SECOND AMENDED AND RESTATED

                               OPERATING AGREEMENT

                                       OF

                      SOUTHWEST IOWA RENEWABLE ENERGY, LLC



                              Dated: March 7, 20008

                           SECOND AMENDED AND RESTATED
                               OPERATING AGREEMENT
                                       OF
                      SOUTHWEST IOWA RENEWABLE ENERGY, LLC


                                TABLE OF CONTENTS
                                                                                                        Page

ARTICLE I. THE COMPANY...................................................................................1
         1.1 Formation...................................................................................1
         1.2 Name........................................................................................1
         1.3 Purpose; Powers.............................................................................1
         1.4 Principal Place of Business.................................................................1
         1.5 Term........................................................................................1
         1.6 Registered Agent............................................................................1
         1.7 Title to Property...........................................................................1
         1.8 Payment of Individual Obligations...........................................................2
         1.9 Independent Activities; Transactions With Affiliates........................................2
         1.10 Definitions................................................................................2

ARTICLE II. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS......................................................7
         2.1 Initial Capital Contributions...............................................................7
         2.2 Additional Capital Contributions; Additional Units..........................................7
         2.3 Capital Accounts............................................................................8

ARTICLE III. ALLOCATIONS.................................................................................8
         3.1 Profits.....................................................................................8
         3.2 Losses......................................................................................8
         3.3 Special Allocations.........................................................................8
         3.4 Regulatory Allocations.....................................................................10
         3.5 Loss Limitation............................................................................10
         3.6 Other Allocation Rules.....................................................................10
         3.7 Tax Allocations: Code Section 704(c).......................................................11
         3.8 Tax Credit Allocations.....................................................................11

ARTICLE IV. DISTRIBUTIONS...............................................................................11
         4.1 Net Cash Flow..............................................................................11
         4.2 Amounts Withheld...........................................................................11
         4.3 Limitations on Distributions...............................................................11

ARTICLE V. MANAGEMENT...................................................................................12
         5.1 Directors..................................................................................12
         5.2 Number of Directors........................................................................12
         5.3 Election of Directors......................................................................12
         5.4 Authority of Directors.....................................................................13
         5.5 Director as Agent..........................................................................15
         5.6 Restriction on Authority of Directors......................................................15



                                       i

         5.7 Meetings...................................................................................17
         5.8 Notice.....................................................................................17
         5.9 Conduct of Meeting.........................................................................18
         5.10 Quorum....................................................................................18
         5.11 Manner of Acting; Informal Action.........................................................18
         5.12 Presumption of Assent.....................................................................18
         5.13 Removal of Directors......................................................................18
         5.14 Vacancies.................................................................................18
         5.15 Compensation..............................................................................18
         5.16 Committees; Authority.....................................................................18
         5.17 Voting; Potential Financial Interest......................................................19
         5.18 Duties and Obligations of Directors.......................................................19
         5.19 Chairman and Vice Chairman................................................................19
         5.20 President and Chief Executive Officer.....................................................19
         5.21 Chief Financial Officer...................................................................19
         5.22 Secretary; Assistant Secretary............................................................20
         5.23 Vice President............................................................................20
         5.24 Delegation................................................................................20
         5.25 Execution of Instruments..................................................................20
         5.26 Limitation of Liability; Indemnification..................................................20

ARTICLE VI. MEMBERSHIP UNITS; MEMBERS...................................................................21
         6.1   Membership Units.........................................................................21
         6.2 Certificates; Surrender for Transfer.......................................................22
         6.3 Members....................................................................................22
         6.4 Additional Members.........................................................................22
         6.5   Members' Voting Rights...................................................................22
         6.6 Member Meetings............................................................................23
         6.7 Place of Meeting...........................................................................23
         6.8 Conduct of Meetings........................................................................23
         6.9 Notice.....................................................................................23
         6.10 Contents of Notice........................................................................23
         6.11 Adjourned Meetings........................................................................24
         6.12 Waiver of Notice..........................................................................24
         6.13 Fixing of Record Date.....................................................................24
         6.14 Quorum and Proxies........................................................................24
         6.15 Voting; Action by Members.................................................................24
         6.16  Continuation of the Company..............................................................24
         6.17 No Member Right of Redemption or Return of Capital........................................24
         6.18 Waiver of Dissenters Rights...............................................................24
         6.19 Loans.....................................................................................25
         6.20 Actions Without a Meeting by Members Holding Series B Units...............................25

ARTICLE VII. ACCOUNTING, BOOKS AND RECORDS..............................................................25
         7.1 Accounting, Books and Records..............................................................25
         7.2 Delivery to Members and Inspection.........................................................25
         7.3 Reports....................................................................................26

                                       ii

         7.4 Tax Matters................................................................................26
         7.5   Withholding..............................................................................27

ARTICLE VIII. AMENDMENTS................................................................................27
         8.1 Amendments.................................................................................27

ARTICLE IX. TRANSFERS...................................................................................27
         9.1   General Restrictions.....................................................................27
         9.2   Not Binding Until Entered in Company Books...............................................28
         9.3   Pledge of Units Allowed..................................................................28
         9.4 Prohibited Transfers.......................................................................28
         9.5   Indemnification..........................................................................28
         9.6   Transferee Subject to Transfer Restrictions..............................................28
         9.7   Unit Transfer Policy.....................................................................28
         9.8 No Dissolution or Termination..............................................................28
         9.9 Rights of Unadmitted Assignees.............................................................28
         9.10 Admission of Substitute Members...........................................................29
         9.11  Preemptive Rights of Series B Unit Holders...............................................29

ARTICLE X.  DISSOLUTION AND WINDING UP..................................................................30
         10.1 Dissolution...............................................................................30
         10.2 Winding Up................................................................................30
         10.3 Compliance with Certain Requirements of Regulations; Deficit Capital Accounts.............30
         10.4 Deemed Distribution and Recontribution....................................................31
         10.5 Rights of Unit Holders....................................................................31
         10.6 Allocations During Period of Liquidation..................................................31
         10.7 Character of Liquidating Distributions....................................................31
         10.8 The Liquidator............................................................................31
         10.9 Forms of Liquidating Distributions........................................................32

ARTICLE XI. MISCELLANEOUS...............................................................................32
         11.1 Notices...................................................................................32
         11.2 Binding Effect............................................................................32
         11.3 Construction..............................................................................32
         11.4 Headings..................................................................................32
         11.5 Severability..............................................................................32
         11.6 Incorporation By Reference................................................................32
         11.7 Variation of Terms........................................................................32
         11.8 Governing Law.............................................................................32
         11.9 Waiver of Jury Trial......................................................................32
         11.10 Counterpart Execution....................................................................33
         11.11 Specific Performance.....................................................................33
         11.12 No Third Party Rights....................................................................33

                                      iii

                           SECOND AMENDED AND RESTATED
                               OPERATING AGREEMENT
                                       OF
                      SOUTHWEST IOWA RENEWABLE ENERGY, LLC


     THIS SECOND AMENDED AND RESTATED  OPERATING  AGREEMENT (the "Agreement") is
entered into effective as of the 7th day of March,  2008, by and among Southwest
Iowa Renewable  Energy,  LLC, an Iowa limited liability company (the "Company"),
each of the Persons identified as Members on attached Exhibit "A," and any other
Persons that may from  time-to-time be  subsequently  admitted as Members of the
Company in accordance with the terms of this Agreement.  Capitalized  terms used
but not  otherwise  defined  herein  shall have the meaning set forth in Section
1.10.

     In  consideration  of the covenants and agreements  contained  herein,  and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

                             ARTICLE I. THE COMPANY

1.1     Formation.  The Company was formed as an Iowa limited liability company
by filing Articles of Organization with the Iowa Secretary of State on March 28,
2005. This Agreement amends and replaces in its entirety the Operating Agreement
of Company dated March 28, 2005.

1.2     Name.  The name of the Company is  "Southwest  Iowa  Renewable  Energy,
LLC," and all business of the Company shall be conducted in such name.

1.3     Purposes;  Powers.  The  nature of the  business  and  purposes  of the
Company are to: (i) own,  construct,  operate,  lease,  finance,  contract with,
and/or invest in ethanol production and by-product production  facilities;  (ii)
process feedstock into ethanol and related by-products,  and market such ethanol
and by-products;  and (iii) engage in any other business and investment activity
in  which  an Iowa  limited  liability  company  may  lawfully  be  engaged,  as
determined  by the  Directors.  The Company has the power to do any and all acts
necessary,  appropriate,  proper, advisable, incidental or convenient to, and in
furtherance of, the purposes of the Company as set forth in this Section 1.3 and
has, without  limitation,  any and all powers that may be exercised on behalf of
the Company by the Directors pursuant to Article V of this Agreement.

1.4     Principal  Place of Business. The Company shall continuously maintain a
principal  place of  business  in the  State of Iowa,  at such  location  as the
Directors may  determine.  Any  documents  required by the Act to be kept by the
Company shall be maintained at the Company's principal place of business.

1.5     Term.  The term of the Company  commenced on the date the Articles were
filed with the Iowa Secretary of State,  and shall continue until the winding up
and  liquidation  of the  Company  and its  business  is  completed  following a
Dissolution Event as provided in Article X of this Agreement.

1.6     Registered  Agent. The Company shall continuously maintain a registered
office and a registered agent for service of process in the State of Iowa and in
any other state in which it is required by law to do so. The name and address of
the Company's initial Registered Agent in Iowa shall be William E. Hanigan,  666
Grand Avenue, Suite 2000, Des Moines, Iowa 50309.

1.7     Title to Property.  All Property owned by the Company shall be owned by
the Company as an entity and not in the name of any Member,  and no Member shall
have any ownership interest in such

                                       1

Property,  except as a Member of the  Company.  Each  Member's  interest  in the
Company shall be personal property for all purposes.

1.8     Payment  of Individual  Obligations.  The  Company's  credit and assets
shall be used solely for the benefit of the Company, and no asset of the Company
shall be  Transferred  or  encumbered  for,  or in payment  of,  any  individual
obligation of any Member.

1.9     Independent Activities; Transactions With Affiliates.

     (a) The Directors shall be required to devote such time to the business and
affairs of the Company as may be  necessary  to manage and operate the  Company,
and shall be free to serve any other Person or  enterprise  in any capacity that
they deem appropriate in their discretion.

     (b Neither this  Agreement  nor any  activity  undertaken  pursuant  hereto
shall:  (i) prevent any Member or Director or their  Affiliates from engaging in
whatever  activities  they  choose,  whether the same are  competitive  with the
Company or otherwise,  and any such activities may be undertaken  without having
or incurring  any  obligation  to offer any interest in such  activities  to the
Company or any other  Member;  or (ii)  require any Member or Director to permit
the Company or any other  Director or Member or their  Affiliates to participate
in any such activities.  Except as expressly provided in this Section 1.9(b), as
a material part of the consideration for the execution of this Agreement by each
Member, each Member hereby waives,  relinquishes and renounces any such right or
claim of participation.

     (c) No contract or  transaction  between the Company and one or more of its
Members, or between the Company and any other Person in which one or more of the
Members  is a  director,  manager  or  officer,  or in which  such  Member has a
financial  interest,  shall  be void or  voidable  (i)  solely  because  of such
relationship, (ii) solely because a Director appointed or elected by such Member
is present at, or  participates  in, the meeting of the  Directors at which such
contract  or  transaction  is  authorized,  or (iii)  solely  because a Director
appointed  or elected by such Member  votes are counted for such  authorization;
provided,  however,  the material facts as to the  relationship are disclosed to
the  Directors  and a majority of the  disinterested  Directors  authorize  such
contract  or  transaction,  regardless  of whether the  disinterested  Directors
constitute a quorum.

1.10 Definitions.  Capitalized words and phrases used in this Agreement have the
following meanings:

     (a) "Act" means the Iowa  Limited  Liability  Company  Act, as amended from
time to time, or any corresponding provisions of any succeeding law.

     (b) "Adjusted  Capital  Account  Deficit"  means,  with respect to any Unit
Holder, the deficit balance, if any, in such Unit Holder's Capital Account as of
the end of the  relevant  Fiscal  Year,  after  giving  effect to the  following
adjustments:  (i) crediting to such Capital  Account any amounts which such Unit
Holder is deemed to be  obligated  to restore  pursuant  to the next to the last
sentences of Sections  1.704-2(g)(1) and  1.704-2(i)(5) of the Regulations;  and
(ii)  debiting  to  such  Capital   Account  the  items  described  in  Sections
1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of
the  Regulations.  The  foregoing  definition  is  intended  to comply  with the
provisions  of  Section  1.704-1(b)(2)(ii)(d)  of the  Regulations  and shall be
interpreted consistently therewith.

     (c) "Affiliate" means, with respect to any Person or entity: (i) any Person
directly or indirectly  controlling,  controlled by or under common control with
such Person or entity; (ii) any officer,  director,  general partner,  member or
trustee of any such  Person or  entity;  or (iii) any Person or entity who is an
officer, director, general partner, member or trustee of any Person described in
clauses (i) or (ii) of this sentence. For purposes of this definition, the terms
"controlling,"  "controlled  by" or "under  common


                                       2

control  with" shall mean the  possession,  direct or indirect,  of the power to
direct or cause the  direction  of the  management  and  policies of a Person or
entity,  whether  through the  ownership  of voting  securities,  by contract or
otherwise,  or the power to elect a  majority  of the  directors,  managers,  or
persons exercising similar authority with respect to such Person or entities.

     (d) "Agreement"  means the Company's Second Amended and Restated  Operating
Agreement, as amended from time to time.

     (e) "Articles"  means the Company's  Articles of  Organization on file with
the Iowa Secretary of State's Office, as amended from time to time.

     (f)  "Assignee"  means a  transferee  of  Units  who is not  admitted  as a
Substitute Member pursuant to Section 9.10 of this Agreement.

     (g) "Capital  Account" means the separate  capital  account  maintained for
each Unit Holder in accordance with Section 2.3 of this Agreement.

     (h) "Capital  Contributions"  means, with respect to any Member, the amount
of money (US  Dollars),  and the  initial  Gross  Asset  Value of any  assets or
property  other  than  money,   contributed  by  the  Member  or  such  Member's
predecessors  in interest to the Company,  (net of  liabilities  secured by such
contributed property that the Company is considered to assume or take subject to
under Code  Section  752) with  respect to the Units held or  purchased  by such
Member, including additional Capital Contributions.

     (i) "Code"  means the  United  States  Internal  Revenue  Code of 1986,  as
amended from time to time.

     (j) "Company" means Southwest Iowa Renewable  Energy,  LLC, an Iowa limited
liability company.

     (k)  "Company  Minimum  Gain" has the meaning  given the term  "partnership
minimum gain" in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

     (l) "Debt" means:  (i) any  indebtedness for borrowed money or the deferred
purchase  price of property as evidenced by notes,  bonds or other  instruments;
(ii) obligations as lessee under capital leases;  (iii)  obligations  secured by
any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
existing on any asset owned or held by the  Company,  whether or not the Company
has  assumed or become  liable for the  obligations  secured  thereby;  (iv) any
obligation  under any interest rate swap agreement;  (v) accounts  payable;  and
(vi) obligations,  contingent or otherwise,  under direct or indirect guarantees
of  indebtedness  or  obligations of the kinds referred to in clauses (i), (ii),
(iii), (iv) and (v), above.  Notwithstanding the foregoing,  however, Debt shall
not include  obligations in respect of any accounts payable that are incurred in
the ordinary  course of the  Company's  business and are not  delinquent  or are
being contested in good faith by appropriate proceedings.

     (m)  "Depreciation"  means,  for each Fiscal  Year,  an amount equal to the
depreciation,  amortization,  or other cost recovery  deduction  allowable  with
respect to an asset for such Fiscal  Year,  except that if the Gross Asset Value
of an asset differs from its adjusted  basis for federal  income tax purposes at
the beginning of such Fiscal Year,  Depreciation  shall be an amount which bears
the same ratio to such  beginning  Gross Asset  Value as the federal  income tax
depreciation,  amortization,  or other cost  recovery  deduction for such Fiscal
Year bears to such beginning adjusted tax basis; provided,  however, that if the
adjusted  basis for federal  income tax purposes of an asset at the beginning of
such


                                       3

Fiscal Year is zero,  Depreciation  shall be determined  with  reference to such
beginning  Gross  Asset  Value  using  any  reasonable  method  selected  by the
Directors.

     (n) "Director" means any Person who: (i) is elected as a Director  pursuant
to Article V of this Agreement or who has otherwise  become a Director  pursuant
to the  terms  of this  Agreement;  and  (ii) has not  ceased  to be a  Director
pursuant to the terms of this Agreement.  "Directors" mean all such Persons. For
purposes of the Act, the Directors shall be deemed to be the "managers" (as such
term is defined and used in the Act) of the Company.

