SC Builders, LLC. v. Joshua Adam Shepard

IN THE DISTRICT COURT IN AND FOR TULSA COUNTY STATE OF OKLAHOMA SC BUILDERS, LLC. and SMF PREMIER PROPERTIES, LLC, Plaintiffs, v. JOSHUA ADAM SHEPARD, Defendant. Case No.: CJ-2026-01117 Caroline Wall PETITION Plaintiffs, SC Builders, LLC., and SMF Premier Properties, LLC, by and through their undersigned counsel, set forth the following causes of action against Defendant Joshua Adam Shepard. Plaintiffs and Defendant may together be referred to as the "Parties." PARTIES, JURISDICTION AND VENUE 1. Plaintiffs SC Builders, LLC., and SMF Premier Properties, LLC., are Oklahoma limited liability companies which conduct business in Tulsa County, Oklahoma, and in other counties in Oklahoma. 2. Defendant Joshua Adam Shepard is managing member of SC Builders, LLC. Plaintiff SMF Premier Properties, LLC., is also a member. A non-party, James Factor, is a third member of SC Builders, LLC. The managing member of SMF Premier Properties, LLC., is Steven G. Ferrell. 3. The issues in this case involve the breach by the Defendant of the Operating Agreement of SC Builders, LLC. 4. All relevant events occurred in Tulsa County, Oklahoma. 5. Jurisdiction and venue are proper in the District Court for Tulsa County, Oklahoma. BACKGROUND FACTS 6. On or about March 16, 2023, Plaintiff SMF Premier Properties, LLC., Defendant Joshua Adam Shepard and a non-party, James Factor entered into an “Operating Agreement for Member-Managed Limited Liability Company” for the purpose of creating an Oklahoma limited liability company (the “Operating Agreement”). See Exhibit “A” and incorporated herein. 7. In accordance with provisions of the Agreement the limited liability company created by the filing of organization documents with the Secretary of the State of Oklahoma is known as SC Builders, LLC., or such fictitious or assumed named as might lawfully from time to time be adopted. 8. SC Builders, LLC., was to function as a three-member LLC with Defendant Joshua Adam Shepard appointed as the Managing Member. 9. SC Builders, LLC’s stated purpose was “contracting for land work, construction and building, property development and management, and related trades to facilitate the company’s purposes provided in the Articles of Organization.” See Article III of the “Operating Agreement”. 10. The Parties capital contribution as reflected in Exhibit “A” of the “Operating Agreement” shows Joshua Adam Shepard at 48%, SMF Premier Properties, LLC., Steven G. Ferrell, Manager, at 37% and James Factor at 15%. 11. Section 5.01 of the “Operating Agreement” states “Distribution of Cash Available for Distribution shall be made not less frequently than Monthly after the cash capital of the Company reaches $400,000.00. The total amount of distribution will be determined and established by majority vote of the members. Any distribution of property shall be treated as a distribution of cash in the amount of the fair market value of such property. Distribution shall be made to the Members by the Company pro rata, according to the number of Units held by each, with all Outstanding Units being treated alike.” 12. In October 2023, Defendant and managing member of the LLC., Joshua Adam Shepard, withdrew $348,208.44 from the LLC’s bank account to buy himself a home. This was done without a majority vote of the LLC. In addition, no pro rata distribution was made to SMF Premier Properties, LLC., as required by the “Operating Agreement.” As of December 31, 2023, Defendant took $267,323.32 from SC Builders, LLC. Only $15,008 has been distributed to Member James Factor and $5,000.00 to SMF Premier Properties, LLC, since March 2023. In 2024, Defendant took $393,521.72 from SC Builders, LLC, without consent of the other members of the LLC and no pro data distribution was made to SMF Premier Properties, LLC. In 2025, Defendant took $551,816.91 from SC Builders, LLC, without consent of the other members of the LLC and no pro data distribution was made to SMF Premier Properties, LLC. Thus far in January through February 2026, Defendant has taken over $78,000 from SC Builders, LLC, without consent of the other members of the LLC and no pro data distribution was made to SMF Premier Properties, LLC. COUNT ONE: BREACH OF CONTRACT 13. Paragraph 1-12 are incorporated herein. 14. During the period of operations from March 2023 through February 2026 Joshua Adam Shepard has taken over $1,000,000 from SC Builders, LLC without the knowledge or consent of member SMF Premier Properties, LLC., and applied it to his personal use. No pro rata share was distributed to the other members of the LLC. 15. Defendant Joshua Adam Shepard has knowingly and intentionally violated the terms of the "Operating Agreement" for his own enrichment and to the determinant of both SC Builders, LLC., and SMF Premier Properties, LLC. COUNT TWO: BREACH OF FIDUCIARY DUTY 16. Paragraphs 1-15 are incorporated herein. 17. Defendant Joshua Adam Shepard acted to the detriment of SC Builders, LLC., by depleting its operating revenues. 18. The Defendant had both a contractual and a fiduciary duty to conduct himself in the best interest of SC Builders, LLC., and to do so in good faith. 19. A fiduciary relationship was created by the justifiably anticipated trust and confidence that SC Builders, LLC., placed in the Defendant, based on the Operating Agreement and the differing contributions to the LLC. 20. As a result of Defendant's tortious conduct, SC Builders, LLC., has suffered the loss of operating capital to such a degree as to jeopardize its continued viability. COUNT THREE: FRAUD 21. Paragraphs 1-20 are incorporated herein. 22. Elements of common law fraud are: (a) a false material misrepresentation, (b) made as a positive assertion which is either known to be false, or made recklessly without knowledge of the truth, (c) with the intention that it be acted upon, and (d) which is relied on by the other party to his own detriment. 23. Defendant repeatedly misrepresented the status of accounts to the Plaintiff SMF Premier Properties, LLC., and withdrew funds from the LLC operating account without pro rata distribution to the other members. COUNT FOUR: EMBEZZLEMENT 24. Paragraphs 1-23 are incorporated herein. 25. Embezzlement is the fraudulent appropriation of property of any person or legal entity, legally obtained, to any use or purpose not intended or authorized by its owner where the property was obtained by being by being entrusted to that person for a specific purpose, use or disposition. 26. Plaintiff SMF Premier Properties, LLC., in acting upon the terms of the "Operating Agreement", entrusted funds of the LLC to SC Builders, LLC., for the specific purpose of meeting company obligations. 27. There was no vote of the members authorizing the withdrawal of funds for personal use unrelated to company obligations by Joshua Adam Shepard. Furthermore, no pro rata distribution was made as required by the "Operating Agreement" of SC Builders, LLC. 28. Defendant Joshua Adam Shepard knowingly and with intent misappropriated such funds to his own enrichment, thereby depriving the Plaintiffs of revenues to which they were entitled. COUNT FIVE: ACCOUNTING 29. Paragraphs 1-28 are incorporated herein. 30. Plaintiffs demand, and Defendant should justly provide a specific and accurate accounting of the money Defendant has taken from SC Builders, LLC. COUNT SIX: INJUNCTION 31. Paragraphs 1-30 are incorporated herein. 32. Pursuant to Oklahoma Statute §§ 1381 et seq. the Plaintiffs demand an injunction against the Defendant and his management of the SC Builders, LLC, in order to thwart the Defendant’s further malfeasance and misfeasance of his fiduciary obligations to the Plaintiffs. 