $50,000 plus 20% would equal 60 shares. Fifty shares would be sold. Mr. Stone receives 20% of the shares for finding the deal and putting it together.

Mr. Stone will also be paid for being the general contractor at fair market value, $25 per hour as of January 1, 2011.

He will also be paid for being the management company at fair market value of 10%. Management may be subcontracted, depending on the location of the property.

How to buy:

Please read through the operating agreement and prospectus and understand the risk. You can get a copy of the prospectus and operating agreement, by downloading them from the website at 8percent.us or you can contact Harold Stone and he will mail them to you. When you buy shares of 8% Greenleaf LLC you will receive numbered shares with your name on them. You can see an example on the website. Your ownership is recorded in the LLC Ledger of Shareholders.

Contact information:

E-mail address:

hhhstone@juno.com

Cell phone:

208-880 -7448

Mailing address:

P.O. Box 1102

Nampa, ID 83653

Self-Directed IRA:

The shares can be purchased through a self-directed IRA.

The self-directed IRA company that Mr. Stone uses is: Mountain West Entrust IRA

10096 W. Fairview Ave. Suite 160

Boise, Idaho 83704

1-208-377-3311

Mountain West charges a minimum fee of $175 annually. As a result I recommend buying at least 15 shares for your self-directed IRA to prevent your profits from being used up by the annual fees.

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Operating Agreement

8 PERCENT GREENLEAF, L.L.C.,

Operating Agreement

Adopted June , 2011

8 PERCENT GREENLEAF, L.L.C.,

OPERATING AGREEMENT

TABLE OF CONTENTS

ARTICLE PAGE

I Definitions ............................................................................................................ 3

II Formation ............................................................................................................. 7

III Nature of Business ...................................................... 9

IV Accounting and Records ........................................................................................ 9

V Names and Addresses of Members ...................................................................... 10

VI Rights and Duties of Members ............................................................................. 10

VII Managing Members ............................................................................................. 13

VIII Contributions and Capital Accounts .................................................................... 18

IX Allocations and Distributions ............................................................................... 19

X Taxes .................................................................................................................... 20

XI Disposition of Membership Interests ................................................................... 20

XII Dissociation of a Member .................................................................................... 20

XIlI Admission of Assignees and ................................................................................ 23

XIV Dissolution and Winding Up ............................................................................... 23

XV Miscellaneous Provisions ..................................................................................... 24

8 PERCENT GREENLEAF, LLC

OPERATING AGREEMENT

This Operating Agreement of 8 PERCENT GREENLEAF, L.L.C., an Idaho limited liability company organized pursuant to the Idaho Limited Liability Company Act, is entered into and shall be effective as of the Effective Date, by and among the Company and the person or persons executing this Agreement as a Member or Members.

ARTICLE I

DEFINITIONS

For purposes of this Operating Agreement (as defined below), unless the context clearly indicates otherwise, the following terms shall have the following meanings:

1.1 Act - The Idaho Limited Liability Company Act and all amendments to the Act.

1.2 Additional Member - A Member other than an Initial Member or a Substitute

Member who has acquired a Membership Interest from the Company.

1.3 Articles - The Articles of Organization of the Company as properly adopted and

amended from time to time by the Members and tiled with the Secretary of State.

1.4 Assignee - A transferee of a Membership Interest who has not been admitted as a

Substitute Member.

1.5 Capital Account - The accounts maintained for a Member or Assignee determined in accordance with Article VIII .

1.6 Capital Contribution - Any contribution of Property, services or the obligation

to contribute Property or services made by or on behalf of a Member or Assignee.

1. 7 Code - The Internal Revenue Code or 1986. as amended.

1.8 Commitment - The Capital Contributions that a Member or Assignee is obligated

to make under this Operating Agreement.

1.9 Company - 8 PERCENT GREENLEAF, LLC , a limited liability company formed under the laws of Idaho, and any successor limited liability company.

1. 10 Company Property - Any Property owned by the Company.

1.11 Contributing Members - Those Members making contributions as a result of the failure of a Delinquent Member to make the contributions required by the Commitment as described in Article VIII.

1.12 Default Interest Rate - The lower of (a) the legal rate or (b) the then-current prime rate quoted by the largest commercial bank in the jurisdiction of the Principal Office plus three percent.

1. 13 Delinquent Member - A Member or Assignee who has failed to meet the Commitment of that Member or Assignee.

