Minority-Member-Friendly LLC Operating Agreement Template

"Affiliate" means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such specified Person. For purposes of this definition:

(a) "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise; and

(b) "Person" means any individual, corporation, partnership, limited liability company, trust, association, governmental authority or other entity.

"Available Cash" means, with respect to any fiscal quarter, all cash and cash equivalents of the Company on hand as of the last day of such fiscal quarter, less only the following:

(a) amounts required to pay current and reasonably anticipated operating expenses and debt service of the Company for the immediately following [number] months, as set forth in the Approved Budget; and

(b) reasonable reserves for contingent liabilities or capital expenditures, the aggregate amount of which shall not exceed [percentage]% of the Company's gross revenues for the preceding fiscal year unless a greater amount is approved by Unanimous Consent.

"Capital Contribution" means the total amount of cash, and the agreed fair market value of any property other than cash (net of liabilities secured by such property that the Company is considered to assume or take subject to), contributed or deemed contributed to the Company by a Member pursuant to this Agreement. The term does not include any loan made by a Member to the Company, which shall be treated as indebtedness of the Company and not as a Capital Contribution.

"Fair Market Value" means, with respect to any Membership Interest, the price that would be paid for such Membership Interest by a hypothetical willing buyer to a hypothetical willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Fair Market Value shall be calculated as the product of:

(a) the value of the Company as a whole, determined as a going concern; and

(b) the Percentage Interest represented by such Membership Interest,

in each case without any discount for minority interest, lack of control, lack of marketability or illiquidity, and without any premium for control.

"Independent Appraiser" means a nationally or regionally recognized valuation firm, investment bank or accounting firm that regularly performs valuations of businesses comparable to the Company and meets each of the following requirements:

(a) it has not, within the [number] years preceding its engagement, been engaged by, provided material services to, or received material compensation from the Company, any Member or any Affiliate of any Member; and

(b) it is not otherwise subject to any relationship that would reasonably be expected to impair its independence or objectivity.

"Membership Interest" means the entire ownership interest of a Member in the Company at any particular time, including:

(a) such Member's Percentage Interest and Capital Account;

(b) its right to share in Profits, Losses and distributions;

(c) its right to vote, consent and participate in the management and governance of the Company;

(d) its right to receive information concerning the Company; and

(e) all other rights and obligations of such Member under this Agreement and applicable law.

"Percentage Interest" means, with respect to each Member, the percentage set forth opposite such Member's name in the Section entitled "Members, Capital Contributions and Percentage Interests," as such percentage may be adjusted from time to time only in strict accordance with this Agreement. The Percentage Interests of all Members shall at all times total one hundred percent (100%).

"Transfer" means any direct or indirect sale, assignment, transfer, conveyance, gift, exchange, pledge, hypothecation, encumbrance, grant of a security interest in, or other disposition of all or any portion of a Membership Interest or any economic or voting right therein, whether voluntary, involuntary or by operation of law. The term also includes any Change of Control of a Member, as defined in the Section entitled "Restrictions on Transfer of Membership Interests."

The following rules of interpretation apply to this Agreement:

(a) capitalized terms used but not defined in this Section have the meanings given to them elsewhere in this Agreement;

(b) the words "include," "includes" and "including" are deemed to be followed by "without limitation";

(c) the words "herein," "hereof" and "hereunder" refer to this Agreement as a whole;

(d) references to any Section are references to the Section of this Agreement bearing the stated heading;

(e) the singular includes the plural and vice versa;

(f) "Business Day" means any day other than a Saturday, Sunday or day on which commercial banks in [city, State] are authorized or required by law to close;

(g) no provision of this Agreement shall be construed against any Member by reason of such Member having drafted or proposed such provision; and

(h) headings are for convenience only and shall not affect interpretation.

A separate capital account (a "Capital Account") shall be established and maintained for each Member in accordance with the capital account maintenance principles prescribed under the income tax laws and regulations applicable to entities treated as partnerships for income tax purposes in [jurisdiction] (the "Tax Rules"). Each Member's Capital Account shall be:

(a) credited with the amount of cash and the agreed fair market value of any property contributed by such Member (net of liabilities secured by such property), and with such Member's allocable share of Profits and items of income and gain; and

(b) debited with the amount of cash and the fair market value of any property distributed to such Member (net of liabilities secured by such property), and with such Member's allocable share of Losses and items of deduction and loss.

"Profits" and "Losses" mean, for each fiscal year or other period, the taxable income or loss of the Company for such period, determined in accordance with the Tax Rules and adjusted as necessary to reflect book value rather than tax basis where the Tax Rules so require. The Company's accountants shall compute Profits and Losses using consistently applied methods. No change in method of computation shall be adopted without Unanimous Consent.

Except as otherwise required by the Tax Rules or expressly provided in this Section, Profits and Losses for each fiscal year shall be allocated among the Members pro rata in accordance with their respective Percentage Interests. It is the express intention of the Members that allocations of Profits and Losses correspond with, and support, the pro rata distribution of Available Cash provided in this Agreement.

Notwithstanding the foregoing, the Company shall make any special or regulatory allocations of income, gain, loss or deduction required by the Tax Rules, including qualified income offset, minimum gain chargeback and similar provisions, to the minimum extent necessary to comply with such Tax Rules. Any such special allocations shall be taken into account in making subsequent allocations so that, to the maximum extent possible, the net amount of allocations to each Member equals the net amount that would have been allocated had such special allocations not been required.

Losses shall not be allocated to any Member to the extent such allocation would cause or increase a deficit balance in such Member's Capital Account, adjusted as required by the Tax Rules, while any other Member has a positive Capital Account balance. Losses so limited shall be allocated to the Members having positive Capital Account balances in proportion to such balances.

For income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Members in the same manner as the corresponding book items are allocated. The Tax Rules governing contributed property and revaluations shall be applied using the method approved by Unanimous Consent. In the absence of such approval, the method that results in the least disproportionate tax burden on any Member shall be used.

In the event of a Transfer of a Membership Interest or the admission of a Member during any fiscal year, Profits and Losses shall be allocated between the transferor and the transferee, or among the Members, using an interim closing of the books as of the effective date of such Transfer or admission. A daily proration method may be used instead only with the consent of each affected Member.

No Member shall be entitled to interest on its Capital Contributions or Capital Account. No Member shall have any obligation to restore a deficit balance in its Capital Account, whether during the term of the Company, upon liquidation of its Membership Interest or upon dissolution of the Company. No Member shall be entitled to withdraw or receive the return of any part of its Capital Contributions or Capital Account, except as expressly provided in this Agreement.

