LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

[________________________________]

(Company Name)

A Kentucky Limited Liability Company

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PREAMBLE

THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this "Agreement") is entered into and effective as of [__/__/____] (the "Effective Date"), by and among the Members identified in Exhibit A attached hereto.

WHEREAS, the Members desire to form a limited liability company under the laws of the Commonwealth of Kentucky pursuant to the Kentucky Limited Liability Company Act, KRS §§ 275.001 et seq. (the "Act"); and

WHEREAS, the Members desire to enter into this Agreement to set forth their respective rights, powers, duties, and obligations with respect to the Company;

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

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ARTICLE I - DEFINITIONS

Section 1.1 Definitions

As used in this Agreement, the following terms shall have the meanings set forth below:

"Act" means the Kentucky Limited Liability Company Act, KRS §§ 275.001 et seq., as amended from time to time.

"Additional Capital Contribution" means any Capital Contribution made by a Member after the Initial Capital Contribution.

"Adjusted Capital Account" means the Capital Account maintained for each Member, adjusted as required by Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

"Adjusted Capital Account Deficit" means the deficit balance, if any, in a Member's Adjusted Capital Account.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.

"Agreement" means this Limited Liability Company Operating Agreement, as originally executed and as amended from time to time.

"Articles of Organization" means the Articles of Organization of the Company filed with the Kentucky Secretary of State pursuant to KRS § 275.025.

"Assignee" means a Person who has acquired a Membership Interest but has not been admitted as a Member.

"Bankrupt" or "Bankruptcy" means the filing of a voluntary petition in bankruptcy, being adjudged bankrupt or insolvent, filing a petition seeking reorganization, making an assignment for the benefit of creditors, or similar insolvency proceedings.

"Capital Account" means the capital account maintained for each Member in accordance with Section 4.4 of this Agreement.

"Capital Contribution" means any contribution of cash, property, or services to the Company by a Member.

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

"Company" means [________________________________], LLC, a Kentucky limited liability company.

"Distributable Cash" means all cash received by the Company from operations, less amounts used to pay Company expenses, debt service, and reasonable reserves.

"Distribution" means any transfer of money or property by the Company to a Member on account of a Membership Interest.

"Economic Interest" means a Member's share of Profits, Losses, and Distributions.

"Effective Date" means [__/__/____].

"Fiscal Year" means the Company's fiscal year, which shall be the calendar year unless otherwise determined by the Members.

"Initial Capital Contribution" means the Capital Contribution made by each Member upon formation of the Company as set forth in Exhibit B.

"Majority Vote" or "Majority in Interest" means Members holding more than fifty percent (50%) of the Percentage Interests.

"Manager" means any Person designated as a Manager of the Company pursuant to Article VII.

"Member" means each Person who executes this Agreement as a Member or is subsequently admitted as a Member.

"Membership Interest" means a Member's entire interest in the Company, including Economic Interest and voting rights.

"Net Profits" and "Net Losses" mean the Company's income, gain, loss, deductions, and credits as determined for federal income tax purposes.

"Percentage Interest" means each Member's percentage ownership interest in the Company as set forth in Exhibit A.

"Person" means any individual, corporation, partnership, limited liability company, trust, estate, association, or other entity.

"Prime Rate" means the prime rate as published in The Wall Street Journal.

"Profits" and "Losses" mean the net income or net loss of the Company for each Fiscal Year as determined for federal income tax purposes.

"Secretary of State" means the Kentucky Secretary of State.

"Supermajority Vote" means Members holding at least [____]% of the Percentage Interests.

"Tax Matters Partner" or "Partnership Representative" means the Person designated pursuant to Article XIII to represent the Company in tax matters.

"Transfer" means any sale, assignment, gift, pledge, encumbrance, hypothecation, or other disposition of a Membership Interest.

"Treasury Regulations" means the regulations promulgated by the United States Treasury Department under the Code.

"Unanimous Vote" means the affirmative vote of all Members.

"Withdrawal" means the voluntary withdrawal of a Member from the Company.

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ARTICLE II - FORMATION AND ORGANIZATION

Section 2.1 Formation

The Company was formed as a Kentucky limited liability company upon the filing of the Articles of Organization with the Kentucky Secretary of State on [__/__/____] pursuant to KRS § 275.025.

Section 2.2 Name

The name of the Company is [________________________________], LLC. The Company may conduct business under that name or any assumed name approved by the Manager(s) or, if member-managed, by a Majority Vote.

Section 2.3 Principal Office

The principal office of the Company shall be located at:

[________________________________]
[________________________________]
[________________________________]

The Company may change its principal office upon approval by the Manager(s) or, if member-managed, by a Majority Vote.

Section 2.4 Registered Office and Agent

The Company's registered office in Kentucky shall be:

[________________________________]
[________________________________]
[________________________________]

The Company's registered agent at such address shall be:

[________________________________]

The registered office and/or registered agent may be changed by filing the appropriate documents with the Kentucky Secretary of State pursuant to KRS § 275.040.

Section 2.5 Term

The Company shall have perpetual existence unless dissolved in accordance with Article XII of this Agreement or the Act.

Section 2.6 Purpose

The Company is formed for the following purposes:

[________________________________]
[________________________________]
[________________________________]

and for any other lawful business purpose permitted under the Act and applicable law.

Section 2.7 Powers

The Company shall have all powers necessary, suitable, or convenient to accomplish its purposes, including without limitation all powers granted to limited liability companies under the Act.

