Limited Liability Company Formation Worksheet

Long Form Operating Agreement for Member-Managed Limited Liability Company

Operating Agreement made this , between , a limited liability company organized pursuant to the , hereinafter sometimes referred to herein as the Company, , of , , of , and , of , hereinafter called the Members.

For and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned Members agree as follows:

Article I. Definitions of Terms.

A. Definitions. Unless the context otherwise requires, the terms defined in this Article I shall, for the purposes of this Agreement, have the following meanings:

1. Act means the , as amended from time to time.

2. Additional Members has the meaning set forth in Article XIII-A.

3. Affiliate means, with respect to a specified Person, any Person that directly or indirectly controls, is controlled by, or is under common control with, the specified Person.

4. Agreement means this Operating Agreement of the Company, as amended, modified, supplemented or restated from time to time.

5. Capital Account means, with respect to any Member, the account maintained for such Member in accordance with the provisions of Article IV-D.

6. Capital Contribution means, with respect to any Member, the aggregate amount of money and the fair market value of any property contributed to the Company pursuant to Article IV-A with respect to such Member's Interest.

7. Certificate means the Certificate of Formation of the Company and any amendments filed with the office of the Secretary of State of pursuant to the .

8. Code means the Internal Revenue Code of 1986, as amended from time to time.

9. Company means , the limited liability company formed and continued under and pursuant to the Act and this Agreement.

10. Covered Person means a Member, any Affiliate of a Member, and related persons or agents.

11. Fiscal Year means: (i) the period commencing upon the formation of the Company and ending on ; (ii) any subsequent 12-month period commencing on and ending on ; or (iii) any portion of such period required for allocations.

12. Interest means a Member's limited liability company interest in the Company.

13. Member means each of , and , and includes any Person admitted as an Additional Member pursuant to this Agreement.

14. Net Cash Flow means gross cash receipts less amounts paid and reserves established by the Members.

15. Percentage Interest means the Interest of a Member, expressed as a portion of one hundred percent, as shown on Schedule A.

16. Person includes any individual, corporation, partnership, trust, estate, limited liability company, or other legal entity.

17. Profits and Losses means the Company's taxable income or loss for such Fiscal Year.

18. Tax Matters Partner has the meaning set forth in Article XI-A.

19. Treasury Regulations means the income tax regulations promulgated under the Code.

B. Headings. The headings and subheadings in this Agreement are included for convenience and identification only.

Article II. Formation and Term.

A. Formation.

1. The Members have formed the Company as a limited liability company under and pursuant to the provisions of the .

2. Upon the execution of this Agreement, , and shall be admitted as Members of the Company.

3. The name and mailing address of each Member and the amount contributed to the capital of the Company shall be listed on Schedule A.

4. , as an authorized person within the meaning of the , shall execute, deliver and file the Certificate.

B. Name. The name of the Company is .

C. Term. The term of the Company shall commence on the date the Certificate is filed and shall continue until , unless dissolved earlier.

D. Registered Agent and Office. The Company's registered agent and office in shall be , of .

E. Principal Place of Business. The principal place of business of the Company shall be at .

F. Qualification in Other Jurisdictions. The Members shall, if required by law or if deemed advisable, cause the Company to be qualified in any jurisdiction in which the Company transacts business.

Article III. Purpose and Powers of the Company.

A. Purpose. The Company is formed for engaging in any lawful act or activity for which limited liability companies may be formed under the .

B. Powers of the Company.

1. The Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, incidental or convenient to further the purpose set forth in Article III-A.

2. The Company may merge with, or consolidate into, another limited liability company or other business entity upon the approval of all of the Members.

Article IV. Capital Contributions; Interests; Capital Accounts; Advances.

A. Capital Contributions.

1. Each Member has contributed or is deemed to have contributed to the capital of the Company the amount set forth on Schedule A.

