Karen Pratt has agreed to invest $200,000 into an LLC with Jennifer Stahl and Don Keene. Stahl and Keene will not invest any money, but will provide effort and expertise to the LLC. Stahl and Keene have agreed that the net income of the LLC should be divided so that Pratt is to receive a 10% preferred return on her capital investment prior to any remaining income being divided equally among the partners. In addition, Stahl and Keene 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 Karen Pratt counsel, what might you suggest in forming the final agreement?