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LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

Area Creative Enterprise, LLC

THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT ("Agreement"), dated as of the 5th day of July, 2004, by and between the undersigned members (collectively, "Members").

W I T N E S S E T H

In consideration of the covenants and mutual agreements hereinafter set forth, the parties hereto (hereinafter collectively referred to as the "Members") agree as follows:

1. FORMATION OF LIMITED LIABILITY COMPANY. The Members hereby form a limited liability company (hereinafter referred to as the "Company") pursuant to the provisions of the New Mexico Limited Liability Company Act ("Act"). Articles of Organization have been filed with the New Mexico Secretary of State in accordance with the Act.

2. GENERAL PROVISIONS.

a. Name. The name of the Company shall be Area Creative Enterprise, LLC. The Company may also conduct business under such trade name(s) as the Managers may determine.

b. Purpose. The general purpose of the Company is to engage any lawful activities permitted under the Act.

c. Principal Office. The principal office and place of business of the Company shall be 93 Bayley; Folsom, NM; 88419, or such place as the Managers may from time to time determine.

3. MEMBERS.

a. Voting. Each member shall have one vote, equal to the vote of any other member, regardless of the amount of investment the member may have in the company.

b. Authority of Members. No Member acting alone shall have any power or authority to bind the Company unless the Member has been authorized by the Managers to act as an agent of the Company.

c. Limitation on Liability. No Member shall have any personal liability for any debts or losses of the Company beyond his respective capital contributions, except as provided by law.

d. Joining.  A new Member may be added to the membership of the Company by a majority vote of the Managers.  Upon joining, new Members must contribute $60 (Signing Fee) immediately and agree to contribute $20 per month ("Monthly Fee") thereafter for a period of one year.  By joining the Company, the new member is agreeing to pay the Monthly Fee and is obligated to do so for one year regardless of whether or not the member subsequently withdraws from the Company.

e. Withdrawal.  After one year, a Member may choose to withdraw from the Company.  A Member may withdraw before one year by paying the remainder of the Monthly Fees owed for the first year which was agreed to upon joining.  In either case, the Member forfeits all investments such as cash, time, and materials in the Company and forfeits all future sharing in the profits of the company.  No money shall be returned or paid to a Member upon withdrawal.

f. Expulsion.  Any Member may be expelled from the Company by a 3/4 majority vote by all other Members.  If expelled, the Member forfeits all investments such as cash, time, and materials in the Company and forfeits all future sharing in the profits of the company.  No money shall be returned or paid to a Member upon expulsion.

g. Contribution of Capital.  The Signing Fee and every subsequent Monthly Fee paid by a Member shall be counted as a contribution of  capital for the purposes of determining the ratio of distribution of profits and losses to the Members.

h. Extra Contribution of Capital.  After paying the Signing Fee, no member is allowed to contribute more capital to the Company than the amount of the Monthly Fee each month unless the Managers vote unanimously to allow such extra contribution.  Extra contribution from a member must be voted on and approved separately for each month in which such a contribution is made, the amount of the contribution is to be agreed upon prior to the contribution.  No extra voting power shall be granted to any member who makes extra contributions of capital, only the distribution of profits and losses shall be affected.

i. Benefits.  Any Member who is not in arrears and continues to pay the Monthly Fee during and after the first year shall have the right to display merchandise free of charge in any storefront, gallery, booth, or similar venue which is owned, rented, or organized by the Company.  The Company shall be obligated to facilitate reasonable protection, sale, and collection of proceeds for any Member's merchandise in a fair and equal manner as compared to any other Member.  All proceeds from the sale of such merchandise shall be returned to the Member.  The amount of space allocated to any Member shall be determined by the Managers.  Any merchandise may be disallowed for whatever reason by a 3/4 majority vote by all of the Members.

j. Non-members.  Merchandise from persons who are not Members may be displayed and sold at the Managers' discretion.  A portion from the sale of such merchandise shall be retained by the Company, as decided upon by the Managers on a case by case basis.

8. MANAGEMENT.

a. Appointment of Managers. Betty A. Short and Michael K. Schoonover are appointed Managers of the Company, and shall serve until his or her resignation, removal or until his or her successor has been appointed and has undertaken his or her duties.