2. No Member shall be required to make any additional capital contribution to the Company.

B. Member's Interest. A Member's Interest shall for all purposes be personal property.

C. Status of Capital Contributions.

1. Except as otherwise provided, the amount of a Member's Capital Contributions may be returned only with the consent of all Members.

2. No Member shall receive any interest, salary or drawing with respect to its Capital Contributions or for services rendered on behalf of the Company.

3. Except as otherwise provided, the Members shall be liable only to make their capital contributions.

D. Capital Accounts.

1. An individual Capital Account shall be established and maintained for each Member.

2. The Capital Account of each Member shall be maintained in accordance with the Agreement and applicable tax rules.

E. Advances. If any Member shall advance any funds to the Company in excess of its Capital Contributions, the amount shall be treated as a debt obligation of the Company.

Article V. Members.

A. Powers of Members. The Members shall have the power to exercise any and all rights or powers granted pursuant to this Agreement and the .

B. Reimbursements. The Company shall reimburse the Members for ordinary and necessary out-of-pocket expenses incurred on behalf of the Company.

C. Partition. Each Member waives any and all rights to maintain an action for partition of the Company's property.

D. Resignation. A Member may not resign from the Company without the written consent of all of the other Members.

VI. Management.

A. Management of the Company.

1. Management of the Company shall be vested in the Members. Except as otherwise expressly provided, actions require approval of Members owning more than % of the Percentage Interests.

2. The Members shall have full, exclusive and complete discretion to manage the business and affairs of the Company. There shall not be a manager of the Company.

3. With respect to third parties, each Member is an agent of the Company's business, and each Member may bind the Company.

B. Reliance by Third Parties. Any Person dealing with the Company or any Member may rely upon a certificate signed by any Member as to matters relating to the Company.

Article VII. Amendments and Meetings

A. Amendments. Any amendment to this Agreement shall be adopted if it receives the affirmative vote of all Members and is in writing executed by all Members.

B. Meetings of the Members.

1. Meetings of the Members may be called at any time by any Member. Notice shall be given not less than days nor more than days prior to the meeting.

2. The Members shall establish all other provisions relating to meetings, including notice, waiver, action by consent, quorum requirements, and voting.

3. The Company may take any action contemplated by this Agreement as approved by the unanimous written consent of the Members.

Article VIII. Allocations.

A. Profits and Losses.

1. Subject to the allocation rules of Article VIII-B, Profits for any Fiscal Year shall be allocated among the Members in proportion to the Percentage Interests.

2. Subject to the allocation rules of Article VIII-B, Losses for any Fiscal Year shall be allocated among the Members in proportion to the Percentage Interests.

B. Allocation Rules.

1. Profits, Losses and other items shall be determined on a daily, monthly or other basis as determined by the Members.

2. Except as otherwise provided, all items of Company income, gain, loss, deduction and any other allocations shall be divided among the Members in the same proportions as they share Profits and Losses.

3. The Members are aware of the income tax consequences of the allocations made by this Article and agree to be bound by its provisions.

4. The Members intend that the allocation provisions comply with 26 U.S.C.A. § 704(b) of the Code and the Treasury Regulations.

C. Tax Allocations; 26 U.S.C.A. § 704(c) of the Code. Income, gain, loss and deduction with respect to contributed property shall be allocated among the Members as required by tax law.

Article IX. Distributions.

A. Net Cash Flow. Except as otherwise provided in Article XV, any distribution of the Net Cash Flow during any Fiscal Year shall be made to the Members in proportion to the Percentage Interests.

B. Distribution Rules. All distributions pursuant to Article IX-A shall be at such times and in such amounts as shall be determined by the Members.

C. Limitations on Distribution. The Company shall not make a distribution to any Member if such distribution would violate applicable law.

Article X. Books and Records.

A. Books, Records and Financial Statements.

1. The Company shall maintain separate books of account at its principal place of business and shall keep a true and accurate record of all costs, expenses, credits and income.

