LLC Operating Agreement Guide for Tech Startups and Small Businesses

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

FOR [COMPANY NAME], LLC

A [STATE] Limited Liability Company

TABLE OF CONTENTS

1. Company Formation
2. Capital Contributions
3. Allocations and Distributions
4. Management
5. Members
6. Meetings
7. Financial Matters
8. Transfer Restrictions
9. Withdrawal and Exit of Members
10. Dissolution and Liquidation
11. Liability and Indemnification
12. Confidentiality and Restrictive Covenants
13. Dispute Resolution
14. Amendment
15. Miscellaneous Provisions

THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this "Agreement") is made and entered into as of [DATE] (the "Effective Date"), by and among [COMPANY NAME], LLC, a [STATE] limited liability company (the "Company"), and each of the persons listed on Exhibit A attached hereto and incorporated herein by reference (individually a "Member" and collectively the "Members").

RECITALS

WHEREAS, the Company was formed as a limited liability company under the laws of the State of [STATE] by the filing of Articles of Organization (the "Articles") with the [STATE] Secretary of State on [DATE OF FORMATION]; and

WHEREAS, the Members desire to enter into this Agreement to set forth their respective rights, duties, and obligations with respect to the Company and to provide for the management and operation of the Company's business.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree as follows:

ARTICLE I: COMPANY FORMATION

1.1 Formation

The Company was formed as a limited liability company under the laws of the State of [STATE] on [DATE OF FORMATION] by filing the Articles with the [STATE] Secretary of State pursuant to the [STATE] Limited Liability Company Act, as amended from time to time (the "Act"). The rights and liabilities of the Members shall be as provided in the Act, except as otherwise expressly provided in this Agreement.

1.2 Name

The name of the Company is [COMPANY NAME], LLC. The Company may conduct business under that name or any other name approved by the [MANAGERS/MEMBERS]. The [MANAGERS/MEMBERS] shall file any fictitious name certificates and similar filings, and any amendments thereto, that may be appropriate or required by law.

1.3 Principal Place of Business

The principal place of business of the Company shall be [ADDRESS], or such other location as the [MANAGERS/MEMBERS] may from time to time designate.

1.4 Registered Office and Registered Agent

The Company's initial registered office shall be at [REGISTERED OFFICE ADDRESS], and the name of its initial registered agent at such address shall be [REGISTERED AGENT NAME]. The registered office and registered agent may be changed from time to time by filing the address of the new registered office and/or the name of the new registered agent with the appropriate state authorities pursuant to the Act and applicable regulations.

1.5 Purpose

The Company is formed for the purpose of engaging in any lawful business, purpose, or activity for which limited liability companies may be formed under the Act. The Company shall have all the powers necessary or convenient to effect any purpose for which it is formed, including all powers granted by the Act.

1.6 Term

The term of the Company commenced on the date the Articles were filed with the [STATE] Secretary of State and shall continue perpetually unless the Company is earlier dissolved and terminated in accordance with this Agreement or the Act.

1.7 Intent

It is the intent of the Members that the Company shall always be operated in a manner consistent with its treatment as a [PARTNERSHIP/S-CORPORATION/DISREGARDED ENTITY] for federal and state income tax purposes. It is also the intent of the Members that the Company not be operated or treated as a partnership for purposes of Section 303 of the Federal Bankruptcy Code. No Member shall take any action inconsistent with the express intent of the Members.

1.8 No Partnership Intended for Non-Tax Purposes

The Members have formed the Company under the Act, and expressly do not intend hereby to form a partnership under either the [STATE] Uniform Partnership Act or the [STATE] Uniform Limited Partnership Act. The Members do not intend to be partners to one another or partners as to any third party. To the extent any Member, by word or action, represents to another person that any other Member is a partner or that the Company is a partnership, the Member making such representation shall be liable to any other Member who incurs personal liability by reason of such representation.

ARTICLE II: CAPITAL CONTRIBUTIONS

2.1 Initial Capital Contributions

Each Member shall make the initial Capital Contribution described for that Member on Exhibit A at the time and on the terms specified in Exhibit A and shall perform all obligations and provide all services set forth on Exhibit A. If no time for contribution is specified, the Capital Contributions shall be made upon the filing of the Articles with the [STATE] Secretary of State. The value of each Member's Capital Contribution shall be as set forth on Exhibit A. No interest shall accrue on any Capital Contribution, and no Member shall have the right to withdraw or be repaid any Capital Contribution except as provided in this Agreement.

2.2 Additional Capital Contributions

(a) Mandatory Contributions. The [MANAGERS/MEMBERS] may determine from time to time that additional capital contributions are needed to enable the Company to conduct its business. Upon making such a determination, the [MANAGERS/MEMBERS] shall give written notice to all Members of that fact and the amount of the additional contribution needed, and each Member shall contribute, within [NUMBER] days after the date such notice is sent, that Member's pro rata share (based on Percentage Interests) of the total additional contribution required.

(b) Failure to Make Additional Capital Contributions. If any Member fails to make a required additional capital contribution within the time specified in Section 2.2(a) (a "Non-Contributing Member"), the other Members (the "Contributing Members") may, but shall not be obligated to, contribute the amount of the Non-Contributing Member's additional capital contribution on a pro rata basis based on the Contributing Members' respective Percentage Interests or in such other percentages as they may agree. In such event, the Contributing Members shall be entitled, at their option, to either:

(i) Treat the amount contributed on behalf of the Non-Contributing Member as a loan to the Non-Contributing Member bearing interest at the rate of [INTEREST RATE]% per annum from the date of the loan until the date of repayment. Such loan shall be payable on demand or, at the option of the Contributing Members, shall be repaid out of any distributions that would otherwise be made to the Non-Contributing Member under this Agreement; or

(ii) Adjust the Percentage Interests of the Members to reflect the additional capital contributions made by the Contributing Members, with the Non-Contributing Member's Percentage Interest being reduced and the Contributing Members' Percentage Interests being increased in proportion to the additional capital contributions made by the Contributing Members. The formula for such adjustment shall be as follows: each Member's new Percentage Interest shall equal (A) the sum of (1) the value of the Member's previous Capital Contributions plus (2) the value of the Member's additional Capital Contribution, divided by (B) the sum of the value of all Capital Contributions made by all Members to the Company.

