Common use of Amendment of Operating Agreement Clause in Contracts

Amendment of Operating Agreement. The Following shall be added as a new 9.5 Section Hot Issues: In the event the Managing Member decides to invest in securities which are the subject of a public distribution and which the Managing Member, in his sole discretion, believes may become a "hot issue" as that term is defined in Article III, Section 1 of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "Association"), such investment shall be made in accordance with the following provisions: (a) any such investment made in a particular Fiscal Period shall be made in a special account (the "Hot Issues account"); (b) only those Members who do not fall within the proscription of Article III, section 1 of said Rules of Fair Practice ("Unrestricted Members") shall have any beneficial interest in the Hot Issues Account; (c) each Unrestricted Member shall have a beneficial interest in the Hot Issues Account for any Fiscal Period in the proportion which (i)a such Unrestricted Partner's Capital account as of the beginning of the Fiscal Period bore to (ii) the sum of the Capital Accounts of all Unrestricted Members as of the beginning of such fiscal Period. (d) Funds required to make a particular investment shall be transferred to the Hot Issues account from the regular account of the Company; securities involved in the public distribution shall be purchased in the Hot Issues Account, held in the Hot Issues Account and eventually sold from the Hot Issues Account or transferred to the regular account at fair market value as of the day of transfer as determined by the Managing Member with such transfer being treated as a sale; if such securities are sold from the Hot Issues account, the proceeds of the sale shall be transferred from the Hot Issues account to the regular account of the Company. (e) as of the last day of each Fiscal Period in which a particular investment or investments are held in the Hot Issues Account: (A) interest shall be debited to the Capital Accounts of the Unrestricted Members in accordance with their beneficial interest in the Hot Issues Account at the interest rate being paid by the Company from time to time for borrowed funds during the period in that Fiscal Period that funds from the regular account have been held in or made available to the particular Hot Issues Account or, if no such funds are being borrowed during such period, the interest rate that the Managing Member determines would have been paid if funds had been borrowed by the Company during such period; and such interest shall be credited to the Capital Accounts of all the Members and the Managing Member, in the proportions which (i) each Member's Capital Account as of the beginning of such Fiscal Period bore to (iii) the sum of the Capital accounts of all Members as of the beginning of such Fiscal Period and (B) any Net Profits or Net Losses during such Fiscal Period with respect to the Hot Issues Account shall be allocated to the Capital accounts of the Unrestricted Members in accordance with their beneficial interest in the Hot Issues Account during such Fiscal Period; provided, however, that the amount of such interest shall not exceed the amount of profit accrued in the Hot Issues Account; and