LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

[________________________________], LLC

A Michigan Limited Liability Company

---

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 State of Michigan pursuant to the Michigan Limited Liability Company Act, MCL §§ 450.4101-450.5200 (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 and to provide for the governance, management, and operation of 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:

---

ARTICLE I - FORMATION AND ORGANIZATION

Section 1.1 Formation

The Members hereby form a limited liability company pursuant to the Michigan Limited Liability Company Act, MCL §§ 450.4101-450.5200. Articles of Organization have been or shall be filed with the Michigan Department of Licensing and Regulatory Affairs (LARA) in accordance with MCL § 450.4201.

Section 1.2 Name

The name of the Company shall be:

[________________________________], LLC

The Company may conduct business under such trade names or assumed names as the Members or Managers may determine from time to time, provided that any required filings are made with the appropriate Michigan authorities.

Section 1.3 Principal Office

The principal office of the Company shall be located at:

[________________________________]
[________________________________]
[________________________________], Michigan [____]

The Company may maintain additional offices at such other places as the Members or Managers may from time to time determine.

Section 1.4 Registered Agent and Registered Office

The name and address of the Company's registered agent for service of process in Michigan, as required by MCL § 450.4207, shall be:

Registered Agent: [________________________________]

Registered Office Address:
[________________________________]
[________________________________]
[________________________________], Michigan [____]

The registered agent and registered office may be changed from time to time by filing the appropriate documents with LARA.

Section 1.5 Term

The Company shall have perpetual existence unless dissolved in accordance with Article XIII of this Agreement or as otherwise provided by law.

Section 1.6 Purpose

The Company is formed for the following purposes:

[________________________________]
[________________________________]
[________________________________]

The Company may engage in any lawful business or activity for which limited liability companies may be formed under the Act, as determined by the Members or Managers from time to time.

Section 1.7 Michigan-Specific Provisions

(a) Annual Statement. The Company shall file an annual statement with LARA as required by MCL § 450.4207a, including payment of the required filing fee.

(b) Series LLCs. The Members acknowledge that Michigan does NOT currently permit Series LLCs under the Act.

(c) Professional LLCs. If the Company is a professional limited liability company, it shall comply with the additional requirements of the Act applicable to professional limited liability companies.

Section 1.8 Foreign Qualification

The Members or Managers may cause the Company to qualify to conduct business in any jurisdiction outside Michigan where such qualification is necessary or desirable.

---

ARTICLE II - DEFINITIONS

Section 2.1 Defined Terms

For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Act" means the Michigan Limited Liability Company Act, MCL §§ 450.4101-450.5200, as amended from time to time.

"Adjusted Capital Account" means, with respect to any Member, such Member's Capital Account balance adjusted as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

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

"Agreement" means this Limited Liability Company Operating Agreement, as amended, modified, supplemented, or restated from time to time.

"Articles of Organization" means the Articles of Organization filed with LARA pursuant to MCL § 450.4201, as amended or restated from time to time.

"Assignee" means a Person to whom a Membership Interest has been transferred but who has not been admitted as a Substitute Member.

"Bankruptcy" means, with respect to any Person, the occurrence of any of the following: (i) the filing of an application by such Person for, or such Person's consent to, the appointment of a trustee, receiver, or custodian of such Person's assets; (ii) the entry of an order for relief with respect to such Person in proceedings under the United States Bankruptcy Code; (iii) the making by such Person of a general assignment for the benefit of creditors; (iv) the entry of an order, judgment, or decree by any court of competent jurisdiction appointing a trustee, receiver, or custodian of the assets of such Person unless such proceedings and the Person appointed are dismissed within ninety (90) days; or (v) the failure by such Person generally to pay such Person's debts as such debts become due.

"Capital Account" means, for each Member, the capital account established and maintained for such Member in accordance with Section 4.5 of this Agreement.

"Capital Contribution" means, with respect to any Member, the total amount of cash and the fair market value of any property contributed to the Company by such Member.

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

"Company" means [________________________________], LLC, the limited liability company formed pursuant to this Agreement.

"Distributable Cash" means all cash received by the Company from operations and from all other sources, less any amounts used to pay or establish reserves for Company expenses, debt payments, capital improvements, replacements, and contingencies.

"Distribution" means any transfer of cash or property by the Company to one or more Members with respect to their Membership Interests, without separate consideration.

"Economic Interest" means a Member's or Assignee's share of the Company's Profits, Losses, and Distributions but does not include any right to participate in the management or affairs of the Company.

"Effective Date" means the date set forth in the Preamble of this Agreement.

"Fiscal Year" means the Company's fiscal year, which shall be the calendar year or such other fiscal year as may be established by the Members or Managers.

"LARA" means the Michigan Department of Licensing and Regulatory Affairs.

"Majority in Interest" means Members holding more than fifty percent (50%) of the total Percentage Interests of all Members entitled to vote on a matter.