The Member designated to act on behalf of the Company in tax audits, examinations and proceedings (the "Tax Representative") shall be [name of Member or individual] or such other Person as is approved by Unanimous Consent. The Tax Representative shall:

(a) promptly, and in any event within [number] Business Days, notify all Members of any tax audit, notice or proceeding;

(b) permit each Member to participate in all such proceedings at the Company's expense; and

(c) not settle any tax matter, extend any statute of limitations, make any material tax election, or elect any procedure that shifts tax liability among Members without the prior written consent of the Minority Member.

The Company has been, or shall be, organized as a limited liability company under the limited liability company laws of the State of [State] (the "LLC Statute") by the filing of the Certificate of Formation. The Members hereby ratify, confirm and approve the filing of the Certificate of Formation and all actions taken in connection therewith by any authorized person. The rights and obligations of the Members and the administration of the Company shall be governed by this Agreement, the Certificate of Formation and the LLC Statute. To the fullest extent permitted by the LLC Statute, this Agreement shall control in the event of any conflict.

The name of the Company is "[Name of Company], LLC." All business of the Company shall be conducted under that name or such other name as may be approved by Unanimous Consent and properly registered in accordance with applicable law.

The purpose of the Company is to engage in [description of principal business activities] (the "Business") and in any lawful activities reasonably necessary, incidental or ancillary thereto. The Company shall not engage in any business or activity outside the scope of the Business without Unanimous Consent.

The principal office of the Company shall be located at [address of principal office], or at such other location as may be approved by a Majority of Members. Written notice of any relocation shall be given to each Member at least [number] days before it takes effect. The Company may maintain such other offices as the Board of Managers may determine.

The registered agent of the Company for service of process in the State of [State] shall be [name of registered agent], whose address is [address of registered agent]. The Board of Managers may change the registered agent or registered office upon notice to all Members.

The term of the Company commenced upon the filing of the Certificate of Formation. It shall continue in perpetuity unless the Company is dissolved and its affairs wound up in accordance with this Agreement and the LLC Statute.

The Company is intended to be classified as a partnership, and not as an association taxable as a corporation, for income tax purposes. No election or action inconsistent with such classification shall be made or taken without Unanimous Consent. The Members do not intend that the Company be a partnership, joint venture or general partnership for any purpose other than income tax purposes, and no Member shall be liable for the obligations of any other Member by reason of this Agreement.

The Members of the Company, their respective initial Capital Contributions and their respective Percentage Interests as of the Effective Date are as follows:

Member A: [Full Legal Name of Member A]; initial Capital Contribution of [amount in currency] [and/or description of contributed property and agreed value]; Percentage Interest of [percentage]%.

Member B: [Full Legal Name of Member B]; initial Capital Contribution of [amount in currency] [and/or description of contributed property and agreed value]; Percentage Interest of [percentage]%.

Member C (the Minority Member): [Full Legal Name of Member C]; initial Capital Contribution of [amount in currency] [and/or description of contributed property and agreed value]; Percentage Interest of [percentage]%.

Each Member shall make its initial Capital Contribution on or before [date or number of days after the Effective Date]. Any non-cash Capital Contribution shall be valued at the amount agreed in this Section. If no value is stated, the value shall be determined by Unanimous Consent or, failing such consent, by an Independent Appraiser. The Minority Member's Percentage Interest shall not be reduced by reason of any valuation of non-cash contributions made by any other Member.

No Member shall be required to make any additional Capital Contribution, loan or guarantee to or for the benefit of the Company, whether by capital call or otherwise, unless such obligation is approved by Unanimous Consent. Any additional Capital Contributions so approved shall be offered to, and may be made by, each Member pro rata in accordance with its Percentage Interest.

If the Company requires additional funds and Unanimous Consent to an additional Capital Contribution is not obtained, any Member may, with the approval of a Majority of Members, offer to lend such funds to the Company. Any such loan (a "Member Loan") shall be subject to the following conditions:

(a) it shall be offered to all Members pro rata in accordance with their Percentage Interests;

(b) it shall bear interest at a rate not exceeding [interest rate]% per annum;

(c) it shall be unsecured unless otherwise approved by Unanimous Consent; and

(d) it shall in no event be convertible into a Membership Interest, nor result in any dilution of the Percentage Interest of a non-lending Member, without such Member's prior written consent.

The Percentage Interests set forth in this Section may be adjusted only in the following circumstances:

(a) by Unanimous Consent;

(b) upon the issuance of additional Membership Interests in compliance with the preemptive rights set forth in the Section entitled "Admission of Additional and Substitute Members"; or

(c) upon a Transfer or purchase of a Membership Interest made in compliance with this Agreement.

Any purported adjustment in violation of this Section shall be null and void. Following any permitted adjustment, the Company shall deliver to each Member, within [number] Business Days, a written statement reflecting the updated Capital Contributions and Percentage Interests of all Members.

Membership Interests shall be uncertificated unless the Board of Managers, with Unanimous Consent, determines otherwise. The Company shall maintain a register of Members reflecting the name, address, Capital Contributions and Percentage Interest of each Member. Each Member shall be entitled to a copy of this register upon request.

Each Member represents and warrants to the Company and to each other Member, as of the Effective Date, as follows:

(a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization;

(b) it has full power and authority to execute, deliver and perform this Agreement;

(c) this Agreement constitutes its legal, valid and binding obligation; and

(d) the execution and performance of this Agreement do not conflict with its organizational documents or any agreement or judgment binding upon it.

Within [number] days after the end of each fiscal quarter, the Company shall distribute to the Members all Available Cash for such fiscal quarter. Such distributions shall be made pro rata in accordance with the Members' respective Percentage Interests as of the record date for such distribution. The Company may retain Available Cash rather than distribute it only with Unanimous Consent.

All distributions of every kind shall be made to the Members simultaneously and strictly pro rata in accordance with their Percentage Interests. This rule applies to all distributions, whether made from operating cash flow, refinancing proceeds, sale proceeds or otherwise, and whether made before or upon dissolution, except for liquidating distributions governed by the Section entitled "Dissolution, Winding Up and Liquidation." No Member or Affiliate of a Member shall receive any preferential return, priority distribution, management fee or similar payment that has the effect of a non-pro rata distribution, except as approved by Unanimous Consent.

Notwithstanding any other provision of this Section, the Company shall, to the extent of available funds, distribute to each Member, no later than [number] days before the due date of each estimated or annual income tax payment, an amount (a "Tax Distribution"). The Tax Distribution shall at least equal the product of:

(a) the net taxable income allocated to such Member for the applicable period; and

(b) the highest combined marginal income tax rate applicable to a business entity resident in [jurisdiction], as reasonably determined by the Company's accountants.

Tax Distributions shall be made pro rata in accordance with the Percentage Interests. They shall be treated as advances against, and shall reduce, the next distributions otherwise payable to such Member under this Section.