b. Authority of the Managers. Except as otherwise expressly provided herein, all decisions respecting any matter set forth in this Agreement or otherwise affecting or arising out of conduct of the business of the Company shall be made by the Managers. The Managers shall have the exclusive right and full authority to manage, conduct and operate the Company business and to make all decisions regarding the operation of the Company business and to perform any and all other acts or activities customary or incident to the management of the Company business. Specifically, but not by way of limitation, the Managers shall be authorized to: (i) employ such agents, employees, managers, accountants, attorneys, consultants and other persons necessary or appropriate to carry out the business and affairs of the Company and to pay as an expense of the Company such reasonable fees, expenses, salaries, wages and other compensation to such persons as the Managers shall determine; (ii) cause to be paid all amounts due and payable by the Company to any person or entity; (iii) pay, expend, renew, modify, adjust, submit to arbitration, prosecute, defend or compromise upon such terms as the Managers may determine and upon such evidence as it may deem sufficient any obligation, suit, liability, cause of action or claim, including taxes, either in favor of or against the Company; (iv) make any and all expenditures or investments of excess funds in obligations which the Managers, in their sole discretion, deem necessary or appropriate in connection with the management of the affairs of the company and the carrying out of its obligations and responsibilities under this Agreement; (v) lease Company property on such terms and conditions as the Managers shall determine to be in the interest of the Company; (vi) incur such indebtedness on behalf of the Company as the Managers deem necessary to carry out business and affairs of the Company; (vii) purchase insurance insuring the Managers and/or employees of the Company from personal liability for actions taken in good faith on behalf of the Company; (viii) execute on behalf of the Company all instruments and documents; (ix) hold and own any Company real and/or personal properties in the name of the Company; (x) enter into other agreements on behalf of the Company; and (xi) all other acts as may be necessary or appropriate to the conduct of the Company business. With respect to all of their obligations, powers and responsibilities under Agreement, the Managers are authorized to execute and deliver for and on behalf of the Company such deeds, leases, notes, contracts, agreements, assignments, bills of sale, security agreements, deeds to secure debt and other documents in such form such terms and conditions as they shall deem proper.

c. Removal of Managers. The Members may from time to time remove any Manager upon the affirmative vote of a majority of the Members.

d. Action by Managers. The Managers shall act jointly on all matters.  Any action shall be voted upon, requiring a majority vote of all Managers before implementation, except where otherwise specified in this Operating Agreement.

e. Banking.  All managers may have access to and may be an authorized signer for any bank accounts held in the name of the Company.  All Company bank accounts shall require two signatures for any transaction or modification.

9. BOOKS, RECORDS AND MEETINGS.

a. Books and Records. The Managers shall keep, or cause to be kept, at the principal office of the Company, full and true books and records of account for the Company, which shall be available for reasonable inspection and examination by the Members or their duly authorized representatives during normal business hours upon prior written request to the Managers. The Managers shall not be required to deliver or mail copies of the articles of organization, or any amendment or cancellation thereof to the Members.

b. Accounting Period, Annual Financial Statements. The accounting period of the Company shall be the calendar year ending December 31. The Managers shall provide each Member with a financial statement of the Company within a reasonable time after the end of the calendar year.

c. Federal Income Taxes. The Managers shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which the Company does business. Within a reasonable time after the close of each Company year, the Managers shall furnish a report to each Member of the net profits or losses of the Company to each Member, together with a statement indicating the Member's share in profits or losses for such year. In addition, each Member shall be provided with such additional information as may be reasonably required in preparing his or her own state and federal income tax returns.

d. Meetings. All Members shall be given 3 days prior notice of any meeting of the Managers and or Members.  Any Member may waive notice of or attendance at any meeting of the Members, and may attend by proxy, telephone or any other electronic communication device or may execute a signed written consent. At such meeting, the Members shall transact such business as may properly be brought before the meeting. The Managers shall keep minutes of all meetings of the Members. The minutes shall be placed in the company records of the Company.

e. Action Without Meeting. Any action required by the Act or by this Agreement to be taken by the Members may be taken without a meeting if written consents setting forth the action so taken shall be signed by a majority of the Members and such consents shall have the same force and effect as a vote of the Members. Any such signed consents shall be placed in the minute book of the Company and forwarded to any Members who did not consent to the particular action in accordance with Section 14-11-309 of the Act.

11. AMENDMENTS.

a. Amendments. Amendments to this Agreement may be proposed by any Member. A proposed amendment shall be adopted and be effective as an amendment hereto if it receives the affirmative vote of the majority of the Members.

b. Restrictions on Amendments. Notwithstanding Section 11.a. hereof, this Agreement shall not be amended without the consent of each Member adversely affected if such amendment would (i) modify the limited liability of such Member; or (ii) alter the interest of such Member in the profits, losses, or distributions of the Company.

12. MISCELLANEOUS.

a. Entire Agreement. This Agreement contains the entire agreement among the Members with respect to the subject matter hereof.  Verbal agreements are not binding in regards to the Company.

b. Captions and Pronouns. The captions in this Agreement and the particular pronouns used herein, whether masculine, feminine, or neuter, are inserted for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof. Where the content demands, the singular shall include the plural and the plural shall mean the singular.

c. Severability. If any provision of this Operating Agreement or the application thereof to any person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Operating Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

IN WITNESS WHEREOF, this Agreement has been executed by each of the Members as of the day and year first above written.

MEMBERS:

Betty A. Short   ______________________________      Date _______________________________


Michael K Schoonover ___________________________________      Date ___________________________

SCHEDULE A

SCHEDULE OF MEMBERS AND CAPITAL CONTRIBUTIONS

Name and Address	Capital
Betty A. Short 165 Grand Ave., Box 364 Folsom, NM 88419	$60.00
Michael K. Schoonover 93 Bayley, Box 465 Folsom, NM 88419	$60.00