Form 12-3

Although the Texas Business Organizations Code (TBOC) permits a protected or registered series to be established without filing a separate certificate of formation, the existence, structure, and operation of each series must be evidenced in writing to preserve the liability segregation provided by subchapter M of the TBOC. The series agreement (sometimes called a series addendum or series declaration) is the primary instrument that accomplishes this separation.

Agreement and Declaration Establishing Series of [name of LLC]

This Agreement and Declaration (“Agreement”) is entered into effective [date] by [name of limited liability company], a Texas series limited liability company (“Company”), as evidenced by the signatures of the holders of membership interest, set forth below, to evidence the Com­pany’s intent and actions to hereby create the series identified below (any or all series created herein, hereafter the “Series”).

All actions taken hereunder are taken pursuant to the Company’s operating agreement (“Company Agreement”) and all applicable laws under the laws of the state of Texas. Unless otherwise specified herein, all capitalized terms used herein shall have the meanings assigned to them in the Company Agreement. The Series shall be managed by the Managers (or manag­ing Members) of the Company, and the rights and obligations of the Members of the Series shall be governed by the Company Agreement, as supplemented hereby, unless and until such Company Agreement shall be replaced by a series-specific agreement.

Name of Series:      The Company hereby establishes the following registered Series:

[Name of LLC] — Series A

[Name of LLC] — Series B

Purpose:       The purpose of this Series is to transact any and all lawful business the Series is entitled to transact under applicable law.

Series Members and Series Sharing Ratios:       All Members of the Company are associated with each Series. Unless otherwise agreed in writing, the percentages in which the Company Members shall share any distributions or allocations thereof (their “Series Sharing Ratios”) are the same as their respective percentage interests in the Company.

Additional Series Members; Dilution:       No additional Series Members shall be admitted to the Series without the Company’s prior approval. Upon such approval, new Mem­bers may be admitted, and the Series Sharing Ratios of existing Members shall be adjusted accordingly. Any such admission shall be reflected in a written series-specific agreement exe­cuted by all Members of the Series and of the Company, which may supplement or amend this Agreement.

Distributions:       Distributable funds of each Series shall be distributed to its Members in accordance with their Series Sharing Ratios, subject to applicable provisions of the Com­pany Agreement and the Texas Business Organizations Code.  

Transfers:       No Member may transfer, pledge, or assign all or part of their interest in a Series, or grant a security interest in the right to receive distributions, without the prior written consent of the Company.

Maintenance of Books and Accounts:       The Company shall maintain separate and distinct books, records, and accounts for each Series sufficient to account for the assets and liabilities of that Series separately from the assets and liabilities of the Company generally or any other Series, in compliance with section 101.602(b) of the Texas Business Organizations Code. Each Series may establish one or more separate bank and/or investment accounts in its own name.

Assumed Name:       The Company shall secure and maintain assumed name certificates for each Series with the Texas secretary of state in accordance with Texas law. Each certificate shall be renewed or re-filed as required by law, and any Series that ceases to exist shall discon­tinue its assumed name.

IN WITNESS WHEREOF, this Agreement has been executed effective as of the date set forth above.

MANAGERS:

   
[Name of manager]

MEMBERS:

   
[Name of member]