The Company shall not make any distribution to the extent that, immediately after giving effect thereto:

(a) the Company would be unable to pay its debts as they become due in the ordinary course of business; or

(b) the Company's total liabilities would exceed the fair value of its total assets, as determined in accordance with the LLC Statute.

Any distribution deferred under this restriction shall be made as soon as it becomes lawful. No Member shall be obligated to return any distribution received in good faith, except as required by mandatory provisions of applicable law.

The Company may withhold from any distribution and pay over to the appropriate taxing authority any amount it is required by law to withhold with respect to a Member. Any amount so withheld shall be treated as having been distributed to such Member. The Company shall give the affected Member written notice of any proposed withholding at least [number] Business Days before the payment is made, together with supporting documentation, so that such Member may provide any forms or certifications that would reduce or eliminate such withholding.

No Member shall be required to accept a distribution of any asset other than cash in lieu of a cash distribution. No Member shall be required to accept a distribution of any asset in a proportion different from that in which such asset is distributed to the other Members.

Each distribution shall be accompanied by a written statement setting forth:

(a) the calculation of Available Cash for the relevant period;

(b) the amount of reserves retained and the justification therefor; and

(c) the amount distributed to each Member.

If the Minority Member reasonably believes that the Company has retained Available Cash in excess of the amounts permitted by this Agreement, it may require that the calculation be reviewed by the Company's independent accountants at the Company's expense. Any excess so identified shall be distributed within [number] Business Days after the accountants' determination.

The business and affairs of the Company shall be managed by a board of managers (the "Board of Managers") consisting of three (3) individuals (each a "Manager"). Each Member shall have the exclusive right to designate one (1) Manager, and to remove and replace its designated Manager at any time, with or without cause, upon written notice to the Company and the other Members. No Manager may be removed except by the Member that designated such Manager. The initial Managers are as follows:

[Name of Manager], designated by Member A.

[Name of Manager], designated by Member B.

[Name of Manager], designated by the Minority Member.

Each Manager shall have one (1) vote on all matters before the Board of Managers. Except for Reserved Matters and other matters that this Agreement expressly requires to be approved by the Members, actions of the Board of Managers shall require the affirmative vote of at least two (2) Managers at a meeting at which a quorum is present, or the written consent of all Managers. A quorum of the Board of Managers shall require the presence of all three (3) Managers. If a quorum is not present at a duly called meeting, the meeting shall be adjourned for not less than [number] Business Days, with notice of the adjourned meeting given to all Managers. At the adjourned meeting, any two (2) Managers shall constitute a quorum, provided that no Reserved Matter may be acted upon at such adjourned meeting.

Meetings of the Board of Managers shall be held at least [frequency, e.g., quarterly] and may be called by any Manager upon not less than [number] Business Days' written notice to each other Manager. The notice shall state the time, place and agenda of the meeting and be accompanied by all materials reasonably necessary to consider the matters to be addressed. No matter not described in the notice may be acted upon unless all Managers are present and consent to its consideration. Managers may participate by telephone or video conference or similar means by which all participants can hear one another.

The Board of Managers may appoint a chief executive officer, chief financial officer and such other officers (the "Officers") as it deems necessary, with such titles, duties and compensation as it shall determine, subject to the Section entitled "Reserved Matters and Minority Member Protections." Officers shall serve at the pleasure of the Board of Managers and may be removed by the Board of Managers at any time. Officers shall have only such authority as is expressly delegated to them in writing by the Board of Managers. No Officer shall take any action constituting a Reserved Matter without the approvals required by this Agreement.

No Member, solely in its capacity as a Member, shall have authority to act for or bind the Company. No Manager, acting individually, shall have authority to act for or bind the Company, except as expressly authorized by resolution of the Board of Managers. Any act taken in contravention of this Section or of the Section entitled "Reserved Matters and Minority Member Protections" shall be void as between the Members and the Company. The Member or Manager responsible for such act shall indemnify the Company and the other Members against all losses arising therefrom.

The Board of Managers shall cause to be prepared and submitted to the Members, not later than [number] days before the commencement of each fiscal year, an annual operating and capital budget and business plan for such fiscal year. Once approved in accordance with the Section entitled "Reserved Matters and Minority Member Protections," such budget and plan constitute the "Approved Budget." Until a new Approved Budget is adopted, the Company shall operate under the prior year's Approved Budget, adjusted only for non-discretionary expenses and contractual obligations.

Managers shall serve without compensation unless otherwise approved by Unanimous Consent. Each Manager shall, however, be reimbursed by the Company for reasonable and documented out-of-pocket expenses incurred in attending meetings and performing duties on behalf of the Company. The Manager designated by the Minority Member shall be entitled to receive all information and materials provided to any other Manager, at the same time and in the same form.

The Company shall not, without Unanimous Consent, establish any committee of the Board of Managers, unless the Manager designated by the Minority Member is entitled to be a member of such committee. Any delegation of authority by the Board of Managers to any committee, Officer or third party shall be subject to the limitations of this Agreement. No such delegation shall diminish the rights of the Minority Member under this Agreement.

An annual meeting of the Members shall be held within [number] days after the end of each fiscal year, at the principal office of the Company or at such other place as the Members may agree, to review the Company's annual financial statements and performance and to transact such other business as may properly come before the meeting. Special meetings of the Members may be called by any Member or any Manager at any time.

Written notice of each meeting of the Members shall be given to each Member not less than [number] days nor more than [number] days before the date of the meeting. The notice shall state the date, time, place and means of remote participation, and shall include a reasonably detailed description of each matter to be considered together with all supporting materials. Attendance at a meeting by a Member constitutes a waiver of notice, except where the Member attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called or convened.

Notwithstanding any disparity in Percentage Interests or Capital Contributions, each Member shall have one (1) vote on every matter submitted to a vote of the Members. No Member shall have any weighted, cumulative or casting vote. No Member's voting rights shall be suspended, diluted or limited except as expressly provided in this Agreement.

A quorum for any meeting of the Members shall require the presence, in person or by proxy, of all three (3) Members. If a quorum is not present, the meeting shall be adjourned to a date not less than [number] Business Days later, and notice of the adjourned meeting shall be given to all Members. At such adjourned meeting, the presence of any two (2) Members shall constitute a quorum. However, no Reserved Matter may be approved at an adjourned meeting without the affirmative vote of each Member whose consent is required under the Section entitled "Reserved Matters and Minority Member Protections."

Except for Reserved Matters and other matters requiring Unanimous Consent, any matter submitted to the Members shall be approved by the affirmative vote of at least two (2) of the three (3) Members (a "Majority of Members"). "Unanimous Consent" means the affirmative vote or written consent of all Members then holding a Membership Interest. Unanimous Consent shall not be deemed given by silence, inaction or course of dealing.