Section 2.8 Title to Property

All property owned by the Company, whether real or personal, tangible or intangible, shall be owned by the Company as an entity, and no Member shall have any ownership interest in such property in the Member's individual name.

Section 2.9 No State Law Partnership

The Members intend that the Company shall not be a partnership (including a limited partnership) or joint venture for any purpose other than federal and state income tax purposes, and this Agreement shall not be construed to suggest otherwise.

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ARTICLE III - MEMBERS

Section 3.1 Initial Members

The initial Members of the Company, their addresses, and their Percentage Interests are set forth in Exhibit A.

Section 3.2 Admission of Additional Members

Additional Members may be admitted to the Company upon:

(a) The approval of [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the existing Members;

(b) The execution of a counterpart of this Agreement or a joinder agreement;

(c) The satisfaction of any conditions to admission established by the Members; and

(d) Compliance with all applicable provisions of the Act.

Section 3.3 Representations and Warranties

Each Member represents and warrants to the Company and to each other Member that:

(a) Such Member has the legal capacity and authority to enter into this Agreement and to perform the Member's obligations hereunder;

(b) This Agreement constitutes the legal, valid, and binding obligation of such Member, enforceable against such Member in accordance with its terms;

(c) The execution, delivery, and performance of this Agreement by such Member does not conflict with any agreement to which such Member is a party;

(d) Such Member is acquiring the Membership Interest for investment purposes only and not with a view to distribution;

(e) Such Member is an "accredited investor" as defined in Regulation D under the Securities Act of 1933 (if applicable);

(f) Such Member has received and reviewed all information concerning the Company that the Member considers necessary or appropriate for deciding whether to acquire the Membership Interest;

(g) Such Member understands that the Membership Interest has not been registered under federal or state securities laws and is subject to substantial restrictions on transfer; and

(h) Such Member has had the opportunity to consult with independent legal and tax advisors regarding this investment.

Section 3.4 No Personal Liability

Except as otherwise provided in the Act, no Member 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.

Section 3.5 Member Duties

(a) Duty of Loyalty. Members shall account to the Company for any property, profit, or benefit derived in the conduct of the Company's business or from a use of Company property. Members shall refrain from dealing with the Company as or on behalf of a party having an interest adverse to the Company, and shall refrain from competing with the Company as provided in Section 3.6.

(b) Duty of Care. Members shall act with the care that a person in a like position would reasonably exercise under similar circumstances with respect to Company activities and affairs.

(c) Good Faith and Fair Dealing. Members shall discharge their duties and exercise their rights under this Agreement consistent with the implied contractual obligation of good faith and fair dealing.

Section 3.6 Non-Competition and Non-Solicitation

[☐ Check if applicable]

(a) Non-Competition. During the term of membership and for a period of [____] years thereafter, no Member shall directly or indirectly engage in any business that competes with the Company within [________________________________] (geographic area).

(b) Non-Solicitation. During the term of membership and for a period of [____] years thereafter, no Member shall solicit any employee, customer, or client of the Company.

(c) Enforceability. The parties acknowledge that the restrictions in this Section are reasonable and necessary to protect the legitimate interests of the Company.

Section 3.7 Confidentiality

Each Member shall maintain the confidentiality of all proprietary and confidential information of the Company and shall not disclose such information to any third party except as required by law or with the consent of the Manager(s) or, if member-managed, by a Majority Vote.

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ARTICLE IV - CAPITAL CONTRIBUTIONS

Section 4.1 Initial Capital Contributions

Each Member shall make the Initial Capital Contribution set forth opposite such Member's name in Exhibit B on or before the date specified therein.

Section 4.2 Additional Capital Contributions

(a) Mandatory Additional Contributions. [☐ Check if applicable] Members shall be required to make Additional Capital Contributions as follows:

[________________________________]
[________________________________]

(b) Voluntary Additional Contributions. Any Member may make voluntary Additional Capital Contributions with the consent of the Manager(s) or, if member-managed, by a Majority Vote.

(c) Failure to Contribute. If a Member fails to make a required Capital Contribution when due, the Company may, at its option:

(1) Pursue any legal remedies available;

(2) Reduce such Member's Percentage Interest proportionately;

(3) Treat the unpaid amount as a loan from the other Members who fund such shortfall, bearing interest at the Prime Rate plus [____]%; or

(4) Exercise any other remedy set forth in this Agreement.

Section 4.3 Capital Contribution Loans

If the Company requires funds beyond the Capital Contributions, the Members may, but shall not be obligated to, lend funds to the Company. Any such loans shall bear interest at a rate determined by the Manager(s) or, if member-managed, by a Majority Vote, and shall be documented in a promissory note.

Section 4.4 Capital Accounts

(a) Establishment. A separate Capital Account shall be established and maintained for each Member in accordance with the capital accounting rules of Treasury Regulations Section 1.704-1(b)(2)(iv).

(b) Credits. Each Member's Capital Account shall be credited with:

(1) The amount of money contributed by such Member;

(2) The fair market value of property contributed by such Member (net of liabilities);

(3) Such Member's allocable share of Profits and any separately stated items of income or gain; and

(4) Any other amounts required by the Treasury Regulations.

(c) Debits. Each Member's Capital Account shall be debited with:

(1) The amount of money distributed to such Member;

(2) The fair market value of property distributed to such Member (net of liabilities);

(3) Such Member's allocable share of Losses and any separately stated items of deduction or loss; and

(4) Any other amounts required by the Treasury Regulations.