33. Because of the Plaintiffs likelihood to win this cause of action and because of the likelihood that the Plaintiffs will suffer irreparable harm if an injunction is not entered this Court should enter an injunction prohibiting the Defendant from operating as a managing member of the SC Builders, LLC, from enjoying access to the assets of the LLC, and from taking or receiving disbursements from the LLC until such time as other LLC members are rightfully compensated, or until this Court orders otherwise. WHEREFORE, premises considered, Plaintiffs pray for judgment against the Defendant on their causes of action for Breach of Contract, Breach of Fiduciary Duty, Fraud and Embezzlement and that judgment be rendered in favor of the Plaintiffs against the Defendant for an amount that exceeds $75,000.00, together with Plaintiffs' costs, expenses and attorney's fees. Respectfully submitted, Keith O. McArtor, OBA #14091 601 S. Boulder Ave., Ste. 602 Tulsa, Oklahoma 74119 (918) 584-4992 Fax (918) 582-2366 [email protected] Attorney for Plaintiffs OPERATING AGREEMENT OF SC Builders, LLC OKLAHOMA LIMITED LIABILITY COMPANY THIS OPERATING AGREEMENT (The "Agreement") is entered into by and among the members named on the signature pages hereto (the "Members") of SC Builders, LLC, an Oklahoma limited liability company (the "Company"). In consideration of the mutual covenants and conditions hereinafter set forth, the Members hereby agree that the terms of the Operating Agreement governing the Company shall be as follows: ARTICLE I. Organizational Matters Section 1.01. Formation. The Company shall be formed as a limited liability company pursuant to the provisions of the Act (as hereinafter defined). The rights and obligations of the Members, and the affairs of the Company, shall be governed first by the mandatory provisions of the Act, second by the Company's Articles of Organization, third by this Agreement, and fourth by the optional provisions of the Act. In the event of any conflict among the foregoing, the conflict shall be resolved in the order of priority set forth in the preceding sentence. Section 1.02. Name. The name of the Company shall be SC Builders, LLC. Section 1.03. Principal Office. The Company may also maintain offices at such other place or places as the members deem advisable. Principal Office. The principal office of the Company in the State of Oklahoma shall be located at: 14169 South Broadway Street, PO Box No. 1507, Glenpool, Oklahoma 74033. Registered Agent. The name and address of its resident agent is: Joshua Adam Shepard, 14459 South Kendalwood Blvd., Glenpool, Oklahoma 74033. Section 1.04. Term. The Company shall commence upon the filing for records of the Company's Articles of Organization with the Oklahoma Secretary of State and shall continue for a perpetual period if permitted by law, or for a period of 50 years if it cannot be perpetual, unless sooner terminated as herein provided. ARTICLE II. Definitions Section 2.01. Definitions. For purposes of this Agreement, the following terms shall have the following meanings: "Act" means the Oklahoma Limited Liability Company Act, as it may be amended from time to time, and any successor to such act. "Affiliate" means any Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. As used in this definition of "Affiliate", the term "control" means either (1) the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise, or (2) a direct or indirect equity interest of ten percent (10%) or more in the entity. "Agreement" means this Operating Agreement, as it may be amended or supplemented from time to time. "Articles of Organization" means the articles of organization, as amended from time to time, filed by the Company under this Act. "Assignee" means a Person to whom one or more Units have been transferred, by transfer or assignment, or otherwise, in a manner permitted under this Agreement, and who has agreed to be bound by the terms of this Agreement but who has not become a Substitute Member. "Business Day" means Monday through Friday of each week, except legal holidays recognized as such by the Government of the United States or of the State of Oklahoma. "Capital Account" means each capital account maintained for a Member pursuant to the Act. "Capital Contributions" means the sum of the total amount of cash and the total value of property contributed or services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services contributed to the Company by all Members, or any one Member, as the case may be (or the predecessor holders of any Units of any such Members). Services rendered includes the loaning of personal property or equipment to the Company or using personal property or equipment on behalf of the company in order to further the business service. "Capital Gain" means the Company's allocable share of gain from the disposition by the Company of a capital asset as defined in the Code (including any portion of such gain treated as ordinary income). "Cash Available for Distribution" means, with respect to any period, all cash receipts and funds received by the Company (except for Capital Contributions) minus (1) all cash expenditures and (2) the Company's cash management fund and representing working capital or other reserves. "Code" means the Internal Revenue Code of 1986, as amended, as in effect from time to time. "Company" means the limited liability company formed by the filing of the Company's Articles of Organization with the Oklahoma Secretary of State. "Company Property" means all property owned, leased or acquired by the Company from time to time. "Disqualified Member" has the meaning specified in Section 12.01. "Event of Dissolution" has the meaning specified in Section 12.01. In the event units are held jointly, an event which would otherwise be a disqualifying event will not be a disqualifying event, and will not give rise to an event of disqualification, so long as the units which were held jointly are held and controlled exclusively by one of the joint interest holders. "Income" and "Loss" mean an amount equal to the Company's taxable income (excluding Capital Gain) or loss (including capital loss) for each taxable year, determined in accordance with Section 703(1) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments: A. Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Income or Loss shall be added to such Income or Loss; B. Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(1)(2)(B) of the Code expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Income or Loss, shall be subtracted from such Income or Loss; and C. Upon the distribution of property by the Company to a Member, gain or loss attributable to the difference between the fair market value of the property and its basis shall be treated as recognized. "Majority Vote of the Members" means the affirmative vote of the holders of a majority of the Outstanding Units held by the Members. "Mandatory Provisions of the Act" means those provisions of the Act which may not be waived by the Members acting unanimously or otherwise. "Member" means those individuals executing this Agreement as Members of the Company on the signature pages hereto. In the event units are held jointly, the Member shall be such joint unit holders. In the event units are held jointly, each such joint interest owner shall designate one of the joint interest owners as the voting representative of the jointly held Member units. "Opinion of Counsel" means a written opinion of counsel (who shall be regular counsel to the Company). "Outstanding" means the number of Units issued by the Company as shown on the Company's books and records, less any Units held by the Company. "Person" means a natural person, partnership, domestic or foreign limited partnership, domestic or foreign limited liability company, trust, estate, association or corporation. "Record Holder" means the Person