     (o) "Dissolution Event" shall have the meaning set forth in Section 10.1 of
this Agreement.

     (p) "Effective Date" means March 7, 2008.

     (q) "Facilities" means the ethanol and by-product  production facilities to
be constructed and operated by the Company in or around Council Bluffs, Iowa.

     (r) "Fiscal Year" means: (i) any twelve-month  period commencing on October
1 and ending on September 30; and (ii) the period  commencing on the immediately
preceding  October 1 and ending on the date on which all Property is distributed
to the Unit Holders pursuant to Article X of this Agreement,  or, if the context
requires,  any  portion of a Fiscal Year for which an  allocation  of Profits or
Losses or a distribution is to be made.

     (s) "GAAP" means generally accepted accounting  principles in effect in the
United States of America from time to time.

     (t) "Gross  Asset  Value"  means with  respect  to any asset,  the  asset's
adjusted  basis for federal  income tax  purposes,  except as  follows:  (i) The
initial  Gross Asset Value of any asset  contributed  by a Member to the Company
shall be the  gross  fair  market  value of such  asset,  as  determined  by the
Directors,   provided  that  the  initial  Gross  Asset  Values  of  the  assets
contributed to the Company pursuant to Section 2.1 of this Agreement shall be as
set forth in such  Section;  (ii) The Gross Asset  Values of all Company  assets
may, in the discretion of the Directors,  be adjusted to equal their  respective
gross fair  market  values  (taking  Code  Section  7701(g)  into  account),  as
determined by the Directors as of the following  times: (A) upon the acquisition
of an  additional  interest  in the  Company  by any new or  existing  Member in
exchange  for  more  than  a de  minimis  Capital  Contribution;  (B)  upon  the
distribution  by the  Company  to a Member of more than a de  minimis  amount of
Company Property as consideration  for an interest in the Company;  and (C) upon
the  liquidation  of the  Company  within  the  meaning of  Regulations  Section
1.704-1(b)(2)(ii)(g);  (iii) The Gross Asset Value of any item of Company assets
distributed to any Member shall be adjusted to equal the gross fair market value
(taking  Code  Section  7701(g)  into  account)  of such  asset  on the  date of
distribution as determined by the Directors;  and (iv) The Gross Asset Values of
Company assets shall be increased or decreased,  as  applicable,  to reflect any
adjustments to the adjusted basis of such assets pursuant to Code Section 734(b)
or Code Section 743(b),  but only to the extent that such  adjustments are taken
into account in determining  Capital  Accounts  pursuant to Regulations  Section
1.704-1(b)(2)(iv)(m)  and  subparagraph  (vi) of the definition of "Profits" and
"Losses" or Section  3.3(g) of this  Agreement;  provided,  however,  that Gross
Asset Values  shall not be adjusted  pursuant to this  subparagraph  (iv) to the
extent  that  an  adjustment  pursuant  to  subparagraph  (ii)  is  required  in
connection  with a  transaction  that would  otherwise  result in an  adjustment
pursuant  to this  subparagraph  (iv).  If the Gross Asset Value of an asset has
been  determined  or  adjusted  pursuant  to  subparagraph  (ii) or (iv) of this
paragraph,   such  Gross  Asset  Value  shall  thereafter  be  adjusted  by  the
Depreciation  taken into  account  with  respect to such asset,  for purposes of
computing Profits and Losses.

     (u)  "Issuance  Items" has the meaning set forth in Section  3.3(h) of this
Agreement.


                                       4

     (v) "Liquidation  Period" has the meaning set forth in Section 10.6 of this
Agreement.

     (w)  "Liquidator"  has  the  meaning  set  forth  in  Section  10.8 of this
Agreement.

     (x)  "Member"  means any  Person:  (i)  whose  name is set forth as such on
Exhibit "A" attached  hereto or as it may be amended  from time to time,  or who
has become a Member pursuant to the terms of this Agreement; and (ii) who is the
owner of one or more  Units and has not  ceased to be a Member  pursuant  to the
terms of this Agreement. "Members" means all such Persons.

     (y) "Membership Economic Interest" means collectively,  a Member's share of
"Profits"  and  "Losses,"  the right to receive  distributions  of the Company's
assets, and the right to information  concerning the business and affairs of the
Company as required by the Act. The Membership  Economic Interest of a Member is
quantified by the unit of measurement referred to herein as "Units."

     (z)  "Membership  Interest"  means  collectively,  the Membership  Economic
Interest and the Membership Voting Interest.

     (aa) "Membership Voting Interest" means  collectively,  a Member's right to
vote as set forth in this Agreement or as required by the Act.

     (bb) "Net Cash Flow" means the gross cash  proceeds of the Company less the
portion  thereof used to pay or establish  reserves for Company  expenses,  debt
payments,   capital  improvements,   replacements  and  contingencies,   all  as
reasonably  determined  by the  Directors,  plus any  reduction in the amount of
reserves, all as may be reasonably determined by the Directors.  "Net Cash Flow"
shall not be reduced by Depreciation,  amortization, cost recovery deductions or
similar  allowances,  but  shall be  increased  by any  reductions  of  reserves
previously established.

     (cc) "New  Securities"  means  Series A Units of the  Company,  and rights,
options or warrants to purchase Series A Units of the Company, and securities of
any type  whatsoever that are, or may become,  convertible or exchangeable  into
Series A Units

     (dd)  "Nonrecourse  Deductions"  has  the  meaning  set  forth  in  Section
1.704-2(b)(1) of the Regulations.

     (ee)  "Nonrecourse   Liability"  has  the  meaning  set  forth  in  Section
1.704-2(b)(3) of the Regulations.

     (ff) "Officer" has the meaning set forth in Section 5.24 of this Agreement.

     (gg) "Permitted  Transfer" has the meaning set forth in Section 9.1 of this
Agreement.

     (hh) "Person" means any individual,  general or limited partnership,  joint
venture,  limited liability company,  corporation,  trust, estate,  association,
nominee or other entity.

     (ii)"Profits and Losses" mean, for each Fiscal Year, an amount equal to the
Company's taxable income or loss for such Fiscal Year,  determined in accordance
with Code Section 703(a) (for this purpose,  all items of income, gain, loss, or
deduction  required to be stated  separately  pursuant to Code Section 703(a)(1)
shall be included in taxable  income or loss),  with the  following  adjustments
(without duplication): (i) Any income of the Company that is exempt from federal
income tax and not otherwise  taken into account in computing  Profits or Losses
pursuant to this  definition  of "Profits"  and "Losses"


                                       5

shall be added to such  taxable  income or loss;  (ii) Any  expenditures  of the
Company  described  in Code  Section  705(a)(2)(b)  or treated  as Code  Section
705(a)(2)(b) expenditures pursuant to Regulations Section  1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing  Profits or Losses pursuant to
this  definition of "Profits" and "Losses" shall be subtracted from such taxable
income or loss; (iii) In the event the Gross Asset Value of any Company asset is
adjusted  pursuant to  subparagraphs  (ii) or (iii) of the  definition  of Gross
Asset Value above,  the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the Gross Asset Value of the asset) or an item
of loss (if the  adjustment  decreases  the Gross Asset Value of the asset) from
the  disposition  of such asset and shall be taken into  account for purposes of
computing Profits or Losses; (iv) Gain or loss resulting from any disposition of
Property with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the Property
disposed  of,  notwithstanding  that the  adjusted  tax  basis of such  Property
differs  from  its  Gross  Asset  Value;  (v)  In  lieu  of  the   depreciation,
amortization, and other cost recovery deductions taken into account in computing
such taxable income or loss, there shall be taken into account  Depreciation for
such Fiscal Year,  computed in accordance  with the definition of  Depreciation;
(vi) To the extent an  adjustment to the adjusted tax basis of any Company asset
pursuant to Code Section  734(b) is required,  pursuant to  Regulations  Section
1.704-(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts
as a result of a  distribution  other  than in  liquidation  of a Unit  Holder's
interest in the Company,  the amount of such  adjustment  shall be treated as an
item of gain (if the  adjustment  increases  the basis of the asset) or loss (if
the  adjustment  decreases  such basis) from the  disposition  of such asset and
shall be taken into  account for purposes of  computing  Profits or Losses;  and
(vii)  Notwithstanding  any other provision of this definition,  any items which
are specially  allocated pursuant to Sections 3.3, 3.4 and 3.5 of this Agreement
shall not be taken into account in computing  Profits or Losses.  The amounts of
the items of Company income,  gain, loss or deduction  available to be specially
allocated  pursuant  to Sections  3.3,  3.4 and 3.5 of this  Agreement  shall be
determined by applying rules analogous to those set forth in  subparagraphs  (i)
through (vi) above.

     (jj) "Property"  means all real and personal  property owned or acquired by
the Company  (including cash), and any improvements  thereto,  and shall include
both tangible and intangible property.

     (kk) "Regulations"  means the Income Tax Regulations,  including  Temporary
Regulations,  promulgated  under the Code, as such  regulations are amended from
time to time.

     (ll)  "Regulatory  Allocations" has the meaning set forth in Section 3.4 of
this Agreement.

     (mm) "Securities Act" means the Securities Act of 1933, as amended.

     (nn)  "Series A Directors"  has the meaning set forth in Section  5.3(d) of
this Agreement.

     (oo)  "Series B Directors"  has the meaning set forth in Section  5.3(b) of
this Agreement.

     (pp)  "Series C Director"  has the  meaning set forth in Section  5.3(a) of
this Agreement.

     (qq) "Series E Directors" has the meaning set forth in Section 5.3(c).

     (rr)  "Series A Units"  means Units of the Company  issued as  described in
Section 6.1(a).

     (ss)  "Series B Units"  means Units of the Company  issued as  described in
Section 6.1(b).

     (tt)  "Series C Units"  means Units of the Company  issued as  described in
Section 6.1(c).

     (uu)  "Series E Units"  means Units of the Company  issued as  described in
Section 6.1(d).


                                       6

     (vv) "Tax Matters  Member" has the meaning set forth in Section 7.4 of this
Agreement.

     (ww) "Transfer"  means,  as a noun, any voluntary or involuntary  transfer,
sale,  pledge  or  hypothecation  or  other  disposition  and,  as  a  verb,  to
voluntarily or involuntarily  transfer,  give, sell, exchange,  assign,  pledge,
bequest, hypothecate or otherwise dispose of.

     (xx) ."Transfer  Restrictions"  means the restrictions on Transfer of Units
in Article IX and the Unit Transfer Policy attached as Exhibit "C."

     (yy)  "Unit"  means  an  ownership   interest  in  the  Company  issued  in
consideration of a Capital  Contribution  made as provided in Article II of this
Agreement,  issued in the form of Series A Units,  Series B Units or such  other
classes as issued pursuant to this Agreement.

     (zz) "Unit  Holder" means any Person who is the owner of one or more Units.
"Unit Holders" means all such Persons.

     (aaa)  "Unit  Holder  Nonrecourse  Debt" has the same  meaning  as the term
"partner nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations.

     (bbb) "Unit Holder  Nonrecourse  Debt Minimum  Gain" means an amount,  with
respect to each Unit Holder  Nonrecourse Debt, equal to the Company Minimum Gain
that  would  result if such Unit  Holder  Nonrecourse  Debt  were  treated  as a
Nonrecourse  Liability,  determined in accordance with Section  1.704-2(i)(3) of
the Regulations.

     (ccc) "Unit Holder Nonrecourse Deductions" has the same meaning as the term
"partner nonrecourse  deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of
the Regulations.

     (ddd) "Unit Holder  Register" means the register  maintained by the Company
at its principal office or by the Company's duly appointed agent,  setting forth
the name,  address and Capital  Contributions  of each Unit Holder (or such Unit
Holder's  predecessors  in  interest),  and the  number  of  Units,  certificate
number(s)  and date of  issuance  of Units  issued  to each Unit  Holder,  which
register shall be modified from time to time as additional  Units are issued and
as Units are Transferred pursuant to this Agreement.

     (eee) "Unit Transfer Policy" is the policy for Transferring  Units attached
as Exhibit "C."

               ARTICLE II. CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

2.1 Initial Capital Contributions.  The name, address,  Capital Contribution and
Units  quantifying the Membership  Interest of each of the Members are set forth
on Exhibit "A" attached  hereto,  and shall also be set forth on the Unit Holder
Register.

2.2 Additional Capital Contributions;  Additional Units. No Unit Holder shall be
obligated to make any additional Capital  Contributions to the Company or to pay
any  assessment  to the  Company,  other  than any  unpaid  amounts on such Unit
Holder's  original Capital  Contributions,  and no Units shall be subject to any
calls, requests or demands for capital. Subject to Section 5.6, additional Units
may be issued in consideration of Capital Contributions as agreed to between the
Directors and the Persons acquiring such Units.

                                       7

2.3 Capital Accounts. A Capital Account shall be maintained for each Unit Holder
in accordance with the following provisions:

     (a) To each Unit Holder's Capital Account there shall be credited: (i) such
Unit Holder's Capital Contributions;  (ii) such Unit Holder's distributive share
of Profits  and any items in the  nature of income or gain  which are  specially
allocated pursuant to Sections 3.3, 3.4 and 3.5 of this Agreement; and (iii) the
amount of any  Company  liabilities  assumed  by such  Unit  Holder or which are
secured by any Property distributed to such Unit Holder;

     (b) To each Unit Holder's  Capital Account there shall be debited:  (i) the
amount of money and the Gross Asset Value of any  Property  distributed  to such
Unit Holder pursuant to any provision of this Agreement; (ii) such Unit Holder's
distributive  share of Losses and any items in the nature of  expenses or losses
which are  specially  allocated  pursuant to Sections  3.3,  3.4 and 3.5 of this
Agreement;  and (iii) the amount of any  liabilities of such Unit Holder assumed
by the Company or which are  secured by any  Property  contributed  by such Unit
Holder to the Company;

     (c) In the event Units are Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the Transferred Units; and

     (d)  In   determining   the  amount  of  any   liability  for  purposes  of
subparagraphs  (a) and (b) above,  Code Section 752(c) and any other  applicable
provisions of the Code and Regulations shall be taken into account.

     The  foregoing  provisions  and the  other  provisions  of  this  Agreement
relating to the  maintenance  of Capital  Accounts  are  intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent therewith. In the event the Directors determine that it is prudent to
modify the manner in which Capital  Accounts,  or any debits or credits  thereto
(including,  without limitation, debits or credits relating to liabilities which
are secured by contributed  or distributed  property or which are assumed by the
Company  or any  Unit  Holders),  are  computed  in order to  comply  with  such
Regulations,  the Directors may make such modification,  provided that it is not
likely  to have a  material  effect on the  amounts  distributed  to any  Person
pursuant to Article X of this Agreement upon the dissolution of the Company. The
Directors  also  shall  make  any   appropriate   modifications   in  the  event
unanticipated  events might  otherwise  cause this  Agreement not to comply with
Regulations Section 1.704-1(b).

                            ARTICLE III. ALLOCATIONS

3.1 Profits. After giving effect to the special allocations in Sections 3.3, 3.4
and 3.5 of this Agreement,  Profits for any Fiscal Year shall be allocated among
the Unit Holders in proportion to Units held.

3.2 Losses.  After giving effect to the special allocations in Sections 3.3, 3.4
and 3.5 of this  Agreement,  Losses for any Fiscal Year shall be allocated among
the Unit Holders in proportion to Units held.

3.3 Special Allocations.  The following special allocations shall be made in the
following order:

     (a)  Minimum  Gain  Chargeback.  Except as  otherwise  provided  in Section
1.704-2(f)  of the  Regulations,  notwithstanding  any other  provision  of this
Article  III,  if there is a net  decrease  in Company  Minimum  Gain during any
Fiscal  Year,  each Unit Holder shall be  specially  allocated  items of Company


                                       7

income and gain for such  Fiscal  Year (and,  if  necessary,  subsequent  Fiscal
Years) in an amount  equal to such Unit  Holder's  share of the net  decrease in
Company  Minimum  Gain,   determined  in  accordance  with  Regulations  Section
1.704-2(g).  Allocations  pursuant  to the  previous  sentence  shall be made in
proportion  to the  respective  amounts  required to be  allocated  to each Unit
Holder  pursuant  thereto.  The items to be so allocated  shall be determined in
accordance with Sections  1.704-2(f)(6)  and  1.704-2(j)(2)  of the Regulations.
This  Section  3.3(a) is intended to comply  with the  minimum  gain  chargeback
requirement in Section  1.704-2(f) of the  Regulations  and shall be interpreted
consistently therewith.