1.14 Distribution - A transfer of Property to a Member with respect to a Membership Interest as described in Article IX.

1.15 Disposition (Dispose) - Any sale, assignment, transfer, exchange, mortgage, pledge, grant, hypothecation, or other transfer, absolute or as security or encumbrance (including dispositions by operation of law).

1.16 Dissociation (Dissociate) - Any action which causes a Person to cease to be a Member as described in Article XII hereof.

1.17 Dissolution Event - An event, the occurrence of which will result in the dissolution of the Company under Article XIV unless the Members agree to the contrary.

1.18 Initial Capital Contribution - The Capital Contribution agreed to be made by the Initial Member as described in Article VIII.

1.19 Initial Member - The Person or Persons identified on Exhibit" A" attached hereto and made a part hereof by this reference who have executed the Operating Agreement

1.20 Management Right - The right of a Member to participate in the management of the Company, including the rights to information and to consent or approve or vote on actions of the Company.

1.21 Managing Member - A Member selected to manage the affairs of the Company under Article VII hereof.

1.22 Member - Initial Member, Substitute Member or Additional Member, and, unless the context expressly indicates to the contrary, includes Managing Members and Assignees.

1.23 Membership Interest - The rights of a Member or, in the case of an Assignee, the rights of the assigning Member in Distributions (liquidating or otherwise) and allocations of the profits, losses, gains, deductions, and credits of the Company.

1.24 Net Losses - The losses and deductions of the Company determined in accordance with accounting principles consistently applied from year to year employed under the method of accounting adopted by the Company and as reported separately or in the aggregate, as appropriate, on the tax return of the Company filed for Federal income tax purposes.

1.25 Net Profits - The income and gains of the Company determined in accordance with accounting principles consistently applied from year to year employed under the method of accounting adopted by the Company and as reported separately or in the aggregate, as appropriate, on the tax return of the Company filed for Federal income tax purposes.

1.26 Notice - Notice shall be in writing. Notice to the Company shall be considered given when mailed by first class mail postage prepaid addressed to any Managing Member in care of the Company at the address of the Principal Office. Notice to a Member shall be considered given when mailed by first class mail postage prepaid addressed to the Member at the address reflected in the Operating Agreement unless the Member has given the Company a Notice of a different address.

1.27 Operating Agreement - This Operating Agreement including all Subscription Agreements, if any, and amendments adopted in accordance with the Operating Agreement and the Act.

1.28 Organization - A Person other than a natural person. Organization includes, without limitation, corporations (both non-profit and other corporations), partnerships (general, limited, limited liability, and limited liability limited), joint ventures, limited liability companies, and unincorporated associations, but the term does not include joint tenancies and tenancies by the entirety.

1.29 Property - Any property, real or personal, tangible or intangible, including money and any legal or equitable interest in such property, but excluding services and promises to perform services in the future.

1.30 Person - An individual. trust, estate, or any Organization permitted to be a member of a limited liability company under the laws of Idaho.

1.31 Proceeding - Any judicial or administrative trial, hearing or other activity, civil, criminal or investigative, the result of which may be that a court, arbitrator, or governmental agency may enter a judgment, order, decree, or other determination which, if not appealed and reversed, would be binding upon the Company, a Member or other person subject to the jurisdiction of such court, arbitrator, or governmental agency.

1.32 Regulations - Except where the context indicates otherwise, the permanent, temporary, proposed, or proposed and temporary regulations of the Department of the Treasury under the Code as such regulations may be lawfully changed from time to time.

1.33 Resignation - The act by which a Managing Member ceases to be a Managing Member.

1.34 Sharing Ratio - With respect to any Member, the percentage as specified on Exhibit "A" to this Operating Agreement, as may be modified in Article IX.

1.35 Subscription Agreement - Agreement between a Member and the Company to fulfill the Commitment defined in paragraph 1.8.

1.36 Substitute Member - An Assignee who has been admitted to all of the rights of membership pursuant to the Operating Agreement.

1.37 Taxable Year - The taxable year of the Company as determined pursuant to § 706 of the Code.

1.38 Taxing Jurisdiction - Any state, local, or foreign government that collects tax, interest or penalties, however designated. on any Member's share of the income or gain attributable to the Company.

ARTICLE II

FORMATION

2.1 Organization - The Company is hereby organized as an Idaho limited liability

company pursuant to the provisions of the Act.

