**Exhibit 3.30.2**

**LIMITEDLIABILITY COMPANY OPERATING AGREEMENTOFDECRANE CABIN INTERIORS, LLC**

** **

This LIMITEDLIABILITY COMPANY OPERATING AGREEMENT (this “Agreement”) of DeCrane CabinInteriors, LLC, a limited liability company organized under the laws of Delaware(the “Company”), is made and entered into effective as of January 2, 2002 byDeCrane Aircraft Holdings, Inc., a Delaware corporation (the “Initial Member”).Capitalized words and phrases used in this Agreement and not otherwise definedhere are used as defined in Article 13 or in Section 14.21 (Tax Definitions).

 

RECITALS

WHEREAS, the Initial Member formed the Company pursuant to the DelawareLimited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended fromtime to time (the “Act”), by filing a Certificate of Formation of the Companywith the office of the Secretary of State of the State of Delaware.

WHEREAS, the Initial Member intends that the Company be treated as apass-through entity for federal income tax purposes.

 

NOW, THEREFORE,the Initial Member hereby provides as follows:

 

# 1.                                       **ORGANIZATION**

## 1.1                                 **Name**

The name of the Companywill be “DeCrane Cabin Interiors, LLC.” The business of the Company may be conducted under that name or, uponcompliance with applicable laws, any other name that the Board of Directorsdeemsthan a appropriate or advisable. Any Manager may file any fictitious name certificates and similarfilings, and any amendments thereto, that such Manager considers appropriate oradvisable.

## 1.2                                 **Purpose and Limitations**

The purpose of theCompany is to engage in any lawful activity for which a limited liabilitycompany may be organized under the Act. The Company shall have full power and authority to do every act andthing necessary or convenient to carry out the purposes for which it wasformed.

 

## 1.3                                 **Managed by Managers and Board of Directors**

The Company shall bemanaged by its Managers appointed hereunder, subject to the supervision andpowers of the Board of Directors as set forth in this Agreement.

## 1.4                                 **Principal Office**

The principal office of the Company shall be at DeCrane CabinInteriors, LLC, 2361 Rosecrans Avenue, Suite 180, El Segundo, CA  90245. The Board of

 

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Directors may change the principal place of businessof the Company to any place from time to time in their discretion.

 

## 1.5                                 **Agent for Service of Process**

The initial agent forservice of process on the Company shall be CT Corporation System.

# 2.                                       **CAPITALCONTRIBUTIONS**

## 2.1                                 **Initial Member**

DeCrane Aircraft Holdings, Inc. shall be the sole Initial Member.  The address, initial Capital Contributionand initial LLC Percentage of the Initial Member are:

 

| **Member, Address**                                                                                  |   | **Capital****Contribution** |   | **Initial LLC****Percentage** |   |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------|-------------------------------|--------|
| DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue,Suite 180

El Segundo, California  90245 |   | $                           | 100.00 |                          | 100    | % |
| Totals:                                                                                              |   | $                           | 100.00 |                          | 100    | % |

 

## 2.2                                 **Initial Capital Contribution**

The initial CapitalContribution shall be paid to the Company concurrently with the signing of thisAgreement.  No Person shall be treated asa Member for any purpose until the Company receives such Person’s initialCapital Contribution.

## 2.3                                 **Expertise**

Each Member shall makeavailable to the Manager his or its expertise for the benefit of the Companyand the Company’s business.

## 2.4                                 **Guarantees of the Company’s Debts**

If a Member guarantees adebt of the Company and that debt is paid by the Member (or its successors ininterest), then such payment shall be considered a loan to the Company and notan additional Capital Contribution.  Theamount of debt paid by the Member shall be repayable out of the Company’s cashand, unless otherwise agreed between the Company and the lending Member, shallbear interest at an annual rate equal to one percentage point above the primelending rate of Bank of America, NA (or another similar financial institution,if any, designated jointly by such Member and the Managers) in effect at thetime the debt is paid.

## 2.5                                 **Additional Capital Contributions or Loans**

No Member shall berequired to contribute or lend any additional funds to the Company.

 

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## 2.6                                 **Loans**

If any Member makes anyloan to the Company or advances money on its behalf, the amount of any suchloan or advance shall not be treated as a Capital Contribution but shall be adebt due from the Company.  The amountof any such loan or advance by a lending Member shall be repayable out of theCompany’s cash and shall bear interest at an annual rate equal to one pointsabove the prime lending rate of Bank of America, NA (or a similar financialinstitution acceptable to the lending Member and the Managers) then in effect.

## 2.7                                 **Investment Representation**

Each Member representsand warrants to the Company as of the date on which he or it becomes a Memberthat (a) he or it has a pre-existing personal or business relationshipwith each other Member, and (b) his or its acquisition of an Interest is madeas principal for his or its own account and not with a view to or for sale inconnection with any distribution of such Interest.

## 2.8                                 **Title to Property**

All real and personalproperty owned by the Company shall be owned by it as an entity and, insofar aspermitted by applicable law, no Member shall have any ownership interest insuch property in his or its individual name or right, and each Member’s interestin the Company shall be personal property for all purposes.

## 2.9                                 **Interests Uncertificated**

Interests shall not beevidenced or represented by any instrument or certificate, but rather, theirownership shall be determined by reference to the terms of this Agreement as itmay be amended from time to time.

# 3.                                       **DISTRIBUTIONS**

## 3.1                                 **Distributions Generally**

The Managers shall causethe Company to make such distributions to the Members in amounts (if any) asmay be determined from time to time by the Board of Directors.  Any distributions that are made to Membersshall be made in the following order and priority:

(a)                                  First, to the Members until theirAdjusted Capital Contributions are reduced to zero (pro rata among them inproportion to their Adjusted Capital Contributions); and

(b)                                 Second, the balance, if any, to theMembers in proportion to their LLC Percentages at that time.

## 3.2                                 **Estimated Tax Payments**

If required by applicablelaw, or permitted by applicable law and approved by the Board of Directors, theManagers may cause the Company to make estimated payments of tax for any Memberafter consultation with such Member.

 

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## 3.3                                 **Amounts Withheld**

All amounts withheldpursuant to applicable law with respect to any payment or distribution to theCompany or the Members shall be treated as amounts distributed to such Membersfor all purposes under this Agreement. The Managers shall allocate any such amounts among the Members in accordancewith applicable law.

## 3.4                                 **Return of Capital**

Except as otherwiseprovided in this Agreement, no Member shall demand or receive a return of hisor its Capital Contribution without the approval of the Board ofDirectors.  Under circumstancesrequiring a return of any Capital Contribution, no Member shall have the rightto receive property other than cash except as may be specifically provided inthis Agreement.  No Member shall haveany personal liability for the repayment of the Capital Contribution of anyother Member.

# 4.                                       **FINANCE**

## 4.1                                 **LLC Funds**

All property of theCompany in the form of cash not otherwise invested shall be deposited in one ormore bank accounts maintained in the name of the Company or the name of theInitial Member, in such financial institutions as the Managers shall determine.The funds of the Company shall not be commingled with the funds of any otherPerson.  The Managers shall deposit intosuch accounts all revenue and proceeds of or in connection with the Company’sbusiness and all amounts received by the Managers from, for, or on behalf of,the Company.

## 4.2                                 **Books and Records**

The Managers shallmaintain or cause to be maintained accurate books and records of account of thebusiness of the Company in accordance with generally accepted accountingprinciples consistently applied, setting forth a true and accurate account ofall business transactions arising out of and in connection with the conduct ofthe Company’s business.