     (b) Unit Holder Minimum Gain  Chargeback.  Except as otherwise  provided in
Section 1.704-2(i)(4) of the Regulations, notwithstanding any other provision of
this  Article III, if there is a net  decrease in Unit Holder  Nonrecourse  Debt
Minimum Gain  attributable to a Unit Holder  Nonrecourse  Debt during any Fiscal
Year,  each Unit  Holder  who has a share of the Unit  Holder  Nonrecourse  Debt
Minimum Gain attributable to such Unit Holder  Nonrecourse  Debt,  determined in
accordance with Section  1.704-2(i)(5)  of the  Regulations,  shall be specially
allocated  items of  Company  income  and gain for such  Fiscal  Year  (and,  if
necessary,  subsequent  Fiscal  Years) in an amount equal to such Unit  Holder's
share  of the net  decrease  in  Unit  Holder  Nonrecourse  Debt  Minimum  Gain,
determined in accordance with  Regulations  Section  1.704-2(i)(4).  Allocations
pursuant to the previous  sentence shall be made in proportion to the respective
amounts required to be allocated to each Unit Holder pursuant thereto. The items
to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4)
and 1.704-2(j)(2) of the Regulations.  This Section 3.3(b) is intended to comply
with the minimum gain  chargeback  requirement in Section  1.704-2(i)(4)  of the
Regulations and shall be interpreted consistently therewith.

     (c) Qualified Income Offset. In the event any Member unexpectedly  receives
any   adjustments,   allocations,   or   distributions   described  in  Sections
1.704-1(b)(2)(ii)(d)(4),  1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of
the Regulations,  items of Company income and gain shall be specially  allocated
to such Member in an amount and manner  sufficient to  eliminate,  to the extent
required by the  Regulations,  the Adjusted  Capital  Account Deficit as soon as
practicable,  provided that an allocation  pursuant to this Section 3.3(c) shall
be made only if and to the extent that the Member would have an Adjusted Capital
Account  Deficit  after all other  allocations  provided for in this Article III
have been tentatively made as if this Section 3.3(c) were not in the Agreement.

     (d) Gross Income Allocation.  In the event any Member has a deficit Capital
Account at the end of any Fiscal  Year which is in excess of the sum of: (i) the
amount such Member is  obligated  to restore  pursuant to any  provision of this
Agreement;  and (ii) the amount such Member is deemed to be obligated to restore
pursuant  to  the   penultimate   sentences   of  Sections   1.704-2(g)(1)   and
1.704-2(i)(5) of the  Regulations,  then in such  circumstance  each such Member
shall be specially  allocated  items of Company income and gain in the amount of
such excess as quickly as possible, provided that an allocation pursuant to this
Section  3.3(d)  shall be made only if and to the extent that such Member  would
have a deficit Capital Account in excess of such sum after all other allocations
provided for in this Article III have been made as if Sections 3.3(c) and 3.3(d)
were not in this Agreement.

     (e) Nonrecourse  Deductions.  Nonrecourse Deductions for any Fiscal Year or
other period shall be specially  allocated  among the Members in  proportion  to
Units held.

     (f)  Unit  Holder  Nonrecourse  Deductions.  Any  Unit  Holder  Nonrecourse
Deductions  for any Fiscal Year shall be specially  allocated to the Unit Holder
who bears the economic risk of loss with respect to the Unit Holder  Nonrecourse
Debt to which  such Unit  Holder  Nonrecourse  Deductions  are  attributable  in
accordance with Regulations Section 1.704-2(i)(1).

     (g) Section 754  Adjustments.  To the extent an  adjustment to the adjusted
tax basis of any Company asset,  pursuant to Code Section 734(b) or Code Section
743(b) is required,  pursuant to


                                       9

Regulations Section  1.704-1(b)(2)(iv)(m)(2) or  1.704-1(b)(2)(iv)(m)(4),  to be
taken  into  account  in  determining  Capital  Accounts  as  the  result  of  a
distribution  to a Unit Holder in  complete  liquidation  of such Unit  Holder's
interest in the Company, the amount of such adjustment to Capital Accounts shall
be  treated  as an item of gain (if the  adjustment  increases  the basis of the
asset) or loss (if the  adjustment  decreases  such basis) and such gain or loss
shall be  specially  allocated  to the Unit  Holders  in  accordance  with their
interests    in   the    Company    in    the    event    Regulations    Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Unit Holder to whom such distribution
was made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

     (h) Allocations  Relating to Taxable Issuance of Company Units. Any income,
gain, loss or deduction  realized as a direct or indirect result of the issuance
of Units  by the  Company  to a Unit  Holder  (the  "Issuance  Items")  shall be
allocated among the Unit Holders so that, to the extent possible, the net amount
of such Issuance Items, together with all other allocations under this Agreement
to each  Unit  Holder  shall be equal to the net  amount  that  would  have been
allocated to each such Unit Holder if the Issuance Items had not been realized.

3.4  Regulatory  Allocations.  The  allocations  set forth in  Sections  3.3(a),
3.3(b),  3.3(c),  3.3(d),  3.3(e),  3.3(f),  3.3(g)  and  3.5  (the  "Regulatory
Allocations")   are  intended  to  comply  with  certain   requirements  of  the
Regulations.  It is the intent of the Unit Holders that, to the extent possible,
all  Regulatory  Allocations  shall  be  offset  either  with  other  Regulatory
Allocations or with special allocations of other items of Company income,  gain,
loss or deduction pursuant to this Section 3.4.  Therefore,  notwithstanding any
other provision of this Article III (other than the Regulatory Allocations), the
Directors  shall make such  offsetting  special  allocations of Company  income,
gain, loss or deduction in whatever  manner they determine  appropriate so that,
after such offsetting  allocations are made, each Unit Holder's  Capital Account
balance is, to the extent  possible,  equal to the Capital  Account balance such
Unit Holder would have had if the  Regulatory  Allocations  were not part of the
Agreement  and all Company items were  allocated  pursuant to Sections 3.1, 3.2,
and 3.3(h).

3.5 Loss Limitation.  Losses allocated pursuant to Section 3.2 of this Agreement
shall not exceed the  maximum  amount of Losses  that can be  allocated  without
causing any Unit Holder to have an Adjusted  Capital  Account Deficit at the end
of any Fiscal Year. In the event some but not all of the Unit Holders would have
Adjusted  Capital  Account  Deficits as a consequence of an allocation of Losses
pursuant  to Section 3.2 of this  Agreement,  the  limitation  set forth in this
Section 3.5 shall be applied on a Unit  Holder by Unit  Holder  basis and Losses
not  allocable  to any Unit  Holder  as a  result  of such  limitation  shall be
allocated to the other Unit Holders in accordance with the positive  balances in
such Unit Holder's  Capital  Accounts so as to allocate the maximum  permissible
Losses  to  each  Unit  Holder  under   Section   1.704-1(b)(2)(ii)(d)   of  the
Regulations.

3.6 Other Allocation Rules.

     (a) For  purposes  of  determining  Profits,  Losses  and any  other  items
allocable  to any  period,  Profits,  Losses and any such other  items  shall be
determined  on a daily,  monthly or other basis,  as determined by the Directors
using  any  permissible  method  under  Code  Section  706 and  the  Regulations
thereunder.

     (b) The Unit  Holders  are  aware of the  income  tax  consequences  of the
allocations  made by this  Article  III and  hereby  agree  to be  bound  by the
provisions of this Article III in reporting  their shares of Company  income and
loss for income tax purposes.

     (c) Solely for purposes of determining a Unit Holder's  proportionate share
of the "excess  nonrecourse  liabilities"  of the Company  within the meaning of
Regulations  Section  1.752-3(a)(3),  the


                                       10

Unit Holders'  aggregate  interests in Company  Profits shall be deemed to be as
provided  in  the  Capital   Accounts.   To  the  extent  permitted  by  Section
1.704-2(h)(3)  of  the  Regulations,  the  Directors  shall  endeavor  to  treat
distributions  of Net Cash Flow as  having  been  made  from the  proceeds  of a
Nonrecourse  Liability or a Unit Holder Nonrecourse Debt only to the extent that
such  distributions  would cause or increase an Adjusted Capital Account Deficit
for any Unit Holder.

     (d) Profits and Losses to the Unit  Holders  shall be  allocated  among the
Unit  Holders in the ratio  which each Unit  Holder's  Units  bears to the total
number of Units issued and outstanding.

3.7 Tax Allocations; Code Section 704(c). In accordance with Code Section 704(c)
and the Regulations  thereunder,  income, gain, loss, and deduction with respect
to any Property  contributed to the capital of the Company shall, solely for tax
purposes,  be  allocated  among the Unit  Holders  so as to take  account of any
variation between the adjusted basis of such Property to the Company for federal
income tax  purposes and its initial  Gross Asset Value.  In the event the Gross
Asset Value of any Company asset is adjusted  pursuant to  subparagraph  (ii) of
the  definition  of Gross  Asset  Value in Section  1.10(t)  of this  Agreement,
subsequent  allocations of income, gain, loss and deduction with respect to such
asset shall take account of any  variation  between the  adjusted  basis of such
asset for  federal  income tax  purposes  and its Gross  Asset Value in the same
manner  as  under  Code  Section  704(c)  and the  Regulations  thereunder.  Any
elections or other decisions  relating to such allocations  shall be made by the
Directors in any manner that  reasonably  reflects the purpose and  intention of
this Agreement. Allocations pursuant to this Section 3.7 are solely for purposes
of federal,  state and local taxes and shall not affect,  or in any way be taken
into  account  in  computing,  any Unit  Holder's  Capital  Account  or share of
Profits,  Losses, other items or distributions pursuant to any provision of this
Agreement.

3.8 Tax Credit Allocations. All income tax credits with respect to the Company's
property or operations  shall be allocated  among the Members in accordance with
their  respective  Membership  Interests  for the Fiscal Year  during  which the
expenditure, production, sale or other event giving rise to such credits occurs.
This Section 3.8 is intended to comply with the applicable tax credit allocation
principles of  Regulations  Section  1.704-1(b)(4)(ii)  and shall be interpreted
consistently therewith.

                            ARTICLE IV. DISTRIBUTIONS

4.1 Net Cash Flow.  Subject to the terms and conditions of any  applicable  loan
covenants and restrictions,  the Directors, in their sole discretion, shall make
distributions  of Net Cash Flow,  if any, to the Unit Holders in  proportion  to
Units held.  In  determining  Net Cash Flow,  the  Directors  shall  endeavor to
provide for cash  distributions at such times and in such amounts as will permit
the Unit Holders to make timely payment of income taxes.

4.2 Amounts Withheld. All amounts withheld pursuant to the Code or any provision
of any state, local or foreign tax law with respect to any payment, distribution
or  allocation  to the Company or the Unit  Holders  shall be treated as amounts
paid or  distributed,  as the case may be, to the Unit  Holders  with respect to
which such amount was  withheld  pursuant to this  Section 4.2 for all  purposes
under this  Agreement.  The Company is  authorized to withhold from payments and
distributions,  or with respect to  allocations,  to the Unit Holders and to pay
over to any federal, state, local or foreign government, any amounts required to
be so  withheld,  and shall  allocate  any such amounts to the Unit Holders with
respect to which such amount was withheld.

4.3 Limitations on Distributions. The Company shall make no distributions to the
Unit  Holders  except as  provided  in this  Article IV and in Article X of this
Agreement. Notwithstanding any other provision, no distribution shall be made if
not permitted to be made under the Act.


                                       11

                              ARTICLE V. MANAGEMENT

5.1  Directors.  Except as otherwise  provided in this  Agreement or required by
law, the Directors shall direct the business and affairs and exercise all of the
powers of the Company,  and shall adopt such policies,  rules,  regulations  and
actions as they deem advisable. Subject to Section 5.6 of this Agreement and any
other  express  provisions of this  Agreement to the contrary,  the business and
affairs  of the  Company  shall be  managed  by and under the  direction  of the
Directors and not by the Members.

5.2 Number of Directors. The number of Directors shall be fixed at seven (7).

5.3 Election of Directors.

     (a) Members holding Series C Units shall have the right, voting as a class,
to elect one (1)  Director.  The Director  elected by Members  holding  Series C
Units ("Series C Director") shall hold office  indefinitely until a successor is
elected and  qualified,  or until the  earlier  death,  resignation,  removal or
disqualification of such Series C Director.

     (b) Members holding Series B Units shall have the right, voting as a class,
to elect that number of Directors  which bears the same  proportion to the total
number of  Directors  of the Company as the total number of Series B Units owned
by such  Members  bears  to the  total  number  of  Units  of the  Company  then
outstanding,  rounded to the nearest whole number of Directors;  provided,  that
Members  holding  Series B Units shall have the right to elect no fewer than one
(1)  Director.  By way of example  and not for  purposes of  limitation:  (i) if
Members  holding  Series B Units hold a number of Series B Units equal to 21% of
the total number of Units outstanding, then such class of Members shall have the
right to elect or appoint one (1) Director; and (ii) if Members holding Series B
Units hold a number of Series B Units equal to 35% of the total  number of Units
outstanding, then such class of Members shall have the right to elect or appoint
two (2) Directors.  Directors elected by Members holding Series B Units ("Series
B Directors")  shall hold office  indefinitely  until a successor is elected and
qualified, or until the earlier death, resignation,  removal or disqualification
of any such  Series B  Director.  Unless  otherwise  approved  by the  remaining
Directors,  at least one of the Directors  elected by the Series B Members shall
be an officer of one of the Series B Members.

     (c) Members holding Series E Units shall have the right, voting as a class,
to elect that number of Directors calculated in the following manner: (1) during
such  time as the total  number of Series B Units,  Series E Units and any other
Units owned by such Members holding Series E Units equals or exceeds 21%, but is
less than 30%,  of the total  number of Units of the Company  then  outstanding,
then such Members holding Series E Units may elect one (1) Director,  (2) during
such  time as the total  number of Series B Units,  Series E Units and any other
Units owned by such Members holding Series E Units equals or exceeds 30%, but is
less than 40%,  of the total  number of Units of the Company  then  outstanding,
then such Members  holding Series E Units may elect two (2)  Directors,  and (3)
during such time as the total  number of Series B Units,  Series E Units and any
other Units owned by such Members  holding  Series E Units equals or exceeds 40%
of the total number of Units of the Company then outstanding,  then such Members
holding  Series E Units  may  elect  three (3)  Directors;  provided,  that once
Members holding Series E Units shall have obtained the right to elect a Director
pursuant to the foregoing,  the Members holding Series E Units shall  thereafter
hold the right to elect no fewer  than one (1)  Director.  Directors  elected by
Members  holding  Series  E Units  ("Series  E  Directors")  shall  hold  office
indefinitely  until a successor is elected and  qualified,  or until the earlier
death,  resignation,  removal or disqualification of any such Series E Director.
The rights  granted in this  Section  5.3(c) to Members  holding  Series E Units
shall be in addition  to, and shall not be in  replacement  of, any other rights
such  Members may have to elect or appoint  Directors as a result of such Member
holding  any other Unit of the  Company  granting  rights for such  election  or
appointment.


                                       12

     (d) Members holding Series A Units shall have the right, voting as a class,
to elect the remaining number of Directors  ("Series A Directors") which are not
elected by the Members holding Series E Units,  Series C Units,  Members holding
Series B Units or other Series of Units that may be granted the right to elect a
Director(s).  The initial  Series A Directors have been elected to serve certain
terms and until a  successor  is elected  and  qualified,  or until the  earlier
death,  resignation,  removal or disqualification of any such Series A Director.
At the  expiration  of the term of the two (2) Series A  Directors  whose  terms
expire in 2007,  one (1)  replacement  of such  Directors  shall serve a term of
three (3) years and  his/her  replacement  shall serve a term of four (4) years,
and the  other  replacement  of such  Directors  shall  serve a term of four (4)
years. At the expiration of the term of the initial Series A Director whose term
expires in 2008,  the term for the  replacement of such Director shall last four
(4) years.  At the expiration of the term of the initial Series A Director whose
term expires in 2009,  the term for the  replacement of such Director shall last
four (4) years.  Beginning in 2008, all newly elected  Series A Directors  shall
serve  terms of four (4) years.  If at any time the number of Series A Directors
is changed,  the terms shall be adjusted,  as necessary,  so that  approximately
one-fourth (1/4) of the Series A Directors are elected at each annual meeting of
the Members holding Series A Units.

