Member Structure Agreement

Member Structure Agreement

This Member Structure Agreement (the "Agreement") is made effective as of , by and between , a company organized under the laws of (the "Company"), and the undersigned members, initially and (each a "Member" and collectively the "Members").

RECITALS

WHEREAS, the Company is duly formed and existing pursuant to the laws of the jurisdiction set forth above and engages in lawful business activities consistent with its formation documents; and

WHEREAS, the Members hold membership interests in the Company and desire to set forth the classes of membership, the allocation of profits and losses, capital contribution obligations, voting rights and restrictions on transfer of membership interests; and

WHEREAS, the Members and the Company desire to reduce to writing the agreed member structure and related governance matters as of the effective date set forth above.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below: "Membership Interest" means the entire interest of a Member in the Company, including economic and governance rights unless otherwise specified; "Class" means a designation of Membership Interests as set forth in Section 2. Capitalized terms not otherwise defined herein shall have the meanings ascribed in the Company formation documents, unless inconsistent with this Agreement.

2. MEMBERSHIP INTERESTS AND CLASSES

2.1 Classes of Membership. The Company shall have the following classes of membership interests and the rights of each class shall be as set forth herein: Class A: ; Class B: .

2.2 Issuance and Allocation. The initial allocation of Membership Interests among the Members is set forth below and constitutes the full economic and voting allocation until modified pursuant to Section 14:

3. CAPITAL CONTRIBUTIONS; ADDITIONAL CAPITAL

3.1 Initial Contributions. The Members shall have contributed the amounts set forth above and such contributions shall be recorded on the Company's books as the Members' capital accounts. The Members acknowledge that additional contributions may be required to meet the needs of the Company as determined in accordance with the voting provisions of Section 5.

3.2 Failure to Contribute. If a Member fails to make a required capital contribution within the time specified by the Company, the non-defaulting Members may, by vote, approve remedies including but not limited to (a) dilution of the defaulting Member's percentage interest, (b) imposition of a reasonable interest charge on the overdue amount, and (c) purchase of the defaulting Member's interest in accordance with Section 6.

4. ALLOCATIONS AND DISTRIBUTIONS

4.1 Allocations. Profits and losses of the Company for each fiscal year shall be allocated to the Members in proportion to their respective Membership Percentages, subject to any class-specific allocation provisions set forth in Section 2.

4.2 Distributions. Distributions of available cash shall be made at such times and in such amounts as determined by the Members in accordance with the governance provisions herein. Distributions shall be made pro rata in accordance with Membership Percentages unless otherwise required by applicable law or by a separate unanimous written agreement of the Members.

5. VOTING AND MANAGEMENT

5.1 Management Structure. The Company shall be managed by Manager-managed Member-managed. If manager-managed is selected, the initial manager shall be:

5.2 Voting Rights. Except as otherwise provided herein or in the operative formation documents, each Member shall have voting power in proportion to its Membership Percentage. Actions requiring the approval of Members shall require the vote percentages specified in the Company formation documents or, if not specified, a simple majority of Membership Percentages.

6. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL

6.1 Restriction on Transfer. No Member may Transfer any Membership Interest except in compliance with this Section 6. "Transfer" means any sale, assignment, encumbrance, pledge, hypothecation, or other disposition.

6.2 Right of First Refusal. Prior to any proposed Transfer (other than a Permitted Transfer as defined in the formation documents), the transferring Member shall give written notice to the Company and the non-transferring Members specifying the terms of the proposed Transfer. The Company or the non-transferring Members shall have a right of first refusal to purchase the offered interest on the same terms.

7. BUY-SELL; DEADLOCK

7.1 Buy-Sell on Triggering Event. In the event of a Member's death, incapacity, bankruptcy, or breach of a material obligation hereunder, the non-affected Members shall have the option to purchase the affected Member's interest at fair market value as determined by an independent appraiser or by formula set by unanimous consent.

7.2 Deadlock. If the Members are unable to reach agreement on a matter requiring Member approval and the Company suffers material adverse consequences due to such deadlock, the Members shall submit the matter to binding arbitration or, if agreed by unanimous written consent, to buy-out procedures mutually agreed in writing.

8. ADMISSION OF ADDITIONAL MEMBERS

Additional Members may be admitted only upon the unanimous written consent of the existing Members and upon execution of any required joinder agreement agreeing to be bound by the terms of this Agreement. The terms of admission shall specify capital contribution and Membership Percentage adjustments and any special rights or restrictions.

9. TAX MATTERS

9.1 Tax Classification. The Members agree to cause the Company to be treated for federal and applicable state tax purposes in the manner determined by the Members. The Members shall designate a Member or third party to act as the Tax Matters Partner or Partnership Representative with authority to make tax elections on behalf of the Company.

10. BOOKS, RECORDS, AND ACCOUNTING

The Company shall keep complete and accurate books and records of the Company's operations and financial affairs. Members and their authorized representatives shall have reasonable access to books and records at reasonable times for any proper purpose. The fiscal year shall end on unless otherwise determined by the Members.

11. REPRESENTATIONS AND WARRANTIES

Each Member represents and warrants to the other Members that such Member has full power and authority to enter into this Agreement, that this Agreement constitutes a valid and binding obligation of such Member enforceable in accordance with its terms, and that the execution and performance will not violate any agreement to which such Member is a party.

12. INDEMNIFICATION

To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Member and manager from and against any loss, liability or expense (including reasonable attorneys' fees) incurred by reason of any act or omission performed in good faith on behalf of the Company, except for acts or omissions constituting gross negligence, willful misconduct or a knowing violation of law.

13. NOTICES

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below by personal delivery, certified mail (return receipt requested), or reputable overnight courier. Notice is effective upon receipt.

14. AMENDMENTS; WAIVER

This Agreement may be amended only by a written instrument signed by all Members. No failure or delay by any party in exercising any right under this Agreement shall operate as a waiver of that right, and a waiver must be in writing to be effective.

15. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction of , without regard to principles of conflicts of law that would result in the application of the laws of another jurisdiction.

16. ENTIRE AGREEMENT

This Agreement, together with the Company's formation documents and any joinder agreements executed in accordance with this Agreement, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, whether written or oral.

17. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be reformed to the extent necessary to give effect to the parties' intent.

18. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be effective as originals.

19. MISCELLANEOUS

The headings in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. The parties shall cooperate and execute such additional documents and take such further actions as may be reasonably necessary to carry out the intent and purposes of this Agreement.

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