in whose name such Unit is registered on the books and records of the Company as of the close of business on a particular Business Day. "Substitute Member" means a transferee of a Unit who is admitted as a Member to the Company pursuant to Section 11.01 in place of and with all the rights of a Member. "Tax Item" means each item of income, gain, loss, deduction, or credit of the Company for federal tax purposes, as separately stated and calculated pursuant to the Code. "Tax Matters Partner" means the individual designated pursuant to Section 9.02. "Unit" means a Unit representing an interest in the Company. ARTICLE III. Purpose Section 3.01. Purpose of the Company. The purpose of the Company is contracting for land-work, construction and building, property development and management, and related trades that facilitate the Company's purpose as provided in the Articles of Organization. ARTICLE IV. Capital Contributions Section 4.01. Units. There shall be an aggregate of 100,000 Units in the Company. Section 4.02. Capital Contributions and Services Rendered Contribution A. Initial Contributions: Each Member shall contribute cash and/or property set forth opposite each Member's name on Exhibit "A". Each member shall receive the number of Units set forth opposite such Member's name on Exhibit "A" hereto, at the times set forth therein. B. Subsequent Contributions: Any contributions by current or future members shall be under such terms and conditions as are provided by this agreement. In the event such terms are not specified in this agreement, the Members holding a holding a majority of units shall determine such terms. C. Services Rendered: Services rendered includes, but is not limited to, each member's use of his or her professional skills on behalf of the business for the purpose of furthering the business purpose. From time to time, it may be necessary for either the member to use, loan, lease, or sell his or her equipment to the company for the purpose of furthering the business purpose. It is acknowledged and expected that any member who has equipment necessary for fulfilling an obligation of the company to any client or customer will not unreasonably withhold that equipment from the company and facilitate the use of that equipment for the purpose of honoring any contracts that the company is obligated to perform upon. D. Equipment: From time to time, it may be necessary for members to loan, lease, lend, or purchase equipment to be used by the company in the course and scope of fulfilling its business purpose. Any member who has equipment that members, on a unanimous vote, agree to lease, purchase or otherwise use for the fulfillment of the company's business contracts, obligations, or business purpose must execute with the company a contract that explains the owner, equipment, time period, financial terms, the nature of the transfer or use, estimated monetary value, insurance obligations, and any other necessary information. Section 4.03. Capital Accounts. A. The Company shall maintain for each Member a separate Capital Account. The term "Capital Account" shall mean as to any Member and as to any Units held by that Member the amount of the initial Capital Contribution attributable to the Units held by that Member, which amount shall be (1) increased by subsequent Capital Contributions by such Member, and Capital Gain and Income allocated to such Member pursuant to Section 5.02, and (2) decreased by distributions to such Member pursuant to Section 5.01 and Losses allocated to such Member pursuant to Section 5.02. Distributions shall be debited to Capital Accounts in the year containing the record date for such distribution. B. It is not currently anticipated that the Company will receive any Capital Contributions in any form other than cash. In the event any in-kind contributions or contributions in the form of services are ever made, after unanimous approval of the Managers, the Capital Account of the Member shall be increased by the fair market value of the property or services contributed by such Member. C. The foregoing definition of Capital Account and certain other provisions of this Agreement are intended to comply with the Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with that regulation. Such regulation contains additional rules governing maintenance of capital accounts that have not been addressed in this Agreement. D. An Assignee of a Unit will succeed to the Capital Account relating to the Unit transferred. However, if the transfer causes a termination of the Company under Section 708(b)(1)(B) of the Code, the Company Property shall be deemed to have been distributed in liquidation of the Company to the Members (including the transferee of a Unit) pursuant to Section 12.02 and re-contributed by such Members and transferees in reconstitution of the Company. The Capital Accounts of such reconstituted Company shall be maintained in accordance with the principles of this Section 4.03. E. At such times as may be permitted or required by Treasury Regulations issued pursuant to Section 704 of the Code, the Capital Accounts shall be re-valued and adjusted to reflect the then fair market value of Company Property and the Capital Accounts shall be maintained to comply with Treasury Regulations Section 1.704-1(b)(2)(iv)(f). All allocations of gain resulting from such revaluation shall be made consistently with that regulation; and to the extent not inconsistent therewith, the Income allocation provisions of Section 5.02 hereof. Section 4.04. Interest. No interest shall be paid by the Company on Capital Contributions, on balances in a Member's Capital Account or on any other funds distributed or distributable under this Agreement. Section 4.05 No Withdrawal. Except as otherwise required under any Mandatory Provisions of the Act, no Member shall have (1) any right to resign voluntarily or otherwise to withdraw from the Company, or (2) any right to the withdrawal or reduction of any part of his Capital Contribution, without the written consent of all remaining Members of the Company. Section 4.06. Loans. Loans by a Member to the Company shall not be considered Capital Contributions. The Company shall not make any loans to any Member or any Affiliate of any Member. Section 4.07. Additional Capital Contributions. In the event that the Members determine by a Majority Vote of the Members that additional Capital Contributions by the Members are required to pay current operating expenses, current indebtedness and current installments of long-term indebtedness of the Company when due and in adequate time to obtain all discounts available by reason of prompt payment, each Member shall contribute in cash to the capital of the Company an amount equal to his pro rata share of the aggregate additional Capital Contribution called for (according to the number of Units held by each, with all Outstanding Units being treated alike), in the time and manner determined by a Majority Vote of the Members. In the event a Member shall fail to make the required additional Capital Contribution, the other Members shall have the right, but not the obligation, to make the contribution which would otherwise have been made by the non-contributing Member. The amount of any additional contribution shall be added to the Capital Account of the contributing Member. Section 4.08. Rights of Contributing Member. The contributing Member shall have the right to demand of the non-contributing Member that the non-contributing Member, within five (5) days after written demand, submit a written offer to purchase the Units of the contributing Member stating the terms and amount, and, in the alternative, to sell the non-contributing Member's interest on the same terms. The contributing Member shall have the option for thirty (30) days to: (1) continue the Company by accepting the non-contributing Member's purchase offer or sale offer; or (2) serve notice that the Company shall be dissolved in accordance with Sections 12.01 and 12.02 herein. Failure of a non-contributing Member to execute and deliver such a purchase offer and sale offer within the time prescribed on written demand of the contributing Member shall entitle the contributing Member to dissolve the Company or to exercise a right to purchaser the interest of the non-contributing Member at a price equal to the basis of the non-contributing Member in such Units. ARTICLE V. Allocations and Distributions Section 5.01. Distribution of Cash Available for Distribution. Distributions of all Cash Available for Distribution shall be made not less frequently than monthly after the cash capital of the Company reaches $400,000.00 (four hundred thousand dollars and zero cents). The total amount of distribution will determined and set by majority vote of the members. Any distribution of property shall be treated as a distribution of cash in the amount of the fair market value of such property. Distribution shall be made to the Members by the Company pro rata, according to the number of Units held by each, with all Outstanding Units being treated alike. Section 5.02. Allocation of Income and Loss. A. All Tax Items shall be allocated to all Members and Assignees in accordance with their respective Units in the Company. All outstanding Units shall be treated equally. B. Notwithstanding anything to the contrary in this Section 5.02, if there is a net decrease in "minimum gain" (within the meaning of Treasury Regulations Section 1.704-1(b)(4)(iv)(c) during a fiscal year, all Members with a deficit balance in their Capital Accounts at the end of that year (excluding items described in Treasury Regulations Section 1.704-1(b)(4)(iv)[e] shall be allocated, before any other allocations of Company items for such fiscal year, items of Income and gain for such year (and if necessary, subsequent years), in an amount and in the proportions necessary to eliminate such deficits as quickly as possible. The foregoing sentence is intended to be a "minimum gain charge back" provision as described in Treasury Regulations Section 1.704-1(b)(4)(iv)(e), and shall be interpreted and applied in all respects in accordance with that regulation. C. If during any fiscal year of the Company, any Member unexpectedly receives an adjustment, allocation, or distribution of the type described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), that Member shall be allocated items of Income in an amount and manner sufficient to eliminate that Member's deficit Capital Account balance as quickly as possible. D. Under regulations prescribed by the Secretary of the Treasury pursuant to Section 704(c) of the Code, items of Capital Gain, Income and Loss with respect to property contributed to the Company by a Member shall be shared among Members so as to take account of the variation between the basis of the property to the Company and its fair market value at the time of contribution. The Members shall have the power to make such elections, adopt such conventions, and allocate Capital Gain, Income and Loss as each of them deems appropriate to comply with Section 704(c) of the Code and any Treasury Regulations promulgated thereunder and to preserve, to the extent possible, uniformity of the Units. Any items allocated under this Section 5.02D shall not be debited or credited to Capital Accounts to the extent that item is already taken into account (upon formation or otherwise) in determining a Member's Capital Account. E. Upon the transfer of a Unit, Income, Capital Gain and Loss attributable to the transferred Unit shall, for federal income tax purposes, be allocated to the owners of such Unit on the basis of the Income or Loss for each month that such Person was the owner of such Units, determined on an interim closing of the books method. The Members may revise, alter, or otherwise modify the method of allocation as they determine necessary to comply with Section 706 of the Code and regulations or rulings promulgated thereunder. F. If, and to the extent that, any Member is deemed to recognize Income as a result of any transaction between the Member and the Company pursuant to Sections 482, 483, 1272-1274, or 7872 of the Code, or any similar provision now or hereafter in effect, any corresponding resulting Loss or deduction of the Company shall be allocated to the Member who was charged with that Income. G. All tax credits for federal or state income tax purposes shall be allocated in the same manner as Income. ARTICLE VI Management and Operation of Business by Managers Section 6.01. Managers. Management of the Company shall be vested in one or more Managers, as are appointed by the Members from time to time pursuant to this Agreement. In the event that no Managers are appointed, or all Managers have been removed from office as provided in this Article VI, the business of the Company shall be under the exclusive management of the Members, and in such case, the agreement of a majority of Members shall be necessary for all decisions affecting the Company, and individual Members shall have no power as such. Section 6.02. Authority of Managers. A Manager or Managers may exercise all the powers of the Company whether derived from law, the Articles of Organization of this Agreement, except such powers as are by statute, by the Articles of Organization or by this Agreement vested solely in the Members. Section 6.03. Restrictions on Managers. Notwithstanding any other provision hereof, no Manager or Managers, if there be any, shall, without the written consent or written ratification of the specific act by all the Members: A. Borrow money in excess of $100,000.00; B. Sell any Company Property (or assets, in related transactions) having a fair market value over $25,000.00 outside of the ordinary course of business; C. Enter into any contract which is not terminable at will, involving an anticipated total expenditure of over $500,000.00; D. Do any act which would make it impossible to carry on the ordinary business of the Company; E. Compromise any claim over $25,000.00; F. Admit a Person as a Member, except as provided in this Agreement; or G. Knowingly perform any act that would subject a Member to personal liability. Section 6.04. Number, Term and Qualifications. The Company may have one or more Managers. Appointment of Manager(s) or increases or decreases in the number of Managers may be made as the Members shall from time to time determine, by agreement of a Members holding a majority of units in Company. Each Manager shall hold office until his successor shall have been appointed. Managers need not be Members of the Company. Section 6.05. Manner of Acting. The agreement of Managers holding a majority of the units held by all Managers shall be necessary for all decisions affecting the Company, and individual Managers shall have no power as such. Modification or termination of representative agreements between Company and any Member shall require approval of Managers holding at least two-thirds (2/3) of the units held by all Managers. Section 6.06. Outside Activities. Each Manager and such Manager's Affiliates may have business interests and engage in business activities in addition to those relating to the Company, excluding business interests and activities in direct competition with the Company, for such Manager's or such Manager's Affiliates' own account or for the account of others, and no provision of this Agreement shall be deemed to prohibit such Manager or such Manager's Affiliates from conducting such businesses and activities. Neither the Company, the Members or the other Managers shall have