(d) Compliance. The Capital Accounts shall be maintained in compliance with Treasury Regulations Section 1.704-1(b)(2)(iv), and this Agreement shall be interpreted and applied consistently with such regulations.

Section 4.5 No Interest on Capital

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

Section 4.6 Return of Capital

Except as otherwise provided in this Agreement, no Member shall have the right to demand or receive the return of all or any part of the Member's Capital Contributions or Capital Account.

Section 4.7 Loans by Members

Any Member may make loans to the Company with the consent of the Manager(s) or, if member-managed, by a Majority Vote. Such loans shall not increase the lending Member's Capital Account or Percentage Interest.

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ARTICLE V - ALLOCATIONS

Section 5.1 Allocation of Profits and Losses

(a) Profits. Except as otherwise provided in this Article V, Profits for each Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

(b) Losses. Except as otherwise provided in this Article V, Losses for each Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

Section 5.2 Special Allocations

(a) Minimum Gain Chargeback. Notwithstanding any other provision of this Article V, if there is a net decrease in partnership minimum gain during any Fiscal Year, each Member shall be allocated items of income and gain for such year (and, if necessary, subsequent years) in proportion to, and to the extent of, an amount equal to such Member's share of the net decrease in partnership minimum gain, determined in accordance with Treasury Regulations Section 1.704-2(g).

(b) Member Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any other provision of this Article V (except Section 5.2(a)), if there is a net decrease in partner nonrecourse debt minimum gain during any Fiscal Year, each Member who has a share of such partner nonrecourse debt minimum gain shall be allocated items of income and gain for such year (and, if necessary, subsequent years) in proportion to, and to the extent of, an amount equal to such Member's share of the net decrease in partner nonrecourse debt minimum gain, determined in accordance with Treasury Regulations Section 1.704-2(i).

(c) Qualified Income Offset. If a Member unexpectedly receives any adjustment, allocation, or distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such adjustment, allocation, or distribution causes or increases an Adjusted Capital Account Deficit, items of income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, such Adjusted Capital Account Deficit as quickly as possible.

(d) Gross Income Allocation. If a Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year, such Member shall be allocated items of gross income and gain in an amount sufficient to eliminate such deficit as quickly as possible.

(e) Nonrecourse Deductions. Nonrecourse deductions for any Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

(f) Member Nonrecourse Deductions. Any partner nonrecourse deductions for any Fiscal Year shall be allocated to the Member who bears the economic risk of loss with respect to the partner nonrecourse debt to which such deductions are attributable, in accordance with Treasury Regulations Section 1.704-2(i).

(g) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or 743(b) is required to be taken into account in determining Capital Accounts, the amount of such adjustment shall be treated as an item of gain (if positive) or loss (if negative), 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 Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

Section 5.3 Curative Allocations

The special allocations set forth in Section 5.2 are intended to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. Such special allocations may not be consistent with the manner in which the Members intend to divide Company profit and loss. Accordingly, the Manager(s) shall make curative allocations so that, to the extent possible, the net amount of allocations to each Member equals the amount that would have been allocated if the special allocations had not occurred.

Section 5.4 Tax Allocations

(a) General Rule. Except as otherwise provided in this Section 5.4, items of income, gain, loss, deduction, and credit shall be allocated among the Members for income tax purposes in the same manner as the corresponding items are allocated for Capital Account purposes.

(b) Section 704(c) Allocations. In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value at the time of contribution.

(c) Revaluation Allocations. If the Capital Accounts of the Members are adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f), subsequent allocations of income, gain, loss, and deduction shall take into account any variation between the adjusted basis of property and its book value in the same manner as under Code Section 704(c).

Section 5.5 Allocation Upon Transfer

If any Membership Interest is Transferred during any Fiscal Year, the Profits, Losses, and other items attributable to such interest shall be allocated between the transferor and transferee based on [☐ the closing of the books method / ☐ the interim closing method / ☐ a proration method] as determined by the Manager(s) or, if member-managed, by a Majority Vote.

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ARTICLE VI - DISTRIBUTIONS

Section 6.1 Distributions Generally

Distributions of Distributable Cash shall be made at such times and in such amounts as determined by the Manager(s) or, if member-managed, by a Majority Vote, subject to the following provisions.

Section 6.2 Distribution Priority

Distributions shall be made in the following order of priority:

(a) First, to Members in proportion to their Percentage Interests until each Member has received an amount equal to such Member's Capital Contributions;

(b) Second, to Members in proportion to their respective Percentage Interests.

[☐ Alternative: All distributions shall be made to Members in proportion to their respective Percentage Interests.]

Section 6.3 Tax Distributions

(a) The Company shall distribute to each Member, at least quarterly, an amount equal to such Member's estimated federal, state, and local income tax liability attributable to the Member's allocable share of Company income for such period, based on the highest marginal tax rate applicable to individuals.

(b) Tax distributions shall be treated as advances against other distributions to which such Member would otherwise be entitled.

Section 6.4 Limitations on Distributions

(a) Statutory Limitation. No distribution shall be made if, after giving effect to the distribution, the Company would not be able to pay its debts as they become due in the usual course of business, or the Company's total liabilities would exceed the sum of its total assets.

(b) Capital Account Limitation. No distribution shall be made to a Member to the extent that such distribution would cause or increase an Adjusted Capital Account Deficit for such Member.