2. The Members shall prepare and maintain the books of account and file all applicable federal and state tax returns.

B. Accounting Method. The books and records of the Company shall be kept on the accrual method of accounting.

C. Annual Audit. At any time at a Member's sole discretion, the financial statements of the Company may be audited by an independent certified public accountant.

Article XI. Tax Matters.

A. Tax Matters Partner.

1. is designated as Tax Matters Partner of the Company for purposes of federal tax law.

2. The Tax Matters Partner shall, within days of receipt of any IRS notice, deliver a copy to each Member.

B. Taxation as Partnership. The Company shall be treated as a partnership for U.S. federal income tax purposes.

Article XII. Liability; Exculpation; Indemnification.

A. Liability. Except as otherwise provided by the , the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company.

B. Exculpation.

1. No Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any act or omission performed in good faith on behalf of the Company, except for gross negligence or willful misconduct.

2. A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon information presented by qualified Persons.

3. Fiduciary Duty. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties to replace such other duties and liabilities.

4. Indemnification. To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred in good faith on behalf of the Company.

5. Expenses. Expenses incurred by a Covered Person in defending any claim shall be advanced by the Company upon receipt of an undertaking to repay if not entitled to indemnification.

6. Insurance. The Company may purchase and maintain insurance on behalf of Covered Persons.

7. Outside Businesses. Any Member or Affiliate of a Member may engage in other business ventures independently or with others.

Article XIII. Additional Members.

A. Admission. By approval of all Members, the Company is authorized to admit any Person as an additional member of the Company.

B. Allocations. Additional Members shall not be entitled to retroactive allocation of the Company's income, gains, losses, deductions, credits or other items.

Article XIV. Assignability and Substitute Members.

A. Assignability of Interests. No Member may assign the whole or any part of its Interests.

B. Recognition of Assignment by Company. No assignment or pledge of any Interest in violation of this Article shall be valid or effective.

C. Pledge. No Member may pledge or otherwise encumber the whole or any part of its Interests.

Article XV. Dissolution, Liquidation and Termination.

A. No Dissolution. The Company shall not be dissolved by the admission of Additional Members in accordance with the terms of this Agreement.

B. Events Causing Dissolution. The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events:

1. The expiration of the term of the Company, as provided in Article II-C;

2. The written consent of all Members;

3. The death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or other event under the that terminates membership unless, within days, the remaining Members agree in writing to continue the business; or

4. The entry of a decree of judicial dissolution under applicable statute.

C. Liquidation. Upon dissolution, the Members shall wind up the Company's affairs and distribute proceeds in the order required by this Agreement.

D. Termination. The Company shall terminate when all assets have been distributed and the Certificate canceled in the manner required by the Act.

E. Claims of the Members. The Members and former Members shall look solely to the Company's assets for the return of their Capital Contributions.

Article XVI. Miscellaneous.

A. Notices. All notices provided for in this Agreement shall be in writing and delivered by courier, telecopy, or registered/certified mail.

B. Failure to Pursue Remedies. Failure to insist upon strict performance shall not prevent a subsequent act from having the effect of an original violation.

C. Cumulative Remedies. The rights and remedies provided by this Agreement are cumulative.

D. Binding Effect. This Agreement shall be binding upon and inure to the benefit of all parties and their successors, legal representatives and assigns.

E. Interpretation. All references in this Agreement to Articles, Sections and Paragraphs shall refer to corresponding provisions of this Agreement.

F. Severability. The invalidity or unenforceability of any particular provision shall not affect the other provisions.

G. Counterparts. This Agreement may be executed in any number of counterparts.

H. Integration. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter of this Agreement.

I. Governing Law. This Agreement shall be interpreted in accordance with the laws of .

The parties have executed this Agreement the day and year first above written.

(Name of LLC)

Schedule A

Member names, addresses, capital contributions, and percentage interests should be entered here.