Any action that may 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 the number of votes required to approve such action at a meeting at which all Members were present. Any action by written consent that is not unanimous shall be effective only after a copy has been delivered to each non-consenting Member and [number] Business Days have elapsed. Consents may be executed and delivered by electronic means.

A Member may vote by written proxy granted to its duly authorized officer, employee or representative, or to another Member, provided that such proxy is delivered to the Company before the meeting. No proxy shall be irrevocable or be valid for more than [number] months from its date unless the proxy expressly provides otherwise.

Minutes of every meeting of the Members and of the Board of Managers shall be prepared by a secretary designated by the Board of Managers. Draft minutes shall be circulated to all Members within [number] Business Days after the meeting, and shall be deemed final only upon approval at the next meeting or by written consent. Any Member may require that its objection or dissent on any matter be recorded in the minutes.

Notwithstanding any other provision of this Agreement, the Company shall not, and no Member, Manager or Officer shall cause or permit the Company or any of its subsidiaries to, take, agree to take or commit to any of the following actions (each a "Reserved Matter") without the prior written approval of the Minority Member, given either as part of a Unanimous Consent or separately in writing:

(a) amend, restate or waive any provision of this Agreement or the Certificate of Formation;

(b) issue, create or authorize any additional Membership Interest, class or series of interest, option, warrant or other right convertible into or exercisable for any interest in the Company;

(c) admit any new Member;

(d) require any additional Capital Contribution;

(e) redeem, repurchase or otherwise acquire any Membership Interest other than as expressly provided in this Agreement;

(f) merge, consolidate, convert or reorganize the Company, or sell, lease, license or otherwise dispose of all or a substantial portion of its assets or of any asset with a value exceeding [amount in currency];

(g) acquire any business, entity or equity interest;

(h) incur, guarantee or assume any indebtedness in excess of [amount in currency] in the aggregate, or grant any lien over Company assets;

(i) adopt or materially modify the Approved Budget, or make any expenditure exceeding the Approved Budget by more than [percentage]%;

(j) change the nature or scope of the Business;

(k) enter into, amend or terminate any Related Party Transaction;

(l) appoint, remove or set the compensation of the chief executive officer or chief financial officer;

(m) appoint or replace the Company's independent accountants;

(n) commence, settle or compromise any litigation, arbitration or claim involving an amount exceeding [amount in currency];

(o) change the tax classification of the Company or its fiscal year;

(p) dissolve, liquidate or wind up the Company;

(q) file any voluntary petition in bankruptcy or make any assignment for the benefit of creditors; or

(r) alter the distribution policy set forth in this Agreement.

The rights of the Minority Member under this Section are personal to the Minority Member and its Permitted Successors. A "Permitted Successor" is any transferee of all of the Minority Member's Membership Interest that is admitted as a Member in accordance with this Agreement. These rights shall not be diminished by any reduction in the Minority Member's Percentage Interest resulting from any action not approved by the Minority Member. Any action taken in breach of this Section shall be null and void and of no force or effect.

If the Members fail to reach agreement on any Reserved Matter or on the adoption of an Approved Budget, and such failure continues for [number] days after the matter was first formally submitted to the Members (a "Deadlock"), any Member may refer the Deadlock to the senior executive officers of the Members. Such officers shall meet in good faith within [number] Business Days to attempt to resolve it. If the Deadlock is not resolved within [number] days after such referral, the Members shall submit the matter to non-binding mediation in accordance with the Section entitled "Governing Law and Dispute Resolution." During any Deadlock, the Company shall continue to be operated in the ordinary course consistent with past practice and the most recent Approved Budget.

The Minority Member shall not be required to approve, and shall not be liable to the Company or any Member for declining to approve, any Reserved Matter. Any such refusal shall not constitute a breach of any duty owed under this Agreement or applicable law, provided the Minority Member acts in good faith.

No Member or group of Members shall take any action, whether as Member, Manager, Officer, creditor, lender or otherwise, that is intended to, or would reasonably be expected to, unfairly prejudice, oppress, dilute or discriminate against the Minority Member in its capacity as a Member. Prohibited actions include:

(a) the diversion of Company opportunities or revenues;

(b) the payment of excessive compensation or fees to any Member or its Affiliates; and

(c) the structuring of transactions so as to circumvent the Minority Member's rights under this Agreement.

The Company shall not incorporate, acquire or hold any subsidiary unless the organizational documents of such subsidiary provide the Minority Member with approval rights substantially equivalent to those set forth in this Section with respect to such subsidiary. Any reference to the Company in this Section shall be deemed to include each subsidiary of the Company.

The Company and the Members acknowledge that the rights of the Minority Member under this Section are a material inducement to the Minority Member's investment in the Company. They further acknowledge that a breach of this Section would cause irreparable harm to the Minority Member for which monetary damages would be inadequate. Accordingly, the Minority Member shall be entitled to injunctive relief and specific performance to enforce this Section, without the necessity of posting bond or proving actual damages, in addition to any other remedy available.

Each Member, and each Manager in the performance of its functions, shall owe to the Company and to each other Member the duties of loyalty, care and good faith and fair dealing. These duties are the same as those owed by managers of a manager-managed limited liability company under the LLC Statute. Nothing in this Agreement shall be construed to eliminate, waive or restrict such duties, except as expressly provided in this Section.

A Member or Manager that has, or whose Affiliate has, any direct or indirect financial or other interest in any transaction, arrangement or matter involving the Company (an "Interested Party") shall disclose in writing to all Members the material facts of such interest promptly, and in any event before such matter is considered by the Board of Managers or the Members. An Interested Party shall continue to have a duty to disclose any material change in such interest.

"Related Party Transaction" means any contract, transaction, loan, arrangement or series of related transactions between the Company or any subsidiary, on the one hand, and any Member, Manager, Officer or any Affiliate, family member or associated entity of any of them, on the other hand. Each Related Party Transaction shall be subject to the following requirements:

(a) it shall be on terms no less favorable to the Company than those that could be obtained in a comparable arm's-length transaction with an unrelated third party;

(b) it shall be approved as a Reserved Matter; and

(c) where the Minority Member or its Affiliate is not the counterparty, it shall be approved by the Minority Member in its sole discretion.

The Minority Member may require that the fairness of any proposed Related Party Transaction with a value exceeding [amount in currency] be confirmed by an Independent Appraiser or other independent advisor at the Company's expense before approval.

An Interested Party shall not vote, and its designated Manager shall not vote, on any matter in which it has a conflicting interest. Such matter shall instead be decided by the disinterested Members, or by the Managers designated by the disinterested Members. For purposes of determining approval of any such matter, the vote of the disinterested Members shall be deemed to constitute the requisite approval, provided that any Reserved Matter shall always require the approval of the Minority Member unless the Minority Member is the Interested Party.