Section 6.5 Distributions in Kind

(a) No Member shall have the right to demand and receive property other than cash in return for the Member's Capital Contribution.

(b) The Manager(s) or, if member-managed, a Majority Vote may determine to make distributions in kind. Any property distributed in kind shall be valued at its fair market value as determined in good faith by the Manager(s) or Members.

Section 6.6 Withholding

The Company shall withhold from distributions to any Member any amounts required to be withheld under applicable federal, state, or local tax laws. Amounts withheld shall be treated as amounts distributed to such Member for all purposes of this Agreement.

Section 6.7 Distribution upon Withdrawal

Upon a Member's Withdrawal (to the extent permitted), such Member shall be entitled to receive, within a reasonable time after Withdrawal, the fair market value of such Member's Membership Interest as of the date of Withdrawal, determined in accordance with Section 10.4.

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ARTICLE VII - MANAGEMENT

Section 7.1 Management Structure

The Company shall be:

☐ Member-Managed. The business and affairs of the Company shall be managed by or under the direction of the Members. Each Member shall have the authority to bind the Company in the ordinary course of business.

☐ Manager-Managed. The business and affairs of the Company shall be managed by or under the direction of one or more Managers designated below.

Section 7.2 Number and Designation of Managers

[If Manager-Managed:]

(a) The number of Managers shall be [____].

(b) The initial Manager(s) shall be:

Name: [________________________________]
Address: [________________________________]
Title: [________________________________]

Name: [________________________________]
Address: [________________________________]
Title: [________________________________]

(c) Manager information is also set forth in Exhibit C.

Section 7.3 Term of Office

Each Manager shall hold office until the earlier of:

(a) The Manager's death, resignation, or removal;

(b) The appointment of a successor Manager; or

(c) The dissolution and winding up of the Company.

Section 7.4 Resignation and Removal of Managers

(a) Resignation. 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 of notice.

(b) Removal. Any Manager may be removed at any time, with or without cause, by [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the Members.

Section 7.5 Vacancies

Any vacancy in the position of Manager shall be filled by [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the Members.

Section 7.6 Authority of Managers

Subject to the provisions of this Agreement requiring Member approval, the Manager(s) shall have full, exclusive, and complete authority and discretion to manage and control the business and affairs of the Company, including without limitation the authority to:

(a) Execute, deliver, and perform any contracts, agreements, or other instruments on behalf of the Company;

(b) Open and maintain bank accounts and other financial accounts;

(c) Borrow money, issue evidences of indebtedness, and grant security interests in Company property;

(d) Employ, engage, and dismiss employees, agents, contractors, attorneys, accountants, and other service providers;

(e) Acquire, hold, manage, and dispose of real and personal property;

(f) Institute, prosecute, defend, and settle legal proceedings;

(g) Determine the amount and timing of distributions;

(h) Make tax elections and determine tax matters;

(i) Admit new Members and issue additional Membership Interests;

(j) Amend this Agreement as provided herein; and

(k) Take any other action necessary or appropriate to carry out the Company's purposes.

Section 7.7 Major Decisions

Notwithstanding Section 7.6, the following actions shall require the approval of [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the Members:

(a) Merger, consolidation, or conversion of the Company;

(b) Sale of all or substantially all of the Company's assets;

(c) Dissolution of the Company;

(d) Amendment of the Articles of Organization or this Agreement;

(e) Admission of new Members;

(f) Issuance of additional Membership Interests;

(g) Incurrence of indebtedness exceeding $[________________________________];

(h) Making or guaranteeing loans exceeding $[________________________________];

(i) Capital expenditures exceeding $[________________________________];

(j) Entering into any contract or commitment exceeding $[________________________________];

(k) Filing for bankruptcy or similar proceedings;

(l) Changing the nature of the Company's business;

(m) Amending the Company's tax classification; and

(n) [________________________________].

Section 7.8 Officers

(a) The Manager(s) or, if member-managed, a Majority Vote may appoint officers of the Company, including a President, Vice President, Secretary, Treasurer, and such other officers as may be deemed necessary.

(b) Officers shall have such titles, duties, and authority as determined by the Manager(s) or Members.

(c) Officers shall serve at the pleasure of the Manager(s) or Members and may be removed at any time with or without cause.

Section 7.9 Compensation of Managers

Managers shall be entitled to receive compensation for services rendered to the Company in such amounts as determined by [☐ a Majority Vote / ☐ a Supermajority Vote] of the Members.

Section 7.10 Standard of Care

(a) Each Manager shall perform the Manager's duties in good faith, in a manner the Manager reasonably believes to be in the best interests of the Company, and with such care as an ordinarily prudent person in a like position would use under similar circumstances.

(b) A Manager shall not be liable to the Company or any Member for any action taken or omission made in good faith in managing the business and affairs of the Company if the Manager complied with the standard of care set forth in this Section.

Section 7.11 Conflicts of Interest

(a) A Manager may engage in other business activities, including activities that may compete with the Company, unless otherwise agreed in writing.

(b) Any transaction between the Company and a Manager or a Manager's Affiliate shall be approved by [☐ a Majority Vote of the disinterested Members / ☐ a Majority Vote / ☐ a Unanimous Vote].

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ARTICLE VIII - MEETINGS AND VOTING

Section 8.1 Annual Meeting

An annual meeting of Members shall be held at such time and place as determined by the Manager(s) or, if member-managed, by a Majority Vote, for the purpose of reviewing the Company's affairs and transacting such other business as may come before the meeting.