2.2 Agreement - For and in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, a Member executing the Operating Agreement hereby agrees to the terms and conditions of the Operating Agreement, as it may from time to time be amended according to its terms. It is the express intention of the Member or Members that the Operating Agreement shall

be the sole source of agreement of the parties, and, except to the extent a provision of the Operating Agreement expressly incorporates Federal income tax rules by reference to sections of the Code or Regulations or is expressly prohibited or ineffective under the Act, the Operating Agreement shall govern, even when inconsistent with, or different than, the provisions of the Act or any other law or rule. To the extent any provision of the Operating Agreement is prohibited or ineffective under the Act, the Operating Agreement shall be considered amended to the smallest degree possible in order to make the agreement effective under the Act. In the event the Act is subsequently amended or interpreted in such a way to make any provision of the Operating Agreement that was formerly invalid valid, such provision shall be considered to be valid from the effective date of such interpretation or amendment.

2.3 Name - The name of the Company is 8 PERCENT GREENLEAF, L.L.C., and all business of the Company shall be conducted under that name or under any other name, but in any case, only to the extent permitted by applicable law.

2.4 Effective Date - The Operating Agreement shall become effective upon the date of execution of the Operating Agreement.

2.5 Term - The Company shall have perpetual existence unless the Company is

dissolved and its affairs wound up in accordance with the Act or the Operating Agreement. The plan is to hold real estate property for eight to twelve years and then dissolve the company.

2.6 Registered Agent and Office - The registered agent for the service of process and

the registered office shall be that Person and location reflected in the Articles as filed in the office of the Secretary of State. The Managing Members, may, from time to time, change the registered agent or office through appropriate filings with the Secretary of State. If the Managing Members shall fail to designate a replacement registered agent or change of address of the registered office, any Member may designate a replacement registered agent or file a notice of change of address through appropriate filings with the Secretary of State.

2.7 Principal Office - The Principal Office of the Company shall be located at 5729 Chuckwagon Rd., Nampa, ID 83686.

ARTICLE III

NATURE OF BUSINESS

3.1 The Company may engage in any lawful business permitted by the Act or the laws of any jurisdiction in which the Company may do business. The Company will purchase real estate for investment purposes, hold the property for a time, estimated to be eight to ten years and then liquidate the property and dissolve the company. The Company shall have the authority to do all things necessary or convenient to accomplish its purpose and operate its business.

ARTICLE IV

ACCOUNTING AND RECORDS

4.1 Books and Records - The Company shall keep adequate books and records at its

principal place of business, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Company. Any Member or his designated representative shall have the right, at any reasonable time, to have access to and inspect and copy the contents of such books or records.

4.2 Annual Reports - Within a reasonable period after the end of each Company fiscal year, each Member shall be furnished with pertinent information regarding the Company and its activities during such period.

4.3 Tax Information - Necessary tax information shall be delivered to each Member

after the end of each Taxable Year of the Company. Every effort shall be made to furnish such information within 75 days after the end of each Taxable Year.

4.4 Accounts - The Managing Members shall maintain a record of Capital Accounts

for each Member in accordance with Article VIII.

ARTICLE V

NAMES AND ADDRESSES OF MEMBERS

5.1 The names and addresses of the Initial Member or Members are as reflected on

Exhibit “A” attached hereto and by this reference made a part hereof.

ARTICLE VI

RIGHTS AND DUTIES OF MEMBERS

6.1 Management Rights - In the event that there is only one Member of the Company, that Member shall have the exclusive right and authority to manage the affairs of the Company. In all other cases, all Members who have not Dissociated shall be entitled to vote on any matter submitted to a vote of the Members. However, Assignees shall not in any event be entitled to vote on any matters.

6.1.1 Acts Requiring a Majority Vote: The following matters, without

limitation, require a Majority vote:

A. disagreements regarding the authority of Managing Members under paragraph 7.4;

B. compensation of Managing Members under paragraph 7.5;

C. removal of a Managing Member under paragraph 7.7.

6.1.2 Acts Requiring Super-majority Vote: The following matters require

the favorable vote of 70% of all of the Members:

A. any amendment to the Operating Agreement;

B. the continuation of the Company after a Dissolution Event described in paragraph 14.1.2;

C. the authorization of a Managing Member or Member to do any act on behalf of the Company that contravenes the Operating Agreement;

D. the admission of an Assignee as a Substitute Member under paragraph 13.2, and the admission of an Additional Member under paragraph 13.3;