     (e) Nominees for a Director position up for election by any series of Units
shall be named by the then-current Directors elected by the particular series of
Units or by a nominating  committee  established by the Directors elected by the
particular series of Units.  Nominations may also be made by any Member entitled
to vote in the  election of Directors  of the  particular  series of Units to be
elected. Any Member that intends to nominate a Person for election as a Series A
Director may do so only if written  notice of such Member's  intent to make such
nomination is given one hundred twenty (120) calendar days prior to the one year
anniversary  of the date on which the Company  delivered  the prior year's proxy
statement or notice of annual  meeting to Series A Members.  Provided,  however,
that  for the  first  election  of  Series A  Directors,  such  notice  shall be
delivered  not less than  thirty  (30) days prior to the date of the  special or
annual  meeting of the  Members at which the  election  will be held.  Each such
notice  shall set forth:  (i) the name and  address of the Member who intends to
make the nomination; (ii) a representation that the Member is a holder of record
of Series A Units  entitled  to vote at such  meeting  and  intends to appear in
person or by proxy at the  meeting  to  nominate  the  Person  specified  in the
notice; (iii) the name, age, address and principal occupation/employment of each
nominee;  (iv) a description of all arrangements or  understandings  between the
Member  and  each  nominee  and any  other  Person(s)  pursuant  to  which  such
nominations are to be made; (v) such other information regarding each nominee as
would be  required to be included  in a proxy  statement  filed  pursuant to the
proxy rules of the Securities and Exchange Commission;  (vi) the consent of each
nominee to serve as a Series A Director  if so elected;  and (vii) a  nominating
petition  signed and dated by the holders of at least five  percent  (5%) of the
then  outstanding  Series A Units and clearly setting forth the proposed nominee
as a candidate  for the Series A Director's  seat to be filled.  The Company may
require any proposed nominee to furnish such other information as may reasonably
be required by the Company to determine the eligibility of such proposed nominee
to serve as a Series A Director.  The  presiding  Officer of the meeting may, if
the facts warrant,  determine that a nomination was not made in accordance  with
the foregoing procedures,  and if so determined,  the defective nomination shall
be  disregarded.  The amendment or repeal of this Section 5.3 or the adoption of
any provision inconsistent therewith shall require the approval of a majority of
the Members holding Series A Units.

5.4 Authority of Directors.  Subject to the  limitations  and  restrictions  set
forth in this  Agreement and the Act, the Directors  shall direct the management
of the  business and affairs of the Company and shall have all of the rights and
powers which may be possessed by a "manager"  under the Act  including,  without
limitation,  the right and power to do or  perform,  and the  further  right and
power by  resolution  to delegate to the  Officers or such other  Persons as the
Directors deem appropriate, the right and power to do or perform, the following:


                                       13

     (a) Conduct the business and carry on the  operations  of the Company,  and
have  and  exercise  the  powers  granted  by the Act in any  state,  territory,
district or possession of the United States,  or in any foreign  country,  which
may be  necessary or  convenient  to effect any or all of the purposes for which
the Company is organized;

     (b) Acquire by purchase,  lease or otherwise any real or personal  property
which may be necessary,  convenient,  or incidental to the accomplishment of the
purposes of the Company;

     (c) Operate,  maintain,  finance,  improve,  construct, own, operate, sell,
convey,  assign,  mortgage and lease any real estate and any  personal  property
necessary,  convenient,  or incidental to the  accomplishment of the purposes of
the Company;

     (d) Execute any and all agreements,  contracts,  documents,  certifications
and  instruments  necessary or  convenient in  connection  with the  management,
maintenance and operation of the business and affairs of the Company,  including
executing  amendments to this Agreement and the Articles in accordance  with the
terms  of  this   Agreement,   both  as  Directors  and  where   permitted,   as
attorney-in-fact  for the Members  pursuant to any power of attorney  granted by
the Members to the Directors;

     (e) Borrow money and issue evidences of indebtedness necessary, convenient,
or incidental to the  accomplishment of the purposes of the Company,  and secure
the same by mortgage, pledge or other lien on any Company assets;

     (f) Execute,  in  furtherance of any or all of the purposes of the Company,
any deed, lease,  mortgage,  deed of trust, mortgage note, promissory note, bill
of sale,  contract or other  instrument  purporting to convey or encumber any or
all of the Company assets;

     (g) Prepay in whole or in part, refinance,  increase,  modify or extend any
liabilities  affecting  the assets of the Company and in  connection  therewith,
execute any extensions or renewals of encumbrances on any or all of such assets;

     (h) Care for and  distribute  funds to the  Members by way of cash  income,
return of capital or otherwise,  all in accordance  with the  provisions of this
Agreement,  and perform  all matters in  furtherance  of the  objectives  of the
Company and this Agreement;

     (i)  Contract on behalf of the Company for the  employment  and services of
employees and independent contractors,  and delegate to such Persons the duty to
manage or supervise any of the assets or operations of the Company;

     (j) Engage in any kind of activity  and perform and carry out  contracts of
any kind necessary or incidental to, or in connection  with, the  accomplishment
of the purposes of the Company,  as may be lawfully carried on or performed by a
limited  liability  company under the laws of each state in which the Company is
then formed or qualified;

     (k) Take, or refrain from taking, all actions,  not expressly proscribed or
limited by this Agreement or the Articles, as may be necessary or appropriate to
accomplish the purposes of the Company;

     (l) Institute,  prosecute,  defend, settle, compromise and dismiss lawsuits
or other judicial or administrative  proceedings  brought on or in behalf of, or
against,  the Company,  the Members or the


                                       14

Directors or Officers in connection  with activities  arising out of,  connected
with,  or  incidental  to this  Agreement,  and  engage  counsel  or  others  in
connection therewith;

     (m) Purchase, take, receive, subscribe for or otherwise acquire, own, hold,
vote, use, employ,  sell,  mortgage,  lend, pledge, or otherwise dispose of, and
otherwise use and deal in and with,  shares or other interests in or obligations
of  domestic  or  foreign   corporations,   associations,   general  or  limited
partnerships,  other limited  liability  companies,  or individuals or direct or
indirect  obligations  of  the  United  States  or  of  any  government,  state,
territory,  government district or municipality or of any instrumentality of any
of them;

     (n) Agree with any Person as to the form and other terms and  conditions of
such Person's Capital Contribution to the Company and cause the Company to issue
Membership Interests and Units in consideration for such Capital Contribution as
provided in Section 6.1(d); and

     (o) Indemnify Members,  Directors or Officers, or former Members, Directors
or Officers,  and to make any other  indemnification  that is authorized by this
Agreement in accordance with, and to the fullest extent permitted by, the Act.

5.5 Director as Agent.  Notwithstanding the power and authority of the Directors
to manage the  business  and  affairs of the  Company,  no  Director  shall have
authority  to act as agent for the  Company  for the  purposes  of its  business
(including the execution of any instrument on behalf of the Company)  unless the
Directors have authorized the Director to take such action.

5.6 Restrictions on Authority of Directors.

     (a)  Notwithstanding  any provision in this Agreement to the contrary,  the
Directors  shall not have  authority  to, and they  covenant and agree that they
shall not, do any of the  following  acts without the  unanimous  consent of the
Members:

     (i)  Cause or permit  the  Company  to engage in any  activity  that is not
          consistent  with the  purposes  of the Company as set forth in Section
          1.3 of this Agreement;

     (ii) Knowingly  engage in any act in  contravention  of this  Agreement  or
          which would make it  impossible  to carry on the ordinary  business of
          the Company, except as otherwise provided in this Agreement; or

     (iii) Possess  Company  Property,  or  assign  rights in  specific  Company
          Property, for other than a Company purpose.

     (b) The Directors  shall not have authority to, and they covenant and agree
that they shall not cause the Company to,  without the consent of sixty-six  and
two-thirds percent (66 2/3%) of the Membership Voting Interests:

     (i)  Merge,  consolidate,  exchange,  sell or  otherwise  dispose of all or
          substantially all of the Property;

     (ii) Make an  election  for the  Company  to be  classified  for income tax
          purposes as an association taxable as a corporation;


                                       15

     (iii) Cause the  Company to acquire  any equity or debt  securities  of any
          Director or Member or any of their Affiliates, or otherwise make loans
          to any Director or Member or any of their Affiliates; or

     (iv) Take any  action to cause a  Dissolution  Event as  defined in Section
          10.1  (other  than  seeking  approval  of Members as  provided in this
          Section).

The actions specified herein as requiring the consent of the Members shall be in
addition  to any  actions  by the  Director  that  are  specified  in the Act as
requiring the consent or approval of the Members.  Unless otherwise  required by
this Agreement or the Act, any such required consent or approval may be given by
a vote of a majority of the Membership Voting Interests.

     (c) The Directors  shall not have authority to, and they covenant and agree
that they shall not cause the  Company to,  without the  approval of all Members
holding Series B Units:

     (i)  Create or issue additional  Series B Units or any additional series of
          Units  with  rights  senior  to the  Series  B  Units  (provided  that
          allocating  election of Directors from among Director seats  currently
          allocated  to  Series A Units in  substantially  the  same  manner  as
          Directors  are  allocated  to Series B Units  shall not be  considered
          senior rights);

     (ii) Approve  or  propose  any  amendment  to  this  Agreement  that  would
          adversely impact the rights of the Series B Units;

     (iii) Change  the status of the  Company  from one in which  management  is
          vested in one or more  Directors to one in which  management is vested
          in the Members, or vice versa;

     (iv) Repurchase or redeem any Series B Units;

     (v)  Cause the  Company to  voluntarily  take any action that would cause a
          bankruptcy of the Company; or

     (vi) Approve  the  transfer  or  issuance  of Units if (a)  following  such
          Transfer  or  issuance,  the  transferee  or  recipient  of such Units
          (together with such transferee's or recipient's Affiliates) shall hold
          more  than 17 % of the  total  issued  and  outstanding  Units  of the
          Company  (provided that the foregoing shall not apply to any purchaser
          approved by the Directors which purchases directly from the Company or
          the Company's underwriter in a public offering), or (b) the transferee
          or recipient or any of its  Affiliates  is a direct  competitor in the
          grain merchandising business of a Member holding Series B Units.

     (d) The Directors  shall not have authority to, and they covenant and agree
that they shall not cause the  Company to,  without the  approval of all Members
holding Series C Units:

     (i)  Create or issue additional  Series C Units or any additional series of
          Units  with  rights  senior  to the  Series  C  Units  (provided  that
          allocating  election of Directors from among Director seats  currently
          allocated  to  Series A Units in  substantially  the  same  manner  as
          Directors  are  allocated  to Series B Units  shall not be  considered
          senior rights);


                                       16

     (ii) Approve  or  propose  any  amendment  to  this  Agreement  that  would
          adversely impact the rights of the Series C Units; or

     (iii) Repurchase or redeem any Series C Units.

     (e) The Directors  shall not have authority to, and they covenant and agree
that they shall not cause the  Company to,  without the  approval of all Members
holding Series E Units:

     (i)  Create or issue additional  Series E Units or any additional series of
          Units  with  rights  senior  to the  Series  E  Units  (provided  that
          allocating  election of Directors from among Director seats  currently
          allocated  to  Series A Units in  substantially  the  same  manner  as
          Directors  are  allocated  to Series E Units  shall not be  considered
          senior rights);

     (ii) Approve  or  propose  any  amendment  to  this  Agreement  that  would
          adversely impact the rights of the Series E Units, including,  without
          limitation an increase in the number of Directors of the Company;

     (iii) Change  the status of the  Company  from one in which  management  is
          vested in one or more  Directors to one in which  management is vested
          in the Members, or vice versa;

     (iv) Repurchase or redeem any Series E Units;

     (v)  Cause the  Company to  voluntarily  take any action that would cause a
          bankruptcy of the Company;

     (vi) Approve  the  transfer  or  issuance  of Units if (a)  following  such
          Transfer  or  issuance,  the  transferee  or  recipient  of such Units
          (together with such transferee's or recipient's Affiliates) shall hold
          more than 15% of the total issued and outstanding Units of the Company
          (provided that the foregoing shall not apply to any purchaser approved
          by the  Directors  which  purchases  directly or  indirectly  from the
          Company or the Company's underwriter in a public offering), or (b) the
          transferee  or  recipient  or  any  of  its  Affiliates  is  a  direct
          competitor  in the grain  merchandising  business of a Member  holding
          Series E Units.

5.7 Meetings.  A regular meeting of the Directors  shall be held,  without other
notice  than this  Section,  immediately  after,  and at the same  place as, the
annual meeting of the Members.  Additionally,  the Directors may, by resolution,
prescribe the time and place for holding  regular  meetings and may provide that
such resolution  constitutes  notice thereof.  If the Directors do not prescribe
the time and place for the holding of regular  meetings,  such regular  meetings
shall be held at the time and place specified in the notice of each such regular
meeting. Unless otherwise prescribed by statute,  special meetings may be called
by, or at the request of, the  Chairman  or any two (2) or more  Directors.  The
Directors  may  designate  any  location  as the place of any regular or special
meeting.  If no designation is made, the place of meeting shall be the principal
office of the Company.

5.8 Notice.  Notice shall be given to each  Director with respect to any special
meeting of the Directors,  stating the date, time and place of the meeting. Such
notice  shall be given at least  two (2)  days  prior  thereto  and  shall be in
writing,  unless oral notice is reasonable under the  circumstances.  If mailed,
such  notice  shall be deemed to be  delivered  on the  earlier of five (5) days
after deposit in the U.S. mail addressed to the  Director's  address as shown on
the Company's  records with postage prepaid,  or upon


                                       17

receipt. Any Director may waive notice of any meeting. Except as provided in the
next sentence, the waiver must be in writing, signed by the Director entitled to
notice,  and filed with the minutes  relating to the action taken.  A Director's
attendance  at a meeting  shall  constitute a waiver of notice of such  meeting,
except  where such  Director  attends the  meeting  for the  express  purpose of
objecting  to the  transaction  of any  business  because  the  meeting  was not
lawfully  called or convened.  Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Directors need be specified in
the notice or waiver of notice of such meeting.

5.9 Conduct of Meeting. All Directors, to the extent possible,  shall personally
attend all Directors  meetings.  However,  any Director may  participate  in any
regular or special meeting by any means of  communication by which all Directors
participating may simultaneously  hear each other during the meeting. A Director
participating in a meeting by this means is deemed to be present in person.

5.10  Quorum.  A majority of the duly  elected  and  qualified  Directors  shall
constitute a quorum for the  transaction  of business.  If less than a quorum is
represented at a meeting, the Directors  represented may adjourn the meeting and
reschedule it for a later date without  further  notice.  At such  adjourned and
rescheduled  meeting at which a quorum is present or  represented,  any business
may be  transacted  which might have been  transacted  at the original  meeting.
Directors  present at a duly organized meeting may continue to transact business
until  adjournment,  notwithstanding  the  withdrawal of Directors to leave less
than a quorum.

5.11 Manner of Acting;  Informal  Action.  Except as otherwise  provided in this
Agreement, the act of a majority of the Directors at a meeting at which a quorum
is present shall be the act of the Directors.  Unless otherwise provided by law,
any action  required or permitted to be taken at a meeting of the  Directors may
be taken  without a meeting if a consent in writing  setting forth the action so
taken is signed by all  Directors  entitled  to vote with  respect  the  subject
matter thereof.

5.12 Presumption of Assent. A Director present at a meeting shall be presumed to
have assented to action taken, unless the dissent of such Director is entered in
the minutes of the meeting or unless such  Director  files a written  dissent to
such action with the other Directors before the adjournment  thereof or forwards
such dissent by mail to the other  Directors  immediately  after the adjournment
thereof.  Such right to dissent shall not apply to a Director who voted in favor
of an action.

5.13  Removal  of  Directors.  Members  holding a Series  of Units may  remove a
Director  representing that Series of Units, with or without cause, at a meeting
called for that purpose,  if notice has been given that a purpose of the meeting
is such removal.

5.14  Vacancies.  Any vacancy  occurring in the  Directors  may be filled by the
affirmative vote of a majority of the remaining Directors of the Series of Units
that such vacant  position  serves to  represent.  A Director  elected to fill a
vacancy shall be elected for the unexpired term of such  Director's  predecessor
in office.

5.15  Compensation.  The Directors shall have authority to establish  reasonable
compensation of all Directors for services to the Company as Directors, officers
or otherwise,  and to provide for reimbursement to Directors of their reasonable
expenses of attending Directors' meetings.