No Member or Affiliate of a Member, other than the Minority Member and its Affiliates, shall directly or indirectly engage in, own, manage or participate in any business that competes with the Business within [geographic area] while it is a Member and for [number] months thereafter, without Unanimous Consent. No Member shall usurp, divert or appropriate for itself or any of its Affiliates any business opportunity within the scope of the Business that comes to its attention in its capacity as a Member or Manager without first offering such opportunity to the Company. The Minority Member and its Affiliates shall be free to engage in other business activities, including activities in the same or similar lines of business, provided they do not use the Company's confidential information in doing so.

Each Member shall hold in strict confidence, and shall not disclose to any third party or use for any purpose other than monitoring and protecting its investment in the Company, any confidential or proprietary information of the Company. This obligation does not apply to disclosures to the following:

(a) such Member's Affiliates, directors, officers, employees, lenders, professional advisors and bona fide prospective transferees, in each case bound by confidentiality obligations no less protective than those set forth herein; or

(b) any Person, as required by law, regulation or legal process.

Any Member that breaches any provision of this Section shall be liable to the Company and to each non-breaching Member for all resulting losses, damages and costs, including reasonable attorneys' fees. Such Member shall account to the Company for any profit derived from such breach. A Member may bring an action on behalf of the Company to enforce this Section without making a prior demand on the Board of Managers if the Interested Party controls the Board of Managers with respect to the matter. In that event, the reasonable costs of such action shall be borne by the Company.

The Board of Managers shall cause the Company to keep, at its principal office, complete and accurate books of account and records of the Company. The books and records shall be maintained in accordance with [applicable generally accepted accounting principles or other accounting standard] consistently applied, and shall include:

(a) the register of Members;

(b) copies of the Certificate of Formation, this Agreement and all amendments thereto;

(c) all tax returns and reports;

(d) all financial statements;

(e) minutes and written consents of the Members and the Board of Managers;

(f) all material contracts; and

(g) all documents relating to Related Party Transactions.

The fiscal year of the Company shall end on [date] of each year.

The Company shall deliver to each Member the following, at the Company's expense:

(a) within [number] days after the end of each fiscal year, annual financial statements of the Company, including a balance sheet, income statement, statement of cash flows and statement of changes in Members' capital, audited by the independent accountants approved as a Reserved Matter;

(b) within [number] days after the end of each fiscal quarter, unaudited quarterly financial statements together with a comparison to the Approved Budget and a management commentary;

(c) within [number] days after the end of each month, a monthly management report setting forth revenues, expenses, cash position and indebtedness; and

(d) promptly, and in any event within [number] Business Days, notice of any material litigation, default, regulatory action, loss of material customer or contract, or other event that has had or would reasonably be expected to have a material adverse effect on the Company.

Within [number] days after the end of each fiscal year, the Company shall deliver to each Member all information necessary for the preparation of such Member's income tax returns, including a statement of such Member's allocable share of Profits, Losses and other tax items. Drafts of the Company's income tax returns shall be delivered to all Members at least [number] days before filing. The Company shall consider in good faith any comments of the Minority Member on such drafts.

Each Member, and its authorized representatives, accountants and attorneys, shall have the right, upon not less than [number] Business Days' written notice and during normal business hours, to do any of the following:

(a) inspect and copy any of the books, records, contracts and documents of the Company and its subsidiaries;

(b) visit and inspect the properties and facilities of the Company; and

(c) discuss the affairs, finances and accounts of the Company with its Managers, Officers, employees and independent accountants.

No Member shall be required to state a purpose for any such inspection, and the Company shall not condition access upon the execution of any additional confidentiality undertaking beyond that set forth in this Agreement.

The Minority Member may, not more than [number] time(s) in any fiscal year, cause an audit or review of the books and records of the Company to be conducted by an independent accounting firm of its choice. The audit shall be at the Minority Member's expense, except as follows. If such audit or review reveals any material misstatement, any underpayment of distributions to the Minority Member exceeding [percentage]%, or any undisclosed Related Party Transaction, then the full cost of such audit or review shall be borne by the Company. The Company shall promptly pay to the Minority Member any underpaid distributions together with interest at the rate of [interest rate]% per annum.

The Company shall maintain its books and records, including electronic records, for a period of not less than [number] years after the end of the fiscal year to which they relate, or for such longer period as may be required by law. Upon request, the Company shall provide any Member with access to an electronic data room or accounting system containing the Company's financial records on a read-only basis.

The information and inspection rights of each Member under this Section are in addition to, and not in limitation of, any information rights available to Members under the LLC Statute. Such rights shall not be restricted, conditioned or waived except with the prior written consent of the affected Member. The information rights of a Member shall survive any dispute between such Member and the Company or any other Member.

No Member shall Transfer all or any portion of its Membership Interest without the prior written consent of each of the other Members. Each other Member may grant or withhold such consent in its sole discretion, except as otherwise provided in this Section. Any purported Transfer made without such prior written consent, or otherwise in violation of this Agreement, shall be null and void ab initio. The Company shall not recognize any such purported Transfer or record it in the register of Members.

Each of the other Members shall not unreasonably withhold, condition or delay its consent to any Transfer by a Member of all, but not less than all, of its Membership Interest to an Affiliate that is wholly owned, directly or indirectly, by the transferring Member or by the ultimate parent of the transferring Member (a "Permitted Affiliate Transfer"). Any such Transfer is subject to the following conditions:

(a) the transferee shall agree in writing to retransfer the Membership Interest to the transferring Member if it ceases to be such an Affiliate; and

(b) the transferring Member shall remain jointly and severally liable with the transferee for all obligations under this Agreement.

A Member desiring to Transfer any Membership Interest (the "Transferring Member") shall deliver to the other Members a written notice (a "Transfer Notice") setting forth:

(a) the identity of the proposed transferee and its ultimate beneficial owners;

(b) the Membership Interest proposed to be Transferred;

(c) the price and all other material terms and conditions of the proposed Transfer; and

(d) copies of all agreements and correspondence with the proposed transferee.

Within [number] days after receipt of a Transfer Notice, each other Member shall either consent to or decline the proposed Transfer. In the alternative, each other Member may elect to purchase its pro rata share (or, if another Member declines, all) of the Membership Interest proposed to be Transferred, at the same price and on the same terms as set forth in the Transfer Notice.

