Dave Lester has agreed to invest $200,000 into an LLC with Alicia Knowles and Brian Kim. Knowles and Kim will not invest any money, but will provide effort and expertise to the LLC. Knowles and Kim have agreed that the net income of the LLC should be divided so that Lester is to receive a 10% preferred return on his capital investment prior to any remaining income being divided equally among the partners. In addition, Knowles and Kim have suggested that the operating agreement be written so that all matters are settled by majority vote, with each partner having a one-third voting interest in the LLC.
If you were providing Dave Lester counsel, what might you suggest in forming the final agreement?