5.16  Committees;  Authority.  The  Directors  may create such  committees,  and
appoint such Directors to serve on them, as the Directors deem appropriate. Each
committee must have two (2) or more Directors,  who serve at the pleasure of the
Directors.  The creation of a  committee,  and the  appointment  of Directors to
serve on it, must be approved by a majority  of the  Directors.  The  procedural
requirements  for  Director  meetings  under this  Article V shall also apply to
committee meetings.  Committees of the


                                       18

Directors may exercise only those aspects of the Directors'  authority which are
expressly conferred by the Directors by express resolution.  Notwithstanding the
foregoing, however, a committee may not, under any circumstances:  (i) apportion
or authorize distributions; (ii) approve or propose any action for which the Act
requires Member approval; (iii) elect Officers; (iv) fill vacancies of Directors
or on any of its  committees;  (v) adopt,  amend, or repeal the Articles or this
Agreement;  (vi)  approve a plan of  merger;  (vii)  authorize  or  approve  the
reacquisition of Units,  except  according to a formula or method  prescribed by
the Directors; or (ix) authorize or approve the issuance or sale or contract for
sale of Units or determine the designation and relative rights, preferences, and
limitations of a class or series of Units.  All such committees shall include at
least one (1) Series E Director,  unless  otherwise  approved by Members holding
Series E Units or if such appointment is otherwise  prohibited by applicable law
related to the independence of Directors.

5.17 Voting;  Potential  Financial  Interest.  No Director shall be disqualified
from  voting on any  matter  solely by reason  of such  Director's  (or  his/her
Affiliate's)  potential financial interest in the outcome of such vote, provided
that the nature of such potential financial interest was reasonably disclosed at
the time of such vote.

5.18 Duties and  Obligations of Directors.  The Directors shall take all actions
which may be necessary or appropriate: (i) for the continuation of the Company's
valid  existence as a limited  liability  company under the laws of the State of
Iowa and each other jurisdiction in which such existence is necessary to protect
the  limited  liability  of  Members or to enable  the  Company  to conduct  the
business  in  which  it is  engaged;  and  (ii)  for the  accomplishment  of the
Company's  purposes,  including  the  acquisition,   development,   maintenance,
preservation,   and  operation  of  Company  Property  in  accordance  with  the
provisions of this Agreement and applicable laws and regulations.  Each Director
shall have the duty to discharge the foregoing duties in good faith and with the
care an  ordinarily  prudent  person in a like  position  would  exercise  under
similar  circumstances.  The Directors shall be under no other fiduciary duty to
the Company or the Members to conduct the affairs of the Company in a particular
manner.

5.19  Chairman  and Vice  Chairman.  Unless  provided  otherwise by a resolution
adopted by the  Directors,  the Chairman shall be appointed by the Directors and
preside at meetings of the Members and the Directors;  shall see that all orders
and resolutions of the Directors are carried into effect;  may maintain  records
of and certify proceedings of the Directors and Members;  and shall perform such
other duties as may from time to time be prescribed by the  Directors.  The Vice
Chairman shall, in the absence or disability of the Chairman, perform the duties
and exercise  the powers of the Chairman and shall  perform such other duties as
the Directors or the Chairman may from time to time prescribe. The Directors may
designate more than one Vice Chairmen,  in which case the Vice Chairmen shall be
designated by the Directors so as to denote which is most senior in office. Each
Chairman or Vice Chairman shall be chosen from individuals serving as Directors.

5.20  President  and Chief  Executive  Officer.  Until  provided  otherwise by a
resolution  of the  Directors,  the  Chairman  shall  also  act  as the  interim
President and CEO of the Company  (herein  referred to as the  "President";  the
titles of  President  and CEO shall  constitute  a reference to one and the same
office and Officer of the Company),  and the Chairman may exercise the duties of
the office of Chairman using any such designations.  The Directors shall appoint
someone  other than the Chairman as the  President of the Company not later than
the commencement of substantial operations of the Facilities, and such President
shall  perform  such duties as the  Directors  may from time to time  prescribe,
including without limitation, the management of the day-to-day operations of the
Facilities.

5.21 Chief Financial Officer.  Unless provided otherwise by a resolution adopted
by the  Directors,  the Chief  Financial  Officer  of the  Company  shall be the
Treasurer  of the  Company  and shall keep  accurate  financial  records for the
Company;  shall deposit all monies, drafts, and checks in the name of and to the


                                       19

credit of the  Company in such banks and  depositories  as the  Directors  shall
designate from time to time;  shall endorse for deposit all notes,  checks,  and
drafts  received  by the  Company  as ordered by the  Directors,  making  proper
vouchers therefore;  shall disburse Company funds and issue checks and drafts in
the name of the  Company  as  ordered  by the  Directors,  shall  render  to the
President  and  the  Directors,  whenever  requested,  an  account  of all  such
transactions  as Chief Financial  Officer and of the financial  condition of the
Company,  and  shall  perform  such  other  duties as may be  prescribed  by the
Directors or the President from time to time.

5.22 Secretary;  Assistant Secretary. The Secretary shall attend all meetings of
the  Directors  and of the Members and shall  maintain  records of, and whenever
necessary,  certify all  proceedings  of the Directors  and of the Members.  The
Secretary  shall keep the required  records of the Company,  when so directed by
the Directors or other person(s) authorized to call such meetings, shall give or
cause to be given  notice of  meetings  of the  Members  and of  meetings of the
Directors,  and shall also  perform such other duties and have such other powers
as the Chairman or the Directors  may prescribe  from time to time. An Assistant
Secretary,  if any, shall perform the duties of the Secretary during the absence
or disability of the Secretary.

5.23 Vice President.  The Company may have one or more Vice Presidents.  If more
than one, the Directors shall  designate  which is most senior.  The most senior
Vice  President  shall perform the duties of the President in the absence of the
President.

5.24  Delegation.  Unless  prohibited  by a  resolution  of the  Directors,  the
President,  Chief Financial Officer, Vice President and Secretary (individually,
an "Officer" and  collectively,  "Officers") may delegate in writing some or all
of the duties and powers of such Officer's management position to other Persons.
An Officer who  delegates the duties or powers of an office  remains  subject to
the standard of conduct for such  Officer  with respect to the  discharge of all
duties and powers so delegated.

5.25 Execution of Instruments.  All deeds, mortgages,  bonds, checks,  contracts
and other  instruments  pertaining  to the  business  and affairs of the Company
shall be  signed  on behalf of the  Company  by (i) the  Chairman;  or (ii) when
authorized by  resolution(s) of the Directors,  the President;  or (iii) by such
other person or persons as may be designated from time to time by the Directors.

5.26 Limitation of Liability;  Indemnification.  To the maximum extent permitted
under the Act and other applicable law, no Member,  Director or Officer shall be
personally liable for any debt, obligation or liability of the Company merely by
reason of being a Member,  Director  or  Officer.  Furthermore,  to the  maximum
extent permitted under the Act, the liability of Directors and Officers shall be
eliminated, and no Director or Officer shall be personally liable to the Company
or its Members for monetary  damages for,  any action  taken,  or any failure to
take  action,  as a Director or  Officer,  except for  liability  for any of the
following:

          a. The amount of a  financial  benefit  received  by the  Director  or
     Officer to which the Director or Officer is not entitled;

          b. An intentional infliction of harm on the Company or its Members;

          c. A violation of Section 807 of the Act;

          d. An intentional violation of criminal law.


                                       20

To the maximum  extent  permitted  under the Act and other  applicable  law, the
Company,  its receiver,  or its trustee (in the case of its receiver or trustee,
to the extent of Company Property) shall indemnify,  save and hold harmless, and
pay all  judgments and claims  against each Director or Officer  relating to any
liability  or damage  incurred by reason of any act  performed  or omitted to be
performed by such Director or Officer,  in  connection  with the business of the
Company,  including  reasonable  attorneys'  fees  incurred by such  Director in
connection  with the  defense of any action  based on any such act or  omission,
which  attorneys' fees may be paid as incurred,  including all such  liabilities
under  federal and state  securities  laws as  permitted  by law. To the maximum
extent  permitted  under the Act and other  applicable  law, in the event of any
action by a Unit Holder against any Director or Officer,  including a derivative
suit, the Company shall  indemnify,  save and hold harmless,  and pay all costs,
liabilities,  damages  and  expenses  of such  Director  or  Officer,  including
reasonable   attorneys'   fees   incurred  in  the   defense  of  such   action.
Notwithstanding  the  foregoing  provisions,  no  Director  or Officer  shall be
indemnified  by the Company to the extent  prohibited or limited by the Act. The
Company may purchase and maintain insurance on behalf of any Director or Officer
in his or her official capacity against any liability described in this Section,
whether or not the  Company  would  otherwise  be  required  to  indemnify  such
Director or Officer against such liability.

                      ARTICLE VI. MEMBERSHIP UNITS; MEMBERS

6.1 Membership Units. The authorized capital of the Company shall consist solely
of the following  classes of Units,  having the rights,  powers and  preferences
herein described:

          (a) The  Company  may issue  Series A Units in such  amounts,  at such
     times,  to such  Persons  and on such  other  terms and  conditions  as the
     Directors  may  determine.  Ownership  of one or more  Series A Units shall
     entitle a Member to the Membership  Voting  Interest,  Membership  Economic
     Interest  and  other  rights  and  obligation  expressly  set forth in this
     Agreement.

          (b) The  Company  may issue  Series B Units in such  amounts,  at such
     times,  to such Persons and on such other terms and conditions as contained
     in this Agreement.  Ownership of one or more Series B Units shall entitle a
     Member to the Membership Voting Interest,  Membership Economic Interest and
     other rights and obligation expressly set forth in this Agreement.

          (c) Subject to Section 5.6(d), the Company may issue Series C Units in
     such  amounts,  at such times,  to such Persons and on such other terms and
     conditions as the Directors may determine.  Ownership of one or more Series
     C  Units  shall  entitle  a  Member  to  the  Membership  Voting  Interest,
     Membership Economic Interest and other rights and obligation  expressly set
     forth in this Agreement.

          (d) The  Company  may issue  Series E Units in such  amounts,  at such
     times,  to such Persons and on such other terms and conditions as contained
     in this Agreement.  Ownership of one or more Series E Units shall entitle a
     Member to the Membership Voting Interest,  Membership Economic Interest and
     other rights and obligations expressly set forth in this Agreement.

          (e) Other  than as  expressly  set forth in this  Agreement,  Series A
     Units,  Series  B Units,  Series C Units  and  Series  E Units  shall  have
     identical rights. Except as provided in the following sentence, the special
     rights  pertaining  to Series B Units as set forth in  Sections  5.6(c) and
     9.11 shall remain in effect so long as the original  Holder of the Series B
     Units and its  Affiliates  continue  to own all  Series B Units  originally
     purchased by them.  From and after May 1, 2011, the original  Holder of the
     Series  B Units  and its  Affiliates  may  sell up to 15% per  annum  (on a
     cumulative  basis)  of the  Series  B Units  originally  purchased  without
     terminating the special rights pertaining to Series B Units as set forth in
     Sections 5.6(c) and 9.11; provided,  however, that once the original Holder
     of Series B Units and its


                                       21

     Affiliates  hold 25% or less of the  Series B Units  originally  purchased,
     such  Units  shall be  automatically  converted  to  Series A Units.  It is
     further  provided that Series B Units  transferred from the original Holder
     and its Affiliates shall be  automatically  converted into and re-issued as
     Series A Shares  upon  transfer.  The  provisions  of the  preceding  three
     sentences of this  Section  6.1(c) shall not apply to transfers of Series B
     Units among the original Holder of The Series B Units and its Affiliates.

          (f) Series C Units  transferred  from the  original  Holders and their
     Affiliates shall be automatically  converted into and re-issued as Series A
     Units upon transfer;  further, that if the total of Series C Units that are
     held by the original  Holders of the Series C Units and their Affiliates is
     less than  eight-hundred  thirty-three  (833),  all Series C Units shall be
     automatically  converted to Series A Units.  This provision shall not apply
     to transfers  of Series C Units among the original  Holders of the Series C
     Units and their Affiliates.

          (g)   Additional  and  different   classes  of  Membership   Interests
     represented by different Units may be created and issued to new or existing
     Members on such terms and conditions as the Directors may  determine.  Such
     additional  and different  classes may have  different  rights,  powers and
     preferences (including,  without limitation, voting rights and distribution
     preferences),  which may be superior to those of existing  Members.  In the
     event of creation of additional  Membership  Interests,  Exhibit A shall be
     updated as necessary by the Directors to reflect such Membership  Interests
     and the  Directors  shall  amend this  Agreement,  and the  Members  hereby
     consent to the  amendment  hereof,  to reflect  (a) the sale of  additional
     Membership  Interests  with such terms as the Board of Managers  shall deem
     appropriate,  (b) the admission of additional Members.  Except as expressly
     set forth in this  Agreement,  Members shall have no  preemptive  rights to
     acquire additional or newly created Units.

6.2 Certificates;  Surrender for Transfer. Certificates representing Units shall
be in such form as shall be determined by the Directors, in their discretion. If
a certificate is lost, destroyed or mutilated, a new one may be issued upon such
terms and  indemnity  to the  Company as the  Directors  may  prescribe.  No new
certificate  shall be issued until the former  certificate  for a like number of
Units has been surrendered and canceled.

6.3  Members.  Each  Person who  desires to become a Member  must  complete  and
execute a signature  page to this  Agreement in the form of Exhibit "B" attached
hereto and such other documents as may be required by the Directors.  Membership
Interests  and Units of the  Members  shall be set forth on Exhibit  "A" to this
Agreement, as amended from time to time.

6.4 Additional Members. Subject to the provisions of Sections 5.6(c), 5.6(e) and
9.10, no Person shall become a Member without the approval of the Directors. The
Directors  may refuse to admit any Person as a Member in their sole  discretion.
Any such admission must comply with the requirements described in this Agreement
and will be effective  only after such Person has executed and  delivered to the
Company such  documentation  as  determined by the Directors to be necessary and
appropriate to effect such admission. All Members acknowledge that the admission
of  additional  Members  may  result  in a  dilution  of a  Member's  Membership
Interest.  Prior to admission as a Member,  a prospective  Member shall agree in
writing  to be bound by this  Agreement  and shall  execute  and  deliver to the
Company  an  Addendum  to this  Agreement  in the form of Exhibit  "B"  attached
hereto.  Upon the execution of such Addendum,  such  additional  Member shall be
deemed to be a party to this Agreement as if such additional Member had executed
this  Agreement  on the original  date hereof,  and shall be bound by all of the
provisions set forth herein.

6.5 Members' Voting Rights. Each Member holding Series A Units shall be entitled
to one (1) vote for each Series A Unit registered in the name of such Member (as
shown in the Unit Holder  Register) as to any matter for which a Member  holding
Series A Units is entitled to vote under this  Agreement or the


                                       22

Act.  Each Member  holding  Series B Units shall be entitled to one (1) vote for
each Series B Unit  registered  in the name of such Member (as shown in the Unit
Holder  Register) as to any matter for which a Member  holding Series B Units is
entitled to vote under this  Agreement or the Act. Each Member  holding Series C
Units shall be entitled to one (1) vote for each Series C Unit registered in the
name of such Member (as shown in the Unit Holder  Register) as to any matter for
which a Member  holding  Series C Units is entitled to vote under this Agreement
or the Act. Each Member holding Series E Units shall be entitled to one (1) vote
for each  Series E Unit  registered  in the name of such Member (as shown in the
Unit Holder Register) as to any matter for which a Member holding Series E Units
is  entitled  to vote  under  this  Agreement  or the Act.  Unless  a matter  is
expressly  reserved in this  Agreement  for the vote or approval of a particular
class of Units,  each  Member  holding  Units  (regardless  of  class)  shall be
entitled to vote  thereon,  with each  Member  entitled to one (1) vote for each
Unit  registered  in the  name of such  Member  (as  shown  in the  Unit  Holder
Register). Members do not have cumulative voting rights as to any matter. Except
as otherwise  expressly  provided for in this Agreement,  Members shall not have
any right or power to take part in the  management  or control of the Company or
its business and affairs or to act for or bind the Company in any way.

6.6 Member  Meetings.  Meetings of the Members shall be called by the Directors,
and shall be held at the principal  office of the Company or at such other place
as shall be designated by the person calling the meeting.  Members  representing
an  aggregate of not less than thirty  percent  (30%) of the  Membership  Voting
Interests may also in writing  demand that the  Directors  call a meeting of the
Members.  Regular  meetings of the Members  shall be held not less than once per
Fiscal Year.

6.7  Place of  Meeting.  The  Directors,  or in the  absence  of  action  by the
Directors, the Chairman, may designate any place as the place for any meeting of
the Members,  unless by written consents,  a majority of all Members entitled to
vote at the meeting designate a different place for the holding of such meeting.
If no designation is made by the Directors,  the Chairman or by unanimous action
of the Members,  the place of meetings  shall be at the principal  office of the
Company.