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

"Member" means each Person who executes this Agreement as a Member, each Person who is subsequently admitted as a Member, and any Person who acquires a Membership Interest and is admitted as a Member, in each case for so long as such Person continues to hold a Membership Interest.

"Membership Interest" means a Member's entire interest in the Company, including such Member's Economic Interest and all rights to participate in the management of the Company.

"Percentage Interest" means, for each Member, such Member's percentage ownership interest in the Company as set forth in Exhibit A, as adjusted from time to time.

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

"Profit" and "Loss" mean, for each Fiscal Year, an amount equal to the Company's taxable income or loss for such year, determined in accordance with Code Section 703(a).

"Substitute Member" means a Person who has been admitted to the Company as a Member in place of a transferring Member.

"Supermajority" means Members holding at least [____] percent ([____]%) of the total Percentage Interests.

"Transfer" means any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation, encumbrance, or other disposition.

"Treasury Regulations" means the federal income tax regulations promulgated under the Code.

Section 2.2 Interpretation

Unless the context otherwise requires: (a) words in the singular include the plural and vice versa; (b) "including" means "including without limitation"; (c) references to Articles, Sections, and Exhibits mean Articles, Sections, and Exhibits of this Agreement.

---

ARTICLE III - MEMBERS

Section 3.1 Initial Members

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

Section 3.2 Admission of Additional Members

Additional Members may be admitted to the Company only upon:

(a) The written consent of Members holding at least [____] percent ([____]%) of the Percentage Interests;

(b) The execution and delivery by such Person of a counterpart signature page to this Agreement or a joinder agreement;

(c) The receipt by the Company of such Capital Contribution as shall be determined by the Members; and

(d) The amendment of Exhibit A to reflect the admission of such new Member.

Section 3.3 Representations and Warranties of Members

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

(a) Such Member has the full legal right, power, and authority to enter into this Agreement and to perform such Member's obligations hereunder;

(b) This Agreement constitutes the legal, valid, and binding obligation of such Member;

(c) Such Member is acquiring the Membership Interest for investment purposes only;

(d) Such Member understands that the Membership Interest has not been registered under the Securities Act of 1933 or under any state securities laws;

(e) Such Member is an "accredited investor" as defined in Rule 501 of Regulation D or has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company; and

(f) Such Member has had the opportunity to ask questions of and receive answers from the Company.

Section 3.4 No Personal Liability

Except as otherwise required by the Act or this Agreement, 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 of the Company. This limitation is consistent with MCL § 450.4501.

Section 3.5 Member Duties

Each Member shall:

(a) Act in good faith in all dealings with the Company and the other Members;

(b) Provide the Company with such information as may reasonably be required for tax reporting and other legitimate purposes;

(c) Comply with all applicable laws and regulations; and

(d) Refrain from engaging in any activity that would constitute a breach of this Agreement.

Section 3.6 Withdrawal of Members

(a) Voluntary Withdrawal. A Member may not voluntarily withdraw from the Company prior to the dissolution and winding up of the Company without the prior written consent of Members holding at least [____] percent ([____]%) of the Percentage Interests (excluding the withdrawing Member).

(b) Consequences of Unauthorized Withdrawal. If a Member withdraws from the Company in violation of this Section 3.6, such Member shall be liable to the Company for damages caused by such withdrawal.

Section 3.7 Information Rights

Each Member shall have the right, upon reasonable advance notice, to:

(a) Inspect and copy the records required to be maintained by the Company;

(b) Obtain a copy of the Company's federal, state, and local income tax returns for each Fiscal Year; and

(c) Obtain such other information concerning the Company's affairs as is just and reasonable, as provided by MCL § 450.4404.

---

ARTICLE IV - CAPITAL CONTRIBUTIONS

Section 4.1 Initial Capital Contributions

Each Member has contributed or shall contribute to the Company the amount of cash or other property set forth opposite such Member's name in Exhibit A as such Member's initial Capital Contribution.

Section 4.2 Additional Capital Contributions

(a) No Obligation. Except as otherwise provided in this Agreement, no Member shall be required to make any additional Capital Contributions to the Company.

(b) Voluntary Contributions. Additional Capital Contributions may be made by any Member with the consent of Members holding at least [____] percent ([____]%) of the Percentage Interests.

(c) Capital Calls. If the Members determine that additional capital is necessary, the Members holding at least [____] percent ([____]%) of the Percentage Interests may issue a capital call requiring all Members to contribute additional capital in proportion to their Percentage Interests.