If any Member other than the Minority Member proposes to Transfer any Membership Interest to a third party, and the other Members consent to such Transfer, the Minority Member shall have the right (a "Tag-Along Right") to require that the proposed transferee purchase from the Minority Member a proportionate part of its Membership Interest. Such purchase shall be at the same price per unit of Percentage Interest and on the same terms and conditions as are applicable to the Transferring Member. Where the proposed Transfer would result in the transferee, together with its Affiliates, holding a Percentage Interest greater than [percentage]%, the Minority Member may at its election require the purchase of all of its Membership Interest. The Transferring Member shall not complete any such Transfer unless the transferee simultaneously purchases the Membership Interest that the Minority Member has elected to sell.

No Member shall be required to sell, transfer or vote in favor of the sale or transfer of its Membership Interest by reason of any proposed Transfer by another Member. No provision of this Agreement shall be construed as granting any Member a drag-along or compulsory sale right with respect to the Membership Interest of the Minority Member.

Any direct or indirect change in the ownership or control of a Member that results in the Persons controlling such Member as of the Effective Date ceasing to control such Member (a "Change of Control") shall constitute a Transfer requiring the consent of the other Members under this Section. Each Member shall give the other Members written notice of any proposed Change of Control not less than [number] days before its consummation.

No Member shall pledge, mortgage, hypothecate or grant a security interest in all or any part of its Membership Interest without the prior written consent of each of the other Members. Any enforcement or foreclosure by a secured party, whether or not consented to, shall constitute a Transfer subject to this Agreement. Any such enforcement or foreclosure shall entitle the other Members to exercise the purchase rights set forth in the Section entitled "Buyout Events and Purchase of Membership Interests."

Any Transfer permitted under this Section shall be subject to the following conditions, which shall be satisfied before the Transfer takes effect:

(a) the transferee shall execute a written joinder agreeing to be bound by all terms of this Agreement;

(b) the Transfer shall not cause the Company to be treated as an association taxable as a corporation, to be terminated for tax purposes, or to violate any applicable law or material contract;

(c) the Transfer shall not cause the Company to be required to register under any securities or investment company laws; and

(d) the Transferring Member shall pay all costs incurred by the Company and the other Members in connection with the Transfer.

Additional Members may be admitted to the Company only upon the issuance of new Membership Interests approved as a Reserved Matter. The admission shall take effect upon the execution by the new Member of a written joinder to this Agreement and the making of any Capital Contribution required as a condition of admission. The Percentage Interests of the existing Members shall be adjusted only as expressly set forth in the instrument of admission approved by Unanimous Consent.

Before the Company issues any new Membership Interest or any right convertible into or exercisable for a Membership Interest (collectively, "New Interests") to any Person, the Company shall first offer such New Interests to each existing Member. Each Member shall be entitled to subscribe for New Interests in proportion to its Percentage Interest, at the same price and on the same terms as are proposed for any other subscriber. Each Member shall have not less than [number] days from receipt of written notice of the offer to elect to subscribe. To the extent any Member does not fully exercise its right, the unsubscribed New Interests shall be re-offered to the Members that elected to subscribe in full, pro rata. Only thereafter may such New Interests be offered to third parties, within [number] days, at a price and on terms no more favorable to the subscriber than those offered to the Members.

Any New Interests issued at a price per unit of Percentage Interest lower than Fair Market Value, as determined by an Independent Appraiser at the request of the Minority Member, shall entitle the Minority Member, if it did not consent to such issuance, to the issuance of an additional Membership Interest for no additional consideration. Such additional Membership Interest shall be sufficient to restore the economic value of the Minority Member's Membership Interest immediately before such issuance.

A transferee of a Membership Interest pursuant to a Transfer permitted under the Section entitled "Restrictions on Transfer of Membership Interests" shall be admitted as a substitute Member (a "Substitute Member") only upon satisfaction of all conditions set forth in that Section. A Substitute Member shall succeed to the Capital Account, Percentage Interest, rights and obligations of the transferor with respect to the Membership Interest transferred. The rights of the Minority Member under the Section entitled "Reserved Matters and Minority Member Protections" shall pass only to a Permitted Successor.

Any Person that acquires a Membership Interest, whether by operation of law, foreclosure or otherwise, without being admitted as a Substitute Member in accordance with this Agreement shall be an assignee only. An assignee shall be entitled solely to receive the distributions and allocations to which its transferor would have been entitled. An assignee shall have no right to vote, consent, designate a Manager, receive information beyond that required by the LLC Statute, or otherwise participate in the management or governance of the Company. The voting and consent rights attributable to such Membership Interest shall not be exercised by any Person until a Substitute Member is admitted. Matters requiring the vote of Members shall be determined by the remaining Members.

Upon the admission of any additional or Substitute Member, the Board of Managers shall promptly amend the register of Members to reflect such admission. The Board of Managers shall deliver a copy of the amended register to each Member. All reasonable costs and expenses of the Company associated with the admission of a Substitute Member shall be borne by the transferor and the transferee, jointly and severally.

The admission of any additional Member shall not, without the prior written consent of the Minority Member, alter any of the following:

(a) the composition of the Board of Managers;

(b) the right of the Minority Member to designate a Manager;

(c) the principle of one vote per Member; or

(d) the requirement of approval by the Minority Member of Reserved Matters.

Any instrument of admission that purports to effect any such alteration without such consent shall be void to that extent.

Each of the following events shall constitute a "Buyout Event" with respect to the Member to which it relates (the "Affected Member"):

(a) the dissolution, liquidation or winding up of the Affected Member;

(b) the Affected Member's filing of a voluntary petition in bankruptcy, adjudication as bankrupt or insolvent, making of a general assignment for the benefit of creditors, or appointment of a receiver or trustee over its assets that is not dismissed within [number] days;

(c) the Affected Member's material breach of this Agreement that is not cured within [number] days after written notice from any other Member;

(d) any purported Transfer by the Affected Member in violation of this Agreement, or any foreclosure upon its Membership Interest; or

(e) a Change of Control of the Affected Member to which the other Members have not consented.

Upon the occurrence of a Buyout Event with respect to an Affected Member, the other Members shall have the option, exercisable within [number] days after receiving written notice of the Buyout Event and of the determination of Fair Market Value, to purchase all, but not less than all, of the Affected Member's Membership Interest at its Fair Market Value. The option shall be exercised by delivery of written notice to the Affected Member. The purchasing Members shall purchase pro rata in accordance with their Percentage Interests, unless they otherwise agree. Where the Buyout Event arises under clauses (c), (d) or (e) of the preceding paragraph, the purchase price shall be [percentage]% of Fair Market Value.

The Minority Member shall have the right (a "Put Right"), exercisable by written notice to the Company and the other Members, to require the other Members, jointly and severally, to purchase all, but not less than all, of the Minority Member's Membership Interest at its Fair Market Value. The Put Right may be exercised upon the occurrence of any of the following:

(a) a Deadlock that remains unresolved for [number] days after the commencement of mediation;

(b) a Buyout Event or Change of Control with respect to any other Member;

(c) any action taken in breach of the Section entitled "Reserved Matters and Minority Member Protections" or the Section entitled "Fiduciary Duties, Conflicts of Interest and Related Party Transactions";

(d) the failure of the Company to make any distribution required under this Agreement within [number] days after its due date; or

(e) at any time after [date or number of years after the Effective Date].