2.3 Capital Accounts

(a) Establishment and Maintenance. A separate Capital Account shall be established and maintained for each Member in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). Each Member's Capital Account shall be increased by (i) the amount of money contributed by such Member to the Company, (ii) the fair market value of property contributed by such Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Internal Revenue Code), and (iii) allocations to such Member of Company income and gain (or items thereof), including income and gain exempt from tax and income and gain described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g), but excluding income and gain described in Treasury Regulations Section 1.704-1(b)(4)(i). Each Member's Capital Account shall be decreased by (i) the amount of money distributed to such Member by the Company, (ii) the fair market value of property distributed to such Member by the Company (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Internal Revenue Code), (iii) allocations to such Member of expenditures of the Company described in Section 705(a)(2)(B) of the Internal Revenue Code, and (iv) allocations to such Member of Company loss and deduction (or items thereof), including loss and deduction described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g), but excluding items described in clause (iii) above and loss or deduction described in Treasury Regulations Section 1.704-1(b)(4)(i) or (iii).

(b) Compliance with Treasury Regulations. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event the [MANAGERS/MEMBERS] determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to comply with such Treasury Regulations, the [MANAGERS/MEMBERS] may make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Member upon the dissolution of the Company.

2.4 No Withdrawal of Capital

No Member shall be entitled to withdraw any part of the Member's Capital Contribution or Capital Account, or to receive any distribution from the Company, except as specifically provided in this Agreement.

2.5 No Interest on Capital Contributions

No Member shall be entitled to receive any interest on the Member's Capital Contributions.

2.6 Loans by Members

Any Member may, at any time, make or cause a loan to be made to the Company in any amount and on such terms as approved by the [MANAGERS/MEMBERS]. Any such approved loans made by a Member shall not be considered a Capital Contribution, and shall not increase the Capital Account of the lending Member. Loans by a Member to the Company shall be evidenced by a promissory note from the Company to the lending Member bearing interest at a rate not to exceed the maximum rate allowed by applicable law and shall be on such other terms as agreed between the [MANAGERS/MEMBERS] and the lending Member.

2.7 Membership Certificates

(a) Issuance of Certificates. The Company [SHALL/SHALL NOT] issue certificates evidencing membership interests in the Company ("Membership Certificates"). If issued, each Membership Certificate shall bear the following legend:

"The membership interest represented by this certificate is subject to, and may not be transferred except in accordance with, the provisions of the Operating Agreement of [COMPANY NAME], LLC, dated as of [DATE], as the same may be amended from time to time, a copy of which is on file at the principal office of the Company. Any attempt to transfer or encumber the membership interest in violation of the referenced Operating Agreement shall be null and void."

(b) Procedures for Issuance. If Membership Certificates are issued, the [MANAGERS/MEMBERS] shall maintain a ledger of all Membership Certificates issued and shall update such ledger from time to time as necessary to accurately reflect the issuance and transfer of membership interests. Upon any transfer of a membership interest in accordance with the provisions of this Agreement, any Membership Certificates representing the transferred interest shall be surrendered to the Company for cancellation, and new Membership Certificates representing the transferred interest shall be issued to the transferee.

ARTICLE III: ALLOCATIONS AND DISTRIBUTIONS

3.1 Allocation of Net Income and Net Loss

(a) General Allocations. Except as otherwise provided in this Agreement, Net Income and Net Loss (including individual items of profit, income, gain, loss, credit, deduction and expense) of the Company shall be allocated among the Members in accordance with their Percentage Interests.

(b) Regulatory Allocations. Notwithstanding Section 3.1(a), the following special allocations shall be made in the following order of priority:

(i) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(f), if there is a net decrease in Company Minimum Gain during any fiscal year, each Member shall be specially allocated items of Company income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 3.1(b)(i) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during any fiscal year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 3.1(b)(ii) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(iii) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 3.1(b)(iii) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article III have been tentatively made as if this Section 3.1(b)(iii) were not in this Agreement.

(iv) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any fiscal year that is in excess of the sum of (A) the amount such Member is obligated to restore pursuant to any provision of this Agreement, and (B) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 3.1(b)(iv) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article III have been made as if Section 3.1(b)(iii) and this Section 3.1(b)(iv) were not in this Agreement.

(v) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year shall be specially allocated among the Members in proportion to their Percentage Interests.

(vi) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any fiscal year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i)(1).

(vii) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Internal Revenue Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such section of the Treasury Regulations.

(c) Curative Allocations. The allocations set forth in Section 3.1(b) (the "Regulatory Allocations") are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section 3.1(c). Therefore, notwithstanding any other provision of this Article III (other than the Regulatory Allocations), the [MANAGERS/MEMBERS] shall make such offsetting special allocations of Company income, gain, loss, or deduction in whatever manner they determine appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of this Agreement and all Company items were allocated pursuant to Section 3.1(a).

3.2 Distributions

(a) Operating Distributions. Subject to applicable law and any limitations contained elsewhere in this Agreement, the [MANAGERS/MEMBERS] may elect from time to time to make distributions of Available Cash to the Members. All such distributions shall be made to the Members in proportion to their respective Percentage Interests as of the record date set for such distribution.

(b) Tax Distributions. Notwithstanding Section 3.2(a), to the extent permitted by applicable law and consistent with the Company's obligations to its creditors as determined by the [MANAGERS/MEMBERS] in their reasonable discretion, the Company shall make distributions to each Member with respect to each fiscal year of the Company in an amount equal to the product of (i) the highest marginal federal, state and local tax rates applicable to an individual [or corporation] residing in [CITY, STATE] (taking into account the character of the income), and (ii) the net taxable income allocated to such Member for such fiscal year. Such distributions shall be made on a quarterly basis based on the [MANAGERS'/MEMBERS'] good faith estimate of the amounts that will be allocated to the Members for the relevant fiscal year. Any distributions made pursuant to this Section 3.2(b) shall be treated as advances of distributions to be made pursuant to Section 3.2(a) and shall reduce the amounts that would otherwise be distributed to the Member pursuant to Section 3.2(a).

(c) Limitations on Distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its interest in the Company if such distribution would violate the Act or other applicable law.

(d) No Right to Distributions. No Member has the right to demand and receive any distribution from the Company in any form other than cash. No Member may be compelled to accept from the Company a distribution of any asset in kind in lieu of a proportionate distribution of money being made to other Members, except upon a dissolution and winding up of the Company.