(d) Failure to Contribute. If a Member fails to make a required additional Capital Contribution within [____] days after written notice of a capital call:

☐ The non-contributing Member's Percentage Interest shall be diluted;

☐ The Company may treat the required contribution as a loan to the non-contributing Member bearing interest at [____]% per annum;

☐ The non-contributing Member shall forfeit the right to receive Distributions until all required contributions are made;

☐ Other: [________________________________]

Section 4.3 No Interest on Capital Contributions

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

Section 4.4 Return of Capital Contributions

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

Section 4.5 Capital Accounts

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

(b) Increases. Each Member's Capital Account shall be increased by:
- (i) The amount of cash contributed by such Member;
- (ii) The fair market value of property contributed by such Member (net of liabilities);
- (iii) Allocations to such Member of Profit and items of Company income and gain; and
- (iv) The amount of any Company liabilities assumed by such Member.

(c) Decreases. Each Member's Capital Account shall be decreased by:
- (i) The amount of cash distributed to such Member;
- (ii) The fair market value of property distributed to such Member (net of liabilities);
- (iii) Allocations to such Member of Loss and items of Company expense and loss; and
- (iv) The amount of any liabilities of such Member assumed by the Company.

(d) Transfer. If a Membership Interest is transferred in accordance with this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent attributable to the transferred interest.

Section 4.6 Loans by Members

(a) Loans Permitted. Any Member may, with the approval of Members holding at least [____] percent ([____]%) of the Percentage Interests, lend money to the Company.

(b) Terms of Loans. The terms of any loan by a Member to the Company shall be set forth in a written promissory note or loan agreement approved by the Members.

(c) Priority. Unless otherwise agreed in writing, loans by Members shall be repaid before any Distributions are made to Members.

---

ARTICLE V - ALLOCATIONS OF PROFIT AND LOSS

Section 5.1 Allocation of Profit and Loss

(a) Profits. After giving effect to the special allocations set forth in Section 5.2, Profits for any Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

(b) Losses. After giving effect to the special allocations set forth in Section 5.2, Losses for any Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests; provided, however, that Losses shall not be allocated to a Member to the extent that such allocation would cause such Member to have a negative Adjusted Capital Account balance.

Section 5.2 Special Allocations

(a) Qualified Income Offset. If any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate the Adjusted Capital Account deficit as quickly as possible.

(b) 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.

(c) Member Nonrecourse Debt 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, each Member who has a share shall be specially allocated items of Company income and gain.

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

(e) 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.

(f) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required to be taken into account, the amount of such adjustment shall be treated as an item of gain or loss.

Section 5.3 Tax Allocations

(a) General Rule. Except as otherwise provided in this Section 5.3, for tax purposes, each item of income, gain, loss, deduction, and credit shall be allocated among the Members in the same manner as the corresponding item of Profit or Loss.

(b) Section 704(c) Allocations. In accordance with Code Section 704(c), income, gain, loss, and deduction with respect to any property contributed to the capital of 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 and its initial fair market value.

Section 5.4 Allocations in Respect of Transferred Interests

If any Membership Interest is transferred during any Fiscal Year, Profits, Losses, and other items shall be allocated between the transferor and the transferee:

☐ Based on the number of days each was the owner (prorated);

☐ Based on an interim closing of the Company's books;

☐ Using any other method permitted under Code Section 706.

---

ARTICLE VI - DISTRIBUTIONS

Section 6.1 Distributions of Distributable Cash

(a) Timing. Distributions of Distributable Cash shall be made at such times and in such amounts as determined by:

☐ The Members holding at least [____] percent ([____]%) of the Percentage Interests;

☐ The Manager(s);

☐ Other: [________________________________]

(b) Allocation of Distributions. All Distributions shall be made to the Members in proportion to their respective Percentage Interests, unless otherwise agreed in writing by all Members.

Section 6.2 Distributions in Kind

(a) Authorization. The Company may make Distributions in kind with the approval of Members holding at least [____] percent ([____]%) of the Percentage Interests.

(b) Valuation. Any property distributed in kind shall be valued at its fair market value as of the date of distribution.

Section 6.3 Limitations on Distributions

(a) Statutory Limitations. No Distribution shall be made if, after giving effect to such 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 assets would be less than the sum of its total liabilities, as provided by MCL § 450.4303.

(b) Liability for Wrongful Distribution. Any Member who receives a Distribution knowing that it violates this Section 6.3 shall be liable to the Company for the amount wrongfully distributed.

Section 6.4 Withholding

The Company may withhold from Distributions to any Member any amounts required to be withheld under applicable tax laws.

Section 6.5 Distributions Upon Liquidation

Distributions upon the dissolution and liquidation of the Company shall be made in accordance with Article XIII.

---

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 the Members in accordance with Section 7.2.

☐ MANAGER-MANAGED. The business and affairs of the Company shall be managed by one or more Managers in accordance with Section 7.3.

Section 7.2 Member-Managed Company

If the Company is member-managed:

(a) Management Authority. Except as otherwise provided in this Agreement, all decisions concerning the management and control of the Company shall be made by Members holding at least a Majority in Interest.