## 4.3                                 **Tax Information**

The Managers shallprepare or cause to be prepared, and file, any applicable tax returns requiredto be filed by the Company consistent with the terms of this Agreement.  The Managers shall select an accounting firmto prepare any such tax returns, subject to approval by the Board ofDirectors.  Within 90 days after the endof each taxable year (or such earlier deadlines as may be imposed upon theMembers by law), the Managers shall deliver to each Member all tax informationregarding the Company necessary for such Member to make all required returns, togetherwith a copy of any federal, state and local income tax or information returnsof the Company for the year, and a report listing each material electiveadjustment or calculation (if any) made by any Manager with respect to suchperiod pursuant to Article 14 hereof.

## 4.4                                 **Allocations**

The Profits, Losses andother items of the Company shall be allocated as set forth in Article 14(Additional Tax Provisions).  TheMembers agree to be bound by

 

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these allocationsin reporting their shares of the Company’s income, loss and other items forincome tax purposes.

# 5.                                       **ROLEOF THE MANAGERS**

## 5.1                                 **Managers**

The Initial Member of theCompany has designated the following persons to serve as the initial managersand officers of the Company (herein, “Managers”), until changed pursuant toSections 5.3 or 5.4:

R. Jack DeCrane                           ChiefExecutive Officer

Richard J. Kaplan                         ChiefFinancial Officer, Treasurer and Secretary

Jeffrey A. Nerland                        President

Stephen A.Silverman                  AssistantSecretary

## 5.2                                 **Authority**

Except to the extentotherwise provided in the Articles of Organization or this Agreement (includingthe powers reserved to the Board of Directors and the Members), the businessand affairs of the Company shall be managed and all corporate powers shall beexercised by the Managers, who shall have all of the authority, rights andpowers which may be possessed by managers of a limited liability company underthe Act, and may at their discretion, delegate and assign their managementduties.  The Managers may act jointly orseverally in their role as Managers, and the act of any one Manager is the actof all Managers.

## 5.3                                 **Qualification and Election**

The Managers of theCompany shall be selected by the Initial Member.  The Initial Member may appoint additional Managers from time totime in its discretion, with such title and such roles as the Initial Membermay specify.

## 5.4                                 **Removal and Resignation**

(a)           All Managers serve at the pleasure ofthe Initial Member, and any Manager may be removed with or without cause by theInitial Member, for any reason or no reason, by providing written noticethereof to such Manager.

(b)           Any Manager may resign at any time bygiving written notice to the Company. Any such resignation shall take effect at the date of the receipt ofsuch notice or at any later time specified therein; and, unless otherwisespecified therein, the acceptance of such resignation shall not be necessary tomake it effective.

## 5.5                                 **Duties and Obligations of the Managers**

The Managers shall takeall actions which may be necessary or appropriate to operate and manage theCompany’s business, and otherwise directed by the Board of Directors.

 

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## 5.6                                 **Matters Requiring Unanimous Consent of the Members**

Notwithstanding any otherterm of this Agreement, the Managers shall not, without the unanimous writtenconsent of the Members:

(a)           Do any act in contravention of thisAgreement;

(b)           Do any act which would make itimpossible to carry on the ordinary business of the Company, except asotherwise provided in this Agreement;

(c)           Sell or otherwise dispose of at onetime all or substantially all of the property of the Company, except pursuantto Section 11.3(e) (Winding Up);

(d)           Amend this Agreement or theCertificate of Formation;

(e)           Liquidate or dissolve the Company;

(f)            Admit a new Member;

(g)           Reduce, increase or alter theoutstanding capital of the Company, make any call on capital, issue or redeemInterests, options or other securities of the Company or any subsidiary of theCompany;

(h)           Grant a power of attorney or otherdelegation of the Members’ powers; or

(i)            Cause the Company to merge orconsolidate with any other business.

## 5.7                                 **Matters Requiring the Approval of the Board of Directors**

Notwithstanding any otherterm of this Agreement, without first obtaining the approval of a majority ofthe Board of Directors, at a meeting duly held, or by a written act of suchDirectors in lieu of a meeting, the Managers shall not:

(a)           Appoint or remove an auditor;

(b)           Obtain, incur or suffer an aggregateamount of debt other than in the ordinary course of its business in excess of$50,000; or

(c)           Cause the Company to acquire sharesof or any interest in any corporation or other legal entity, or create anypartnership, joint venture or legal entity of which the Company is or will be apartner, member or similar participant.

 

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## 5.8                                 **Indemnification of Managers**

### 5.8(a)                   **Mandatory**

The Company, itsreceiver or its trustee, shall indemnify, save harmless and pay all judgmentsand claims against the Managers relating to any liability or damage incurred byreason of any act performed or omitted to be performed by the Managers inconnection with the business of the Company, including attorneys’ fees incurredby the Managers in connection with the defense of any action based on any suchact or omission, which attorneys’ fees may be paid as incurred, including allsuch liabilities under federal and state securities laws (including theSecurities Act of 1933, as amended) as permitted by law.

### 5.8(b)                  **If Manager is Exonerated in the Proceeding**

In the event ofany action by a Member against a Manager, including a derivative suit on behalfof the Company, the Company shall indemnify, save harmless and pay all expensesof such Manager, including attorneys’ fees, incurred in the defense of suchaction, if such Manager is successful in such action.

### 5.8(c)                   **No Indemnification**

Notwithstandingthe foregoing provisions of this Section 5.8, the Managers shall not beindemnified from any liability for fraud, bad faith, willful misconduct orgross negligence.

### 5.8(d)                  **Limitation**

Anyindemnification under this Section 5.8 shall be paid from and only to theextent of the Company’s assets, and no Member shall have personal liability forsuch indemnification.

# 6.                                       **ROLEOF THE BOARD OF DIRECTORS**

## 6.1                                 **Number and Designation of Directors**

The Company shall have aBoard of Directors composed of two directors. The Initial Member designates R. Jack DeCrane and Richard J. Kaplan******as the initialdirectors.

## 6.2                                 **Rights and Powers**

The Board of Directorsshall have the powers reserved to it in this Agreement and, in addition, maytake any action reserved to the Members in this Agreement or in the Act.

## 6.3                                 **Term; Removal**

Each director serves atthe pleasure of the Member who designated him or her pursuant to Section 3.1;and each Member having the right to designate one or more directors may removeand replace such designated directors at will, by notice to the Managers anddirectors.  In the event a Member sells,transfers or loses all of its Interests in the Company, all directorsdesignated by such Member shall be removed from the Board of Directors andtheir seats shall be declared vacant.

 

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## 6.4                                 **Meetings**

The Board ofDirectors shall meet at such times as they may elect from time to time, in eachcase at the dates and times agreed by the directors; but the Board of Directorsshall not be required to meet at any fixed time.  The rules set forth in Section 8.2(a), (d), (e), (f) and (g) forthe meetings of Members shall also apply to all meetings of the Board ofDirectors, *except*that there shall be no record date in connection with propositions to be put toa vote at meetings of the Board.  60% of the then-seated directors shallconstitute a quorum for any transacting of business by the Board of Directors,and the Board of Directors may not act in the absence of a quorum.  Any action approved by a majority of thedirectors present at a duly called meeting of the Board of Directors at which aquorum is present, or by all of the directors then-seated by written consentwithout meeting, shall be the action of the Board of Directors.  Any action that may be taken at any meetingof the Board of Directors may be taken without a meeting if a consent inwriting, setting forth the action so taken, is signed and delivered to theManagers by directors having not less than the minimum number of votes thatwould be necessary to authorize or take that action at a meeting at which allof the directors entitled to vote thereon were present and voted.

## 6.5                                 **Limited Liability**

The rights and powers ofa member of the Board of Directors, in his capacity as a director, shall notexceed the rights and powers that a member of a manager-managed limitedliability company could exercise under the Act.  Except to the extent (if any) otherwise required by the Act, nodirector shall be liable for the debts, liabilities, contracts or any otherobligations of the Company.

# 7.                                       **ROLEOF MEMBERS**

## 7.1                                 **Rights and Powers**

The Members shall havethe powers reserved to them in this Agreement or in the Act.