E. the dissolution of the Company; and

F. the amount of additional contributions, if any, needed by the Company to conduct its business under paragraph 8.2; and

G. the authorization to enter into debt or to allow a lien to be placed against the property owned by the Company.

6.2 Majority - Whenever any matter is required or allowed to be approved by a

Majority of the Members or a Majority of the remaining Members under the Act or the Operating Agreement, such matter shall be considered approved or consented to upon the receipt of the affirmative approval or consent, either in writing or at a meeting of the Members, of Members having Sharing Ratios in excess of one-half of the Sharing Ratios of all the Members entitled to vote on a particular matter. In the case of a Member who has Disposed of that Member's entire Membership Interest to an Assignee, but has not been removed as provided below, the Sharing Ratio of such Assignee shall be considered in determining a Majority and such Member's vote or consent shall be determined by such Sharing Ratio.

6.3 Liability of Members - No person solely by virtue of his/her/its Member status

shall be liable as such for the liabilities of the Company. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under this agreement or the Act shall not be grounds for imposing personal liability on any Member or Manager for liabilities of the Company.

6.4 Indemnifications - The Company shall indemnify the Members, Managing

Members, and agents for all costs, losses, liabilities and damages paid or accrued by such Member, Manager or agent in connection with the business of the Company, to the fullest extent provided or allowed by the laws of the State of Idaho.

6.5 Representations and Warranties - Each Member, and in the case of an

Organization, the person(s) executing the Operating Agreement on behalf of the Organization, hereby represents and warrants to the Company and each other Member that: (a) if that Member is an Organization, that it is duly organized, validly existing, and in good standing under the law of its state of organization and that it has full organizational power to execute and agree to the Operating Agreement to perform its obligations hereunder; (b) the Member is acquiring its interest in the Company for the Member's own account as an investment and without an intent to distribute the interest; (c) the Member acknowledges that the interests have not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

6.6 Conflicts of Interest

6.6.1 A Member, including a Managing Member, shall be entitled to enter into transactions that may be considered to be competitive with, or a business opportunity that may be beneficial to, the Company, it being expressly understood that some of the Members may enter into transactions that are similar to the transactions into which the Company may enter.

6.6.2 A Member, including a Managing Member, does not violate a duty or obligation to the Company merely because the Member's conduct furthers the Member's own interest. A Member may lend money to and transact other business with the Company. The rights and obligations of a Member who lends money to or transacts business with the Company are the same as those of a person who is not a Member, subject to other applicable law. No transaction with the Company shall be voidable solely because a Member has a direct or indirect

interest in the transaction if either the transaction is fair to the Company or the disinterested Managing Members or disinterested Members. in either case knowing the material facts of the transaction and the Member's interest, authorize, approve, or ratify the transaction.

ARTICLE VII

MANAGING MEMBERS

7.1 Original Managing Members - The ordinary and usual decisions concerning the

business affairs of the Company shall be made by the Managing Members. There shall initially be one (1) Managing Member who must be a Member of the Company. The initial Managing Member shall be as described on Exhibit "B" which is made a part hereof.

7.2 Term of Office as Managing Member - No Managing Member shall have any

contractual right to such position. The managing member shall be elected each year at the annual meeting by a majority vote of those members attending the annual meeting, either in person or by proxy. The annual meeting shall be held in February of each year. Notice will be given by posting on the Company’s website at least thirty days in advance of the meeting. The Company’s website currently is 8percent.us. Each Managing Member shall serve until his/her term expires or the earliest of:

A. the Dissociation of such Managing Member;

B. removal of the Managing Member; or

C. the voluntary withdrawal as a Managing Member by a Member.

7.3 Authority of Members to Bind the Company - The Members hereby agree that

only the Managing Member and authorized agents of the Company shall have the authority to make representations or warranties, or enter into contracts on behalf of the Company (i.e . bind the Company). No Member other than a Managing Member shall take any action as a Member to bind the Company, and each Member shall indemnify the Company for any costs or damages incurred by the Company as a result of the unauthorized action of such Member. The Managing Member has the power, on behalf of the Company, to do:

7.3.1 the institution, prosecution and defense of any proceeding in the Company's name:

7.3.2 the purchase, receipt, lease or other acquisition, ownership, holding,

improvement, use and other dealing with Property, wherever located:

7.3.3 the sale, conveyance, lease, exchange, and other disposition of Property;

7.34 the conduct of the Company's business, the establishment of

Company offices, and the exercise of the powers of the Company within or without the State of Idaho;