3.3 Withholding

The Company is authorized to withhold from distributions, or with respect to allocations, to the Members and to pay over to any federal, state, local, or foreign government any amounts required to be so withheld pursuant to the Internal Revenue Code or any provisions of any other federal, state, local, or foreign law. All amounts withheld pursuant to this Section 3.3 with respect to any allocation or distribution to a Member shall be treated as amounts distributed to such Member pursuant to Section 3.2 for all purposes under this Agreement.

ARTICLE IV: MANAGEMENT

4.1 Management Structure

The Company shall be [MEMBER-MANAGED/MANAGER-MANAGED].

[FOR MEMBER-MANAGED LLCs:]

4.2 Authority of Members

(a) General Authority. Except as otherwise expressly provided in this Agreement, the business and affairs of the Company shall be managed by the Members. The Members shall direct, manage, and control the business of the Company to the best of their ability. Except for situations in which the approval of the Members is expressly required by this Agreement or by nonwaivable provisions of applicable law, each Member shall have full and complete authority, power, and discretion to manage and control the business, affairs, and properties of the Company, to make all decisions regarding those matters, and to perform any and all other acts or activities customary or incident to the management of the Company's business.

(b) Specific Powers. Without limiting the generality of the foregoing, and subject to the provisions of Section 4.3, the Members shall have all necessary powers to manage and carry out the purposes, business, property, and affairs of the Company, including, without limitation, the power to:

(i) Purchase, lease, or otherwise acquire any real or personal property;

(ii) Sell, convey, mortgage, grant a security interest in, pledge, lease, exchange, or otherwise dispose or encumber any real or personal property;

(iii) Open one or more depository accounts and make deposits into, and write checks and withdrawals against, such accounts;

(iv) Borrow money, incur liabilities, and other obligations;

(v) Enter into any and all agreements and execute any and all contracts, documents, and instruments;

(vi) Engage employees and agents, define their respective duties, and establish their compensation;

(vii) Obtain insurance covering the business and affairs of the Company and its property and the lives and well-being of its employees and agents;

(viii) Start, prosecute, or defend any proceeding in the Company's name; and

(ix) Participate with others in partnerships, joint ventures, and other associations and strategic alliances.

4.3 Major Decisions

Notwithstanding any other provision of this Agreement, the following actions (each, a "Major Decision") shall require the approval of Members holding at least [PERCENTAGE]% of the Percentage Interests:

(a) Amending, modifying, or restating the Articles or this Agreement;

(b) Authorizing any transaction, agreement, or action on behalf of the Company that is unrelated to its purpose as set forth in Section 1.5, or is in contravention of this Agreement;

(c) Issuing or selling any equity securities of the Company or any option or right to acquire any equity securities of the Company, admitting new Members, or diluting the Percentage Interest of existing Members;

(d) Incurring any indebtedness, pledge, or security interest in excess of $[AMOUNT];

(e) Making any loan or advance to, or owning any stock or other securities of, any subsidiary or other corporation, partnership, or other entity;

(f) Making any loan or advance to any person, including any employee or Member, except advances and similar expenditures in the ordinary course of business or under the terms of an employee benefit plan;

(g) Guaranteeing any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

(h) Making any capital expenditure in excess of $[AMOUNT];

(i) Entering into any transaction with any Member or affiliate of any Member, except for normal employment arrangements and benefit programs;

(j) Selling, leasing, licensing, transferring, or otherwise disposing of any of the Company's assets having a value in excess of $[AMOUNT], other than in the ordinary course of business;

(k) Dissolving, liquidating, or winding up the affairs of the Company;

(l) Filing a petition in bankruptcy or reorganization, or instituting any other type of bankruptcy, reorganization, or insolvency proceeding with respect to the Company, consenting to the institution of involuntary bankruptcy, reorganization, or insolvency proceedings with respect to the Company, or making a general assignment of the Company's property for the benefit of creditors; and

(m) Merging or consolidating the Company with or into another entity, or acquiring all or substantially all of the assets or business of another person or entity.

[FOR MANAGER-MANAGED LLCs:]

4.2 Authority of Managers

(a) General Authority. Except as otherwise expressly provided in this Agreement, the business and affairs of the Company shall be managed by one or more Managers. The initial Manager(s) shall be as set forth on Exhibit B attached hereto. Except for situations in which the approval of the Members is expressly required by this Agreement or by nonwaivable provisions of applicable law, the Manager(s) shall have full and complete authority, power, and discretion to manage and control the business, affairs, and properties of the Company, to make all decisions regarding those matters, and to perform any and all other acts or activities customary or incident to the management of the Company's business.

(b) Number of Managers. The number of Managers of the Company shall be fixed at [NUMBER], which number may be increased or decreased from time to time by the affirmative vote of Members holding at least [PERCENTAGE]% of the Percentage Interests, provided that in no instance shall there be less than one Manager.

(c) Term of Managers. Each Manager shall hold office until the earliest of (i) the Manager's resignation, removal, death, or disability, or (ii) the appointment of a successor. Any Manager may resign at any time by giving written notice to the Members. Such resignation shall take effect at the time specified therein, or, if no time is specified, upon receipt thereof by the Members. Any Manager may be removed at any time, with or without cause, by the affirmative vote of Members holding at least [PERCENTAGE]% of the Percentage Interests. Vacancies in the position of Manager for any reason may be filled by the affirmative vote of Members holding at least [PERCENTAGE]% of the Percentage Interests.

(d) Specific Powers. Without limiting the generality of the foregoing, and subject to the provisions of Section 4.3, the Manager(s) shall have all necessary powers to manage and carry out the purposes, business, property, and affairs of the Company, including, without limitation, the power to:

(i) Purchase, lease, or otherwise acquire any real or personal property;

(ii) Sell, convey, mortgage, grant a security interest in, pledge, lease, exchange, or otherwise dispose or encumber any real or personal property;

(iii) Open one or more depository accounts and make deposits into, and write checks and withdrawals against, such accounts;

(iv) Borrow money, incur liabilities, and other obligations;

(v) Enter into any and all agreements and execute any and all contracts, documents, and instruments;

(vi) Engage employees and agents, define their respective duties, and establish their compensation;

(vii) Obtain insurance covering the business and affairs of the Company and its property and the lives and well-being of its employees and agents;

(viii) Start, prosecute, or defend any proceeding in the Company's name; and

(ix) Participate with others in partnerships, joint ventures, and other associations and strategic alliances.