any rights by virtue of this Agreement or the relationship contemplated herein in any business ventures of such Manager or such Manager's Affiliates. Section 6.07. Limitation on Liability of Managers. No Manager of the Company shall be liable to the Company or its Members for monetary damages for breach of fiduciary duty as a Manager; provided, however, that nothing contained herein shall eliminate or limit the liability of a Manager (1) for any breach of the Manager's duty of loyalty to the Company or its Members, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, and (3) for any transaction from which the Manager derived an improper personal benefit. Section 6.08 Outside Activities. All Members other than Members who have executed an agreement to the contrary (and such Member's Affiliates) may have business interests and engage in business activities in addition to those relating to the Company, including, without limitation, business interests and activities in direct competition with the Company for such Member's or such Member's Affiliates' own account or for the account of others, and no provision of this Agreement shall be deemed to prohibit such Member or such Member's Affiliates from conducting such businesses and activities. Neither the Company nor the other Members shall have any rights by virtue of this Agreement or the relationship contemplated herein in any business ventures of such member or such Member's Affiliates. ARTICLE VII. Rights and Obligations of the Members Section 7.01. Limitation of Liability. Anything herein to the contrary notwithstanding, except as otherwise expressly agreed in writing, a Member shall not be personally liable for any debts, liabilities, or obligations of the Company, whether to the Company, to any of the other Members, or to creditors of the Company, beyond the Capital Account of the Member, together with the Member's share of the assets and undistributed profits of the Company. Section 7.02. Rights of Member Relating to the Company. A. Subject to the restrictions of Section 7.03, this Agreement may be amended only by a Majority Vote of the Members. B. In addition to other rights provided by this Agreement or by applicable law, a Member shall have the right, upon demand, and at such Member's own expense: 1. To obtain any and all information regarding the status of the business and financial condition of the Company; 2. Promptly after becoming available, to obtain a copy of the Company's federal, state, and local income tax returns for each year; 3. To have furnished to it a current list of the name and last known business, residence, or mailing address of each Member; 4. To obtain information regarding the Capital Contributions made by each Member; 5. To have furnished to it a copy of this Agreement and the Articles of Organization and any amendments hereto and thereto, together with copies of any powers of attorney pursuant to which this Agreement, the Articles of Organization, and all amendments hereto and thereto have been executed; and 6. To inspect and copy any of the Company's books and records and obtain such other information regarding the affairs of the Company. Section 7.03. Restrictions on Powers. Except as otherwise provided herein or by the Mandatory Provisions of this Act, a Member shall not have the authority or power to act on behalf of, or to bind, the Company, or any other Member, and a Member shall not have the right or power to take any action which would change the Company to a general partnership, change the limited liability of a Member, or affect the status of the Company for federal income tax purposes. Section 7.04. Indemnification. A. Company Indemnity. To the maximum extent permitted by law, the Company shall indemnify and hold harmless all Members, (Managers) their respective Affiliates, and the employees and agents of the Company (each, an "Indemnitee") from and against any and all losses, claims, demands, costs, damages, liabilities, joint and several, expenses of any nature (including attorneys' fees and disbursements), judgments, fines, settlements, penalties and other expenses actually and reasonably incurred by the Indemnitee in connection with any and all claims, demands, actions, suits, or proceedings, civil, criminal, administrative or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise, by reason of the fact that the Indemnitee is or was a Member (or Manager) of the Company or is or was an employee or agent of the Company, including Affiliates of the foregoing, arising out of or incidental to the business of the Company, provided, (1) the Indemnitee's conduct did not constitute willful misconduct or recklessness, (2) the action is not based on breach of this Agreement, (3) the Indemnitee acted in good faith and in a manner he or it reasonably believed to be in, or not opposed to, the best interests of the Company and within the scope of such Indemnitee's authority, and (4) with respect to a criminal action or proceeding, the Indemnitee had no reasonable cause to believe its conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre, or its equivalent, shall not, in and of itself, create a presumption or otherwise constitute evidence that the Indemnitee acted in a manner contrary to that specified above. B. Advancement of Expenses. Expenses incurred by an Indemnitee in defending any claim, demand, action, suit or proceeding subject to this Section 7.04 may, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified as authorized in this Section 7.04. C. Non-Exclusivity. The indemnification provided by this Section 7.04 shall be in addition to any other rights to which the Indemnitee may be entitled under any agreement, vote of the Members, as a matter of law or equity, or otherwise, and shall inure to the benefit of the successors, assignees, heirs, personal representatives and administrators of the Indemnitee. D. Insurance. The Company may purchase and maintain insurance, at the Company's expense, on behalf of any Indemnitees against any liability that may be asserted against or expense that may be incurred by an Indemnitee in connection with the activities of the Company regardless of whether the Company would have the power to indemnify such Indemnitee against such liability under the provisions of this Agreement. ARTICLE VIII. Books, Records, Accounting, and Reports Section 8.01. Books and Records. Appropriate books and records with respect to the Company's business, including without limitation, all books and records necessary to provide to the Member any information, lists and copies of documents required to be provided pursuant to Section 7.02, shall at all times be kept at the principal office of the Company or at such other places as agreed to by the Members. Without limiting the foregoing, the following shall be maintained at the Company's principal office: (1) a current list of the full name and last known business address of each Member (and Manager), (2) copies of records that would enable a Member to determine the relative voting rights of the members, (3) a copy of the Articles of Organization, and any amendments thereto, (4) copies of the Company's federal, states and local income tax returns and reports, if any, for the three most recent years and (5) copies of any financial statements of the Company for the three most recent fiscal years. Any records maintained by the Company in the regular course of its business may be kept on, or be in the form of, magnetic tape, photographs or any other information storage device, provided that the records so kept are convertible into clearly legible written form within a reasonable period of time. Section 8.02. Accounting. The books of the Company for regulatory and financial reporting purposes shall be maintained on an accrual basis of