6.8 Conduct of Meetings. Subject to the discretion of the Directors, the Members
may  participate  in any Member  meeting  by means of  telephone  conference  or
similar means of communication by which all participants in the meeting can hear
and be heard by all other participants.

6.9 Notice.  Written  notice stating the place and time of any annual or special
Member meeting shall be delivered or mailed not less than five (5) nor more than
sixty (60) days prior to the meeting date, to each Member of record  entitled to
vote at such  meeting as of the close of  business on the day before said notice
is delivered or mailed.  Such notices  shall be deemed to be effective  upon the
earlier of: (i)  deposit  postage-prepaid  in the U.S.  mail,  addressed  to the
Member at the  Member's  address as it appears on the Unit Holder  Register,  or
such other  address  as may have been  provided  in writing to the  Company by a
Member;  (ii) the date shown on the  return  receipt  if sent by  registered  or
certified mail, return receipt requested; or (iii) actual receipt.

6.10  Contents of Notice.  The notice of each  Member  meeting  shall  include a
description of the  purpose(s) for which the meeting is called.  If a purpose of
any Member meeting is to consider: (i) a proposed amendment to or restatement of
the Articles or Operating  Agreement  requiring Member approval;  (ii) a plan of
merger or share exchange;  (iii) the sale, lease,  exchange or other disposition
of all, or substantially all of the Company's Property;  (iv) the dissolution of
the  Company;  or (v) removal of a  Director,  then the notice must so state and
must be accompanied, as applicable, by a copy or summary of the (1) amendment(s)
to the Articles or Operating  Agreement,  (2) plan of merger or share  exchange,
(3)  documents  relating  to the  transaction  for  the  disposition  of all the
Company's Property, and/or (4) plan and Articles of Dissolution.


                                       23

6.11 Adjourned Meetings. If any Member meeting is adjourned to a different date,
time or place,  notice need not be given of the new date,  time or place, if the
new  date,  time and  place is  announced  at the  meeting  before  adjournment;
provided  that,  if a new record  date for the  adjourned  meeting is or must be
fixed, then notice must be given to new Members as of the new record date.

6.12 Waiver of Notice. Whenever any notice is required to be given to any Member
under the Act, the Articles or this  Agreement,  a waiver in writing,  signed by
such  Member  shall  be  deemed   equivalent  to  the  giving  of  such  notice.
Furthermore,  a Member's  attendance at a meeting  waives any objection that the
Member might otherwise raise based on lack of notice or defective notice, unless
the Member: (i) objects at the outset of the meeting;  or (ii) in the case of an
objection  claiming that  consideration of a particular matter is not within the
purposes  described  in the meeting  notice,  objects at the time such matter is
presented, and in either case, thereafter does not participate in the meeting.

6.13 Fixing of Record Date. For purposes of determining the Members  entitled to
notice of, or to vote at, any Member meeting or any adjournment  thereof, or for
purposes  of  determining  the  Members  entitled  to  receive  payment  of  any
distribution,  or in order to make a determination  of the Members for any other
purpose,  the Directors may provide that the Unit Transfer books shall be closed
for a stated  period,  not to exceed sixty (60) days. If the Unit Transfer books
shall be closed for such  purpose,  such books  shall be closed for at least ten
(10) days  immediately  preceding  such  meeting.  In lieu of  closing  the Unit
Transfer  books,  the Directors may fix in advance a date as the record date for
any such  determination  of  Members,  such date in any case to be not more than
sixty  (60) days,  and in case of a meeting  of  Members  not less than ten (10)
days,  prior  to  the  date  on  which  the  particular  action  requiring  such
determination  is to be taken.  If the Unit Transfer books are not closed and no
record  date is fixed  for the  determination,  the date on which  notice of the
meeting is mailed or the date on which the resolution of the Directors declaring
a dividend  is  adopted,  as the case may be,  shall be the record date for such
determination.  When a determination  of Members entitled to vote at any meeting
of the Members has been made as provided  in this  Section,  such  determination
shall apply to any  adjournment  thereof,  unless the Directors fix a new record
date,  which it must do if the  meeting  is  adjourned  to a date  more than one
hundred twenty (120) days after the date fixed for the original meeting.

6.14 Quorum and Proxies.  The presence (in person or by proxy or mail ballot) of
Members representing at least twenty five percent (25%) of the Membership Voting
Interests  is  required  for the  transaction  of  business  at a meeting of the
Members.  Voting by proxy or by mail ballot  shall be permitted on any matter if
authorized by the Directors.

6.15 Voting;  Action by Members. If a quorum is present, the affirmative vote of
a majority of the  Membership  Voting  Interests  represented at the meeting and
entitled to vote on the matter  (including units represented in person, by proxy
or by mail ballot when authorized by the Directors)  shall constitute the act of
the  Members,  unless the vote of a greater or lesser  proportion  or numbers is
otherwise required by this Agreement.

6.16  Continuation  of the Company.  The Company shall not be dissolved upon the
occurrence of any event that is deemed to terminate the continued  membership of
a Member,  but rather the Company shall continue  without  dissolution,  and its
affairs shall not be required to be wound up.

6.17 No Member  Right of  Redemption  or Return of Capital.  Except as otherwise
provided in this  Agreement  or the Act, no Member or  transferee  of any Member
shall  have any  right to demand or  receive  a return  of  his/her/its  Capital
Contribution or to require the redemption of his/her/its Units.

6.18 Waiver of Dissenters  Rights.  To the fullest extent  permitted by the Act,
each  Member  hereby  disclaims,  waives  and  agrees  not to  assert:  (i)  any
dissenters' or similar rights under the Act; (ii) any right


                                       24

to require  partition or appraisal of the Company or of any of its assets, or to
cause the sale of any  Company  Property;  or (iii) any  right to  maintain  any
action for partition or to compel any sale with respect to such Member's  Units,
or with respect to any Company Property.

6.19 Loans. Any Member or Affiliate may, with the consent of the Directors, lend
or advance  money to the  Company,  in which case the amount of any such loan or
advance shall not be treated as a contribution to the capital of the Company but
rather  shall be a debt due from the  Company,  repayable  out of the  Company's
cash, and shall have such other terms as approved by the Directors.  None of the
Members or their  Affiliates  shall be  obligated to make any loan or advance to
the Company.

6.20  Actions  Without a Meeting  by Members  Holding  Series B Units Any action
required or permitted to be taken at a meeting of the Members  holding  Series B
Units may be taken  without a meeting,  without  notice and without a vote, if a
consent in  writing,  setting  forth the  action so taken,  is signed by Members
holding  the number of Series B Units  required  to approve  such  action.  Such
consent  will have the same  force and  effect  as a vote of such  Members.  The
signed  consent will be placed by the  Secretary of the Company in the Company's
corporate records.

6.21 Actions  Without a Meeting by Members  Holding  Series E Units.  Any action
required or permitted to be taken at a meeting of the Members  holding  Series E
Units may be taken  without a meeting,  without  notice and without a vote, if a
consent in  writing,  setting  forth the  action so taken,  is signed by Members
holding  the number of Series E Units  required  to approve  such  action.  Such
consent  will have the same  force and  effect  as a vote of such  Members.  The
signed  consent will be placed by the  Secretary of the Company in the Company's
corporate records.

                   ARTICLE VII. ACCOUNTING, BOOKS AND RECORDS

7.1 Accounting,  Books and Records;  Audit Rights.  The books and records of the
Company  shall  be kept,  and the  financial  position  and the  results  of its
operations  recorded,  in  accordance  with GAAP.  The books and  records  shall
reflect all Company  transactions  and shall be appropriate and adequate for the
Company's  business.  The  Company  shall  maintain  at its  principal  place of
business:  (i) a current  list of the full name and last  known  address of each
Member and Assignee set forth in alphabetical  order,  together with the Capital
Contributions,  Capital Account and Units of each Member and Assignee;  (ii) the
full name and address of each Director; (iii) a copy of the Articles and any and
all amendments thereto,  together with executed copies of any powers of attorney
pursuant to which the Articles or any  amendments  thereto  have been  executed;
(iv) copies of the Company's federal, state and local income tax and information
returns and reports,  if any, for the six (6) most recent taxable  years;  (v) a
copy of this Agreement and any and all amendments hereto, together with executed
copies  of any  powers of  attorney  pursuant  to which  this  Agreement  or any
amendments  hereto  have  been  executed;  and  (vi)  copies  of  the  financial
statements of the Company, if any, for the six (6) most recent Fiscal Years. The
Company shall use the accrual  method of accounting  in the  preparation  of its
financial  reports  and for tax  purposes  and shall keep its books and  records
accordingly.  Upon  reasonable  advance  notice,  the books and  records  of the
Company  may be  audited by an  authorized  representative  of a Member  holding
Series B Units or Series E Units at  reasonable  times  during  the term of this
Agreement and for one (1) year following termination of this Agreement. Any such
audit  shall be at  Member's  expense and shall be  conducted  at the  Company's
offices during its regular working hours. Such Member's  representative shall be
allowed to make and retain copies of such books and records.

7.2 Delivery to Members and Inspection.  Any Member or such Member's  designated
representative  shall have reasonable access during normal business hours to the
information  and documents  kept by the Company  pursuant to Section 7.1 of this
Agreement.  The rights  granted to a Member  pursuant  to this


                                       25

Section 7.2 are expressly  subject to compliance by such Member with the safety,
security and  confidentiality  procedures and guidelines of the Company, as such
procedures and guidelines may be amended from time to time.  Upon the request of
any Member  for  purposes  reasonably  related to such  Member's  interest  as a
Member,  the Directors shall promptly deliver to the requesting  Member,  at the
expense of the  requesting  Member,  a copy of the  information  required  to be
maintained under Section 7.1 of this Agreement.  Each Member has the right, upon
reasonable request for purposes  reasonably related to such Member's interest as
a Member and for  proper  purposes,  to:  (i)  inspect  and copy  during  normal
business  hours any of the  Company  records  described  in Section  7.1 of this
Agreement;  and (ii) obtain from the  Directors,  promptly  after their becoming
available,  copies of the  Company's  federal,  state and local  income  tax and
information  returns for each Fiscal Year. Each Assignee shall have the right to
information regarding the Company only to the extent required by the Act.

7.3 Reports. The Chief Financial Officer of the Company shall be responsible for
causing the preparation of financial reports of the Company and the coordination
of financial matters of the Company with the Company's accountants.  The Company
shall cause to be  delivered  to each  Member the  financial  statements  listed
below,  prepared,  in each case  (other than with  respect to  Member's  Capital
Accounts,  which  shall be  prepared  in  accordance  with  this  Agreement)  in
accordance with GAAP consistently applied.  Delivery of the financial statements
shall occur as soon as practicable following the end of each Fiscal Year and the
first three fiscal quarters of each such Fiscal Year (and in any event not later
than ten days prior to the date that an "accelerated  filer" is required to file
its  annual  report  on Form 10-K or its  quarterly  report on Form 10-Q for the
particular Fiscal Year or fiscal quarter, as the case may be, under the rules of
the U.S. Securities and Exchange Commission),  and at such time as distributions
are made to the Unit Holders  pursuant to Article X of this Agreement  following
the occurrence of a Dissolution Event. The financial statements shall consist of
a balance sheet of the Company as of the end of such Fiscal Year and the related
statements of operations,  Unit Holders'  Capital  Accounts and changes therein,
and cash flows for such Fiscal Year or fiscal quarter, together with appropriate
notes to such  financial  statements  and  supporting  schedules.  The Company's
financial  statements for each Fiscal Year shall be audited and certified by the
Company's  accountants,  and in each case setting forth in comparative  form the
corresponding figures for the immediately preceding Fiscal Year end (in the case
of the balance sheet) and the two (2) immediately preceding Fiscal Years (in the
case of the  statements).  Public  access to the  financial  statements  through
either the Company's or the Securities and Exchange  Commission's  website shall
constitute delivery pursuant to this Section 7.3.

7.4 Tax Matters.  The Directors  shall,  without any further consent of the Unit
Holders being required (except as specifically  required  herein),  make any and
all  elections  for  federal,  state,  local and  foreign  tax  purposes  as the
Directors shall determine  appropriate and shall have the right and authority to
represent the Company and the Unit Holders  before taxing  authorities or courts
of  competent  jurisdiction  in tax  matters  affecting  the Company or the Unit
Holders in their  capacities  as Unit  Holders,  and to file any tax returns and
execute any  agreements  or other  documents  relating to or affecting  such tax
matters, including agreements or other documents that bind the Unit Holders with
respect to such tax  matters or  otherwise  affect the rights of the Company and
the Unit Holders.  The  Directors  shall  designate a Person to be  specifically
authorized to act as the "Tax Matters  Member" under the Code and in any similar
capacity under state or local law; provided,  however,  that the Directors shall
have the authority to designate,  remove and replace the Tax Matters  Member who
shall act as the tax  matters  partner  within the  meaning of and  pursuant  to
Regulations  Sections  301.6231(a)(7)-1  and -2 or any similar  provision  under
state or local law. The Tax Matters Member shall receive no compensation for its
services.  All third-party costs and expenses incurred by the Tax Matters Member
in  performing  its  duties as such  (including  legal and  accounting  fees and
expenses)  shall be borne by the Company.  Nothing  herein shall be construed to
restrict the Company from engaging an accounting  firm to assist the Tax Matters
Member in discharging its duties  hereunder.  Necessary tax information shall be
delivered  to each  Unit  Holder  as soon as


                                       26

practicable  after the end of each  Fiscal  Year,  but not later  than three (3)
months after the end of each Fiscal Year.

7.5 Withholding. Each Unit Holder hereby authorizes the Company to withhold from
or pay on behalf of or with  respect to such Unit  Holder any amount of federal,
state,  local or foreign taxes that the Directors  determine that the Company is
required  to  withhold  or pay  with  respect  to any  amount  distributable  or
allocable to such Unit Holder  pursuant to this  Agreement,  including,  without
limitation, any taxes required to be withheld or paid by the Company pursuant to
Code Section 1441,  Code Section  1442,  Code Section 1445 or Code Section 1446.
Any amount paid on behalf of or with respect to a Unit Holder shall constitute a
loan by the Company to such Unit Holder, which loan shall be repaid by such Unit
Holder within  fifteen (15) days after notice from the Company that such payment
must be made unless (i) the Company  withholds  such payment from a distribution
that would otherwise be made to the Unit Holder or (ii) the Directors determine,
in their sole and absolute discretion, that such payment may be satisfied out of
the  available  funds  of the  Company  that  would,  but for such  payment,  be
distributed  to the Unit Holder.  Each Unit Holder  hereby  unconditionally  and
irrevocable  grants to the  Company a security  interest  in such Unit  Holder's
Units to secure such Unit Holder's  obligation to pay to the Company any amounts
owed to the  Company  pursuant  to this  Section  7.5.  In the event that a Unit
Holder fails to pay any amounts owed to the Company when due, the Directors may,
in their sole and absolute discretion,  elect to make the payment to the Company
on behalf of such defaulting  Unit Holder,  and in such event shall be deemed to
have loaned such amount to such  defaulting Unit Holder and shall succeed to all
rights and  remedies  of the  Company as against  such  defaulting  Unit  Holder
(including, without limitation, the right to receive distributions). Any amounts
payable by a Unit  Holder  hereunder  shall bear  interest  at the prime rate as
reported in The Wall  Street  Journal  (but not higher  than the maximum  lawful
rate) from the date such amount is due (i.e.,  fifteen  (15) days after  demand)
until such amount is paid in full.  Each Unit  Holder  shall take such action as
the Company or the  Directors  shall  request in order to perfect or enforce the
security interest created hereunder.

                            ARTICLE VIII. AMENDMENTS

8.1  Amendments.  Amendments to this Agreement may be proposed by the Directors.
Following  any such  proposal,  the  Directors  shall  submit  to the  Members a
verbatim  statement of any  proposed  amendment  (provided  that counsel for the
Company  shall  have  approved  of the  same in  writing  as to  form),  and the
Directors shall include therewith a recommendation as to the proposed amendment.
The  Directors  shall  seek the  written  vote of the  Members  on the  proposed
amendment  or shall call a meeting to vote  thereon  and to  transact  any other
business  that it may deem  appropriate.  Subject to the  provision  of Sections
5.6(c),  5.6(d)  and  5.6(e),  a  proposed  amendment  shall be  adopted  and be
effective as an amendment to this Agreement only if approved by the  affirmative
vote of a majority of the Membership  Voting  Interests  represented at a Member
meeting  at  which a quorum  of the  Members  is  present.  Notwithstanding  any
provision  of this  Section 8.1 to the  contrary,  this  Agreement  shall not be
amended without the consent of each Member adversely  affected if such amendment
would modify the limited liability of a Member.