## 7.2                                 **Limited Liability**

Except to the extent (ifany) otherwise required in the Act, no Member shall be liable for the debts,liabilities, contracts or any other obligations of the Company.

## 7.3                                 **No Partition**

No Member or directorshall, either directly or indirectly, take any action to require partition ofthe Company or of any of its property or to cause the sale of any of suchproperty, nor shall any Manager do so without the approval of the Board ofDirectors.

# 8.                                       **MEETINGSOF MEMBERS**

## 8.1                                 **Required Meetings**

The Member or Membersshall hold meetings at such times as it or they may unanimously agree inwriting, but shall not be required to meet at any fixed time.  At any such meeting, Members holding amajority in Interest shall constitute a quorum.  No

 

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action can betaken by the Members at a meeting after a quorum ceases to be present at themeeting.  The failure of the Company toobserve any corporate formalities or requirements relating to the exercise ofits powers or management of its business or affairs under this Agreement or theAct shall not be grounds for imposing personal liability on the Members forliabilities of the Company.

## 8.2                                 **Procedure**

### 8.2(a)                   **Location**

Unless all of theMembers agree otherwise in writing, meetings of Members shall be held at thechief executive office of the Initial Member in California (or at any otherplace in the County of Los Angeles, State of California, selected by the Boardof Directors and specifically identified in the notice of the meeting), so longas the meeting place has adequate facilities to permit participation bytelephone conference call.

### 8.2(b)                  **Call**

A meeting of theMembers may be called by any Manager, or by any Member or Members representingmore than 10% of the Interests for the purpose of addressing any matters onwhich the Members may vote.

### 8.2(c)                   **Notice**

(1)           Whenever Members arerequired or permitted to take any action at a meeting, a written notice of themeeting shall be given pursuant to Article 12 (Other Provisions) not lessthan 10 days nor more than 60 days before the date of the meeting to eachMember entitled to vote at the meeting. The notice shall state the place, date,and hour of the meeting and the general nature of the business to betransacted.  No other business may betransacted at this meeting.

(2)           An affidavit ofmailing of any notice or report in accordance with the provisions of this paragraph,signed by a Manager, shall be prima facie evidence of the giving of the noticeor report.

(3)           Upon written requestto a Manager by any person entitled to call a meeting of Members, the Managershall immediately cause notice to be given to the Members entitled to vote thata meeting will be held at a time requested by the person calling the meeting,not less than 10 days nor more than 60 days after the receipt of the request.If the notice is not given within 20 days after receipt of the request, theperson entitled to call the meeting may give the notice or, upon theapplication of that person, the superior court of the county in California inwhich the principal office of the Company is located shall summarily order thegiving of the notice, after notice to the Company affording it an opportunityto be heard.  The court may issue anyorder as may be appropriate, including an order designating the time and placeof the meeting, the record date for determination of members entitled to vote,and the form of notice.

### 8.2(d)                  **Adjourned Meetings**

When a meeting ofMembers is adjourned to another time or place, unless the articles oforganization or this Agreement otherwise require and, except as provided inthis paragraph, notice need not be given of the adjourned meeting if the timeand place thereof are announced at the meeting at which the adjournment istaken. At the adjourned meeting, the Company may transact any business that mayhave been

 

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transacted at theoriginal meeting.  If the adjournment isfor more than 45 days, or if after the adjournment a new record date is fixedfor the adjourned meeting, a notice of the adjourned meeting shall be given toeach Member of record entitled to vote at the meeting.

### 8.2(e)                   **Waiver of Notice**

The actions takenat any meeting of Members, however called and noticed, and wherever held, havethe same validity as if taken at a meeting duly held after regular call andnotice, if a quorum is present either in person or by proxy, and if, either beforeor after the meeting, each of the Members entitled to vote, not present inperson or by proxy, signs a written waiver of notice or consents to the holdingof the meeting or approves the minutes of the meeting.  All waivers, consents, and approvals shallbe filed with the Company records or made a part of the minutes of the meeting.Attendance of a person at a meeting shall constitute a waiver of notice of themeeting, except when the person objects, at the beginning of the meeting, tothe transaction of any business because the meeting is not lawfully called orconvened. Attendance at a meeting is not a waiver of any right to object to theconsideration of matters required by this title to be included in the noticebut not so included, if the objection is expressly made at the meeting. Neitherthe business to be transacted nor the purpose of any meeting of Members need bespecified in any written waiver of notice, unless otherwise provided in thearticles of organization or operating agreement, except as provided inparagraph (g) below.

### 8.2(f)                     **Participation by Telephone Conference Call**

Members mayparticipate in a meeting of Members through the use of conference telephones orsimilar communications equipment, as long as all Members participating in themeeting can hear one another. Participation in a meeting pursuant to this provision constitutespresence in person at that meeting.

### 8.2(g)                  **Nature of Proposal**

Any actionapproved at a meeting, other than by unanimous approval of those entitled tovote, shall be valid only if the general nature of the proposal so approved wasstated in the notice of meeting (or at the previous meeting) or in any writtenwaiver of notice.

### 8.2(h)                  **Quorum**

A majority inInterest of the Members represented in person or by proxy shall constitute aquorum at a meeting of Members.  In theabsence of a quorum, any meeting of Members may be adjourned from time to timeby the vote of a majority of the Interest represented either in person or byproxy, but no other business may be transacted.

### 8.2(i)                      **Written Action Without Meeting**

Any action thatmay be taken at any meeting of the Members may be taken without a meeting if aconsent in writing, setting forth the action so taken, is signed and deliveredto the Managers within 60 days of the record date for that action by Membershaving not less than the minimum number of votes that would be necessary to

 

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authorize or takethat action at a meeting at which all Members entitled to vote thereon werepresent and voted.

(1)           Unless the consentsof all Members entitled to vote have been solicited in writing, (A) notice ofany Member approval of an amendment to the articles of organization or thisAgreement, a dissolution of the Company, or a merger of the Company, without ameeting by less than unanimous written consent shall be given at least 10 daysbefore the consummation of the action authorized by such approval, and (B)prompt notice shall be given of the taking of any other action approved byMembers without a meeting by less than unanimous written consent, to thoseMembers entitled to vote who have not consented in writing.

(2)           Any Member giving awritten consent, or the Member’s proxyholder, may revoke the consent by a writingreceived by the Company prior to the time that written consents of Membershaving the minimum number of votes that would be required to authorize theproposed action have been filed with the Company, but may not do so thereafter.This revocation is effective upon its receipt at the principal office of theCompany in California.

### 8.2(j)                      **Proxies**

The use of proxiesin connection with this section will be governed in the same manner as in thecase of corporations formed under the Delaware General Corporation Law.

### 8.2(k)                   **Record Date**

In order that theCompany may determine the Members of record entitled to notices of any meetingor to vote, or entitled to receive any distribution or to exercise any rightsin respect of any other lawful action, a Manager, or Members representing morethan 10 percent of the interests of Members, may fix, in advance, a recorddate, that is not more than 60 days nor less than 10 days prior to the date ofthe meeting and not more than 60 days prior to any other action. If no record dateis fixed:

(1)           The record date fordetermining Members entitled to notice of or to vote at a meeting of Membersshall be at the close of business on the business day next preceding the day onwhich notice is given or, if notice is waived, at the close of business on thebusiness day next preceding the day on which the meeting is held.

(2)           The record date fordetermining Members entitled to give consent to limited liability companyaction in writing without a meeting shall be the day on which the first writtenconsent is given.

(3)           The record date fordetermining Members for any other purpose shall be at the close of business onthe day on which the Managers adopt the resolution relating thereto, or the60th day prior to the date of the other action, whichever is later.