7.3.6 the appointment of employees and agents of the Company, the

defining of their duties, the establishment of their compensation;

7.3.7 the performance of any other act that furthers the business and affairs of the Company;

7.3.8 the payment of compensation, or additional compensation, to any

or all Members and employees on account of services previously rendered to the Company, whether or not an agreement to pay such compensation was made before such services were rendered;

7.3.9 the indemnification of Members or any other Person;

7.3.10 the Company specifically grants the Managing Member the authority to hire Harold Stone, Inc. to manage the property. Currently, Harold Stone, Inc. is charging 10% of the gross to manage the property plus $25.00 an hour for repair work;

7.3.11 the Company specifically authorizes the managing member to sell any real estate property at any time he deems it best to sell the property, without a vote of the members.. It is estimated that the Company will hold the investment real estate for eight to twelve years, however, depending on market conditions and other factors, the managing member may sell the property sooner or hold the property for a longer period. No vote of the members is necessary for the managing member to make this decision and act upon the decision.

7.3.12 the managing member may enter into debt to purchase property at the startup of the Company. When shares are sold, the proceeds from the shares shall be first used to pay off the debt. After the initial debt is paid off, the managing member may NOT enter into any debt or otherwise encumber any property owned by the Company without an affirmative vote of the members.

7.4 Actions of the Managing Members - The Managing Member has the power to

bind the Company as provided in this Article VII. No act of a Member in contravention of such determination shall bind the Company to Persons having knowledge of such determination. Notwithstanding such determination, the act of a Managing Member for the purpose of apparently carrying on the usual way of business or affairs of the Company, including the exercise of the authority indicated in this Article VII, shall bind the Company if the person with whom the Managing Member is dealing does not have knowledge of the determination and the fact that the Managing Member lacks such authority. No person dealing with the Company shall have any obligation to inquire into the power or authority of the Managing Member acting on behalf of the Company.

7.5 Compensation of Managing Member - Each Managing Member shall be

reimbursed all reasonable expenses incurred in managing the Company and shall be entitled to compensation, not to exceed one-half of one percent of the net income. The amount to be reimbursed shall be determined from time to time by the affirmative vote of a Majority of the Members or, in the case of a sole Member of the Company, by that Member.

7.5.1 The initial managing member, as listed in Exhibit “B”, has by agreement of the other members, received stock in the Company for arranging the purchase, repairs and management of the real estate purchased by the Company. The Managing Member will not receive a quarterly payment unless all of the other Members receive a 6% annual return for the quarter. If the other Members receive a full quarterly payment, then the Managing Member shall be entitled to receive a quarterly dividend equal to what the other Members receive.

7.5.2 When the Company sells the real estate investment, the Managing Member will not receive any compensation for his shares until all other members receive at least their initial $1000 per share investment back. Once the other Members receive their initial investment, the Managing Member is entitled to receive up to $1000 per share. Any money left over will then be distributed to all Members according to how many shares they own.

(Alternate 7.5.2) the initial managing member receives compensation for his services both as the owner of Harold Stone, Inc. and by the shares he receives for finding the investment property. When the property is sold, the other members each receive their initial investment, $1000 per share. Any profit from the sale left after the initial investment has been paid is then divided by the total number os shares, including the initial managing member’s, and each member then receives their pro-rata share for each share they own.

7.5.3 The initial managing member may not sell the shares he receives for putting the transaction together prior to the Company selling its investment property. The managing member shall then be compensated for his shares as outlined in this operating agreement.

7.6 Managing Members' Standard of Care - A Managing Member's duty of care in

the discharge of the Managing Member's duties to the Company and the other Members is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law. In discharging his/her/its duties, a Managing Member shall be fully protected in relying in good faith upon the records required to be maintained under Article IV and upon such information, opinions, reports or statements by any of its other Managing Members, Members, or agents, or by any other person, as to matters the Managing Member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the Company or any other facts pertinent to the existence and amount of assets from which distributions to members might properly be paid. The managing member shall not spend more than one-half of one percent of the gross income of the Company for operations of the business aspects of the Company such as , bookkeeping and the cost of the annual meeting.

7.7 Removal of Managing Member - Any Managing Member may be removed by the

affirmative vote of a majority of the Members.