                              ARTICLE IX. TRANSFERS

9.1 General Restrictions. The Directors shall not approve, and the Company shall
not  recognize  for any  purpose,  any  purported  Transfer of Units (other than
Transfers  of  Units to an  Affiliate  of an  existing  Member,  which  shall be
automatically  deemed to be  approved by the  Directors  and  recognized  by the
Company)  unless  and  until  the  Transfer  Restrictions,   consisting  of  the
provisions of this Article and the Unit Transfer Policy,  have been satisfied or
the Directors have by resolution  specifically waived any unsatisfied provision,
condition  or  restriction.  A  Transfer  of  Units  approved  by the  Directors
(including  those  Transfers to an Affiliate of an existing  Member as set forth
above) that satisfies the provisions and


                                       27

conditions  of the Transfer  Restrictions  (or if any  unsatisfied  condition is
waived), shall be referred to in this Agreement as a "Permitted Transfer."

9.2 Not Binding Until Entered in Company  Books. A Transfer of Units (other than
Transfers  of  Units to an  Affiliate  of an  existing  Member,  which  shall be
automatically deemed approved by the Directors and recognized by the Company) is
not binding on the Company  without the approval of the  Directors and direction
by the Directors to enter the Transfer in the books and records of the Company.

9.3 Pledge of Units Allowed.  Notwithstanding the Transfer Restrictions,  a Unit
Holder may  pledge,  grant a Lien on all or any portion of its Units as security
for the payment of debt,  provided that a subsequent  foreclosure or transfer to
the secured  party in lieu of  foreclosure  or otherwise  shall be  considered a
Transfer.

9.4  Prohibited  Transfers.  Any  purported  Transfer  of  Units  that  is not a
Permitted  Transfer shall be null and void and of no force or effect whatsoever;
provided  that, if the Company is required to recognize a Transfer that is not a
Permitted  Transfer (or if the  Directors,  in their sole  discretion,  elect to
recognize a Transfer  that is not a Permitted  Transfer):  (i) the  transferee's
rights  shall  be  strictly  limited  to the  transferor's  Membership  Economic
Interests  associated  with such Units;  and (ii) the Company may offset against
such  Membership  Economic  Interests  (without  limiting  any  other  legal  or
equitable  rights of the  Company) any debts,  obligations  or  liabilities  for
damages that the transferor or transferee may have to the Company.

9.5  Indemnification.  If a Transfer  or  attempted  Transfer  of Units is not a
Permitted Transfer,  the Unit Holder and the prospective  transferee engaging or
attempting  to engage in the Transfer is liable to and shall  indemnify and hold
harmless the Company and the other Unit Holders  from all cost,  liability,  and
damage that the Company and any of the other Unit  Holders may incur  (including
incremental  tax  liabilities,  lawyers'  fees and  expenses) as a result of the
Transfer or  attempted  Transfer and efforts to prohibit the transfer or enforce
the indemnity.

9.6 Transferee Subject to Transfer Restrictions.  Units held by a transferee are
subject to the Transfer  Restrictions  subsequent to a transfer  permitted under
this Article.

9.7 Unit Transfer Policy. The Unit Transfer Policy shall be consistent with this
Agreement and impose  conditions and  restrictions on Transfers to: (1) preserve
the tax status of the Company; (2) comply with state or federal securities laws;
(3) require appropriate information from the transferor and transferee regarding
the transfer; (4) require  representations from the transferor and/or transferee
regarding the Transfer;  and (5) allow the Directors to determine whether or not
the transferee is a competitor of the Company or the Company's  Affiliates.  The
Unit Transfer Policy also shall state the permitted  method and conventions that
shall be used in  allocating  Profits,  Losses,  and each item of  Profits,  and
Losses  and  all  other  items  attributable  between  the  transferor  and  the
transferee.   The  Unit  Transfer   Policy  is  attached  as  Exhibit  "C,"  and
incorporated  as part of this  Agreement.  Subject to the provisions of Sections
5.6(c)(ii)  and  5.6(e)(ii),  the Unit  Transfer  Policy  may be  amended by the
Directors without Member approval.

9.8 No Dissolution or  Termination.  The Transfer of Units pursuant to the terms
of this Article IX shall not dissolve or terminate the Company.  No Member shall
have the right to have the Company  dissolved or to have such  Member's  Capital
Contribution returned except as provided in this Agreement.

9.9 Rights of Unadmitted  Assignees.  A Person who acquires Units but who is not
admitted as a Substitute Member pursuant to Section 9.10 of this Agreement shall
be entitled only to the Membership Economic Interests with respect to such Units
in accordance with this  Agreement,  and shall not be entitled to the Membership
Voting Interests with respect to such Units. In addition, such Person shall


                                       28

have no right to any  information  or  accounting  of the affairs of the Company
except as  required  by the Act,  shall not be  entitled to inspect the books or
records of the  Company,  and shall not have any of the other rights of a Member
under the Act or this Agreement.

9.10  Admission of  Substitute  Members.  Subject to the  provisions of Sections
5.6(c) and 5.6(e),  as to Permitted  Transfers,  a transferee  of Units shall be
admitted as a substitute  Member provided that such transferee has complied with
the following provisions:

          (a) The transferee shall, by written  instrument in form and substance
     reasonably  satisfactory to the Directors,  agree to be bound by all of the
     terms and provisions of this  Agreement,  and assume the obligations of the
     transferor Member hereunder with respect to the Transferred Units.

          (b) The  transferee  shall pay for or  reimburse  the  Company for all
     reasonable legal,  filing and publication costs incurred in connection with
     the admission of the transferee as a Member.

          (c) Except in the case of a Transfer  involuntarily  by  operation  of
     law, if required by the  Directors,  the  transferee  shall  deliver to the
     Company evidence of his/her/its authority to become a Member.

          (d) The transferee and transferor  shall each execute and deliver such
     other instruments as the Directors reasonably deem necessary or appropriate
     in connection with such Transfer.

9.11 Preemptive Rights of Series B Unit Holders.

          (a) Each  Member  holding  Series  B Units  shall  have  the  right to
     purchase  such  Member's  Pro  Rata  Share of any New  Securities  that the
     Company may from time to time issue after the Effective Date. Such Member's
     "Pro Rata Share" for  purposes of this right is the ratio of (i) the number
     of Series B Units held by the  Member to (ii) the total  number of Units of
     the Company then outstanding.

          (b)  If  the  Company   proposes  to  undertake  an  issuance  of  New
     Securities,  it shall give to each Holder of Series B Units written  notice
     of its intention to issue New  Securities  (the  "Notice"),  describing the
     type of New  Securities  and the price and the general terms upon which the
     Company  proposes  to issue such New  Securities.  Each  Holder of Series B
     Units shall have ten (10) business days from the date of actual  receipt of
     any such  Notice to agree in writing to purchase  up to such  Holder's  Pro
     Rata Share of such New  Securities for the price and upon the general terms
     specified in the Notice by giving written notice to the Company and stating
     therein the quantity of New  Securities to be purchased (not to exceed such
     Holder's Pro Rata Share).  Such Units shall be issued as Series B Units. If
     any Holder of Series B Units  fails to so agree in writing  within such ten
     (10) day  period  to  purchase  such  Holder's  full  Pro Rata  Share of an
     offering  of New  Securities,  then such  Holder  shall  forfeit  the right
     hereunder  to  purchase  that  part  of its Pro  Rata  Share  of  such  New
     Securities that such Holder did not so agree to purchase.

9.12 Preemptive Rights of Series E Unit Holders.

          (a) Each  Member  holding  Series  E Units  shall  have  the  right to
     purchase  such  Member's Pro Rata Share of any New  Securities or any other
     series of Units or equity securities that the Company may from time to time
     issue after the Effective Date. Such Member's "Pro


                                       29

     Rata  Share" for  purposes  of this right is the ratio of (i) the number of
     Units (of any series)  held by the Member to (ii) the total number of Units
     of the Company then outstanding.

          (b) If the Company proposes to undertake an issuance of New Securities
     or any other  series of Units or equity  securities,  it shall give to each
     Holder of Series E Units  written  notice of its  intention  to issue  such
     securities  (the "Series E Notice"),  describing the type of securities and
     the price and the general  terms upon which the  Company  proposes to issue
     such securities. Each Holder of Series E Units shall have ten (10) business
     days from the date of actual  receipt of any such  Series E Notice to agree
     in  writing  to  purchase  up to  such  Holder's  Pro  Rata  Share  of such
     securities for the price and upon the general terms specified in the Series
     E Notice by giving  written  notice to the Company and stating  therein the
     quantity of  securities  to be purchased  (not to exceed) such Holder's Pro
     Rata  Share).  If any Holder of Series E Units fails to so agree in writing
     within such ten (10) business day period to purchase such Holder's full Pro
     Rata  Share of an  offering  of such  securities,  then such  Holder  shall
     forfeit the right  hereunder to purchase that part of its Pro Rata Share of
     such securities that such Holder did not so agree to purchase.

                      ARTICLE X. DISSOLUTION AND WINDING UP

10.1  Dissolution.  The Company shall dissolve and shall commence winding up and
liquidating upon the first to occur of any of the following (each a "Dissolution
Event"): (i) the affirmative vote of a the members as required by Section 5.6(b)
to dissolve, wind up and liquidate the Company; or (ii) the entry of a decree of
judicial  dissolution  pursuant  to the Act.  The  Members  hereby  agree  that,
notwithstanding  any provision of the Act, the Company shall not dissolve  prior
to the occurrence of a Dissolution Event.

10.2 Winding Up. Upon the occurrence of a Dissolution  Event,  the Company shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating  its assets and  satisfying the claims of its creditors and Members;
and no Member shall take any action that is inconsistent  with, or not necessary
to or  appropriate  for,  winding  up of the  Company's  business  and  affairs.
Notwithstanding  any provision in this  Agreement to the  contrary,  the Members
acknowledge  and  agree  that all  covenants  and  obligations  set  forth  this
Agreement shall continue to be fully binding upon the Members until such time as
the Property has been distributed  pursuant to this Section 10.2 and Articles of
Dissolution  have  been  filed  pursuant  to the Act.  The  Liquidator  shall be
responsible  for overseeing the prompt and orderly winding up and dissolution of
the Company. The Liquidator shall take full account of the Company's liabilities
and Property and shall cause the Property or the proceeds  from the sale thereof
(as  determined  pursuant  to  Section  10.8 of this  Agreement),  to the extent
sufficient  therefor,  to be applied  and  distributed,  to the  maximum  extent
permitted by law, in the following  order:  (i) first,  to creditors  (including
Members and Directors who are creditors,  to the extent  otherwise  permitted by
law)  in  satisfaction  of all of the  Company's  Debts  and  other  liabilities
(whether by payment or the making of reasonable  provision for payment thereof),
other than liabilities for which reasonable provision for payment has been made;
and  (ii)  second,  except  as  provided  in  this  Agreement,   to  Members  in
satisfaction of liabilities for distributions  pursuant to the Act; (iii) third,
the balance, if any, to the Unit Holders in accordance with the positive balance
in their Capital Accounts  calculated  after making the required  adjustment set
forth in clause  (ii)(C) of the  definition of Gross Asset Value in Section 1.10
of this Agreement,  after giving effect to all contributions,  distributions and
allocations for all periods.

10.3  Compliance  with Certain  Requirements  of  Regulations;  Deficit  Capital
Accounts.  In the event the  Company  is  "liquidated"  within  the  meaning  of
Regulations Section  1.704-1(b)(2)(ii)(g),  distributions shall be made pursuant
to this  Article X to the Unit  Holders who have  positive  Capital  Accounts in


                                       30

compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2).  If any Unit Holder
has a deficit  balance in such Member's  Capital Account (after giving effect to
all contributions, distributions and allocations for all Fiscal Years, including
the Fiscal Year during which such  liquidation  occurs),  such Unit Holder shall
have no obligation to make any  contribution  to the capital of the Company with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Company or to any other Person for any purpose whatsoever. In the discretion
of the Liquidator,  a pro rata portion of the distributions that would otherwise
be made to the Unit Holders  pursuant to this Article X may be: (i)  distributed
to a trust  established  for the benefit of the Unit Holders for the purposes of
liquidating Company assets,  collecting amounts owed to the Company,  and paying
any contingent or unforeseen liabilities or obligations of the Company, in which
case the assets of any such trust shall be  distributed to the Unit Holders from
time to  time,  in the  reasonable  discretion  of the  Liquidator,  in the same
proportions  as the  amount  distributed  to such  trust  by the  Company  would
otherwise have been  distributed to the Unit Holders pursuant to Section 10.2 of
this  Agreement;  or (b)  withheld to provide a  reasonable  reserve for Company
liabilities  (contingent or otherwise) and to reflect the unrealized  portion of
any  installment  obligations  owed to the Company,  provided that such withheld
amounts shall be distributed to the Unit Holders as soon as practicable.

10.4 Deemed Distribution and Recontribution. Notwithstanding any other provision
of this Article X, in the event the Company is liquidated  within the meaning of
Regulations Section  1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred,
the Property shall not be liquidated,  the Company's Debts and other liabilities
shall not be paid or  discharged,  and the Company's  affairs shall not be wound
up.

10.5 Rights of Unit  Holders.  Except as otherwise  provided in this  Agreement,
each Unit Holder shall look solely to the Property of the Company for the return
of such Unit Holder's  Capital  Contribution and shall have no right or power to
demand or receive  Property  other than cash from the Company.  If the assets of
the Company  remaining after payment or discharge of the debts or liabilities of
the  Company are  insufficient  to return such  Capital  Contribution,  the Unit
Holders  shall have no recourse  against the Company or any other Unit Holder or
Directors.

10.6 Allocations  During Period of Liquidation.  During the period commencing on
the first day of the Fiscal Year during  which a  Dissolution  Event  occurs and
ending  on the  date  on  which  all of the  assets  of the  Company  have  been
distributed to the Unit Holders  pursuant to Section 10.2 of this Agreement (the
"Liquidation Period"), the Unit Holders shall continue to share Profits, Losses,
gain,  loss and other items of Company  income,  gain,  loss or deduction in the
manner provided in Article III of this Agreement.

10.7 Character of Liquidating Distributions. All payments made in liquidation of
the interest of a Unit Holder shall be made in exchange for the interest of such
Unit Holder in Property pursuant to Section 736(b)(1) of the Code, including the
interest of such Unit Holder in Company goodwill.

10.8 The  Liquidator.  The  "Liquidator"  shall mean a Person  appointed  by the
Directors  to oversee  the  liquidation  of the  Company.  Upon the consent of a
majority  of  the  Membership  Voting  Interests,  the  Liquidator  may  be  the
Directors.  The Company is authorized to pay a reasonable  fee to the Liquidator
for its  services  performed  pursuant to this  Article X and to  reimburse  the
Liquidator for its reasonable  costs and expenses  incurred in performing  those
services. The Company shall indemnify,  save harmless, and pay all judgments and
claims against such Liquidator and any officers, directors, agents and employees
of the Liquidator  relating to any liability or damage incurred by reason of any
act  performed or omitted to be performed by the  Liquidator,  or any  officers,
directors,  agents  or  employees  of the  Liquidator  in  connection  with  the
liquidation of the Company,  including  reasonable  attorneys'  fees incurred in
connection  with the  defense of any action  based on any such act or  omission,
which  attorneys'  fees  may be paid as  incurred,  except  to the  extent  such
liability  or damage is caused by fraud,  intentional  misconduct,  or a knowing
violation of the laws which was material to the cause of action.


                                       31

10.9 Forms of Liquidating  Distributions.  For purposes of making  distributions
required by Section 10.2 of this Agreement, the Liquidator may determine whether
to distribute  all or any portion of the Property  in-kind or to sell all or any
portion of the Property and distribute the proceeds therefrom.

                            ARTICLE XI. MISCELLANEOUS

11.1  Notices.  Any  notice,  payment,  demand,  or  communication  required  or
permitted to be given by any provision of this Agreement shall be in writing and
shall be deemed to have been delivered, given, and received for all purposes (i)
if delivered personally to the Person or to an officer of the Person to whom the
same is directed, or (ii) when the same is sent, if sent by regular or certified
mail, postage prepaid, or by facsimile,  if such facsimile is followed by a hard
copy of the  facsimile  communication  sent  promptly  thereafter  by regular or
certified mail, postage prepaid,  addressed as follows, or to such other address
as such Person may from time to time specify by notice to the Company: (a) If to
the  Company,  to the  address  determined  pursuant  to  Section  1.4  of  this
Agreement;  (b) If to the Directors, to the address set forth on record with the
Company;  (c) If to a Unit  Holder,  either to the address set forth in the Unit
Holder  Register or to such other  address that has been  provided in writing to
the Company.