(4)           The determination ofMembers of record entitled to notice of or to vote at a meeting of Membersshall apply to any adjournment of the meeting unless

 

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a Manager or theMembers who called the meeting fix a new record date for the adjourned meeting,but the Manager or the Members who called the meeting shall fix a new recorddate if the meeting is adjourned for more than 45 days from the date set forthe original meeting.

## 8.3                                 **Voting Rights**

The Members shall havethe right to vote on the matters explicitly set forth in this Agreement or inthe Act.  Each Member shall have a voteon all matters on which all Members may vote equal to his or its LLC Percentage.  With respect to the Members, the term“majority in interest” means more than 50% of the LLC Percentages of allMembers.

## 8.4                                 **Rules of Conduct**

At each meeting ofMembers they shall appoint a chair who shall conduct the meeting and who shallappoint a secretary of the meeting to keep minutes and file the minutes withthe Company’s permanent files.

# 9.                                       **RESTRICTIONSON TRANSFER**

## 9.1                                 **Restriction on Transfers**

Except as otherwisepermitted by this Agreement, no Member shall Transfer all or any portion of anyInterest.

## **9.2****                              ****Permitted Transfers**

The Initial Member mayTransfer its Interest in connection with a sale of substantially all assets ofthe Initial Member, to the purchaser thereof. The Initial Member may Transfer its Interest for the purpose of providingsecurity for an obligation, by hypothecation, pledge, collateralization orotherwise.  Any Interest so held orTransferred shall remain subject to all of the provisions of this Agreement andthe Member, both individually and as trustee of the trust, shall continue to beconsidered a “Member” for purposes of this Agreement.

## 9.3                                 **Involuntary Transfer**

Any proposed Transfer ofan Interest that is required by law pursuant to any insolvency proceeding of aMember shall be subject to the terms and conditions of this Agreement,including Section 9.7.

## 9.4                                 **Prohibited Transfers**

Any purported Transfer ofan Interest that is not permitted by this Agreement shall be null and void andof no effect whatever; *provided* that if the Company is requiredto recognize a Transfer that is not so permitted, the Interest Transferredshall be strictly limited to the transferor’s rights to allocations anddistributions under this Agreement with respect to the Transferred Interest,which allocations and distributions may be applied (without limiting any otherlegal or equitable rights of the Company) to satisfy any debts, obligations, orliabilities for damages that the transferor or transferee of such Interest mayhave to the Company.

 

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In the case of a Transferor attempted Transfer that is not permitted by this Agreement, the partiesengaging or attempting to engage in such Transfer shall be liable to indemnifyand hold harmless the Company and the other Members from all costs, liabilitiesand damages that any of such indemnified Persons may incur (includingadditional tax liability and lawyers’ fees and expenses) as a result of suchTransfer or attempted Transfer and efforts to enforce this Section 9.4,including such indemnity.

## **9.5****                              ****General Transfer Provisions**

(a)           AllTransfers shall be by instrument in form and substance satisfactory to counselfor the Company and shall contain an expression by the transferee of his or itsintention to accept the Transfer and to adopt and be bound by all of theprovisions of this Agreement, and shall provide for the payment by thetransferor of all reasonable expenses incurred by the Company in connectionwith such Transfer, including the necessary amendments to this Agreement toreflect such Transfer.  The transferorshall sign and acknowledge all such instruments, in form and substancereasonably satisfactory to the Company’s counsel, as may be necessary ordesirable to effect such Transfer.

(b)           TheCompany shall not dissolve or terminate upon the admission of any new Member orupon any permitted Transfer.  EachMember hereby waives any right such Member may have to dissolve, liquidate orterminate the Company in any such event.

(c)           ThisSection 9.5 imposes additional restrictions on the Transfer of Interestsand does not permit any Transfer not otherwise permitted by this Agreement.

## 9.6                                 **Compliance**

Notwithstanding anythingto the contrary in this Agreement, at law or in equity, no Member shallTransfer or otherwise deal with any Interest in a way that would cause adefault under any material agreement to which the Company is a party or bywhich it is bound.

## 9.7                                 **Admission of Members**

No new Members shall beadmitted without the approval required by Section 5.6.  A transferee of an Interest shall not beadmitted as a Member without the approval required by Section 5.6, *provided*that if the transferee is already a Member at the time of the transfer and thetransfer is permitted by this Agreement, then the transferee shall have allrights of a Member with respect to the transferred Interest.

## 9.8                                 **Rights of Unadmitted Assignees**

Notwithstanding any otherprovision of this Agreement, a Person who acquires an Interest but who is notadmitted as a Member of the Company pursuant to this Agreement shall beentitled only to receive, to the extent assigned, the distributions and theallocations to which the assignor would be entitled under this Agreement, butshall have no right to vote or to participate in the management and affairs ofthe Company, or to exercise any of the rights of a Member.

 

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# 10.                                 **[DELIBERATELYOMITTED.]**

# 11.                                 **DISSOLUTION**

## 11.1                           **Liquidating Events**

The Company shalldissolve and commence winding up and liquidating upon the first to occur of anyof the following (“Liquidating Events”):

(a)           Thedecision of all of the Members to dissolve, wind up and liquidate the Company;

(b)           Thesale or transfer by the Company of all or substantially all of its assets;

(c)           Theoccurrence of any other event that makes it unlawful or impossible to carry onthe business of the Company; or

(d)           Entryof a decree of judicial dissolution pursuant to the Act.

## 11.2                           **Continuing Limited Liability Company**

Notwithstanding anyprovision of the Act, the Company shall not dissolve prior to the occurrence ofa Liquidating Event.  The withdrawal,resignation or retirement of any Member which the Company is required by properauthority to recognize, or the death, expulsion, bankruptcy or dissolution ofany Member or the occurrence of any other event which terminates the continuedmembership in the Company of any Member shall not be a liquidating event.

## 11.3                           **Winding Up**

Upon the occurrence of aLiquidating Event:

(a)           TheCompany shall continue solely for the purposes of winding up its affairs in anorderly manner, liquidating its assets, and satisfying the claims of its creditorsand Members;

(b)           NoMember shall take any action that is inconsistent with, or not necessary to orappropriate for, the winding up of the Company’s business and affairs;

(c)           Aperson, who may but need not be a Member, shall be unanimously selected by theMembers (or by arbitration pursuant to the terms hereof if agreement cannot bereached) as the Company’s liquidator, and shall be responsible for overseeingthe winding up and dissolution of the Company and shall take full account ofthe Company’s liabilities and assets;

(d)           NoManager shall receive any additional compensation for any services performedpursuant to this Section 11.3;

(e)           Unlessall Members agree upon a sale among themselves or a division in kind of assets,the assets of the Company shall be sold in the usual course of business usingreasonable business judgment; and

 

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(f)            If any property of the Company is tobe distributed in kind upon the liquidation of the Company, such property shallbe liquidated as promptly as is consistent with obtaining its fair value.

## 11.4                           **Application of Proceeds**

The liquidation proceedsshall be applied and distributed, to the extent sufficient to do so, in thefollowing order:

First, to the payment anddischarge of all of the Company’s debts and liabilities to creditors other thanthe Members;

Second, to the paymentand discharge of all of the Company’s debts and liabilities to the Members; and

The balance, if any, tothe Members in accordance with their Capital Accounts, after giving effect toall contributions, distributions and allocations for all periods.  Any in-kind distributions of property of theCompany shall be made among the Members pro rata in proportion with their relativeCapital Accounts.

## 11.5                           **Negative Capital Accounts**

If a Liquidation Eventand a Tax Liquidation both occur, then:

Distributions shall bemade pursuant to this Article 11 to the Members who have positive CapitalAccounts; and

(a)           Ifany Member has a deficit balance in his or its Capital Account (after givingeffect to all contributions, distributions and allocations for all taxableyears, including the year during which such liquidation occurs), then suchMember shall have no obligation to contribute to the capital of the Company andthe deficit shall not be considered a debt owed to the Company or any otherPerson for any purpose whatsoever; and

(b)           Section 14.19(Negative Capital Accounts: Tax Issues) shall apply.