accounting. The Company books for purposes of maintaining and determining Capital Accounts shall be maintained in accordance with the provisions of this Agreement, Section 704 of the Code and to the extent not inconsistent therewith, the principles described above for financial reporting and regulatory purposes. Section 8.03. Fiscal Year. The fiscal year of the Company shall end on December 31, unless otherwise determined by Majority Vote of the Members. ARTICLE IX. Tax Matters. Section 9.01. Taxable Year. The taxable year of the Company shall end on December 31, unless otherwise determined by Majority Vote of the Members. Section 9.02. Tax Controversies. Subject to the provisions hereof, Ryan Treadway is designated the "Tax Matters Partner" (as defined in Section 6231 of the Code), and is authorized and required to represent the Company, at the Company's expense, in connection with all examinations of the Company's affairs by tax authorities, including resulting administrative and judicial proceedings. Each Member agrees to cooperate with the Tax Matters Partner, and to do or refrain from doing any or all things reasonably required by the Tax Matters Partner to conduct such proceedings. Section 9.03. Taxation as a Partnership. No election shall be made by the Company or any Member for the Company to be excluded from the application of any provision of Subchapter K., Chapter 1 of Subtitle A of the Code or from any similar provisions of any state tax laws. ARTICLE X. Transfer of Units Section 10.01. Transfer. A. The term "transfer" when used in this Article X with respect to a Unit, shall be deemed to refer to a transaction by which the Member assigns all or a portion of its Units, or any interest therein, to another Person, or by which the holder of a Unit assigns the Unit to another Person as Assignee, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, transfer by will or intestate succession, exchange, or any other disposition. B. No Units shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article X. Any transfer or purported transfer of any Units not made in accordance with this Article X shall be null and void. If for any reason any such transfer is not null and void, then the Assignee shall not be a Substitute Member, and shall have no right to participate in Company's affairs as a Member thereof, but instead shall be entitled to receive only the share of profits or other compensation by way of income and the return of contributions to which the transferring Member would otherwise be entitled at the time said transferring Member would be entitled to receive the same. Section 10.02. Transfer of Units by a Member. A. No Units may be transferred by a Member unless the following conditions are first satisfied: 1. The consent of Members holding a majority of units in Company has been obtained, which may be granted or withheld in each Member's sole discretion, such consent to be evidenced by a written instrument, dated and signed by the Member; 2. The transferee and each Member execute and file all documents necessary for the transferee to be a Substitute Member and be bound by the terms hereof and such transferee is admitted as a Substitute Member; and 3. The Company receives an Opinion of Counsel that such transfer would not materially adversely affect the classification of the Company as a partnership for federal and state income tax purposes. 4. Members have a preferential right to purchase the units of another Member in proportion to their ownership percentage. In the event one of the Members declines the right to make a preferential purchase, then the other Members may have the right to purchase all those outstanding shares held by the exiting member. Members must unanimously approve a sale of Units to any outside persons. 5. Member SMF Premier Properties, LLC acknowledges that Steven G. Ferrell is its managing member and that he has the authority to make decisions on its behalf, including voting and participating as a member in SC Builders, LLC. In the event that Steven G. Ferrell becomes incapacitated, dies, disappears or otherwise is unable to carry out his duties as a manager of SMF Premier Properties, LLC. or as a member of SC Builders, LLC., SMF Premier Properties, LLC will automatically relinquish its right to vote as a member, act as an agent, exercise implied or apparent authority, or otherwise participate in the ongoing company SC Builders, LLC until the other members of SC Builders, LLC vote unanimously to reinstate in part or in whole any of the previous authority held by SMF Premier Properties, LLC. 6. SMF Premier Properties, LLC. represents that that entity complies with all Oklahoma laws and has and will remain in good standing with the Oklahoma Secretary of State. B. The transfer restrictions on Company Units shall be conspicuously noted in an appropriate legend on any Unit certificates issued. C. In no event shall any Unit be transferred to a minor or any incompetent except by will or intestate succession. D. The Company need not recognize, for any purpose, any transfer of all or any fraction of a Unit unless there shall have been filed with the Company and recorded on the Company's books a duly executed and acknowledged counterpart of the instrument of assignment and such instrument evidences the written acceptance by the Assignee of all of the terms and provisions of this Agreement and represents that such assignment was made in accordance with all applicable laws and regulations. E. Any holder of a Unit (including a transferee thereof) shall be deemed conclusively to have agreed to comply with and be bound by all terms and conditions of this Agreement, with the same effect as if such holder had executed an express acknowledgment thereof, whether or not such holder in fact has executed such an express acknowledgment. Section 10.03. Restrictions on Transfer. Notwithstanding the other provisions of this Article X, no transfer of any Unit of any Member in the Company shall be made if the transfer (1) would violate applicable federal and state securities laws or rules and regulations of the Securities and Exchange Commission, any state securities commission or any other governmental authority with jurisdiction over the transfer, (2) would materially adversely affect the classification of the Company as a partnership for federal or state income tax purposes or (3) would affect the Company's qualification as a limited liability company under the Act. Section 10.04. Issuance of Certificates. The Company may issue one or more Certificates in the name of the Member evidencing the number of Units issued. Upon the transfer of a Unit in accordance with Article X, the Company shall, if certificates have been issued, issue replacement Certificates. All Certificates shall contain legends required by this Agreement or otherwise required by law. Section 10.05. Lost, Stolen or Destroyed Certificates. The Company shall issue a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate: (1) makes proof by affidavit that a previously issued Certificate has been lost, stolen or destroyed; (2) requests the issuance of a new Certificate before the Company has notice that the Units evidenced by such Certificate have been acquired by a purchaser for value in good faith and without notice of an adverse claim; and (3) if required by the Company, delivers to the Company a bond with surety or sureties acceptable to the Company, to indemnify the Company against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate. The Company shall be entitled to treat each Record Holder as the Member or Assignee in fact of any Units and, accordingly, shall not be required to recognize any equitable or other claim or interest in or with respect to the Units on the part of any other Person, regardless