(b) Agency Authority. Each Member shall be an agent of the Company and shall have the authority to bind the Company in the ordinary course of business as provided by MCL § 450.4401.

(c) Actions Requiring Supermajority or Unanimous Consent. The following actions shall require the consent of Members holding at least [____] percent ([____]%) of the Percentage Interests:

☐ Sale of all or substantially all of the Company's assets outside the ordinary course of business;

☐ Merger, consolidation, or conversion of the Company;

☐ Amendment of the Articles of Organization or this Agreement;

☐ Admission of new Members;

☐ Incurrence of indebtedness in excess of $[________________________________];

☐ Entry into contracts or commitments in excess of $[________________________________];

☐ Initiation or settlement of litigation;

☐ Dissolution of the Company;

☐ Other: [________________________________]

Section 7.3 Manager-Managed Company

If the Company is manager-managed:

(a) Appointment of Managers. The Company shall have [____] Manager(s). The initial Manager(s) shall be:

Name: [________________________________]
Address: [________________________________]

Name: [________________________________]
Address: [________________________________]

(b) Powers of Managers. Subject to limitations in this Agreement, the Manager(s) shall have full authority, power, and discretion to manage and control the business, affairs, and properties of the Company.

(c) Specific Powers. The Manager(s) shall have the power and authority to:

• (i) Enter into contracts, agreements, and obligations on behalf of the Company;
• (ii) Open and maintain bank accounts;
• (iii) Hire, terminate, and supervise employees and independent contractors;
• (iv) Acquire, own, manage, improve, and dispose of property;
• (v) Borrow money and grant security interests;
• (vi) Execute and deliver documents and instruments;
• (vii) Institute, prosecute, defend, settle, and compromise legal actions;
• (viii) Determine the timing and amount of Distributions; and
• (ix) Take all other actions necessary or appropriate to carry out the Company's purposes.

(d) Limitations on Manager Authority. The following actions shall require the consent of Members holding at least [____] percent ([____]%) of the Percentage Interests:

☐ Sale of all or substantially all of the Company's assets outside the ordinary course of business;

☐ Merger, consolidation, or conversion of the Company;

☐ Amendment of the Articles of Organization or this Agreement;

☐ Admission of new Members;

☐ Incurrence of indebtedness in excess of $[________________________________];

☐ Entry into contracts or commitments in excess of $[________________________________];

☐ Initiation or settlement of litigation involving claims in excess of $[________________________________];

☐ Dissolution of the Company;

☐ Other: [________________________________]

(e) Term of Managers. Each Manager shall serve until the earlier of: (i) such Manager's resignation or removal; (ii) such Manager's death or Bankruptcy; or (iii) the designation of a successor Manager.

(f) Resignation. A Manager may resign at any time by giving written notice to the Members.

(g) Removal. A Manager may be removed at any time, with or without cause, by Members holding at least [____] percent ([____]%) of the Percentage Interests.

(h) Vacancies. Any vacancy in the position of Manager shall be filled by a Person designated by Members holding at least [____] percent ([____]%) of the Percentage Interests.

(i) Compensation. The Manager(s) shall be entitled to receive compensation as determined by Members holding at least [____] percent ([____]%) of the Percentage Interests.

Section 7.4 Officers

(a) Designation. The Members or Managers may designate one or more officers of the Company.

(b) Authority. Each officer shall have such authority and perform such duties as may be specified by the Members or Managers.

(c) Removal. Any officer may be removed at any time, with or without cause, by the Members or Managers.

Section 7.5 Duties of Members and Managers

(a) Fiduciary Duties. To the extent permitted by the Act, the fiduciary duties of Members and Managers are as follows:

☐ The Members and Managers shall owe traditional fiduciary duties of loyalty and care;

☐ The duty of loyalty is modified as follows: [________________________________];

☐ The duty of care is modified as follows: [________________________________];

☐ Other: [________________________________]

(b) Duty of Good Faith. Each Member and Manager shall act in good faith in all dealings with the Company and the other Members, as required by MCL § 450.4402.

(c) Business Opportunities. Unless otherwise agreed in writing:

☐ Members and Managers may engage in other business activities, including activities that compete with the Company;

☐ Members and Managers shall present all business opportunities that relate to the Company's business to the Company before pursuing such opportunities personally;

☐ Other: [________________________________]

Section 7.6 Reliance by Third Parties

Persons dealing with the Company may rely upon a certificate signed by any Member (in a member-managed Company) or any Manager (in a manager-managed Company) as to the identity of the Members or Managers and the authority of any Person to act on behalf of the Company.

---

ARTICLE VIII - VOTING AND MEETINGS

Section 8.1 Voting Rights

Each Member shall have voting rights in proportion to such Member's Percentage Interest, unless otherwise specified.

Section 8.2 Member Meetings

(a) Annual Meeting. An annual meeting of the Members may be held at such time and place as determined by the Members or Managers.