## 11.6                           **Discretionary Withholding and Distributions**

With the approval of theBoard of Directors, a pro rata portion of the distributions that wouldotherwise be made to the Members pursuant to this Article 11 may be:

(a)           Distributedto a trust established for the benefit of the Members for the purposes ofliquidating property of the Company, collecting amounts owed to the Company,and paying any contingent or unforeseen liabilities or obligations of the Companyor of the Managers arising out of or in connection with the Company, *provided*that assets of any such trust shall be distributed to the Members from time totime, in the reasonable discretion of the liquidator appointed hereunder, inthe same proportions as the amount distributed to such trust by the Companywould otherwise have been distributed to the Members pursuant to thisAgreement; or

 

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(b)           Withheldto provide a reasonable reserve for liabilities (contingent or otherwise) ofthe Company and to reflect the unrealized portion of any installment obligationsowed to the Company, *provided*that such withheld amounts shallbe distributed to the Members as soon as practicable.

## 11.7                           **Rights of Members**

Except as otherwiseprovided in this Agreement, the Members shall look solely to the assets of theCompany for the return of their Capital Contributions and no Member shall haveany right or power to demand or receive property other than cash from theCompany.  No Member shall have priorityover any other Member as to the return of his or its Capital Contribution,distributions or allocations.

## 11.8                           **Notice of Dissolution**

If a Liquidating Eventoccurs, the Company shall, within 60 days after the occurrence, provide writtennotice of the occurrence to each of the Members and to all known creditors andclaimants whose names appear on the records of the Company.

## 11.9                           **Certificates of Dissolution**

Upon the dissolution ofthe Company, the liquidator appointed hereunder and, to the extent required,any other party hereto or appointed hereunder, shall promptly sign and cause tobe filed certificates of dissolution in accordance with the Act and the laws ofany other states or jurisdictions in which the Company has filed its Articlesof Organization or qualified to transact intrastate business.

# 12.                                 **OTHERPROVISIONS**

## 12.1                           **Entire Agreement**

This Agreement, whichincludes material provisions on the schedules hereto, each of which isincorporated in full herein, constitutes the entire agreement pertaining to theorganization of the Company and completely supersedes all other agreements andall drafts, understandings, negotiations and discussions, whether oral orwritten, among the parties pertaining to the subject matter of this Agreement.

## 12.2                           **Amendments**

No amendment or waiver ofany provision of this Agreement shall be effective unless and until aninstrument reflecting the amendment or waiver has received the approval of theMembers.

The waiver by any partyof a breach or default of any provision of this Agreement shall not operate orbe construed as a waiver of any subsequent breach or default.  A party’s failure either to insist upon anyother party’s strict performance of any provision of this Agreement or toexercise any of the party’s rights or remedies under this Agreement shall notconstitute a waiver of any default by the other party or of any right or remedyof the non-defaulting party.

 

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## 12.3                           **Governing Law**

Delaware law shall govern this Agreement, any agreement toamend or adopt this Agreement, and all disputes arising hereunder.

## 12.4                           **Severable Provisions**

The provisions of thisAgreement are severable, and if any provision is determined to be illegal orotherwise unenforceable, in whole or in part, then the remaining provisions,and any partially unenforceable provisions to the extent enforceable, shall neverthelessbe binding and enforceable and shall be construed as closely as possible totheir original meanings.

## 12.5                           **Binding Effect**

Except as otherwiseprovided in this Agreement, every provision of this Agreement shall bind andbenefit the Members and their respective heirs, legatees, legalrepresentatives, successors, transferees and assigns.

## 12.6                           **Parties in Interest; Third Parties**

All references in thisAgreement to “parties” refer to the parties to this Agreement.  Nothing in this Agreement, expressed orimplied, is intended to confer on any Person or entity other than a party anyright or remedy under or by reason of this Agreement.  The provisions of this Agreement are not intended to benefit anycreditor or other Person (other than a Member in his or its capacity as aMember) to whom any debts, liabilities or obligations are owed or who otherwisehas a claim against the Company or any Member; and no such creditor or otherPerson shall obtain any right under this Agreement against the Company or anyMember by reason of any such debt, liability or obligation, or otherwise.

# 13.                                 **DEFINITIONS**

Capitalized wordsand phrases used in this Agreement have the following meanings

## 13.1                           “**Adjusted Capital Contributions”**

means, as of any day withrespect to a Member, such Member’s Capital Contributions, adjusted as follows:

(a)           Increasedby the amount of any Company liabilities which, in connection withdistributions to such Member pursuant to Section 3.1 (Distributions Generally)and 11.4 (Dissolution/Application of Proceeds) are assumed by such Member orare secured by any property of the Company distributed to such Member; and

(b)           Reducedby the amount of cash and the Gross Asset Value (as defined in Section 14.21)of any property of the Company distributed to such Member pursuant toSections 3.1 (Distributions Generally) and 11.4 (Dissolution/Applicationof Proceeds) and the amount of any liabilities of such Member assumed by theCompany or which are secured by any property contributed by such Member to theCompany.

 

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(c)           Ifsuch Member Transfers all or any portion of his Interest in accordance with theterms of this Agreement, his transferee shall succeed to his or its AdjustedCapital Contributions to the extent it relates to the Transferred Interest.

## 13.2                           “**Agreement**”

means this OperatingAgreement, as amended from time to time.

## 13.3                           “**Board of Directors**”

means the boardestablished pursuant to Article 6 (Role of the Board of Directors).

## 13.4                           “**Business Day**”

means a day that is not aSaturday, Sunday or public holiday in the place to which the notice, consent orother communication is sent.

## 13.5                           “**Capital Account**”

means, with respect toany Member, the Capital Account maintained for such Person in accordance withthe following provisions and Section 14.21:

(a)           Toeach Person’s Capital Account there shall be credited such Person’s CapitalContribution, such Person’s distributive share of Profits and any items in thenature of income or gain which are specially allocated pursuant toSections 14.4 (Minimum Gain Chargeback) through 14.12 (Order ofApplication), and the amount of any of the Company’s liabilities assumed bysuch Person or which are secured by any property of the Company distributed tosuch Person.

(b)           Toeach Person’s Capital Account there shall be debited the amount of money andthe Gross Asset Value of any property distributed to such Person pursuant toany provision of this Agreement, such Person’s distributive share of Losses andany items in the nature of expenses or losses which are specially allocatedpursuant to Sections 14.4 through 14.12 and the amount of any liabilitiesof such Person assumed by the Company or which are secured by any propertycontributed by such Person to the Company.

(c)           Ifany Interest is Transferred in accordance with this Agreement, the transfereeshall succeed to the Capital Account of the transferor to the extent it relatesto the Transferred Interest.

## 13.6                           “**Capital Contribution**”

means, with respect toany Member, the amount of money and the gross fair market value of any property(other than money) contributed pursuant to this Agreement to the controlled bysuch a person or entity.

## 13.7                           “**Code**”

means the InternalRevenue Code of 1986, as amended from time to time.

 

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## 13.8                           “**Company**”

means the Californialimited liability company created and pursuant to this Agreement and thelimited liability company continuing the business in the event of dissolutionas provided in Section 11.2 (Dissolution).

## 13.9                           “**Initial Member**”

has the meaning set forthfor such term in the introductory paragraph of this Agreement.

## 13.10                     “**Interest**”

means, with respect toany Member, the ownership rights of the Member in the Company, including theright to receive distributions from the Company.  In the event any Interest is Transferred in accordance with theprovisions of this Agreement, the transferee of such interest shall succeed tothe Interest of his or its transferor to the extent it is Transferred.

## 13.11                     “**Liquidating Event**”

has the meaning set forthin Section 11.1.