4.3 Major Decisions

Notwithstanding any other provision of this Agreement, the following actions (each, a "Major Decision") shall require the approval of Members holding at least [PERCENTAGE]% of the Percentage Interests:

(a) Amending, modifying, or restating the Articles or this Agreement;

(b) Authorizing any transaction, agreement, or action on behalf of the Company that is unrelated to its purpose as set forth in Section 1.5, or is in contravention of this Agreement;

(c) Issuing or selling any equity securities of the Company or any option or right to acquire any equity securities of the Company, admitting new Members, or diluting the Percentage Interest of existing Members;

(d) Incurring any indebtedness, pledge, or security interest in excess of $[AMOUNT];

(e) Making any loan or advance to, or owning any stock or other securities of, any subsidiary or other corporation, partnership, or other entity;

(f) Making any loan or advance to any person, including any employee or Member, except advances and similar expenditures in the ordinary course of business or under the terms of an employee benefit plan;

(g) Guaranteeing any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

(h) Making any capital expenditure in excess of $[AMOUNT];

(i) Entering into any transaction with any Member or affiliate of any Member, except for normal employment arrangements and benefit programs;

(j) Selling, leasing, licensing, transferring, or otherwise disposing of any of the Company's assets having a value in excess of $[AMOUNT], other than in the ordinary course of business;

(k) Dissolving, liquidating, or winding up the affairs of the Company;

(l) Filing a petition in bankruptcy or reorganization, or instituting any other type of bankruptcy, reorganization, or insolvency proceeding with respect to the Company, consenting to the institution of involuntary bankruptcy, reorganization, or insolvency proceedings with respect to the Company, or making a general assignment of the Company's property for the benefit of creditors; and

(m) Merging or consolidating the Company with or into another entity, or acquiring all or substantially all of the assets or business of another person or entity.

4.4 Officers

(a) Appointment of Officers. The [MANAGERS/MEMBERS] may appoint individuals as officers of the Company, which may include a Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Secretary, Treasurer, and such other officers as the [MANAGERS/MEMBERS] may determine. Any two or more offices may be held by the same person. Each officer shall hold office until his or her successor is duly appointed and qualified or until his or her earlier death, resignation, or removal.

(b) Duties of Officers. Each officer shall have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as may be delegated to them from time to time by the [MANAGERS/MEMBERS].

(c) Removal and Resignation. Any officer may be removed, either with or without cause, by the [MANAGERS/MEMBERS] at any time. Any officer may resign at any time by giving written notice to the [MANAGERS/MEMBERS]. Any such resignation shall take effect at the date of receipt of such notice or at any later time specified therein.

(d) Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise may be filled by the [MANAGERS/MEMBERS].

4.5 Compensation and Reimbursement of Expenses

(a) Compensation. The [MANAGERS/MEMBERS] may fix the compensation, if any, of the Managers, officers, and other employees or agents of the Company. No Manager, officer, employee, or agent of the Company shall be prevented from receiving such compensation by reason of the fact that he or she is also a Member of the Company.

(b) Reimbursement of Expenses. The [MANAGERS/MEMBERS] and officers shall be entitled to receive reimbursement from the Company for reasonable expenses incurred by them on behalf of the Company, including, without limitation, reasonable travel expenses.

4.6 Fiduciary Duties

(a) Duty of Care. Each [MANAGER/MEMBER] shall discharge his, her, or its duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the [MANAGER/MEMBER] reasonably believes to be in the best interests of the Company. In discharging such duties, a [MANAGER/MEMBER] may rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(i) One or more officers or employees of the Company whom the [MANAGER/MEMBER] reasonably believes to be reliable and competent in the matters presented;

(ii) Legal counsel, public accountants, or other persons as to matters the [MANAGER/MEMBER] reasonably believes are within the person's professional or expert competence; or

(iii) A committee of [MANAGERS/MEMBERS] of which the [MANAGER/MEMBER] is not a member if the [MANAGER/MEMBER] reasonably believes the committee merits confidence.

(b) Duty of Loyalty. Each [MANAGER/MEMBER] shall discharge his, her, or its duties with loyalty to the Company and the Members. This duty of loyalty includes, but is not limited to:

(i) Accounting to the Company and holding as trustee for it any property, profit, or benefit derived by the [MANAGER/MEMBER] in the conduct or winding up of the Company's business or derived from a use by the [MANAGER/MEMBER] of the Company's property, including the appropriation of a Company opportunity;

(ii) Refraining from dealing with the Company in the conduct or winding up of the Company's business as or on behalf of a party having an interest adverse to the Company; and

(iii) Refraining from competing with the Company in the conduct of the Company's business before the dissolution of the Company.

(c) Business Opportunities. Notwithstanding the foregoing, a [MANAGER/MEMBER] shall not be liable to the Company or to any Member for any breach of fiduciary duty by reason of any activities of the [MANAGER/MEMBER] or any person or entity in which the [MANAGER/MEMBER] has an interest if:

(i) The [MANAGER/MEMBER] has presented the opportunity to the Company and the Company has declined to pursue it; or

(ii) The opportunity relates to a line of business that is not the same as or similar to the Company's present or contemplated line of business, or the opportunity is one that the Company is not financially able to undertake.

4.7 Liability of [MANAGERS/MEMBERS]

No [MANAGER/MEMBER] shall be liable, responsible, or accountable in damages or otherwise to the Company or any Member for any action taken or failure to act on behalf of the Company within the scope of the authority conferred on the [MANAGER/MEMBER] by this Agreement or by law, unless such action or omission was performed or omitted fraudulently or constituted willful misconduct or gross negligence.

ARTICLE V: MEMBERS

5.1 Members

The names, addresses, initial Capital Contributions, and Percentage Interests of the Members are set forth on Exhibit A attached hereto.

5.2 Additional Members

(a) Admission of Additional Members. Subject to Section 4.3(c), the [MANAGERS/MEMBERS] may admit Additional Members and determine the Capital Contributions and Percentage Interests of such Additional Members.

(b) Rights and Obligations of Additional Members. Before any person may be admitted as an Additional Member, such person shall agree in writing to be bound by all of the terms and conditions of this Agreement. Upon admission, an Additional Member shall have all the rights and obligations of a Member under this Agreement.

5.3 No Liability of Members

No Member shall be liable for the debts, liabilities, contracts, or other obligations of the Company beyond such Member's Capital Contributions and any obligation of the Member pursuant to Section 2.2 to make Capital Contributions, except as otherwise provided by law.