(b) Special Meetings. Special meetings of the Members may be called by:

• (i) Any Manager;
• (ii) Members holding at least [____] percent ([____]%) of the Percentage Interests; or
• (iii) As otherwise provided in this Agreement.

(c) Notice. Written notice of any meeting shall be given to all Members at least [____] days prior to the meeting.

(d) Waiver of Notice. Any Member may waive notice of any meeting before, at, or after such meeting.

Section 8.3 Quorum and Voting

(a) Quorum. Members holding at least [____] percent ([____]%) of the Percentage Interests, present in person or represented by proxy, shall constitute a quorum.

(b) Voting. Except as otherwise provided in this Agreement, all matters submitted to a vote of the Members shall be decided by Members holding at least a Majority in Interest present at a meeting at which a quorum is present.

Section 8.4 Action Without a Meeting

Any action required or permitted to be taken at a meeting of the Members may be taken without a meeting if a written consent setting forth the action is signed by Members holding at least the minimum Percentage Interests necessary to authorize the action.

Section 8.5 Proxies

A Member may vote in person or by proxy. A proxy shall be in writing, signed by the Member, and filed with the Company before or at the time of the meeting.

Section 8.6 Manager Meetings

If the Company is manager-managed and there is more than one Manager:

(a) Meetings. Meetings of the Managers may be called by any Manager upon reasonable notice.

(b) Quorum. A majority of the Managers shall constitute a quorum.

(c) Voting. Each Manager shall have one vote, and the act of a majority of the Managers present at a meeting at which a quorum is present shall be the act of the Managers.

(d) Action Without a Meeting. Any action may be taken without a meeting if a written consent is signed by all of the Managers.

(e) Telephonic Meetings. Managers may participate in meetings by telephone or other electronic means.

---

ARTICLE IX - TAX MATTERS

Section 9.1 Tax Classification

(a) Default Classification. The Members intend that the Company shall be classified for federal income tax purposes as:

☐ A partnership (for multi-member LLCs);

☐ A disregarded entity (for single-member LLCs);

☐ An S corporation (with a timely filed election on Form 2553);

☐ A C corporation (with a timely filed election on Form 8832).

(b) No Contrary Elections. No Member shall take any action to change the Company's tax classification without the written consent of Members holding at least [____] percent ([____]%) of the Percentage Interests.

Section 9.2 Partnership Representative / Tax Matters Partner

(a) Designation. The following Person is designated as the "Partnership Representative" or "Tax Matters Partner":

Name: [________________________________]
Address: [________________________________]

(b) Authority. The Partnership Representative shall have all the powers and authority granted to a partnership representative under the Code and Treasury Regulations.

(c) Information. The Partnership Representative shall keep the Members reasonably informed of any tax audits or disputes.

(d) Expenses. The Company shall reimburse the Partnership Representative for all reasonable expenses incurred in connection with tax audits or disputes.

(e) Successor. If the Partnership Representative ceases to serve, a successor shall be designated by Members holding at least a Majority in Interest.

Section 9.3 Tax Elections

The Members or Managers shall have the authority to make all tax elections on behalf of the Company, including:

(a) Elections under Code Section 754;

(b) Elections to amortize organization and start-up expenses under Code Section 709;

(c) Elections under Code Section 6226 with respect to partnership audits;

(d) Any election to use a specific method of accounting; and

(e) Any other election permitted under the Code or state or local tax laws.

Section 9.4 Tax Returns and Reports

(a) Preparation. The Company shall prepare or cause to be prepared all federal, state, and local income tax returns and reports.

(b) Schedule K-1. The Company shall furnish to each Member a Schedule K-1 within [____] days after the end of each Fiscal Year.

(c) Information. Each Member shall furnish to the Company all information necessary for the preparation of tax returns.

Section 9.5 Withholding Taxes

The Company shall withhold from Distributions any amounts required to be withheld under applicable tax laws.

---

ARTICLE X - TRANSFER OF MEMBERSHIP INTERESTS

Section 10.1 Restrictions on Transfer

(a) General Restriction. Except as otherwise provided, no Member shall Transfer all or any portion of such Member's Membership Interest without the prior written consent of Members holding at least [____] percent ([____]%) of the Percentage Interests (excluding the transferring Member).

(b) Permitted Transfers. A Member may Transfer all or any portion of such Member's Membership Interest without the consent of other Members:

☐ To a spouse, parent, child, grandchild, or sibling of the Member, or to a trust for the benefit of any such Person;

☐ To an Affiliate of the Member;

☐ To another Member;

☐ In connection with the Member's death, to such Member's heirs or estate;

☐ Other: [________________________________]

(c) Conditions to Permitted Transfers. All Permitted Transfers shall be subject to the following conditions:

• (i) The Transfer must comply with applicable securities laws;
• (ii) The transferee must execute a counterpart signature page or joinder agreement;
• (iii) The transferor shall pay all costs associated with the Transfer;
• (iv) The Transfer must not cause the Company to be treated as a publicly traded partnership under Code Section 7704; and
• (v) The Transfer must not cause a termination of the Company under Code Section 708 (if applicable).