ARTICLE VIII

CONTRIBUTIONS AND CAPITAL ACCOUNTS

8.1 Initial Contributions - Each Initial Member shall make the Capital Contribution

described tor that Member on Exhibit “A” at the time and on the terms specified on Exhibit “A” and shall perform that Member's Commitment. If no time for contribution is specified , the Capital Contributions shall be made upon purchasing their share of the Company. The Member’s initial Capital Account balance shall be as set forth on Exhibit “A.” No interest shall accrue on any Capital Contribution and no Member shall have the right to withdraw or be repaid any Capital Contribution except as provided in this Operating Agreement. Each Additional Member shall make the Initial Capital Contribution described in the Subscription Agreement, if any.

8.2 Maintenance of Capital Accounts - The Company shall establish and maintain

Capital Accounts for each Member and Assignee. Each Member's Capital Account shall be increased by the amount of any Money actually contributed by the Member to the capital of

the Company.

8.3 Compliance with §§ 704(b) and 704(c) of the Code - The provisions of this

Article VIII as they relate to the maintenance of Capital Accounts are intended, and shall be construed, and, if necessary, modified to cause the allocations of profits, losses, income, gain and credit pursuant to Article IX to have substantial economic effect under the Regulations promulgated under §§ 704(b) and 704(c) of the Code, in light of the distributions made pursuant to Articles IX and XIV and the Capital Contributions made pursuant to this Article VIII.

ARTICLE IX

ALLOCATIONS AND DISTRIBUTIONS

9. 1 Allocations of Net Profits and Net Losses from Operations - Except as may be

required by § 704(c) of the Code, net profits, net losses, and other items of income, gain, loss, deduction and credit shall be apportioned among the Members and Assignees in proportion to their Sharing Ratios.

9.2 Intent of Allocations - In conjunction with paragraph 8.7 of this Operating

Agreement, it is the intent of the Members and of the Company that the allocations and distributions have substantial economic effect under the Regulations promulgated under § 704(b) of the Code. Should adjustments be necessary to capital accounts or allocations to give effect to the provisions of this Operating Agreement, then the Managing Members shall consult with the tax counsel prior to making any adjustments or allocations in addition to or other than those set forth herein.

9.3 Distributions - From time to time, the Managing Members shall determine in their reasonable judgment to what extent, if any, the Company's cash on hand exceeds the current and anticipated needs, including. without limitation, needs for operating expenses, debt service, acquisitions, reserves, and mandatory distributions, if any. To the extent such excess exists, the Managing Members may make distributions to the Members in accordance with their Sharing Ratios. Such distributions shall be in cash or Property (which need not be distributed proportionately) or partly in both, as determined by the Managing Members.

ARTICLE X

TAXES

10.1 Elections - The Managing Members may make any tax elections for the Company allowed under the Code or the tax laws of any state or other Taxing Jurisdiction having jurisdiction over the Company.

ARTICLE XI

DISPOSITION OF MEMBERSHIP INTERESTS

11.1 Disposition - Any Member or Assignee may dispose of all or a portion of the Member's or Assignee's Membership Interest upon compliance with this Article Xl. No Membership Interest shall be Disposed of:

11.1.1 unless and until the Company receives from the Assignee the

information and agreements that the Managing Members may reasonably require, including but not limited to any taxpayer identification number and any agreement that may be required by any

Taxing Jurisdiction. All transfers of stock must be notarized and recorded in the Company’s records.

11.2 Dispositions not in Compliance with this Article Void - Any attempted Disposition of a Membership Interest. or any part thereof not in compliance with this Article is

null and void.

ARTICLE XII

DISSOCIATION OF A MEMBER

12.1 Dissociation - A Person shall cease to be a Member upon the happening of any of the following events:

12.1.1 The Member ceases to be a Member of the Company due to the

assignment of all of such Member's Membership Interest in the Company and the Assignee has become a Substitute Member.

12.1.2 The Member (i) makes an assignment for the benefit of creditors;

(ii) files a voluntary petition in bankruptcy; (iii) is adjudicated as bankrupt or insolvent; (iv) files a petition or answer seeking for the Member any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition tiled against the Member in any proceeding of this nature; or (vi) seeks, consents to, or acquiesces to the appointment of a trustee, receiver or liquidator of the Member or of all or any substantial part of the Member's properties.

12.1.3 If within one hundred twenty (120) days after the commencement

of any proceeding against the Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if within one hundred twenty (120) days after the appointment without his consent or acquiescence of a trustee, receiver or liquidator of the Member or of all or any substantial part of his properties, the appointment is not vacated or stayed or if within one hundred twenty (120) days after the expiration of any stay, the appointment is not vacated.