5.4 No Withdrawal

No Member shall have the right to withdraw from the Company except as specifically provided in this Agreement or as otherwise agreed to in writing by all of the Members. Any Member who withdraws from the Company in violation of this provision shall be liable to the Company for any damages sustained by the Company as a result of such withdrawal, and the Company may offset the amount of such damages against any amounts otherwise distributable to such Member.

5.5 Transactions with the Company

Subject to Section 4.3(i), any Member may lend money to, borrow money from, act as a surety, guarantor, or endorser for, guarantee or assume one or more obligations of, provide collateral for, or transact other business with the Company, and, subject to applicable law, shall have the same rights and obligations with respect to such matters as a person who is not a Member.

5.6 Voting Rights

(a) Voting by Percentage Interest. Except as otherwise provided in this Agreement or required by the Act, all decisions requiring the approval of the Members shall be made by the affirmative vote of Members holding a majority of the Percentage Interests.

(b) Quorum. A quorum for any meeting of Members shall consist of Members holding a majority of the Percentage Interests.

(c) Electronic Participation. Any Member may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

5.7 No Agency Authority of Members

No Member (other than a Member who is also a Manager in a manager-managed LLC, or a Member acting in accordance with Article IV in a member-managed LLC) is an agent of the Company solely by virtue of being a Member, and no Member has authority to act for the Company solely by virtue of being a Member.

ARTICLE VI: MEETINGS

6.1 Meetings of Members

(a) Annual Meeting. An annual meeting of the Members shall be held on [DATE] of each year, or at such other time as shall be determined by the [MANAGERS/MEMBERS], for the purpose of the transaction of such business as may come before the meeting.

(b) Special Meetings. Special meetings of the Members, for any purpose or purposes, may be called by any [MANAGER/MEMBER].

(c) Place of Meetings. The [MANAGERS/MEMBERS] may designate any place, either within or outside the State of [STATE], as the place of meeting for any meeting of the Members. If no designation is made, the place of meeting shall be the principal place of business of the Company.

(d) Notice of Meetings. Written notice stating the place, day, and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally, by mail, or by electronic transmission, by or at the direction of the [MANAGERS/MEMBERS] calling the meeting, to each Member entitled to vote at such meeting.

(e) Waiver of Notice. A Member may waive any notice required by the Act or this Agreement before or after the date and time stated in the notice. The waiver must be in writing, be signed by the Member entitled to the notice, and be delivered to the Company for inclusion in its records. A Member's attendance at a meeting: (i) waives objection to lack of notice or defective notice of the meeting, unless the Member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (ii) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the Member objects to considering the matter when it is presented.

6.2 Meetings of Managers [FOR MANAGER-MANAGED LLCs]

(a) Regular Meetings. Regular meetings of the Managers may be held without notice at such time and at such place as shall from time to time be determined by the Managers.

(b) Special Meetings. Special meetings of the Managers may be called by any Manager on at least twenty-four (24) hours' notice to each other Manager. Such notice need not state the purpose or purposes of, nor the business to be transacted at, such meeting, except as may otherwise be required by the Act or provided for in this Agreement.

(c) Quorum and Voting. At all meetings of the Managers, a majority of the Managers shall constitute a quorum for the transaction of business, and the act of a majority of the Managers present at any meeting at which there is a quorum shall be the act of the Managers, except as may be otherwise specifically provided by the Act or by this Agreement. If a quorum shall not be present at any meeting of the Managers, the Managers present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

(d) Electronic Participation. Any Manager may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

6.3 Action Without Meeting

Any action required or permitted to be taken at any meeting of the [MANAGERS/MEMBERS] may be taken without a meeting if all [MANAGERS/MEMBERS] consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the [MANAGERS/MEMBERS].

ARTICLE VII: FINANCIAL MATTERS

7.1 Fiscal Year

The fiscal year of the Company shall be the calendar year, unless otherwise determined by the [MANAGERS/MEMBERS].

7.2 Tax Matters

(a) Tax Classification. The Members intend that the Company be treated as a [PARTNERSHIP/S-CORPORATION/DISREGARDED ENTITY] for federal and state income tax purposes, and no Member shall take any action or position inconsistent with such classification.

(b) Tax Matters Partner/Partnership Representative. The [MANAGERS/MEMBERS] shall designate a Member to serve as the "tax matters partner" under Section 6231(a)(7) of the Internal Revenue Code (prior to amendment by the Bipartisan Budget Act of 2015) or the "partnership representative" under Section 6223 of the Internal Revenue Code (as amended by the Bipartisan Budget Act of 2015) (the "Tax Representative"). The Tax Representative shall have all powers and responsibilities provided in the Internal Revenue Code. The Tax Representative shall keep the Members informed of all administrative and judicial proceedings pertaining to the determination of the Company's tax items and shall provide the Members with copies of all notices received from the Internal Revenue Service regarding the commencement of a Company-level audit or a proposed adjustment of any of the Company's tax items. The Company shall reimburse the Tax Representative for reasonable expenses properly incurred while acting in such capacity.

7.3 Bank Accounts

The [MANAGERS/MEMBERS] shall establish one or more bank accounts in the name of the Company into which all Company funds shall be deposited and from which payments of Company funds shall be made.

7.4 Books and Records

(a) Maintenance of Books and Records. The Company shall keep at its principal place of business the following:

(i) A current list of the full name and last known business, residence, or mailing address of each Member, Manager, and officer, both past and present;

(ii) A copy of the Articles and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed;

(iii) Copies of the Company's federal, state, and local income tax returns and reports, if any, for the three most recent years;

(iv) Copies of this Agreement and all amendments hereto;

(v) Copies of any financial statements of the Company for the three most recent years;

(vi) A writing or other data storage device setting forth the amount of cash and a description and statement of the agreed value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future, and the date on which each became a Member; and

(vii) Any other books and records required to be maintained by the Act or other applicable law.

(b) Accounting Method. The books and records of the Company shall be maintained on the [CASH/ACCRUAL] method of accounting.

7.5 Financial Reports

(a) Annual Financial Statements. As soon as practicable after the end of each fiscal year, but in no event later than ninety (90) days after the end of such fiscal year, the [MANAGERS/MEMBERS] shall cause to be prepared and delivered to each Member financial statements of the Company as of the end of and for such fiscal year, including a balance sheet, a statement of operations, a statement of Members' equity, and a statement of cash flows. Such financial statements [SHALL/SHALL NOT] be audited by an independent certified public accountant selected by the [MANAGERS/MEMBERS].