## 13.12                     “**LLC Percentage**”

means, with respect toany Member at any time, the proportion (expressed as a percentage) of suchMember’s Interests at such time to the aggregate number of all Interests thenoutstanding.  If any Interest isTransferred in accordance with the provisions of this Agreement, the transfereeof such Interest shall succeed to the portion of the transferor’s LLCPercentage represented by the Transferred Interest.

## 13.13                     **“Managers”**

means the Persons servingas managers of the Company within the meaning of the Act and pursuant to theterms and conditions of this Agreement.

## 13.14                     “**Member**”

means any Person who is(a) the Initial Member, as designated in Section 2.1, or subsequentlyadmitted as a Member pursuant to this Agreement, *and*(b) who owns anInterest.  “Members” means all such Persons.

## 13.15                      “**Person**”

means any individual,corporation, partnership, limited liability company, joint venture,association, joint stock company, trust (including any beneficiary of thetrust), unincorporated organization, or government or any agency or politicalsubdivision.

## 13.16                     “**Profits**” and “**Losses**”

means, for each fiscalyear or other period, an amount equal to the Company’s taxable income or lossfor such year or period, determined in accordance with Section 14.21.

 

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## 13.17                     “**Transfer**”

(a)           means,as a noun, any voluntary or involuntary assignment, transfer, sale, pledge,hypothecation or other disposition, and, as a verb, voluntarily orinvoluntarily to assign, transfer, sell, pledge, hypothecate or otherwisedispose of or to obtain a charging order against.  A “Transfer” includes a gift or transmutation of an Interest intoanother type of property interest or into an Interest jointly owned withanother Person, including a gift or transmutation of a separate propertyInterest into a community or other joint property Interest with a spouse or anotherPerson, or the partition of a community orother joint property Interest (whether voluntarily, pursuant to a divorceproceeding or otherwise).

# 14.                                 **ADDITIONALTAX PROVISIONS**

## 14.1                           **Tax Classification**

The Members intend thatthe Company shall be classified as a partnership for federal income taxpurposes under Code Section 7701(a)(2) and the corresponding provisions,if any, of state and local law.

## 14.2                           **Profits**

After givingeffect to the special allocations in Sections 14.4 (Minimum GainChargeback) through 14.12 (Order of Application), Profits for any fiscal yearor other period shall be allocated to the Members in proportion to their LLC Percentages.

 

## 14.3                           **Losses and Other Items**

After giving effect tothe special allocations in Sections 14.4 (Minimum Gain Chargeback) through14.12 (Order of Application), Losses for any fiscal year or other period shallbe allocated in the following order and priority:

(a)           Exceptas provided in Section 14.3(b), Losses shall be allocated to the Members inproportion to their LLC Percentages.

(b)           TheLosses allocated pursuant to Section 14.3(a) shall not exceed the maximumamount of Losses that can be so allocated without causing any Member to have anAdjusted Capital Account Deficit at the end of any fiscal year.  If some but not all of the Members wouldhave Adjusted Capital Account Deficits as a consequence of an allocation ofLosses pursuant to Section 14.3(a), the limitation set forth in thisSection 14.3(b) shall be applied on a Member-by-Member basis so as toallocate the maximum permissible Losses to each Member under Section1.704-1(b)(2)(ii)(*d*) of the Regulations.

Except as otherwiseprovided in this Agreement, all items of the Company income, gain, loss,deduction, credit and any other allocations not otherwise provided for shall bedivided among the Members in the same proportions as they share Losses for theperiod.

## 14.4                           **Minimum Gain Chargeback**

Except as provided inSection 1.704-2(f) of the Regulations, notwithstanding any other provision ofthis Article 14, if there is a net decrease in Minimum Gain during anyfiscal year of the Company, each Member shall be specially

 

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allocated items ofCompany income and gain for such year (and, if necessary, subsequent years) inan amount equal to the portion of such Member’s share of the net decrease inMinimum Gain, determined in accordance with Section 1.704-2(g) of theRegulations.  Allocations pursuant tothe previous sentence shall be made in proportion to the respective amountsrequired to be allocated to each Member pursuant to such Regulations.  The items to be so allocated shall bedetermined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of theRegulations.  This Section 14.4 isintended to comply with the minimum gain chargeback requirement in Section1.704-2(f) of the Regulations and shall be interpreted consistently with it.

## 14.5                           **Member Nonrecourse Debt Minimum Gain**

Except as provided inSection 1.704-2(i)(4) of the Regulations, notwithstanding any other provisionof this Article 14 except Section 14.4, if there is a net decrease inMember Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debtduring any Company fiscal year, each Member who has a share of the MemberNonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt,determined in accordance with Section 1.704-2(i)(5) of the Regulations, shallbe specially allocated items of Company income and gain for such year (and, ifnecessary, subsequent years) in an amount equal to the portion of such Member’sshare of the net decrease in Member Nonrecourse Debt Minimum Gain attributableto such Member Nonrecourse Debt, determined in accordance with Section1.704-2(i)(4) of the Regulations. Allocations pursuant to the previous sentence shall be made inproportion to the respective amounts required to be allocated to each Memberpursuant to such Regulations.  The itemsto be so allocated shall be determined in accordance with Sections1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations.  This Section 14.5 is intended to comply with the minimumgain chargeback requirement in Section 1.704-2(i)(4) of the Regulations andshall be interpreted consistently with it.

## 14.6                           **Qualified Income Offset**

In the event any Memberunexpectedly receives any adjustments, allocations or distributions describedin Section 1.704-1(b)(2)(ii)(*d*)(*4*), (*5*) or (*6*) of the Regulations, items of Companyincome and gain shall be specially allocated to each such Member in an amountand manner sufficient to eliminate, to the extent required by the Regulations,the Adjusted Capital Account Deficit of such Member as quickly as possible, *provided*that an allocation pursuant to this Section 14.6 shall be made only if and tothe extent that such Member would have an Adjusted Capital Account Deficitafter all other allocations provided for in this Section 14.6 have beententatively made as if this Section 14.6 were not in the Agreement.

## 14.7                           **Gross Income Allocation**

In the event any Memberhas a deficit Capital Account at the end of any Company fiscal year which is inexcess of the sum of (1) the amount such Member is obligated to restorepursuant to any provision of this Agreement and (2) the amount such Member isdeemed to be obligated to restore pursuant to the penultimate sentences of Sections1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such Member shall bespecially allocated items of Company income and gain in the amount of suchexcess as quickly as possible, *provided* that an allocation pursuant tothis Section 14.7 shall be made only if and to the extent that such Memberwould have a deficit Capital Account in

 

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excess of such sumafter all other allocations provided for in Sections 14.4 through 14.10have been tentatively made as if this Section 14.7 were not in theAgreement.

## 14.8                           **Nonrecourse Deductions**

Nonrecourse Deductionsfor any fiscal year or other period shall be specially allocated among theMembers in proportion to their LLC Percentages.

## 14.9                           **Member Nonrecourse Deductions**

Any Member NonrecourseDeductions for any fiscal year or other period shall be specially allocated tothe Member who bears the economic risk of loss with respect to the MemberNonrecourse Debt to which such Member Nonrecourse Deductions are attributablein accordance with Section 1.704-2(i)(1) of the Regulations.

## 14.10                     **Code Section 754 Adjustments**

To the extent anadjustment to the adjusted tax basis of any Company asset pursuant to CodeSection 734(b) or 743(b) is required, pursuant to Section 1.704-1(b)(2)(iv)(*m*)(*2*)or 1.704-1(b)(2)(iv)(*m*)(*4*) of the Regulations, to be taken intoaccount in determining Capital Accounts as the result of a distribution to aMember in complete liquidation of his or its interest in the Company, theamount of such adjustment to Capital Accounts shall be treated as an item ofgain (if the adjustment increases the basis of the asset) or loss (if theadjustment decreases such basis) and such gain or loss shall be specially allocatedto the Members in accordance with their Interests if such Section1.704-1(b)(2)(iv)(*m*)(*2*) applies, or, if such Section1.704-1(b)(2)(*m*)(*4*) applies, to the Member to whom suchdistribution was made.