11.2 Binding  Effect.  Except as  otherwise  provided in this  Agreement,  every
covenant,  term and provision of this Agreement shall be binding upon, and shall
inure to the  benefit  of, the Company  and the  Members,  and their  respective
heirs, representatives, successors, transferees, and assigns.

11.3 Construction.  Every covenant,  term, and provision of this Agreement shall
be  construed  simply  according  to its fair  meaning and not  strictly  for or
against the Company or any Member.

11.4 Headings.  Article,  Section and other headings contained in this Agreement
are for  reference  purposes  only and are not intended to describe,  interpret,
define or limit the scope,  extent or intent of this  Agreement or any provision
of this Agreement.

11.5  Severability.  Except as otherwise  provided in the  succeeding  sentence,
every  provision of this Agreement is intended to be severable,  and if any term
or provision of this Agreement is illegal or invalid for any reason  whatsoever,
such  illegality or invalidity  shall not affect the validity or legality of the
remainder of this Agreement.  The preceding  sentence of this Section 11.5 shall
be of no force or effect if the  consequence  of enforcing the remainder of this
Agreement  without such  illegal or invalid term or provision  would be to cause
any Member to lose the material benefit of its economic bargain.

11.6 Incorporation By Reference.  Every recital,  exhibit, schedule and appendix
attached to this  Agreement and referred to herein is hereby  incorporated  into
this Agreement by reference unless this Agreement expressly provides otherwise.

11.7 Variation of Terms. All terms and variations thereof used in this Agreement
shall be deemed to refer to masculine,  feminine, or neuter, singular or plural,
as the context may require.

11.8  Governing  Law. The laws of the State of Iowa shall govern the validity of
this Agreement,  the  construction of its terms, and the  interpretation  of the
rights and duties arising hereunder.

11.9  Waiver of Jury  Trial.  Each of the  Members  irrevocably  waives,  to the
fullest  extent  permitted  by law,  all rights to trial by jury in any  action,
proceeding or  counterclaim  arising out of or relating to this Agreement or the
business and affairs of the Company.


                                       32

11.10  Counterpart  Execution.  This  Agreement may be executed in any number of
counterparts  with the same  effect as if all of the Members had signed the same
document.  All counterparts shall be construed together and shall constitute one
agreement.

11.11 Specific Performance. Each Member acknowledges and agrees that the Company
and the other Members would be  irreparably  damaged if any of the provisions of
this Agreement are not performed in accordance  with their specific  terms,  and
that  monetary  damages  would not  provide an  adequate  remedy in such  event.
Accordingly,  it is agreed  that,  in addition to any other  remedy to which the
Company and the non-breaching  Members may be entitled  hereunder,  at law or in
equity,  the  Company  and  the  non-breaching  Members  shall  be  entitled  to
injunctive relief to prevent breaches of the provisions of this Agreement and to
specifically to enforce the terms and provisions of this Agreement.

11.12 No Third Party Rights. None of the provisions  contained in this Agreement
shall be deemed to be for the benefit of or  enforceable  by any third  parties,
including without limitation, any creditors of any Member or the Company.

     DULY ADOPTED by the Company as of March 7, 2008.

                                    SOUTHWEST IOWA RENEWABLE ENERGY, LLC


                                    By: /s/ Karol King
                                        ----------------------------------------
                                    Its:    Chairman
                                        ----------------------------------------


                                       33

                                   EXHIBIT "A"
                                 Membership List


          Name and Address of Members Holding Series A Units                    Series A Units






------------------------------------------------------------------------ ---------------------------
TOTAL:


          Name and Address of Members Holding Series B Units                    Series B Units





------------------------------------------------------------------------ ---------------------------
TOTAL:



          Name and Address of Members Holding Series C Units                    Series C Units






------------------------------------------------------------------------ ---------------------------
TOTAL:


          Name and Address of Members Holding Series E Units                    Series E Units






------------------------------------------------------------------------ ---------------------------
TOTAL:



                                       1

                                   EXHIBIT "B"

                              MEMBER SIGNATURE PAGE

                                 ADDENDUM TO THE
                 SECOND AMENDED AND RESTATED OPERATING AGREEMENT
                     OF SOUTHWEST IOWA RENEWABLE ENERGY, LLC

     The undersigned  does hereby warrant,  represent,  covenant and agree that:
(i) the  undersigned,  as a  condition  to becoming a Member in  Southwest  Iowa
Renewable  Energy,  LLC, has received a copy of the Second  Amended and Restated
Operating Agreement dated ________, 2006, and, if applicable, all amendments and
modifications  thereto; (ii) the undersigned shall be subject to and comply with
all terms and conditions of such Second Amended and Restated Operating Agreement
in all respects,  as if the  undersigned  had executed  said Second  Amended and
Restated  Operating  Agreement  on the  original  date  thereof;  and  (iii) the
undersigned  is and  shall  be  bound by all of the  provisions  of said  Second
Amended and Restated Operating Agreement from and after the date of execution of
this Addendum.


Individuals:                                   Entities:


-----------------------------------------      -----------------------------------------
Name of Individual Member (Please Print)       Name of Entity (Please Print)


----------------------------------------       -----------------------------------------
Signature of Individual                        Print Name and Title of Officer



---------------------------------------------  -----------------------------------------
Name of Joint Individual Member (Please Print) Signature of Officer



-------------------------------------
Signature of Joint Individual Member


Agreed to and Accepted on Behalf of the
Company and its Members:

SOUTHWEST IOWA RENEWABLE ENERGY, LLC


By:
   --------------------------------------------------


Its:
    -------------------------------------------------

                                       1

                                   EXHIBIT "C"

                              UNIT TRANSFER POLICY
                                       OF
                      SOUTHWEST IOWA RENEWABLE ENERGY, LLC


Section 1.1 Definitions, Applicability.

     (a)  Definitions.  The  definitions  of the  Second  Amended  and  Restated
Operating  Agreement of Southwest Iowa  Renewable  Energy,  LLC (the  "Operating
Agreement") apply to this Unit Transfer Policy (the "Policy").

     (b)  Applicability.  This Policy and Article IX of the Operating  Agreement
and the other  applicable  provisions  of the Operating  Agreement  apply to all
Transfers of Units of the Company.

     (c) Intent of Policy.  It is the intent of this Policy as it relates to any
Transfers  that:  (1)  the  tax  status  of the  Company  is the  same  as for a
partnership;  (2) this Company  preserve its partnership tax status by complying
with Regulations,  Section 1.7704-1, et seq., and any amendments; and (3) to the
extent possible,  this Policy shall be read and interpreted to prohibit the free
transferability of Units.

Section 2.1. Complete Prohibition On Certain Transfers Of Units. Notwithstanding
any other provisions of this Policy, the following  Transfers will be prohibited
and the  Directors  will  have no  authority  to  approve  any of the  following
Transfers:

     (a) a Transfer in violation of the Securities  Act or any state  securities
or blue sky laws  applicable  to the  Company or the  Membership  Interest to be
transferred;

     (b) a Transfer  that would  cause the Company to be  considered  a publicly
traded partnership under Section 7704(b) of the Code;

     (c) a  Transfer  that  would  cause  the  Company  to lose its  status as a
partnership  for federal income tax purposes,  taking into account all facts and
circumstances,  including  facts and  circumstances  that might not be  directly
related to the proposed Transfer; or

     (d) a Transfer  that would cause a  termination  of the Company for federal
income tax purposes.

Section 3.1. Conditions To Permitted Transfers.

     (a)  Requirement.  A Transfer shall not be treated as a Permitted  Transfer
unless and until the  conditions in this Section and Sections  5.6(c) and 5.6(e)
of the Operating Agreement are satisfied.

     (b) Conveyance Documents. Except in the case of a Transfer involuntarily by
operation of law, the transferor and transferee shall execute and deliver to the
Company  documents  and  instruments  of  conveyance  as  may  be  necessary  or
appropriate  in the  opinion  of legal  counsel to the  Company  to affect  such
Transfer.  In the case of a Transfer of Units involuntarily by operation of law,
the Transfer shall be confirmed by presentation to the Company of legal evidence
of the  Transfer,  in form and  substance  satisfactory  to legal counsel to the
Company.  In all cases, the Company shall be reimbursed by the transferor and/or
transferee  for all costs and expenses that it  reasonably  incurs in connection
with the Transfer.

                                       1

     (c) Tax  Information.  The  transferor  and  transferee  shall  furnish the
Company  with  the  transferee's  taxpayer  identification  number,   sufficient
information  to  determine  the  transferee's  initial  tax  basis in the  Units
transferred,  and any other  information  reasonably  necessary  to  permit  the
Company to file all  required  federal and state tax  returns and other  legally
required  information  statements or returns.  In addition,  the transferee must
consent to the use of the method and convention of allocating Profits and Losses
and each item of profit and loss for the year of the transfer  that is specified
in the Unit Transfer  Policy.  Without limiting the generality of the foregoing,
the Company shall not be required to make any  Distribution  otherwise  provided
for in the Operating  Agreement with respect to any  Transferred  Units until it
has received this information.

     (d)  Securities  Compliance.  Except  in the  case of a  Transfer  of Units
involuntarily by operation of law, either (1) the Units are registered under the
Securities Act, and any applicable state securities laws, or (2) if requested by
the Directors in their discretion,  the transferor  provides an opinion of legal
counsel, which opinion and legal counsel shall be reasonably satisfactory to the
Directors,  to the  effect  that the  Transfer  is  exempt  from all  applicable
registration  requirements and that the Transfer will not violate any applicable
laws regulating the Transfer of securities.

     (e) Does Not Cause Company To Be Investment Company.  Except in the case of
a Transfer of Units  involuntarily  by  operation  of law, if  requested  by the
Directors in their sole  discretion,  the transferor shall provide an opinion of
legal counsel, which opinion and legal counsel shall be reasonably  satisfactory
to the Directors,  to the effect that the Transfer will not cause the Company to
be deemed to be an  "investment  company"  under the  Investment  Company Act of
1940.

     (f) Does Not Cause Company To Be Publicly Traded Partnership. Except in the
case of a Transfer of Units  involuntarily  by operation of law, if requested by
the Directors in their  discretion,  the transferor  shall provide an opinion of
legal counsel, which opinion and legal counsel shall be reasonably  satisfactory
to the Directors, to the effect that such Transfer will not cause the Company to
be  deemed  to  be a  "publicly-traded  limited  partnership"  under  applicable
provisions of the Code.

     (g) Transferee Is Not A Competitor Of The Company.  Except in the case of a
Transfer  of  Units  involuntarily  by  operation  of law,  the  Directors  must
determine (in their sole  discretion) that the transferee is not a competitor of
the Company or the Company's Affiliates,  or an Affiliate of a competitor of the
Company or a Person who as a Unit Holder or Member  would or may be  detrimental
to the interests of the Company. The proposed transferor and proposed transferee
shall submit information requested by the Directors to make the determination.

     (h) Tax Status Compliance.  Unless otherwise  approved by the Directors,  a
Transfer  of Units  shall not be made  except upon terms which would not, in the
opinion of legal counsel chosen by and mutually  acceptable to the Directors and
the  transferor,  result in the termination of the Company within the meaning of
Section  708 of the Code or  cause  the  application  of the  rules of  Sections
168(g)(1)(B) and 168(h) of the Code or similar rules to apply to the Company. In
determining  whether a particular proposed Transfer will result in a termination
of the  Company,  legal  counsel  to the  Company  shall take into  account  the
existence of prior written  commitments  to Transfer and the  commitments  shall
always be given precedence over subsequent proposed Transfers.

     (i) Suspension Of Transfers After  Dissolution  Event. No notice or request
initiating  the procedures  contemplated  by this Section may be given by a Unit
Holder after a Dissolution Event has occurred.

     (j) Directors May Waive Conditions.  Subject to Section 2.1 of this Policy,
the  Directors  shall  have the  authority  to waive any legal  opinion or other
condition required in this Section;  except that the


                                       2

Directors  may not waive the  conditions  of  Sections  5.6(c) and 5.6(e) of the
Operating Agreement or Section 3.1(g) of this Policy.

Section 3.2  Distributions  And Allocations In Respect of Transferred  Units. If
any  Units  are  Transferred  during  any  Fiscal  Year in  compliance  with the
provisions of this Policy and Article IX,  Profits,  Losses,  each item thereof,
and all other items  attributable to the Transferred  Units for such Fiscal Year
shall be divided and  allocated  between the  transferor  and the  transferee by
taking into account their varying interests during the Fiscal Year in accordance
with Code Section 706(d), using any conventions permitted by law and selected by
the Directors. All distributions on or before the date of such Transfer shall be
made to the transferor,  and all  distributions  thereafter shall be made to the
transferee.  Solely for purposes of making such  allocations and  distributions,
the Company  shall  recognize  such  Transfer to be effective not later than the
first day of the month  following the month in which all documents to effectuate
the Transfer have been executed and delivered to the Company,  provided that the
Company has received  such  documents at least 10 days prior to the first day of
the month,  otherwise  such items  shall be  allocated  and  distributed  to the
transferor,  provided  further  that,  if the Company  does not receive a notice
stating the date such Units were  Transferred and such other  information as the
Directors may  reasonably  require  within thirty (30) days after the end of the
Fiscal  Year  during  which the  Transfer  occurs,  then all such items shall be
allocated,  and all  distributions  shall be made,  to the person or entity who,
according to the books and records of the Company, was the owner of the Units on
the last day of such Fiscal Year. Neither the Company nor any Member shall incur
any liability for making  allocations and  distributions  in accordance with the
provisions  of this  Section,  whether or not the  Directors  or the Company has
knowledge  of any  Transfer  of any Units.  Unless and until a  transferee  is a
permitted  transferee  and such  transferee  is admitted as a Substitute  Member
under Section 9.10 of the Operating  Agreement,  the proposed  transferee  shall
have no interest in the Company and shall not be treated as a Member for purpose
of any distribution, the allocation of Profits or Losses, the voting of Units or
for any other purpose.

Section 3.3. Other Rules Regarding Transfers.

     (a) Tax  Withholdings.  Under  the  Operating  Agreement,  the  Company  is
authorized  to withhold  from  payments  and  distributions,  or with respect to
allocations  to the  Member,  and to pay over to any  federal,  state  and local
government  or any foreign  government,  any amounts  required to be so withheld
pursuant to the Code or any provisions of any other federal, state or local law,
or any foreign  law,  and shall  allocate  any such  amounts to the Members with
respect to which  such  amount was  withheld.  In the event that a  transferring
Member  makes a transfer  of all or a part of  his/her/its  Membership  Interest
during  the  Company's  tax year,  amounts  paid or  withheld  on behalf of such
transferring Member prior to the transfer,  or in connection with the Membership
Interest being transferred,  shall be due to the Company. Pursuant to the Policy
and Operating  Agreement,  the Company has the right,  in its sole discretion to
either (a) require  that the  transferring  Member  deposit with the Company the
amount due, or the amount that is  estimated to be due, in  connection  with the
Membership Interest being transferred,  or (b) require that such payment be made
at any time after the transfer, upon demand by the Company.

     (b) Market Of Units Not Made.  A Unit Holder may not:  (1) make a market in
Units; (2) Transfer its Units on an established  securities  market, a secondary
market (or the  substantial  equivalent of those markets)  within the meaning of
Code  Section  7704(b)  (and  any  Regulations,  proposed  Regulations,  revenue
rulings,  or other official  pronouncements  of the Internal  Revenue Service or
Treasury Department that may be promulgated or published);  and (3) in the event
the  Regulations,  revenue  rulings,  or other  pronouncements  treat any or all
arrangements  which  facilitate  the selling of Company  interests and which are
commonly  referred to as  "matching  services"  as being a  secondary  market or
substantial  equivalent  of a secondary  market,  Transfer  any Units  through a
matching  service that is not approved in


                                       3

advance by the  Company.  A Unit Holder may not Transfer any Units to any Person
unless  the  Person  agrees  to be bound  by the  Transfer  Restrictions  and to
Transfer the Units only to Persons who agree to be similarly bound.

     (c) Units Acquired For Unit Holder's Account. The acquisition of Units by a
Unit Holder shall be deemed to be a  representation  and warranty to the Company
and the other Unit Holders,  that the Unit Holder's acquisition of Units is made
as  principal  for  the  Unit  Holder's  own  account  and  not  for  resale  or
distribution  of the  Units  to  others  in  violation  of  securities  laws  as
determined by the Company and its legal counsel.



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