(b) Quarterly Financial Statements. As soon as practicable after the end of each fiscal quarter other than the last fiscal quarter of the fiscal year, but in no event later than forty-five (45) days after the end of such fiscal quarter, the [MANAGERS/MEMBERS] shall cause to be prepared and delivered to each Member financial statements of the Company as of the end of and for such fiscal quarter, including a balance sheet, a statement of operations, a statement of Members' equity, and a statement of cash flows.

(c) Tax Information. The [MANAGERS/MEMBERS] shall cause to be prepared and delivered to each Member, within seventy-five (75) days after the end of each fiscal year, a Schedule K-1 or such other form as is needed for each Member to file its federal and state income tax returns.

7.6 Member's Inspection Rights

Each Member shall have the right, upon reasonable request and at such Member's expense, to:

(a) Inspect and copy during normal business hours any of the Company records described in Section 7.4;

(b) Obtain from the [MANAGERS/MEMBERS], promptly after they become available, a copy of the Company's federal, state, and local income tax returns for each year; and

(c) Obtain a current list of the name and last known business, residence, or mailing address of each Member and Manager.

ARTICLE VIII: TRANSFER RESTRICTIONS

8.1 General Prohibition on Transfers

(a) Prohibition. Except as permitted by this Article VIII, no Member shall sell, assign, transfer, pledge, hypothecate, or otherwise dispose of or encumber (collectively, "Transfer") all or any portion of such Member's membership interest in the Company without the prior written consent of [MANAGERS/MEMBERS HOLDING AT LEAST [PERCENTAGE]% OF THE PERCENTAGE INTERESTS], which consent may be given or withheld in their sole and absolute discretion.

(b) Void Transfers. Any purported Transfer in violation of this Article VIII shall be null and void and of no force or effect whatsoever.

(c) Admission as Substituted Member. No transferee of all or any portion of any membership interest shall be admitted as a substituted Member without the approval of [MANAGERS/MEMBERS HOLDING AT LEAST [PERCENTAGE]% OF THE PERCENTAGE INTERESTS], which approval may be given or withheld in their sole and absolute discretion. Unless and until a transferee is admitted as a substituted Member, the transferee shall have no right to exercise any of the powers, rights, and privileges of a Member, but shall only be entitled to receive the share of profits, losses, and distributions to which the transferor would otherwise be entitled.

8.2 Permitted Transfers

Notwithstanding Section 8.1, a Member may Transfer all or any portion of such Member's membership interest in the Company without the consent of any other Member in the following circumstances:

(a) To the Company;

(b) To any other Member;

(c) To a trust established for the benefit of the Member or any member of the Member's immediate family, if the Member is the trustee of such trust;

(d) To an entity that is controlled by, controls, or is under common control with the Member;

(e) If the Member is a natural person, to the Member's spouse, parents, siblings, or descendants, or to a trust established for the benefit of any of the foregoing persons; or

(f) If the Member is an entity, to the owners of the Member.

8.3 Right of First Refusal

(a) Notice of Proposed Transfer. If a Member (the "Selling Member") receives a bona fide written offer (the "Offer") from any person or entity (the "Offeror") to purchase all or any portion of the Selling Member's membership interest (the "Offered Interest"), and the Selling Member desires to accept the Offer, the Selling Member shall give written notice (the "Transfer Notice") to the Company and the other Members, which Transfer Notice shall include a copy of the Offer and an offer to sell the Offered Interest to the Company and the other Members for the same price and on the same terms and conditions as those contained in the Offer.

(b) Company Option. The Company shall have the option, exercisable by written notice (the "Company Notice") given to the Selling Member within thirty (30) days after receipt of the Transfer Notice, to purchase all, but not less than all, of the Offered Interest for the price and on the terms and conditions stated in the Offer. If the Company does not elect to purchase all of the Offered Interest, the Company shall so notify the other Members within such thirty (30) day period.

(c) Member Option. If the Company does not elect to purchase all of the Offered Interest, the other Members shall have the option, exercisable by written notice (the "Member Notice") given to the Selling Member within sixty (60) days after receipt of the Transfer Notice, to purchase all, but not less than all, of the Offered Interest for the price and on the terms and conditions stated in the Offer. Each other Member shall have the right to purchase that portion of the Offered Interest that corresponds to the ratio that such Member's Percentage Interest bears to the total Percentage Interests of all other Members electing to purchase the Offered Interest. If any other Member elects not to purchase its full proportionate share of the Offered Interest, the unsubscribed portion shall be allocated among the other Members who have elected to purchase more than their proportionate share, in proportion to their respective Percentage Interests or in such other proportions as they may agree.

(d) Closing. If the Company and/or the other Members elect to purchase all of the Offered Interest, the closing of such purchase shall take place at the principal office of the Company on a date specified by the purchaser(s), which date shall not be later than ninety (90) days after the expiration of the option period described in Section 8.3(c). At the closing, the Selling Member shall deliver to the purchaser(s) documentation sufficient to transfer the Offered Interest, free and clear of all liens, claims, and encumbrances, and the purchaser(s) shall deliver to the Selling Member the purchase price in accordance with the terms of the Offer.

(e) Sale to Offeror. If the Company and/or the other Members do not elect to purchase all of the Offered Interest, the Selling Member may sell the Offered Interest to the Offeror in accordance with the terms of the Offer; provided, however, that (i) such sale must be completed within one hundred twenty (120) days after the expiration of the option period described in Section 8.3(c), and (ii) the Offeror must agree in writing to be bound by all of the terms and conditions of this Agreement. If the Selling Member does not sell the Offered Interest to the Offeror within such one hundred twenty (120) day period, the Offered Interest shall once again be subject to the restrictions set forth in this Article VIII.

8.4 Drag-Along Rights

(a) Drag-Along Notice. If Members holding at least [PERCENTAGE]% of the Percentage Interests (the "Selling Majority") propose to sell all of their membership interests to a third party purchaser in a bona fide arm's-length transaction (the "Drag-Along Sale"), the Selling Majority shall have the right to require all other Members (the "Dragged Members") to sell all of their membership interests to such third party purchaser on the same terms and conditions as the Selling Majority. The Selling Majority shall exercise this right by giving written notice (the "Drag-Along Notice") to the Dragged Members not less than thirty (30) days prior to the proposed closing date of the Drag-Along Sale. The Drag-Along Notice shall set forth the name of the third party purchaser, the proposed amount and form of consideration for the membership interests, and all other material terms and conditions of the Drag-Along Sale.