## 14.11                     **Curative Allocations**

The allocations in thelast sentence of the first paragraph of Section 14.3 (Losses and OtherItems) and Sections 14.4 (Minimum Gain Chargeback), 14.5 (MemberNonrecourse Debt Minimum Gain), 14.6 (Qualified Income Offset), 14.7 (GrossIncome Allocation), 14.8 (Nonrecourse Deductions), 14.9 (Member NonrecourseDeductions) and 14.10 (Code Section 754 Adjustments) (the “**RegulatoryAllocations**”) are intended to comply with certain requirements ofthe Regulations.  It is the intent ofthe Members that, to the extent possible, all Regulatory Allocations shall beoffset either with other Regulatory Allocations or with special allocations ofother items of Company income, gain, loss or deduction pursuant to thisSection 14.11.  Therefore, notwithstandingany other provision of this Article 14 (other than the RegulatoryAllocations), the Managers shall make such offsetting special allocations ofCompany income, gain, loss or deduction in whatever manner they determineappropriate so that, after such offsetting allocations are made, each Member’sCapital Account balance is, to the extent possible, equal to the CapitalAccount balance such Member would have had if the Regulatory Allocations werenot part of the Agreement and all Company items were allocated pursuant toSection 14.2.  In exercising theirdiscretion under this Section 14.11, the Managers shall take into accountfuture Regulatory Allocations under Sections 14.4 and 14.5 that, althoughnot yet made, are likely to offset other Regulatory Allocations previously madeunder Sections 14.8 and 14.9.

 

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## 14.12                     **Order of Application**

Sections 14.4 through14.11 shall be applied in the order in which they are set forth in this Agreement.

## 14.13                     **Allocation Method**

For purposes ofdetermining the Profits, Losses or 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 Managers using any permissiblemethod under Code Section 706 and the Regulations under it.

## 14.14                     **Excess Nonrecourse Liabilities**

Solely for purposes ofdetermining a Member’s proportionate share of the “excess nonrecourseliabilities” of the Company within the meaning of Section 1.752-3(a)(3) ofthe Regulations, the Members’ interests in the Company’s Profits are in proportionto their LLC Percentages.

## 14.15                     **Source of Distributions**

To the extent permittedby Section 1.704-2(h)(3) of the Regulations, the Managers shall endeavor totreat cash distributions to Members as having been made from the proceeds ofNonrecourse Liabilities or Member Nonrecourse Debt only to the extent that suchdistributions would cause or increase an Adjusted Capital Account Deficit forany Member.

## 14.16                     **Tax Allocations: Code Section 704(c)**

In accordance with CodeSection 704(c), income, gain, loss and deduction with respect to anyproperty contributed to the capital of the Company shall, solely for taxpurposes, be allocated among the Members so as to take account of any variationbetween the adjusted basis of such property to the Company for federal income taxpurposes and its initial Gross Asset Value (computed in accordance withSection 14.22(d)(1)).

If the Gross Asset Valueof any Company asset is adjusted pursuant to Section 14.22(d)(3),subsequent allocations of income, gain, loss and deduction with respect to suchasset shall take account of any variation between the adjusted basis of suchasset for federal income tax purposes and its Gross Asset Value in the samemanner as under Code Section 704(c) and the Regulations under it.

Any elections or otherdecisions relating to such allocations shall be made by the Managers in anymanner that reasonably reflects the purpose and intention of thisAgreement.  Allocations pursuant to thisSection 14.16 are solely for purposes of federal, state and local taxesand shall not affect, or in any way be taken into account in computing, anyPerson’s Capital Account or share of Profits, Losses, other items ordistributions pursuant to any provision of this Agreement.

## 14.17                     **Distributions and Allocations in Respect to Transferred Interests**

If any Interest isTransferred during any accounting period in compliance with Article 8(Restrictions on Transfer), then Profits, Losses, each item of Profit and Loss

 

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and all other itemsattributable to the Transferred Interest for such period shall be divided andallocated between the transferor and the transferee by taking into accounttheir varying Interests during the period in accordance with CodeSection 706(d), using any conventions permitted by law and selected by theManagers.

All distributions on orbefore the date of such Transfer shall be made to the transferor, and alldistributions thereafter shall be made to the transferee.

## 14.18                     **Tax Characterization of Payments to a Selling Partner**

The Managers shall, tothe greatest extent allowed by law, determine the tax classification of allpayments by the Company or a Member to a Selling Member.  The parties intend that such payments shall,to the extent possible, be deductible to the Company and ordinary income to theSelling Member.

## 14.19                     **Negative Capital Accounts: Tax Issues**

When a Tax Liquidationoccurs, any distributions required by Section 11.5((a)) shall be made incompliance with Section 1.704-1(b)(2)(ii)(*b*)(*2*) of the Regulations.

## 14.20                     **Tax Matters Partner**

The Initial Member shallbe the Person designated to receive all notices from the Internal RevenueService and other tax authorities that pertain to the tax affairs of theCompany, and shall be the “tax matters partner” for purposes of Code Sections6221 through 6233.  Each party agrees tobe bound by those Code Sections.  The“tax matters partner” shall provide to each other Member in a timely manner thenotices required to be provided by Section 301.6223(g)-1T of the Regulationsand the corresponding provisions of state tax law.  The “tax matters partner” shall be reimbursed by the Company forexpenses reasonably incurred in connection with his work as “tax matters partner.”  The “tax matters partner” shall not beotherwise compensated for such work; and if he or it resigns as “tax matterspartner” or ceases to be a Member, then the Members shall select another “taxmatters partner.”

## 14.21                     **Tax Definitions**

### 14.21(a)                                                       “**Adjusted Capital Account Deficit**”

means, withrespect to any Member, the deficit balance, if any, in such Member’s CapitalAccount as of the end of the relevant fiscal year, after giving effect to thefollowing adjustments:

(1) Credit to such Capital Account any amountswhich such Member is obligated to restore pursuant to any provision of thisAgreement or is deemed to be obligated to restore pursuant to the penultimatesentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(2) Debit to such Capital Account the itemsdescribed in Sections 1.704-1(b)(2)(ii)(*d*)(*4*), (*5*) and (*6*) of the Regulations.

 

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The foregoing definitionof Adjusted Capital Account Deficit is intended to comply with the provisionsof Section 1.704-1(b)(2)(ii)(*d*) of the Regulations and shall beinterpreted consistently with it.

### 14.21(b)                      **CapitalAccounts: Tax Issues**

In determining theamount of any liability for purposes of Sections 13.1(a), 13.1(b), 13.5(a)and 13.5(b) there shall be taken into account Code Section 752(c) and anyother applicable provisions of the Code and Regulations.

The provisions ofSection 13.5 (Capital Account) and the other provisions of this Agreementrelating to the maintenance of Capital Accounts are intended to comply withSection 1.704-1(b) of the Regulations, and shall be interpreted andapplied in a manner consistent with it.

If the Managers determinethat to comply with the Regulations it is prudent to modify the manner in whichthe Capital Accounts, or any debits or credits to the Capital Accounts (includingdebits or credits relating to liabilities which are secured by propertycontributed to or distributed from the Company or which are assumed by theCompany or Members), are computed, they may make such modification, *provided*that it is not likely to have a material effect on the amounts distributable toany Member pursuant to Article 10 (Dissolution) upon the dissolution ofthe Company.