Where the Put Right is exercised under clause (c) of the preceding paragraph, the purchase price shall be [percentage, greater than 100]% of Fair Market Value. The other Members may cause the Company to make such purchase on their behalf, but shall remain jointly and severally liable for the payment of the purchase price.

The closing of any purchase under this Section shall take place at the principal office of the Company, or remotely, within [number] days after the final determination of Fair Market Value. At the closing, the selling Member shall deliver its Membership Interest free and clear of all liens, claims and encumbrances, other than those arising under this Agreement, against payment in full of the purchase price. Payment shall be made in immediately available funds, unless the selling Member agrees in writing to accept deferred payment.

If any purchaser fails to pay the purchase price in full when due, the unpaid amount shall bear interest at the rate of [interest rate]% per annum from the due date until paid. The selling Member may, at its election, do any of the following:

(a) enforce payment;

(b) rescind the purchase; or

(c) in the case of the Put Right, require that the Company be dissolved and wound up in accordance with this Agreement.

All rights of the selling Member under this Agreement, including the right to distributions, information and approval of Reserved Matters, shall continue until the purchase price has been paid in full.

At or before the closing of any purchase under this Section, the purchasing Members shall cause the selling Member and its Affiliates to be fully and unconditionally released from all guarantees, indemnities, security and credit support provided by any of them for the benefit of the Company. If any such release cannot be obtained, the purchasing Members shall indemnify the selling Member and its Affiliates against all liabilities arising thereunder. The selling Member shall be entitled to receive its pro rata share of all distributions declared or attributable to any period ending before the closing.

Each Member shall execute and deliver such instruments of transfer, releases and other documents, and take such other actions, as may reasonably be required to consummate any purchase under this Section. Each Member hereby irrevocably appoints each other Member as its attorney-in-fact, effective only upon its failure to perform within [number] Business Days after written demand, to execute such documents on its behalf.

Whenever this Agreement requires the determination of Fair Market Value, the Members party to the relevant transaction shall endeavor in good faith to agree upon a single Independent Appraiser within [number] Business Days after the event giving rise to such requirement. If they fail to agree within such period, the selling Member, on the one hand, and the purchasing Members, on the other hand, shall each appoint an Independent Appraiser within a further [number] Business Days. The two Independent Appraisers so appointed shall, within [number] Business Days, jointly appoint a third Independent Appraiser. If either side fails to appoint an Independent Appraiser within the required period, the Independent Appraiser appointed by the other side shall determine Fair Market Value alone.

Each Independent Appraiser shall be engaged by the Company on behalf of the relevant Members pursuant to a written engagement letter. The engagement letter shall incorporate the standard of value and the assumptions set forth in this Section. It shall require the Independent Appraiser to act as an expert and not as an arbitrator, and to deliver a written report setting forth its determination of Fair Market Value and the methodologies and material assumptions on which it is based.

In determining Fair Market Value, each Independent Appraiser shall apply the following assumptions and methods:

(a) it shall value the Company as a going concern, unless the Company is then being dissolved, using such generally accepted valuation methodologies as it deems appropriate, which may include discounted cash flow analysis, comparable company analysis and precedent transactions analysis;

(b) it shall take into account all tangible and intangible assets of the Company, including goodwill, intellectual property and contractual rights;

(c) it shall assume that the Company's business will continue to be operated in accordance with its most recent Approved Budget and business plan; and

(d) it shall disregard any diminution in value attributable to the Buyout Event itself or to any breach of this Agreement by any purchasing Member.

No discount for minority interest, lack of control, lack of marketability or illiquidity shall be applied to the Membership Interest of the Minority Member under any circumstance.

The Company and each Member shall provide each Independent Appraiser with prompt and complete access to the books, records, personnel, facilities and information of the Company, and with such other information as the Independent Appraiser may reasonably request. Each Member shall have the right to make written submissions to each Independent Appraiser and to receive copies of all submissions made by any other Member. Each Independent Appraiser shall deliver its report within [number] days after its appointment.

Where three Independent Appraisers have been appointed, Fair Market Value shall be determined as follows:

(a) if the highest and lowest of the three determinations differ by not more than [percentage]% of the lowest determination, Fair Market Value shall be the arithmetic average of the three determinations; and

(b) in any other case, Fair Market Value shall be the arithmetic average of the two determinations closest to each other, or, if the middle determination is equidistant from the other two, the middle determination.

The determination of Fair Market Value made in accordance with this Section shall be final and binding upon the Company and the Members, absent fraud or manifest error. Any Member alleging manifest error shall give written notice thereof within [number] Business Days after delivery of the final report. In that event, the matter shall be referred back to the relevant Independent Appraiser for correction within [number] Business Days.

The fees and expenses of all Independent Appraisers shall be borne by the Company. However, where the valuation results from a Buyout Event arising from the material breach, prohibited Transfer or unconsented Change of Control of a Member, or from the exercise of a Put Right under clause (c) of the relevant paragraph of the Section entitled "Buyout Events and Purchase of Membership Interests," all such fees and expenses shall be borne by the Member in breach or by the purchasing Members, as the case may be.

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 or designating a Manager. No Member shall be obligated to contribute capital, make loans or provide guarantees to the Company, or to restore any deficit in its Capital Account, except as expressly agreed by such Member in writing. The failure of the Company to observe any formalities relating to the exercise of its powers or the management of its business shall not be grounds for imposing personal liability on any Member.

No Member, Manager or Officer (each a "Covered Person") shall be liable to the Company or any Member for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of authority conferred by this Agreement. This exculpation shall not apply to any loss arising from the following on the part of such Covered Person:

(a) fraud, gross negligence, willful misconduct or bad faith;

(b) any knowing violation of law;

(c) any breach of the duty of loyalty or of the Section entitled "Fiduciary Duties, Conflicts of Interest and Related Party Transactions";

(d) any material breach of this Agreement; or

(e) any transaction from which such Covered Person derived an improper personal benefit.

To the fullest extent permitted by applicable law, the Company shall indemnify, defend and hold harmless each Covered Person from and against any and all losses, claims, damages, liabilities, judgments, fines, settlements and expenses (including reasonable attorneys' fees) arising from any threatened, pending or completed action, suit or proceeding in which such Covered Person may be involved by reason of being a Covered Person. No Covered Person shall be entitled to indemnification in respect of any matter excluded from exculpation under the preceding clause. Without limiting the foregoing, the Company shall indemnify the Minority Member, its designated Manager and their respective Affiliates against all losses arising from any act or omission of any other Member, its designated Manager or any Officer that was not approved by the Minority Member or its designated Manager.