(b) Obligations of Dragged Members. Upon receipt of a Drag-Along Notice, each Dragged Member shall be obligated to:

(i) Sell all of its membership interests to the third party purchaser on the same terms and conditions as the Selling Majority;

(ii) Vote its membership interests (if a vote is required) in favor of the Drag-Along Sale and any matters necessary or appropriate for the consummation of the Drag-Along Sale;

(iii) Refrain from exercising any dissenters' or appraisal rights with respect to the Drag-Along Sale;

(iv) Take all actions reasonably necessary to consummate the Drag-Along Sale; and

(v) Execute all agreements and other documents required generally of the Members in connection with the Drag-Along Sale, provided that the Dragged Members shall not be required to make representations and warranties other than with respect to their ownership of their membership interests and authority to sell.

(c) Consideration. In any Drag-Along Sale, all Members shall receive the same amount and form of consideration per percentage point of Percentage Interest.

8.5 Tag-Along Rights

(a) Tag-Along Notice. If any Member or group of Members (collectively, the "Selling Tag Members") proposes to sell membership interests representing more than [PERCENTAGE]% of the total Percentage Interests to a third party purchaser in a bona fide arm's-length transaction (the "Tag-Along Sale"), the Selling Tag Members shall provide written notice (the "Tag-Along Notice") of such proposed sale to all other Members (the "Tag-Along Members") not less than thirty (30) days prior to the proposed closing date of the Tag-Along Sale. The Tag-Along Notice shall set forth the name of the third party purchaser, the proposed amount and form of consideration for the membership interests, the percentage of total Percentage Interests proposed to be sold, and all other material terms and conditions of the Tag-Along Sale.

(b) Exercise of Tag-Along Rights. Each Tag-Along Member shall have the right, exercisable by written notice to the Selling Tag Members within fifteen (15) days after receipt of the Tag-Along Notice, to participate in the Tag-Along Sale by selling to the third party purchaser, on the same terms and conditions as the Selling Tag Members, a portion of such Tag-Along Member's membership interests. The portion of each Tag-Along Member's membership interests that may be included in the Tag-Along Sale shall be equal to the product of (i) the percentage of total Percentage Interests proposed to be sold in the Tag-Along Sale, and (ii) such Tag-Along Member's Percentage Interest.

(c) Reduction of Selling Tag Members' Sale. If the third party purchaser is unwilling to purchase all of the membership interests proposed to be included in the Tag-Along Sale, the number of membership interests to be sold by the Selling Tag Members shall be reduced to the extent necessary to allow the Tag-Along Members to participate in the Tag-Along Sale as provided in Section 8.5(b).

(d) Consideration. In any Tag-Along Sale, all Members shall receive the same amount and form of consideration per percentage point of Percentage Interest.

ARTICLE IX: WITHDRAWAL AND EXIT OF MEMBERS

9.1 Voluntary Withdrawal

No Member shall have the right to voluntarily withdraw from the Company prior to the dissolution and winding up of the Company without the unanimous written consent of the other Members, which consent may be given or withheld in their sole and absolute discretion. Any Member who voluntarily withdraws from the Company in violation of this Section 9.1 shall be liable to the Company for any damages sustained by the Company as a result of such withdrawal, and the Company may offset the amount of such damages against any amounts otherwise distributable to such Member.

9.2 Involuntary Withdrawal

A Member shall be deemed to have involuntarily withdrawn from the Company upon the occurrence of any of the following events (each, an "Involuntary Withdrawal Event"):

(a) With respect to a Member who is a natural person:

(i) The death of the Member;

(ii) The entry of an order by a court of competent jurisdiction adjudicating the Member incompetent to manage the Member's person or estate;

(iii) The appointment of a guardian or conservator for the Member;

(iv) The Member files a petition seeking for the Member any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation;

(v) The Member files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Member in any proceeding of this nature; or

(vi) The Member seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the Member or of all or any substantial part of the Member's properties.

(b) With respect to a Member that is an entity:

(i) The dissolution and commencement of winding up of the Member;

(ii) The filing of a certificate of dissolution or its equivalent for the Member;

(iii) The Member files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation;

(iv) The Member files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature; or

(v) The Member seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the Member or of all or any substantial part of its properties.

9.3 Purchase of Membership Interest Upon Involuntary Withdrawal

(a) Option to Purchase. Upon the occurrence of an Involuntary Withdrawal Event with respect to a Member (the "Withdrawing Member"), the Company or, if the Company does not elect to purchase, the other Members, shall have the option, but not the obligation, to purchase all, but not less than all, of the membership interest of the Withdrawing Member (the "Withdrawing Member's Interest") for the purchase price determined in accordance with Section 9.3(c).

(b) Exercise of Option. The Company shall have sixty (60) days from the date of the Involuntary Withdrawal Event to notify the Withdrawing Member or the Withdrawing Member's legal representative in writing of its election to purchase the Withdrawing Member's Interest. If the Company does not elect to purchase all of the Withdrawing Member's Interest, it shall notify the other Members within such sixty (60) day period, and the other Members shall have thirty (30) days thereafter to notify the Withdrawing Member or the Withdrawing Member's legal representative in writing of their election to purchase the Withdrawing Member's Interest. Each other Member shall have the right to purchase that portion of the Withdrawing Member's Interest that corresponds to the ratio that such Member's Percentage Interest bears to the total Percentage Interests of all other Members electing to purchase the Withdrawing Member's Interest. If any other Member elects not to purchase its full proportionate share of the Withdrawing Member's Interest, the unsubscribed portion shall be allocated among the other Members who have elected to purchase more than their proportionate share, in proportion to their respective Percentage Interests or in such other proportions as they may agree.

(c) Purchase Price. The purchase price for the Withdrawing Member's Interest shall be the fair market value of such interest as determined by an independent appraiser selected by the [MANAGERS/MEMBERS]. The cost of the appraisal shall be borne equally by the Company and the Withdrawing Member or the Withdrawing Member's legal representative. The appraiser shall determine the fair market value of the Withdrawing Member's Interest as of the date of the Involuntary Withdrawal Event, without applying any discounts for lack of marketability or minority interest.

(d) Payment of Purchase Price. The purchase price for the Withdrawing Member's Interest shall be paid as follows:

(i) Ten percent (10%) of the purchase price shall be paid in cash at the closing; and

(ii) The balance of the purchase price shall be paid pursuant to a promissory note executed by the purchaser(s) in favor of the Withdrawing Member or the Withdrawing Member's legal representative. The promissory note shall provide for equal annual payments of principal and interest over a period of [NUMBER] years, with interest accruing at the prime rate as published in The Wall Street Journal on the date of the Involuntary Withdrawal Event plus [NUMBER] percentage points.