The Managers alsoshall (a) make any adjustments that are necessary or appropriate tomaintain equality between the Capital Accounts of the Members and the amount ofCompany capital reflected on the Company’s balance sheet, as computed for bookpurposes, in accordance with Section 1.704-1(b)(2)(iv)(*g*)of the Regulations, and (b) make any appropriate modifications if unanticipatedevents might otherwise cause this Agreement not to comply withSection 1.704-1(b) of the Regulations.

### 14.21(c)                                                       “**Depreciation**”

means, for each fiscalyear or other period, an amount equal to the depreciation, amortization orother cost recovery deduction allowable with respect to an asset for such yearor other period, except that if the Gross Asset Value of an asset differs fromits adjusted basis for federal income tax purposes at the beginning of suchyear or other period, Depreciation shall be an amount which bears the sameratio to such beginning Gross Asset Value as the federal income taxdepreciation, amortization or other cost recovery deduction for such year orother period bears to such beginning adjusted tax basis; *provided, however,* that ifthe federal income tax depreciation, amortization or other cost recoverydeduction for such year is zero, Depreciation shall be determined withreference to such beginning Gross Asset Value using any reasonable methodselected by the Managers.

### 14.21(d)                                                  “**Gross Asset Value**”

means, with respect toany asset, the asset’s adjusted basis for federal income tax purposes, exceptas follows:

 

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(1) The initial Gross Asset Value of any assetcontributed by a Member to the Company shall be the gross fair market value ofsuch asset, as determined by the contributing Member and the Company;

(2) The Gross Asset Value of any the Company assetdistributed to any Member shall be the asset’s gross fair market value on thedate of distribution;

(3) The Gross Asset Values of all the Companyassets shall be adjusted to equal their respective gross fair market values, asdetermined by the Managers, as of the following times: (a) the acquisitionof an additional Interest by any new or existing Member in exchange for morethan a *de minimis*Capital Contribution; (b) the distribution by the Company to a Member ofmore than a *de minimis*amount of property as consideration for an interest in the Company if suchadjustment is necessary or appropriate to reflect the relative economicinterests of the Members in the Company; and (c) the Tax Liquidation ofthe Company; *provided, however* that adjustments pursuant to clauses (a)and (b) above shall be made only if the Managers reasonably determine that suchadjustments are necessary or appropriate to reflect the relative economicinterests of the Members in the Company.

(4) The Gross Asset Values of the property of theCompany shall be increased (or decreased) to reflect any adjustments to theadjusted basis of such assets pursuant to Code Section 734(b) or CodeSection 743(b), but only to the extent that such adjustments are takeninto account in determining Capital Accounts pursuant toSection 1.704-1(b)(2)(iv)(*m*) of the Regulations and Sections 14.10(Code Section 754 Adjustments) and 14.22(j)(6) (Profits and Losses); *provided,however,* that Gross Asset Values shall not be adjusted pursuant tothis Section 14.22(d)(4) to the extent the Managers determine that anadjustment pursuant to Section 14.22(d) is necessary or appropriate inconnection with a transaction that would otherwise result in an adjustmentpursuant to this Section 14.22(d)(4).

(5) After the Gross Asset Value of an asset hasbeen determined or adjusted pursuant to Section 14.22(d)(1), (3) or (4),such Gross Asset Value shall be adjusted by the Depreciation taken into accountwith respect to such asset for purposes of computing Profits and Losses.

### 14.21(e)                                                       “**Member Nonrecourse Debt**”

has the meaning set forthin Section 1.704-2(b)(4) of the Regulations.

### 14.21(f)                                                         “**Member Nonrecourse Debt Minimum Gain**”

means an amount, withrespect to each Member Nonrecourse Debt, equal to the Minimum Gain that wouldresult if such Member Nonrecourse Debt were treated as a Nonrecourse Liability,determined in accordance with Section 1.704-2(i)(3) of the Regulations.

 

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### 14.21(g)                                                      “**Member Nonrecourse Deductions**”

has the meaning set forthin Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

### 14.21(h)                                                      “**Minimum Gain**”

has the meaning set forthin Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations.

### 14.21(i)                                                          “**Nonrecourse Deductions**”

has the meaning set forthin Section 1.704-2(b)(1) of the Regulations.

### 14.21(j)                                                          “**Nonrecourse Liability**”

has the meaning set forthin Section 1.704-2(b)(3) of the Regulations.

### 14.21(k)                                                  “**Profits**” and “**Losses**”

underSection 13.16 shall be determined in accordance with CodeSection 703(a) (for this purpose, all items of income, gain, loss ordeduction required to be stated separately pursuant to CodeSection 703(a)(1) shall be included in taxable income or loss), with thefollowing adjustments:

(1) Any income of the Company that is exempt fromfederal income tax and not otherwise taken into account in computing Profits orLosses pursuant to this Section 14.22(j) shall be added to such taxableincome or loss;

(2) Any expenditures of the Company described inCode Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)expenditures pursuant to Section 1.704-1(b)(2)(iv)(*i*) of the Regulations, andnot otherwise taken into account in computing Profits or Losses pursuant tothis Section 14.22(j) shall be subtracted from such taxable income orloss;

(3) If the Gross Asset Value of any Company assetis adjusted pursuant to Section 14.22(d)(3) or (4), the amount of suchadjustment shall be taken into account as gain or loss from the disposition ofsuch asset for purposes of computing Profits or Losses;

(4) Gain or loss resulting from any disposition ofproperty of the Company with respect to which gain or loss is recognized forfederal income tax purposes shall be computed by reference to the Gross AssetValue of such property disposed of, notwithstanding that the adjusted tax basisof such property differs from its Gross Asset Value;

(5) In lieu of the depreciation, amortization andother cost recovery deductions taken into account in computing such taxableincome or loss, there shall be taken into account Depreciation for such fiscalyear or other period, computed in accordance with Section 14.22(c)(Depreciation);

 

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(6) To the extent an adjustment to the adjusted taxbasis of any Company asset pursuant to Code Section 734(b) or 743(b) isrequired by Section 1.704–1(b)(2)(iv)(*m*)(*4*) of the Regulations to betaken into account in determining Capital Accounts as a result of adistribution other than in liquidation of a Member’s interest in the Company,the amount of such adjustment shall be treated as an item of gain (if the adjustmentincreases the basis of the asset) or loss (if the adjustment decreases thebasis of the asset) from the disposition of the asset and shall be taken intoaccount for purposes of computing Profits or Losses; and

(7) Notwithstanding any other provision of this Section 14.22(j),any items which are specially allocated pursuant to Sections 14.4 (MinimumGain Chargeback) through 14.12 (Order of Application) shall not be taken intoaccount in computing Profits or Losses.

The amounts of the itemsof Company income, gain, loss, or deduction available to be specificallyallocated pursuant to Sections 14.4 (Minimum Gain Chargeback) through 14.12(Order of Application), shall be determined by applying rules analogous tothose set forth in this Section 14.22(j).

### 14.21(l)                          “**Regulations**”

means the Income TaxRegulations promulgated under the Code, as such regulations may be amended fromtime to time.

### 14.21(m)                                                    “**Tax Liquidation**”

means the liquidation ofthe Company within the meaning of Section 1.704-1(b)(2)(ii)(*g*)of the Regulations.

 

THISAGREEMENT AFFECTS IMPORTANT RIGHTS. EACH PARTY REPRESENTS TO EACH OTHER PARTY THAT HE OR IT HAS READ THISAGREEMENT AND HAS HAD THE OPPORTUNITY TO SEEK INDEPENDENT TAX AND LEGAL ADVICECONCERNING THIS AGREEMENT.

 

 

*Initial Member:*

 

DeCRANEAIRCRAFT HOLDINGS, INC.

 

 
| By:    | /s/  Richard J. Kaplan                           |
|--------|--------------------------------------------------|
|   | Richard  J. Kaplan                               |
|   | Senior  Vice President, Chief Financial Officer, |
|   | Secretary  and Treasurer                         |

** **

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