Section 8.2 Special Meetings

Special meetings of Members may be called by:

(a) The Manager(s);

(b) Members holding at least [____]% of the Percentage Interests; or

(c) [________________________________].

Section 8.3 Notice of Meetings

(a) Written notice of each meeting of Members shall be given to each Member not less than [____] nor more than [____] days before the date of the meeting.

(b) Notice shall state the place, date, and time of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

(c) Notice may be waived by any Member in writing before, at, or after the meeting.

Section 8.4 Quorum

The presence in person or by proxy of Members holding at least [____]% of the Percentage Interests shall constitute a quorum for the transaction of business at any meeting of Members.

Section 8.5 Voting Rights

(a) Each Member shall be entitled to vote on any matter submitted to a vote of Members.

(b) Each Member shall have voting power equal to such Member's Percentage Interest.

(c) Except as otherwise provided in this Agreement or required by the Act, the affirmative vote of Members holding a majority of the Percentage Interests represented at a meeting at which a quorum is present shall be the act of the Members.

Section 8.6 Proxies

A Member may vote in person or by proxy executed in writing by the Member or by the Member's duly authorized attorney-in-fact. No proxy shall be valid after [____] months from the date of its execution unless otherwise provided in the proxy.

Section 8.7 Action by Written Consent

Any action required or permitted to be taken at a meeting of Members may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by Members having not less than the minimum number of votes that would be necessary to authorize such action at a meeting at which all Members entitled to vote thereon were present and voted.

Section 8.8 Telephonic Meetings

Members may participate in meetings by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at the meeting.

Section 8.9 Manager Meetings

If the Company is manager-managed, the Manager(s) may hold meetings at such times and places as they determine. Notice, quorum, and voting requirements for Manager meetings shall be as determined by the Manager(s).

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ARTICLE IX - RECORDS AND REPORTS

Section 9.1 Books and Records

The Company shall maintain at its principal office the following:

(a) A current list of the full name and last known mailing address of each Member;

(b) A copy of the Articles of Organization and all amendments thereto;

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

(d) Copies of this Agreement and all amendments thereto;

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

(f) The books and records of the Company; and

(g) Such other records as required by the Act.

Section 9.2 Inspection Rights

Each Member has the right, upon reasonable request for purposes reasonably related to the Member's interest as a Member, to inspect and copy during ordinary business hours the books and records of the Company required to be maintained under Section 9.1.

Section 9.3 Financial Reports

The Manager(s) or, if member-managed, a designated Member shall cause to be prepared and furnished to each Member:

(a) Within [____] days after the end of each Fiscal Year, an annual financial report including a balance sheet, income statement, and statement of cash flows;

(b) Within [____] days after the end of each Fiscal Year, information necessary for the preparation of each Member's federal, state, and local income tax returns (including Schedule K-1); and

(c) Such other reports as determined by the Manager(s) or Members.

Section 9.4 Bank Accounts

The Company shall maintain one or more bank accounts in the Company's name. Withdrawals from such accounts shall be made only by persons authorized by the Manager(s) or, if member-managed, by a Majority Vote.

Section 9.5 Accounting Method

The Company shall use the [☐ cash / ☐ accrual] method of accounting for both book and tax purposes unless otherwise required by law.

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ARTICLE X - TRANSFERS OF MEMBERSHIP INTERESTS

Section 10.1 Restrictions on Transfer

(a) No Member shall Transfer all or any portion of the Member's Membership Interest except in compliance with this Article X.

(b) Any Transfer in violation of this Article X shall be null and void and of no force or effect.

(c) The transferee of any permitted Transfer shall be admitted as a Member only upon compliance with Section 3.2.

Section 10.2 Permitted Transfers

Notwithstanding Section 10.1, a Member may Transfer all or any portion of the Member's Membership Interest:

(a) To any other Member;

(b) To such Member's spouse, children, grandchildren, or trusts for their benefit;

(c) To any entity wholly owned by such Member;

(d) With the prior written consent of [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the other Members; or

(e) [________________________________].

Section 10.3 Right of First Refusal

(a) If a Member (the "Offering Member") receives a bona fide offer from a third party to purchase all or any portion of the Offering Member's Membership Interest that the Offering Member desires to accept, the Offering Member shall first offer to sell such interest to the Company and the other Members on the same terms and conditions.

(b) The Offering Member shall give written notice (the "Offer Notice") to the Company and the other Members setting forth the material terms of the proposed Transfer, including the identity of the proposed transferee, the portion of the Membership Interest to be Transferred, and the price and terms of payment.

(c) For a period of [____] days after receipt of the Offer Notice (the "Company Option Period"), the Company shall have the option to purchase all (but not less than all) of the offered Membership Interest at the price and on the terms set forth in the Offer Notice.

(d) If the Company does not exercise its option, each other Member shall have the option, for a period of [____] days after expiration of the Company Option Period (the "Member Option Period"), to purchase a pro rata portion (based on Percentage Interests) of the offered Membership Interest.

(e) If the options are not exercised, the Offering Member may Transfer the Membership Interest to the third party on terms no more favorable to the third party than those set forth in the Offer Notice, provided such Transfer is completed within [____] days after expiration of the Member Option Period.