of whether it has actual or other notice thereof. ARTICLE XI. Admission of Substitute and Additional Members. Section 11.01. Admission of Substitute Members. A. Upon a transfer of a Unit by a Member in accordance with Article X (but not otherwise), the transferor shall have the power to give, and by transfer of any Certificate issued shall be deemed to have given, the transferee the right to apply to become a Substitute Member with respect to the Unit acquired, subject to the conditions of and in the manner permitted under this Agreement. A transfer of a Certificate representing a Unit shall not be effective with respect to the transferred Units (whether or not such transferee is a Member or Substitute Member with respect to other previously acquired Units) unless and until all of the following conditions are satisfied: 1. The instrument of assignment set forth the intentions of the assignor that the Assignee succeed to the assignor's interest as a Substitute Member in his place; 2. The assignor and Assignee shall have fulfilled all other requirements of this Agreement; 3. The Assignee shall have paid all reasonable legal fees and filing costs incurred by the Company in connection with his substitution as a Member; and 4. The Assignee has executed a copy of this Agreement. The admission of an Assignee as a Substitute Member with respect to a transferred Unit shall become effective on the date the Members representing a majority of unit interests give their written consent to the admission and the books and records of the Company have been modified to reflect such admission. Any Member who transfers all of his Units with respect to which it had been admitted as a Member shall cease to be a Member of the Company upon a transfer of such Units in accordance with Article X and the execution of a counterpart of this Agreement by the transferee and shall have no further rights as a Member in or with respect to the Company (whether or not the Assignee of such former Member is admitted to the Company as a Substitute Member). Section 11.02. Admission of Additional Members. Additional Units may be authorized and issued by the Company upon such terms and conditions as may be approved by a Majority Vote of the Members. Upon the proposed issuance of any such additional Units, each existing Member shall have the redemptive right, but not the obligations, to purchase such portion of the newly issued Units as the ratio of the number of Units then held by such Member bears to the total number of Units held by Members and outstanding before the issuance of the New Units, together with such Member's proportionate share of the other newly issued Units as to which other Members fail to exercise their preemptive rights. ARTICLE XII. Dissolution and Liquidation Section 12.01. Disqualification of Member. Upon the death, resignation, expulsion, bankruptcy or dissolution of a Member (such Member being hereinafter sometimes referred to as a "Disqualified Member"), or if there is an voluntary or involuntary transfer of a Member's units, or the occurrence of any other event which terminates the continued membership of a member in the Company (any of such events being referred to herein as an "Event of Dissolution"). the Company shall dissolve and its affairs shall be wound up. The Company shall thereafter conduct only activities necessary to wind up its affairs, unless there are at least two (2) remaining Members and within sixty (60) days after the occurrence of an Event of Dissolution. all the remaining Members unanimously agree to continue the Company. If an election to continue the Company is made, then: A. The remaining Members may elect, within thirty (30) days of the decision to continue the Company, to purchase the Disqualified Member's Units upon such terms and conditions as the remaining Members and the Disqualified Member or the legal representative of the Disqualified Member, may agree. In the event the remaining Members and the Disqualified Member (of such legal representative) do not agree upon terms and conditions for a purchase of the Units of the Disqualified Member. the remaining Members shall have an option (to be exercised within sixty (60) days after the occurrence of the Event of Dissolution, by giving notice to the Disqualified Member, or such legal representative) to purchase the Units for a cash purchase price determined by the value of the Capital Account of the Disqualified Member, as of the end of the calendar month preceding the occurrence of the Event of Dissolution, adjusted as if all Company Property were sold at fair market value, and all liabilities of the Company were paid and the Company was liquidated in accordance with the provisions of Section 12.02. B. The Company shall continue until the expiration of the term for which it was formed or until the occurrence of another Event of Dissolution, in which event any remaining Members shall again elect whether to continue the Company pursuant to this Section 12.01. Section 12.02. Dissolution and Liquidation. The Company shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following: (1) the term of the Company stated in the Articles of Organization expires; (2) there are fewer than two (2) Members; (3) if, upon the occurrence of an Event of Dissolution, the remaining Members fail to continue the Company pursuant to Section 12.01; or (4) all Members vote to dissolve the Company. Section 12.03. Method of Winding Up. Upon dissolution of the Company pursuant to Section 12.02, the Company shall immediately commence to liquidate and wind up its affairs. The Members shall continue to share profits and losses during the period of liquidation and winding up in the same proportion as before commencement of winding up and dissolution. The proceeds from the liquidating and winding up shall be applied in the following order of priority: A. To creditors, including Members who are creditors, to the extent permitted by law, in satisfaction of liabilities of the Company other than liabilities to Members on account of their Capital Contributions or on account of a Member's withdrawal from the Company or pursuant to a withdrawal of capital; and B. The balance, to Members in accordance with their Capital Accounts. Unless the Members shall unanimously determine otherwise, all distributions will be made in cash, and none of the Company Property will be distributed in kind to the Members. Section 12.04. Filing Articles of Dissolution. Upon the completion of the distribution of Company Property as provided in Section 12.02, Articles of Dissolution shall be filed as required by the Act, and each member agrees to take whatever action may be advisable or proper to carry out the provisions of this Section. Section 12.05. Return of Capital. The return of Capital Contributions shall be made solely from Company Property. ARTICLE XIII. Amendment of Agreement; Meetings; Record Date Section 13.01. Amendments. Amendments to Articles IV, X, XI, and XII shall require unanimous approval of all Members. All other amendments to this Agreement shall require a Two-Thirds Majority Vote of the Members. Section 13.02. Limitations on Amendments. Notwithstanding any other provision of this Agreement, no amendment to this Agreement may (1) enlarge the obligations of any Member under this Agreement or (2) amend this Section 13.01, Section 13.02, or Section 7.03, without the unanimous approval of all Members. Section 13.03. Meetings. Meetings may be called by any Member (or the Managers), by giving at least ten (10) days' prior notice of the time, place and purpose of the meeting to all Members. Section 13.04. Adjournment. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting, if the time and place thereof are announced at the meeting at which the adjournment is taken, unless such adjournment shall be for more than forty-five days. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than forty-five days, a notice of the adjourned meeting shall be given in accordance with this Section 13.04. Section 13.05. Waiver of Notice; Consent to Meeting; Approval of Minutes. The transactions of any meeting of the Company, however called and noticed, and whenever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the Members entitled to vote, but not present in person or by proxy, approves by signing a written waiver of notice or an approval to the holding of the meeting or an approval of the minutes thereof. All waivers, consents, and approvals shall be filed with the Company records or made a part of the minutes of the meeting. Attendance of a Member at a meeting shall constitute a waiver of notice of the meeting, except when such Member objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened; and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be included in the notice of the meeting, but not so included, if the objection is expressly made at the meeting. Section 13.06. Quorum. The holders of more than two-thirds (of the Units entitled to vote represented in person or by proxy, shall constitute a quorum at a meeting of Members. The Members present at a duly called or held meeting at which a quorum is present may continue to participate at such meeting until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum, if any action taken (other than adjournment) is approved by the requisite percentage of Units of Members specified in this Agreement. In the absence of a quorum, any meeting of Members may be adjourned from time to time by a Majority Vote of the Members represented either in person or by proxy entitled to vote, but no other matters may be proposed, approved or disapproved, except as provided in Section 13.04. Section 13.07. Action Without a Meeting. Any action that may be taken by any vote of the Members may be taken without a meeting if a consent to such action is signed by Members holding Units representing not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Units entitled to vote thereon were present and voted. Prompt notice of the taking of any action without a meeting shall be given to those Members who have not consented in writing. ARTICLE XIV. General Provisions Section 14.01. Notices. Any notice, demand, request or report required or permitted to be given or made to a Member under this Agreement shall be in writing and shall be deemed given or mad when delivered in person or when sent by first class mail to the Member at the address set forth on Exhibit A. Any notice, payment, or report to be given or sent to a Member hereunder shall be deemed conclusively to have been given or sent, upon mailing of such notice, payment, or report, to the address shown on the records of the Company, regardless of any claim of any Person who may have an interest in the Unit by reason of an assignment or otherwise. Section 14.02. Captions. All article and section captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to "Articles" and "Sections" are to Articles and Sections of this Agreement. Section 14.03. Pronouns and Plurals. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. Section 14.04. Further Action. The parties to this Agreement shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement. Section 14.05. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assignees. Section 14.06. Integration. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereof. Section 14.07. Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition. Section 14.08. Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto, independently of the signature of any other party. Section 14.09 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Oklahoma, without regard to its principles of conflict of laws. Section 14.10. Invalidity of Provisions. If any provision of this Agreement is or become invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not be affected thereby. Section 14.11. Conveyances. All of the assets of the Company shall be held in the name of the Company, unless the Managers shall determine that any Manager may hold title to any property as nominee for the Company. Any deed, bill of sale, mortgage, lease, contract of sale or other instrument purporting to convey or encumber the interest of the Company of all or any portion of the assets of the Company shall be sufficient if signed on behalf of the Company by one or more Managers. No person shall be required to inquire into the authority of any individual to sign any instrument which is executed pursuant to the provisions of this Article 14.11. Section 14.12. Power of Attorney. A. Managers as Attorneys-In-Fact. By the execution of this Agreement, or a counterpart hereof, each such Member irrevocably constitutes and appoints the Managers as its true and lawful attorneys-in-fact and agent to effectuate, with full power and authority to act in his name, place, and stead in effectuating the purposes of the Company pursuant to the terms and conditions of this Agreement, including the execution, acknowledgment, delivery, filing, and recording of all certificates, documents, contracts, loan documents, or counterparts thereof, and all other documents which the Managers deem necessary or reasonably appropriate to do any of the following: (1) organize, qualify, or continue the Company as a limited liability company, including qualification of the Company in such other jurisdictions as the Company's activities may require; (2) reflect an amendment to this Agreement or the Company's Articles of Organization required by a change in the name of the Company, a change in the principal place of business of the Company, or, subject to the provisions of this Agreement, the admission of a new Member to the Company, if such admission is in compliance with the applicable provisions hereof; (3) accomplish the purposes and carry out the powers of the Company as set forth herein; and (4) subject to the provisions of this Agreement, effect the dissolution and termination of the Partnership. B. Nature of Special Power. The power of attorney granted herein: (1) shall be deemed to be coupled with an interest, shall be irrevocable and shall survive the death, incompetency, or legal disability of a Member; (2) may be exercised only by the Managers, acting together (and their successors and assigns), for each Member, or any or all of them, by listing all, or any, of the Members required to execute any such instrument and executing such instrument as attorney-in-fact for all of any one, of such Members, and (3) shall be binding upon any transferee of a membership interest of a Member hereunder. or any portion thereof, except that where such transferee is qualified as a Substitute Member under this Agreement, the power of attorney shall survive the delivery of such Units for the sole purpose of enabling the Managers, acting together, to execute, acknowledge, and file any instrument on behalf of the transferor of the Units necessary to effect such substitution. IN WITNESS WHEREOF, the Manager and Member(s) have executed this Agreement as of the __3__ day of ____16__, 2023. Joshua Adam Shepherd Managing Member Steven G. Ferrell SMF Premier Properties, LLC Manager, Steven G. Ferrell Member James Factor Member EXHIBIT A MEMBER NAME/ADDRESS ISSUED UNITS CONTRIBUTION PERCENT Joshua Adam Shepherd [Address] Manager 48,000 Capital, Equipment and Services Rendered 48% SMF Premier Properties, LLC Steven G. Ferrell, Manager [Address] 37,000 Capital, Equipment and Services Rendered $100,000.00 contributed plus any equipment Contributed, used, loaned, leased, or other 37% James Factor [Address] Member 15,000 Capital, Equipment and Services Rendered 15%