Section 10.2 Right of First Refusal

(a) Offer Notice. Before any Member (the "Selling Member") may Transfer to a third party (other than in a Permitted Transfer), the Selling Member shall first offer to sell to the Company and/or other Members.

(b) Company Option. For a period of [____] days after receipt of the Offer Notice, the Company shall have the option to purchase all of the Membership Interest offered.

(c) Member Option. If the Company does not exercise its option, each other Member shall have the option for a period of [____] days to purchase such Member's pro rata share.

(d) Over-Allotment. If any Member does not exercise its option in full, the remaining Membership Interest may be purchased by other Members who elected to purchase their full pro rata share.

(e) Sale to Third Party. If the Company and other Members do not exercise their options to purchase all of the Membership Interest offered, the Selling Member may complete the Transfer to the proposed transferee within [____] days.

Section 10.3 Drag-Along Rights

(a) Drag-Along. If Members holding at least [____] percent ([____]%) of the Percentage Interests receive and accept a bona fide offer from a third party to purchase all of the Membership Interests, they may require all other Members to sell their Membership Interests on the same terms and conditions.

(b) Notice. Written notice shall be provided at least [____] days prior to the proposed closing.

(c) Cooperation. The other Members shall cooperate in the consummation of such sale.

Section 10.4 Tag-Along Rights

(a) Tag-Along. If any Member proposes to Transfer more than [____] percent ([____]%) of the total Membership Interests to a third party, each other Member shall have the right to participate in such sale.

(b) Notice. The Selling Member shall provide written notice at least [____] days prior to the proposed closing.

(c) Exercise. Each Tag-Along Member must notify the Selling Member of its election within [____] days.

Section 10.5 Assignees

(a) Assignee Status. A Person who receives a Transfer but who is not admitted as a Substitute Member shall be an Assignee.

(b) Rights of Assignees. An Assignee shall have only the Economic Interest and shall not have any right to participate in the management of the Company.

(c) Admission as Substitute Member. An Assignee may be admitted as a Substitute Member only upon:
- (i) The written consent of Members holding at least [____] percent ([____]%) of the Percentage Interests;
- (ii) The execution of a counterpart signature page; and
- (iii) The satisfaction of any other conditions imposed by the Members.

Section 10.6 Effect of Transfer

Upon any Transfer in compliance with this Agreement:

(a) The transferee shall be bound by all terms and conditions of this Agreement;

(b) The transferor shall be released from all obligations arising after the date of Transfer; and

(c) Exhibit A shall be amended to reflect the Transfer.

---

ARTICLE XI - BUYOUT PROVISIONS

Section 11.1 Events Triggering Buyout

The following events shall constitute "Buyout Events":

(a) Death of a Member;

(b) Permanent disability of a Member who is an individual;

(c) Bankruptcy of a Member;

(d) Withdrawal of a Member (to the extent permitted);

(e) Breach of this Agreement by a Member;

(f) Divorce or legal separation of a Member who is an individual;

(g) Any Transfer or attempted Transfer in violation of this Agreement; or

(h) Any other event specified in this Agreement.

Section 11.2 Buyout Procedure

Upon the occurrence of a Buyout Event:

(a) The Company shall have the option, for a period of [____] days, to purchase all of the affected Member's Membership Interest.

(b) If the Company does not exercise its option, each other Member shall have the option, for a period of [____] days, to purchase its pro rata share.

(c) If the options are not fully exercised, the affected Member shall continue to hold such Membership Interest subject to all terms and conditions.

Section 11.3 Purchase Price

(a) Valuation. The purchase price shall be determined as follows:

☐ Fair market value as determined by mutual agreement within [____] days;

☐ Fair market value as determined by an independent appraiser;

☐ A value determined by applying a formula: [________________________________];

☐ Book value as of the end of the most recent Fiscal Year;

☐ Other: [________________________________]

(b) Adjustments. The purchase price shall be adjusted for any Capital Contributions, Distributions, or other transactions occurring between the valuation date and the closing date.

Section 11.4 Payment Terms

The purchase price shall be payable as follows:

☐ In full at closing by cash, certified check, or wire transfer;

☐ [____] percent ([____]%) at closing, with the balance payable in [____] equal installments bearing interest at [____]% per annum;

☐ Other: [________________________________]

Section 11.5 Closing

The closing of any purchase shall occur within [____] days after determination of the purchase price.