Section 10.4 Valuation of Membership Interest

For purposes of this Agreement, the fair market value of a Membership Interest shall be determined as follows:

(a) Agreement of Parties. First, by mutual agreement of the parties involved;

(b) Appraisal. If the parties cannot agree within [____] days, either party may request that the value be determined by an independent appraiser mutually selected by the parties. If the parties cannot agree on an appraiser within [____] days, each party shall select an appraiser, and the two appraisers shall select a third appraiser, whose determination shall be binding.

(c) Appraisal Costs. The costs of appraisal shall be borne equally by the parties or as otherwise agreed.

Section 10.5 Buy-Sell Provisions

[☐ Check if applicable]

(a) Triggering Events. Upon the occurrence of any of the following events with respect to a Member (a "Triggering Event"), the Company and/or the remaining Members shall have the right and option to purchase such Member's Membership Interest:

(1) Death of the Member;
(2) Disability of the Member (as defined below);
(3) Bankruptcy of the Member;
(4) Withdrawal of the Member;
(5) Expulsion of the Member;
(6) Divorce or dissolution of marriage of the Member; or
(7) [________________________________].

(b) Disability. For purposes of this Section, "Disability" means the Member's inability to perform the Member's duties for the Company by reason of physical or mental incapacity for a period of [____] consecutive days or [____] days in any [____]-month period.

(c) Purchase Price. The purchase price for a Membership Interest acquired pursuant to this Section shall be the fair market value of such interest determined in accordance with Section 10.4.

(d) Payment Terms. The purchase price may be paid, at the election of the purchaser:

(1) In cash at closing; or

(2) By delivery of a promissory note payable in [____] equal [monthly/quarterly/annual] installments, with interest at the Prime Rate plus [____]%, secured by a pledge of the purchased Membership Interest.

Section 10.6 Assignees

(a) An Assignee shall have the right to receive Distributions and allocations of Profits and Losses attributable to the transferred Membership Interest but shall not be entitled to vote or participate in the management of the Company.

(b) An Assignee may be admitted as a Member only upon compliance with Section 3.2.

Section 10.7 Documentation

Any Transfer of a Membership Interest shall be documented by a written instrument in form satisfactory to the Manager(s) or Members.

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ARTICLE XI - WITHDRAWAL OF MEMBERS

Section 11.1 Voluntary Withdrawal

(a) [☐ No Withdrawal Permitted] No Member shall have the right to voluntarily Withdraw from the Company prior to dissolution.

(b) [☐ Withdrawal Permitted] A Member may voluntarily Withdraw from the Company by giving at least [____] days' prior written notice to the Company and the other Members.

Section 11.2 Effect of Withdrawal

(a) Upon Withdrawal, the withdrawing Member shall be entitled to receive the fair market value of such Member's Membership Interest as determined in accordance with Section 10.4.

(b) The Company may elect to pay the Withdrawal amount in cash or in installments as provided in Section 10.5(d).

(c) A withdrawing Member shall remain liable for any obligations to the Company existing at the time of Withdrawal.

Section 11.3 Expulsion

A Member may be expelled from the Company upon the occurrence of any of the following:

(a) The Member's Bankruptcy;

(b) The Member's material breach of this Agreement that remains uncured for [____] days after written notice;

(c) The Member's conviction of a felony;

(d) The Member's fraud, gross negligence, or willful misconduct with respect to the Company; or

(e) [☐ A Majority Vote / ☐ A Supermajority Vote / ☐ A Unanimous Vote] of the other Members.

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ARTICLE XII - DISSOLUTION AND WINDING UP

Section 12.1 Events of Dissolution

The Company shall be dissolved upon the first to occur of the following:

(a) The expiration of the Company's term, if any;

(b) The written consent of [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the Members to dissolve the Company;

(c) The entry of a judicial decree of dissolution pursuant to KRS § 275.290;

(d) Administrative dissolution by the Secretary of State pursuant to KRS § 275.295;

(e) The happening of any event specified in the Articles of Organization; or

(f) Any other event causing dissolution under the Act.

Section 12.2 Continuation of Business

Notwithstanding Section 12.1, the Company shall not be dissolved if, within [____] days after the occurrence of an event of dissolution, Members holding at least [____]% of the Percentage Interests elect to continue the business of the Company.

Section 12.3 Winding Up

Upon dissolution, the Manager(s) or, if there is no Manager, a person designated by a Majority Vote of the Members (the "Liquidating Trustee"), shall wind up the affairs of the Company and liquidate its assets.

Section 12.4 Order of Distribution

The assets of the Company shall be distributed in the following order:

(a) First, to creditors of the Company, including Members who are creditors, in satisfaction of the liabilities of the Company;

(b) Second, to the establishment of any reserves deemed reasonably necessary by the Liquidating Trustee for contingent or unforeseen liabilities of the Company;

(c) Third, to Members in proportion to the positive balances in their Capital Accounts after all allocations of Profits and Losses have been made; and

(d) Fourth, to Members in proportion to their Percentage Interests.

Section 12.5 Articles of Dissolution

Upon completion of the winding up, the Company shall file Articles of Dissolution with the Kentucky Secretary of State pursuant to KRS § 275.300.

Section 12.6 Deficit Capital Accounts

No Member with a deficit Capital Account balance shall be required to restore such deficit upon dissolution or otherwise.