(e) Closing. The closing of the purchase of the Withdrawing Member's Interest shall take place at the principal office of the Company on a date specified by the purchaser(s), which date shall not be later than ninety (90) days after the expiration of the option period described in Section 9.3(b). At the closing, the Withdrawing Member or the Withdrawing Member's legal representative shall deliver to the purchaser(s) documentation sufficient to transfer the Withdrawing Member's Interest, free and clear of all liens, claims, and encumbrances, and the purchaser(s) shall deliver to the Withdrawing Member or the Withdrawing Member's legal representative the down payment and the promissory note as provided in Section 9.3(d).

9.4 Expulsion of a Member

(a) Expulsion for Cause. A Member may be expelled from the Company for Cause upon the affirmative vote of Members holding at least [PERCENTAGE]% of the Percentage Interests (excluding the Percentage Interest of the Member proposed to be expelled). For purposes of this Section 9.4, "Cause" shall mean:

(i) The Member has committed a material breach of this Agreement, which breach remains uncured for thirty (30) days after written notice thereof is given to the Member;

(ii) The Member has committed an act of fraud, theft, or embezzlement against the Company or any of its Members;

(iii) The Member has been convicted of, or has pleaded guilty or no contest to, a felony or a crime involving moral turpitude;

(iv) The Member has engaged in conduct that has had or is reasonably likely to have a material adverse effect on the Company's business or reputation; or

(v) The Member has failed to perform a material portion of the Member's duties and responsibilities to the Company for a period of at least ninety (90) consecutive days.

(b) Effect of Expulsion. Upon the expulsion of a Member, the expelled Member shall cease to be a Member of the Company and shall have no rights as a Member under this Agreement or the Act, except the right to receive payment for the expelled Member's membership interest as provided in Section 9.4(c).

(c) Purchase of Expelled Member's Interest. Upon the expulsion of a Member, the Company shall purchase the expelled Member's membership interest for a purchase price equal to the fair market value of such interest as determined by an independent appraiser selected by the [MANAGERS/MEMBERS], less any damages sustained by the Company as a result of the expelled Member's actions constituting Cause for expulsion. The cost of the appraisal shall be borne by the Company. The appraiser shall determine the fair market value of the expelled Member's membership interest as of the date of expulsion, without applying any discounts for lack of marketability or minority interest. The purchase price shall be paid in accordance with Sections 9.3(d) and 9.3(e).

ARTICLE X: DISSOLUTION AND LIQUIDATION

10.1 Dissolution Events

The Company shall be dissolved and its affairs wound up upon the first to occur of the following events (each, a "Dissolution Event"):

(a) The unanimous written consent of all Members to dissolve the Company;

(b) The sale or other disposition of all or substantially all of the Company's assets;

(c) The entry of a decree of judicial dissolution under the Act; or

(d) The occurrence of any other event that causes the dissolution of a limited liability company under the Act, unless the Company is continued without dissolution in accordance with the Act.

10.2 Winding Up

(a) Liquidator. Upon the occurrence of a Dissolution Event, the [MANAGERS/MEMBERS] shall act as liquidator (the "Liquidator") and shall proceed to wind up the affairs of the Company, liquidate the Company's assets, pay its liabilities, and distribute the remaining assets to the Members in accordance with Section 10.3. The Liquidator shall have full power and authority to sell, assign, and encumber any or all of the Company's assets and to wind up and liquidate the affairs of the Company in an orderly and business-like manner.

(b) Accounting. As promptly as possible after dissolution and again after final liquidation, the Liquidator shall cause a proper accounting to be made of the Company's assets, liabilities, and operations through the last day of the month in which the dissolution occurs or the final liquidation is completed, as applicable.

(c) Winding Up Operations. The Liquidator shall liquidate the assets of the Company as promptly as is consistent with obtaining the fair market value thereof, and apply and distribute the proceeds in accordance with Section 10.3.

(d) Continuation of Business. Notwithstanding the foregoing, the Liquidator may continue the business of the Company to the extent necessary to preserve the value of the Company's assets, provided that such continuation is not inconsistent with the purpose of liquidation.

10.3 Distribution of Assets

Upon the winding up of the Company, the assets of the Company shall be distributed in the following order of priority:

(a) First, to creditors of the Company, including Members who are creditors, to the extent permitted by law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for which reasonable provision for payment has been made and liabilities for distributions to Members under the Act;

(b) Second, to the establishment of any reserves that the Liquidator deems reasonably necessary for any contingent, conditional, or unmatured liabilities or obligations of the Company;

(c) Third, to Members and former Members in satisfaction of liabilities for distributions under the Act; and

(d) Fourth, to the Members in proportion to their respective positive Capital Account balances, after giving effect to all contributions, distributions, and allocations for all periods.

10.4 Certificate of Cancellation

Upon the completion of the winding up of the Company's affairs, the Liquidator shall file a Certificate of Cancellation with the [STATE] Secretary of State.

10.5 No Recourse Against Members

Each Member shall look solely to the assets of the Company for the return of such Member's Capital Contributions and share of profits, and if the Company property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return the Capital Contributions and share of profits of the Members, the Members shall have no recourse against any other Member.

ARTICLE XI: LIABILITY AND INDEMNIFICATION

11.1 Limitation of Liability

(a) No Personal Liability. Except as otherwise provided by the Act or expressly set forth in this Agreement, no Member or Manager shall be personally liable for any debt, obligation, or liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a Member or Manager of the Company.

(b) Good Faith Reliance. A Member or Manager shall not be liable, responsible, or accountable in damages or otherwise to the Company or any Member for any action taken or failure to act on behalf of the Company within the scope of the authority conferred on the Member or Manager by this Agreement or by law, unless such action or omission was performed or omitted fraudulently or constituted willful misconduct or gross negligence.

11.2 Indemnification

(a) Indemnification of Members, Managers, and Officers. The Company shall indemnify, defend, and hold harmless each Member, Manager, and officer of the Company (each, an "Indemnitee") from and against any and all losses, claims, demands, costs, damages, liabilities, expenses of any nature (including attorneys' fees and disbursements), judgments, fines, settlements, and other amounts (collectively, "Liabilities") arising from