---

ARTICLE XII - INDEMNIFICATION AND INSURANCE

Section 12.1 Indemnification by the Company

(a) Indemnified Persons. To the fullest extent permitted by the Act and other applicable law, the Company shall indemnify and hold harmless each Member, Manager, officer, employee, and agent of the Company (each, an "Indemnified Person") from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to any act, omission, or alleged act or omission arising out of such Indemnified Person's activities on behalf of the Company.

(b) Standard of Conduct. Notwithstanding the foregoing, no Indemnified Person shall be entitled to indemnification with respect to:

• (i) Any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing;
• (ii) Any transaction from which such Indemnified Person received a personal benefit in violation of this Agreement;
• (iii) Any act or omission that constitutes willful misconduct or fraud; or
• (iv) Any matter as to which indemnification is prohibited by law.

(c) Michigan Law. This Section 12.1 is intended to provide the maximum indemnification permitted under Michigan law, including MCL § 450.4406.

Section 12.2 Advancement of Expenses

Expenses incurred by an Indemnified Person in defending any claim shall be advanced by the Company prior to the final disposition of such matter upon receipt of an undertaking to repay such amount if it shall be determined that such Indemnified Person is not entitled to be indemnified.

Section 12.3 Insurance

The Company may purchase and maintain insurance on behalf of any Person who is or was a Member, Manager, officer, employee, or agent of the Company against any liability asserted against such Person.

Section 12.4 Indemnification by Members

Each Member shall indemnify and hold harmless the Company and the other Members from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses arising out of or relating to:

(a) Any breach by such Member of any representation, warranty, or covenant in this Agreement;

(b) Any act or omission of such Member that is outside the scope of such Member's authority; or

(c) Any claim by a creditor of such Member that relates to such Member's Membership Interest.

Section 12.5 Survival

The indemnification provisions of this Article XII shall survive the dissolution, liquidation, and termination of the Company.

---

ARTICLE XIII - DISSOLUTION AND WINDING UP

Section 13.1 Events Causing Dissolution

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

(a) The consent of Members holding at least [____] percent ([____]%) of the Percentage Interests;

(b) The entry of a decree of judicial dissolution pursuant to MCL § 450.4802;

(c) The occurrence of any event that makes it unlawful for the Company's business to be continued;

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

(e) [________________________________]; or

(f) Any other event that causes dissolution under the Act.

Section 13.2 Effect of Dissolution

Upon the occurrence of an event of dissolution, the Company shall cease to carry on its business except as necessary for the orderly winding up of the Company's business, but the Company shall not be terminated until all the assets have been distributed and the Certificate of Dissolution has been filed.

Section 13.3 Winding Up

(a) Responsibility. Upon dissolution, the winding up of the Company shall be conducted by the Members or Managers or, if no Member or Manager is available or willing to act, by a Person appointed by Members holding at least a Majority in Interest (the "Liquidator").

(b) Actions. The Liquidator shall have full power and authority to:

• (i) Prosecute and defend suits;
• (ii) Settle and close the Company's business;
• (iii) Dispose of and convey the Company's property;
• (iv) Discharge or make reasonable provision for the Company's liabilities;
• (v) Distribute the Company's remaining property among the Members; and
• (vi) File a Certificate of Dissolution with LARA.

(c) Accounting. As soon as practicable after dissolution, the Liquidator shall cause a final accounting of the Company's affairs to be prepared.

Section 13.4 Distribution of Assets

After dissolution and winding up, the assets shall be distributed in the following order:

(a) First, to creditors (including Members who are creditors) in satisfaction of their claims, in the order of priority as provided by law;

(b) Second, to the establishment of any reserves for contingent or unforeseen liabilities;

(c) Third, to the Members in proportion to their positive Capital Account balances.

Section 13.5 Deficit Capital Accounts

(a) No Restoration. Unless otherwise required by the Act or agreed to in writing, no Member shall be obligated to restore a deficit balance in such Member's Capital Account.

(b) Qualified Income Offset. Any deficit balance shall be handled in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

Section 13.6 Certificate of Dissolution

Upon completion of winding up, the Liquidator shall file a Certificate of Dissolution with LARA.

---

ARTICLE XIV - AMENDMENTS

Section 14.1 Amendments

This Agreement may be amended only by a written instrument signed by:

☐ All Members;

☐ Members holding at least [____] percent ([____]%) of the Percentage Interests;

☐ Other: [________________________________]

Section 14.2 Amendments to Exhibit A

Notwithstanding Section 14.1, Exhibit A may be amended by the Members or Managers, without the consent of all Members, to reflect:

(a) The admission of new Members;

(b) Changes in Members' Capital Contributions or Percentage Interests pursuant to this Agreement;

(c) The Transfer of Membership Interests in accordance with this Agreement;

(d) The withdrawal of Members in accordance with this Agreement; and

(e) Changes in Members' contact information.