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ARTICLE XIII - TAX MATTERS

Section 13.1 Tax Classification

For federal income tax purposes, the Company shall be classified as:

☐ Disregarded Entity (if single-member)
☐ Partnership (default for multi-member)
☐ S Corporation (by election)
☐ C Corporation (by election)

Section 13.2 Partnership Representative

(a) The Partnership Representative of the Company for purposes of Code Section 6223 shall be:

Name: [________________________________]
Address: [________________________________]

(b) The Partnership Representative shall have all powers and authority granted under the Code and Treasury Regulations, including the authority to bind the Company and the Members in any tax proceeding.

(c) The Partnership Representative shall keep the Members informed of all significant tax matters affecting the Company.

(d) The Company shall indemnify and hold harmless the Partnership Representative from and against any liability, cost, or expense incurred in such capacity, except for willful misconduct or gross negligence.

Section 13.3 Tax Elections

The Manager(s) or Partnership Representative shall make any tax elections on behalf of the Company as deemed appropriate, including but not limited to:

(a) Elections under Code Section 754 to adjust the basis of Company property;

(b) Elections under Code Section 704(c) methods;

(c) Elections to extend the statute of limitations for tax assessments; and

(d) Any other elections permitted under the Code or Treasury Regulations.

Section 13.4 Tax Returns

The Partnership Representative or Manager(s) shall cause to be prepared and timely filed all federal, state, and local tax returns required to be filed by the Company.

Section 13.5 Tax Information

Within [____] days after the end of each Fiscal Year, the Company shall furnish to each Member a Schedule K-1 and such other information as necessary for the preparation of such Member's federal, state, and local income tax returns.

Section 13.6 Kentucky State Tax Considerations

NOTICE TO MEMBERS: Kentucky imposes the following taxes that may affect the Company and its Members:

(a) Kentucky Individual Income Tax. Pass-through income from the Company is subject to Kentucky individual income tax at a flat rate of 4.5% (as of 2024).

(b) Limited Liability Entity Tax (LLET). Kentucky imposes a Limited Liability Entity Tax (LLET) on all LLCs doing business in Kentucky pursuant to KRS § 141.0401. The LLET is the lesser of:

(1) 0.095% of Kentucky gross receipts; or
(2) 0.75% of Kentucky gross profits;

with a minimum tax of $175 for entities with Kentucky gross receipts or gross profits of $3 million or more.

(c) Annual Report. The Company is required to file an annual report with the Kentucky Secretary of State.

(d) Nexus and Apportionment. Members who are nonresidents of Kentucky may be subject to Kentucky income tax on their allocable share of Kentucky-source income.

Members should consult their own tax advisors regarding the tax implications of membership in the Company.

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ARTICLE XIV - INDEMNIFICATION

Section 14.1 Indemnification of Members and Managers

(a) The Company shall indemnify and hold harmless each Member and Manager (each, an "Indemnified Person") from and against any and all losses, claims, damages, liabilities, expenses (including reasonable attorneys' fees and costs), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits, or proceedings, civil, criminal, administrative, or investigative, in which the Indemnified Person may be involved, or threatened to be involved, as a party or otherwise, by reason of the fact that such person is or was a Member or Manager of the Company.

(b) The Company's indemnification obligations under this Section shall extend only to acts or omissions occurring in a capacity as a Member or Manager and shall not extend to:

(1) Acts or omissions constituting fraud, gross negligence, or willful misconduct;

(2) Acts or omissions for which indemnification is prohibited by law; or

(3) Any claim brought by the Company against such person.

Section 14.2 Advancement of Expenses

The Company shall advance to any Indemnified Person reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any action or proceeding arising from the Indemnified Person's status as a Member or Manager, subject to an undertaking by such person to repay such amounts if it is ultimately determined that such person is not entitled to indemnification.

Section 14.3 Insurance

The Company may purchase and maintain insurance on behalf of any Indemnified Person against any liability asserted against such person, whether or not the Company would have the power to indemnify such person against such liability under this Article.

Section 14.4 Non-Exclusive

The indemnification provided by this Article shall not be deemed exclusive of any other rights to which an Indemnified Person may be entitled under any agreement, vote of Members, or otherwise.

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ARTICLE XV - DISPUTE RESOLUTION

Section 15.1 Mediation

Any dispute, claim, or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation, or validity thereof (a "Dispute") shall first be submitted to non-binding mediation before a mutually agreed-upon mediator. If the parties cannot agree on a mediator within [____] days, either party may request that one be appointed by [________________________________].

Section 15.2 Arbitration

[☐ Check if applicable]

(a) If mediation is unsuccessful, any Dispute shall be resolved by binding arbitration administered by [________________________________] in accordance with its rules.

(b) The arbitration shall be held in [________________________________], Kentucky.

(c) The arbitrator(s) shall have the authority to award any remedy or relief available under applicable law.

(d) The decision of the arbitrator(s) shall be final and binding, and judgment upon the award may be entered in any court having jurisdiction.

(e) The prevailing party shall be entitled to recover reasonable attorneys' fees and costs.

Section 15.3 Litigation

[☐ Check if applicable]

If arbitration is not selected, any Dispute shall be resolved by litigation in the state or federal courts located in [________________________________] County, Kentucky. The parties consent to the exclusive jurisdiction and venue of such courts.

Section 15.4 Waiver of Jury Trial

[☐ Check if applicable]

EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT.

Section 15.5 Injunctive Relief

Notwithstanding the foregoing, any party may seek injunctive or other equitable relief from any court of competent jurisdiction to prevent irreparable harm pending arbitration or other resolution of a Dispute.