12.1.4 In the case of a Member who is an individual:

A. The Member's death; or

B.. The entry of an order by a court of competent jurisdiction adjudicating the Member incompetent to manage his person or estate.

12.1.7 In the case of a Member who is a trust or is acting as a Member by

virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee.

12.1.8 In the case of a Member that is a separate limited liability company, the dissolution and commencement of winding up of the separate limited liability

company.

12. 1.9 In the case of a Member that is a corporation, the filing of articles of dissolution or forfeiture of its corporate powers or right to do business.

12.1.10 In the case of an estate, the distribution by the fiduciary of the

estate's entire interest in the Company.

12.1.11 In the case of a professional services limited liability company,

restrictions or limitations are placed upon a Member's ability to continue to render professional services as described in Idaho Code ྷ 53-615(5).

12.2 Rights of Dissociating Member - In the event any Member Dissociates prior to the sale of property owned by the Company:

12.2.2 If the Dissociation does not cause a dissolution and winding up of

the Company under Article XIV and the event of Dissociation is under Article 12.1.4 or Article 12.1.7, the Member or the estate of a Member shall be entitled to an amount equal to the value of the Member's Membership Interest in the Company, to be paid upon sale of the Company’s real property. The Dissociated Member shall be entitled to receive an amount equal to the Member's Membership Interest in the Company, to be paid when the Company is dissolved and wound up in accordance with Article XIV. The value of the Member's Membership Interest shall include the amount of any Distributions to which the Member is entitled under the Operating Agreement and the fair value of the Member's Membership Interest as of the date of Dissociation based upon the Member's right to share in distributions from the Company reduced by any damages sustained by the Company as a result of the Member's Dissociation.

ARTICLE XIII

ADMISSION OF ASSIGNEES

13.1 Rights of Assignees - The Assignee of a Membership Interest, once the interest has been recorded on the Company’s books, shall have the same rights as the previous member had.

13.2 Admission of Substitute Members - An Assignee of a Membership Interest shall be admitted as a Substitute Member and admitted to all the rights of the Member who initially assigned the Membership Interest. The Substitute Member has all the rights and powers and is subject to all the restrictions and liabilities of the Member originally assigning the Membership Interest. The admission of a Substitute Member shall not release the Member assigning the Membership Interest from any liability to the Company that may have existed prior to the approval date of admission of the Assignee as a Substitute Member.

13.3 Admission of Additional Members - The Managing Members may permit the admission of Additional Members and determine the Capital Contributions of such Members only upon the vote of a Majority of the Members.

ARTICLE XIV

DISSOLUTION AND WINDING UP

14.1 Dissolution - The Company shall he dissolved and its affairs wound up, upon the sale of the Company’s investment property.

ARTICLE XV

MISCELLANEOUS PROVISIONS

15.1 Entire Agreement - The Operating Agreement represents the entire agreement among all the Members and between the Members and the Company.

15.2 No Partnership Intended for Nontax Purposes - The Members have formed the Company under the Act, and expressly do not intend hereby to form a partnership under either the Idaho Uniform Partnership Act nor the Idaho Uniform Limited Partnership Act. The Members do not intend to be partners one to another, or partners as to any third party. To the extent any Member, by word or action, represents to another person that any other Member is a partner or that the Company is a partnership, the Member making such wrongful representation shall be liable to any other Member who incurs personal liability by reason of such wrongful

representation.

15.3 Rights of Creditors and Third Parties under Operating Agreement - The Operating Agreement is entered into among the Company and the Members for the exclusive benefit of the Company, its Members, and their successors and assignees. The Operating Agreement is expressly not intended for the benefit of any creditor of the Company or any other Person. Except and only to the extent provided by applicable statute, no such creditor or third party shall have any rights under the Operating Agreement or any agreement between the Company and any Member with respect to any Capital Contribution or otherwise.

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EXHIBIT "A"

INITIAL CONTRIBUTION SHARING

MEMBER ACCOUNT RATIO

HAROLD STONE property at8 Greenleaf Ave. 100%

5729 Chuckwagon Rd. $50,000

Nampa, ID 83686

EXHIBIT “B”

MANAGING MEMBER

NAME ADDRESS

Harold Stone 5729 Chuckwagon Rd.

Nampa, ID 83686

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Sample Certificate

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