---

ARTICLE XV - RECORDS AND REPORTING

Section 15.1 Books and Records

The Company shall maintain at its principal office the following books and records:

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

(b) A copy of the Articles of Organization, including all amendments;

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

(d) A copy of this Agreement, including all amendments;

(e) Financial statements for the three most recent years;

(f) Minutes of all meetings of Members and Managers; and

(g) Any written consents of Members and Managers.

Section 15.2 Annual Statement

The Company shall file an annual statement with LARA as required by MCL § 450.4207a.

Section 15.3 Financial Reports

The Company shall provide to each Member:

(a) Within [____] days after the end of each Fiscal Year, annual financial statements; and

(b) Such other financial information as the Members may reasonably request.

---

ARTICLE XVI - MISCELLANEOUS

Section 16.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to conflicts of law principles.

Section 16.2 Dispute Resolution

(a) Negotiation. Any dispute shall first be submitted to good faith negotiation between the parties.

(b) Mediation. If unable to resolve through negotiation within [____] days, the dispute shall be submitted to non-binding mediation administered by [________________________________].

(c) Arbitration/Litigation. If the dispute is not resolved through mediation:

☐ The dispute shall be resolved by binding arbitration administered by [________________________________];

☐ The dispute shall be resolved by litigation in the state or federal courts located in [________________________________], Michigan.

(d) Attorneys' Fees. The prevailing party shall be entitled to recover its reasonable attorneys' fees and costs.

Section 16.3 Entire Agreement

This Agreement, including all Exhibits, constitutes the entire agreement among the Members with respect to the subject matter hereof.

Section 16.4 Severability

If any provision is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not be affected.

Section 16.5 Waiver

No waiver of any breach shall be deemed a waiver of any other breach. No waiver shall be effective unless in writing.

Section 16.6 Notices

All notices shall be in writing and shall be deemed to have been duly given:

(a) Upon delivery, if delivered personally;

(b) One (1) business day after deposit with a nationally recognized overnight courier;

(c) Three (3) business days after deposit in the United States mail, certified or registered, return receipt requested; or

(d) Upon transmission, if sent by electronic mail with confirmation of receipt.

Section 16.7 Successors and Assigns

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

Section 16.8 Counterparts

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original.

Section 16.9 Headings

The headings in this Agreement are for convenience of reference only.

Section 16.10 Construction

This Agreement shall be construed without regard to any presumption against the party causing it to be drafted.

Section 16.11 Time of the Essence

Time is of the essence with respect to all dates and time periods set forth in this Agreement.

Section 16.12 No Third-Party Beneficiaries

Except as expressly provided herein, this Agreement is for the sole benefit of the parties and their respective heirs, executors, administrators, personal representatives, successors, and permitted assigns.

Section 16.13 Further Assurances

Each party shall execute and deliver such additional documents and take such additional actions as may be necessary to effectuate the provisions of this Agreement.

Section 16.14 Legal Representation

Each Member acknowledges that:

(a) Such Member has had the opportunity to consult with independent legal counsel before executing this Agreement;

(b) Such Member has read and understands the terms of this Agreement; and

(c) The Company's legal counsel (if any) has not represented or advised such Member individually.

---

ARTICLE XVII - 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: [__/__/____]

Address:
[________________________________]
[________________________________]
[________________________________]

Member 2:

Signature: [________________________________]

Print Name: [________________________________]

Date: [__/__/____]

Address:
[________________________________]
[________________________________]
[________________________________]

Member 3:

Signature: [________________________________]

Print Name: [________________________________]

Date: [__/__/____]

Address:
[________________________________]
[________________________________]
[________________________________]

(Add additional signature blocks as needed)

---

MANAGERS (if manager-managed):

Manager 1:

Signature: [________________________________]

Print Name: [________________________________]

Date: [__/__/____]

Address:
[________________________________]
[________________________________]
[________________________________]

Manager 2:

Signature: [________________________________]

Print Name: [________________________________]

Date: [__/__/____]

Address:
[________________________________]
[________________________________]
[________________________________]

---

EXHIBIT A - MEMBERS, CAPITAL CONTRIBUTIONS, AND PERCENTAGE INTERESTS

Member Name	Address	Initial Capital Contribution	Percentage Interest
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%

TOTAL: | | $[________________________________] | 100% |

---

EXHIBIT B - INITIAL MANAGERS (if manager-managed)

Manager Name	Address	Title/Role	Compensation
[________________________________]	[________________________________]	[________________________________]	[________________________________]
[________________________________]	[________________________________]	[________________________________]	[________________________________]

---

EXHIBIT C - DESCRIPTION OF CONTRIBUTED PROPERTY (if applicable)

Member: [________________________________]

Description of Property:
[________________________________]
[________________________________]
[________________________________]

Agreed Fair Market Value: $[________________________________]

Liabilities Assumed by Company: $[________________________________]

Net Value of Contribution: $[________________________________]

---

This Operating Agreement is governed by the Michigan Limited Liability Company Act, MCL §§ 450.4101-450.5200.