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ARTICLE XVI - GENERAL PROVISIONS

Section 16.1 Amendments

This Agreement may be amended only by a written instrument signed by [☐ a Majority Vote / ☐ a Supermajority Vote / ☐ a Unanimous Vote] of the Members; provided, however, that any amendment that would:

(a) Modify the Percentage Interest of a Member without such Member's consent;

(b) Increase a Member's Capital Contribution obligations without such Member's consent;

(c) Modify the Profit, Loss, or Distribution rights of a Member without such Member's consent; or

(d) Modify this Section 16.1;

shall require the consent of each affected Member.

Section 16.2 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky, including the Act, without regard to conflicts of law principles.

Section 16.3 Entire Agreement

This Agreement, including all Exhibits hereto, constitutes the entire agreement among the Members with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written.

Section 16.4 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the validity, legality, and enforceability of the remaining provisions shall not be affected.

Section 16.5 Binding Effect

This Agreement shall be binding upon and inure to the benefit of the Members and their respective heirs, executors, administrators, personal representatives, successors, and permitted assigns.

Section 16.6 No Third-Party Beneficiaries

Except as expressly provided herein, this Agreement is not intended to confer any rights or remedies upon any Person other than the Members.

Section 16.7 Notices

All notices required or permitted under this Agreement shall be in writing and shall be deemed given:

(a) When delivered personally;

(b) When sent by email (with confirmation of receipt);

(c) One (1) business day after being sent by overnight courier; or

(d) Three (3) business days after being mailed by certified or registered mail, return receipt requested, postage prepaid;

to the address of such Member set forth in Exhibit A or such other address as the Member may designate in writing.

Section 16.8 Waiver

No waiver of any provision of this Agreement shall be effective unless in writing and signed by the waiving party. No waiver of any breach shall constitute a waiver of any other or subsequent breach.

Section 16.9 Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

Section 16.10 Electronic Signatures

Electronic signatures shall be deemed original signatures for all purposes.

Section 16.11 Construction

The headings in this Agreement are for convenience only and shall not affect its interpretation. The terms "include," "includes," and "including" shall be deemed to be followed by "without limitation."

Section 16.12 Further Assurances

Each Member agrees to execute and deliver such additional documents and take such additional actions as may be necessary or appropriate to carry out the purposes of this Agreement.

Section 16.13 Legal Counsel

Each Member acknowledges that such Member has had the opportunity to consult with independent legal counsel regarding this Agreement and has either done so or voluntarily chosen not to do so.

Section 16.14 Time is of the Essence

Time is of the essence with respect to all provisions of this Agreement that specify a time for performance.

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EXECUTION

IN WITNESS WHEREOF, the undersigned have executed this Limited Liability Company Operating Agreement as of the Effective Date first written above.

MEMBERS:

Member 1:

Signature: ________________________________

Print Name: [________________________________]

Date: [__/__/____]

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Member 2:

Signature: ________________________________

Print Name: [________________________________]

Date: [__/__/____]

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Member 3:

Signature: ________________________________

Print Name: [________________________________]

Date: [__/__/____]

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Member 4:

Signature: ________________________________

Print Name: [________________________________]

Date: [__/__/____]

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[Additional signature blocks as needed]

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EXHIBIT A - MEMBERS

Member Name	Address	Percentage Interest
[________________________________]	[________________________________]	[____]%
[________________________________]	[________________________________]	[____]%
[________________________________]	[________________________________]	[____]%
[________________________________]	[________________________________]	[____]%
TOTAL		100%

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EXHIBIT B - CAPITAL CONTRIBUTIONS

Member Name	Initial Contribution	Type	Date Due
[________________________________]	$[________________________________]	[Cash/Property/Services]	[__/__/____]
[________________________________]	$[________________________________]	[Cash/Property/Services]	[__/__/____]
[________________________________]	$[________________________________]	[Cash/Property/Services]	[__/__/____]
[________________________________]	$[________________________________]	[Cash/Property/Services]	[__/__/____]
TOTAL	$[________________________________]

Description of Non-Cash Contributions:

Member: [________________________________]
Description of Property/Services: [________________________________]
Agreed Fair Market Value: $[________________________________]
Basis for Valuation: [________________________________]

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EXHIBIT C - MANAGERS

[If Manager-Managed]

Manager Name	Title	Address	Term
[________________________________]	[________________________________]	[________________________________]	[________________________________]
[________________________________]	[________________________________]	[________________________________]	[________________________________]

Manager Duties and Responsibilities:

[________________________________]
[________________________________]
[________________________________]

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EXHIBIT D - SPOUSAL CONSENT

The undersigned spouse of [________________________________], a Member of [________________________________], LLC, hereby acknowledges that:

1. I have read and understand the foregoing Limited Liability Company Operating Agreement.

2. I am aware that by its provisions, my spouse agrees to restrictions on the transfer of the Membership Interest owned by my spouse.

3. I agree to be bound by the provisions of the Agreement to the extent of any community property interest or other interest I may have in my spouse's Membership Interest.

4. I consent to the transfer restrictions and other provisions contained in the Agreement and agree that any interest I may have in the Membership Interest shall be subject to this Agreement.

Signature: ________________________________

Print Name: [________________________________]

Date: [__/__/____]

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This Operating Agreement is governed by the Kentucky Limited Liability Company Act, KRS §§ 275.001 et seq. The Company is subject to Kentucky's Limited Liability Entity Tax (LLET) and Kentucky individual income tax on pass-through income. The Company must file annual reports with the Kentucky Secretary of State.