The Company shall advance to each Covered Person, within [number] days after receipt of a written request accompanied by reasonable supporting documentation, the expenses (including reasonable attorneys' fees) incurred in defending any proceeding before its final disposition. Advancement is conditioned upon receipt of a written undertaking by such Covered Person to repay such amounts if it is ultimately determined by a final, non-appealable judgment that such Covered Person is not entitled to indemnification. The Board of Managers shall not condition or delay such advancement on any other ground.

Any indemnification or advancement under this Section shall be satisfied solely out of the assets of the Company and any applicable insurance. No Member shall have any personal liability, or be required to make any Capital Contribution, on account of such indemnification or advancement. The rights conferred by this Section shall be contract rights, shall not be exclusive of any other rights to which any Covered Person may be entitled, and shall continue as to a Covered Person who has ceased to serve in such capacity.

The Company shall purchase and maintain, at its expense, directors' and officers' liability insurance covering each Manager and Officer with limits of not less than [amount in currency] per claim and in the aggregate. The Company shall also maintain general liability, property and such other insurance as is customary for businesses similar to the Business, with reputable insurers. The Company shall provide each Member with certificates evidencing such coverage annually and upon request. Coverage for the Manager designated by the Minority Member shall be no less favorable than that provided to any other Manager.

No amendment, modification or repeal of this Section shall adversely affect any right or protection of any Covered Person with respect to any act or omission occurring before such amendment, modification or repeal. This Section shall survive the dissolution of the Company and the withdrawal or purchase of any Member's Membership Interest.

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

(a) the approval of the Members by Unanimous Consent;

(b) the sale or other disposition of all or substantially all of the assets of the Company, approved in accordance with this Agreement, and the receipt of all proceeds therefrom;

(c) the entry of a decree of judicial dissolution under the LLC Statute;

(d) the election of the Minority Member under the Section entitled "Buyout Events and Purchase of Membership Interests" following a default in payment of the purchase price; or

(e) at any time there are no Members, unless the Company is continued in accordance with the LLC Statute.

The occurrence of a Buyout Event, or the dissolution, bankruptcy or withdrawal of any Member, shall not by itself cause the dissolution of the Company.

Upon the occurrence of a Dissolution Event, the business and affairs of the Company shall be wound up by a liquidator (the "Liquidator") appointed by Unanimous Consent. If the Members fail to agree upon a Liquidator within [number] days, the Liquidator shall be an independent professional appointed jointly by the Minority Member and a Majority of the other Members or, failing such appointment, by the court or arbitral body having jurisdiction under this Agreement. The Liquidator shall have all of the powers of the Board of Managers necessary to wind up the Company. The Liquidator shall act subject to the information rights of the Members and to the approval of the Minority Member for any sale of Company assets to any Member or its Affiliate.

The Liquidator shall proceed diligently to wind up the affairs of the Company and to sell or otherwise liquidate its assets for the highest price reasonably obtainable. Any Member may bid for any asset of the Company on terms no more favorable than those offered to unrelated third parties. Any sale of assets to a Member or its Affiliate shall be at a price not less than the fair market value of such assets as determined by an Independent Appraiser.

The proceeds of liquidation and any remaining assets of the Company shall be applied and distributed in the following order of priority:

(a) first, to creditors of the Company, including Members that are creditors (other than in respect of distributions), in satisfaction of the Company's liabilities, with Member Loans being repaid pari passu with one another;

(b) second, to the establishment of reasonable reserves for contingent or unforeseen liabilities of the Company, which reserves shall be distributed in accordance with the following clause upon the expiration of a period of not more than [number] months; and

(c) third, to the Members in accordance with their positive Capital Account balances, after giving effect to all contributions, distributions and allocations for all periods, including the period in which the liquidation occurs.

No asset of the Company shall be distributed in kind to any Member upon liquidation without the prior written consent of such Member. If any assets are distributed in kind with such consent, they shall be valued at fair market value as determined by an Independent Appraiser. Any unrealized gain or loss shall be allocated to the Members as if such assets had been sold at such value.

The Liquidator shall provide each Member with a statement of the assets and liabilities of the Company as of the date of dissolution, periodic reports on the progress of the winding up at intervals of not more than [number] days, and a final accounting of all receipts and distributions. Each Member shall be entitled to examine the books and records relating to the winding up in accordance with the Section entitled "Books, Records, Information and Inspection Rights."

Upon completion of the winding up and the distribution of all assets of the Company, the Liquidator shall file a certificate of cancellation or similar instrument with [name of filing office] of the State of [State] and take all other actions necessary to terminate the Company. The reasonable fees and expenses of the Liquidator shall be borne by the Company as an expense of winding up.

This Agreement, and all claims or causes of action arising out of or relating to this Agreement or the Company, shall be governed by and construed in accordance with the laws of the State of [State], without giving effect to any choice-of-law or conflict-of-laws rule that would cause the application of the laws of any other jurisdiction. The internal affairs of the Company shall be governed by the LLC Statute.

In the event of any dispute, controversy or claim arising out of or relating to this Agreement, its interpretation, breach, termination or validity, or the governance or affairs of the Company (a "Dispute"), any party may deliver written notice of the Dispute to the other parties. Senior executive officers of the parties to the Dispute shall meet in person or by video conference within [number] Business Days after such notice and attempt in good faith to resolve the Dispute.

If the Dispute is not resolved within [number] days after delivery of the notice of Dispute, any party may submit the Dispute to non-binding mediation administered by [name of mediation institution] in accordance with its mediation rules then in effect. The mediation shall take place in [city, State] before a single mediator. The fees of the mediator and the administrative costs of the mediation shall be borne by the Company.

If the Dispute is not resolved within [number] days after the commencement of mediation, it shall be finally resolved by binding arbitration administered by [name of arbitral institution] in accordance with its commercial arbitration rules then in effect. The arbitration shall be conducted as follows:

(a) the tribunal shall consist of three (3) arbitrators, one appointed by the claimant side, one by the respondent side, and the presiding arbitrator by the two party-appointed arbitrators;

(b) the seat of arbitration shall be [city, State], and the proceedings shall be conducted in English;

(c) the tribunal shall have the power to grant any remedy available at law or in equity, including specific performance and injunctive relief; and

(d) judgment upon the award may be entered in any court having jurisdiction.

Notwithstanding the foregoing, any party may seek temporary, preliminary or permanent injunctive relief, specific performance or other interim measures from any court of competent jurisdiction to prevent a breach of, or to enforce, the Sections entitled "Reserved Matters and Minority Member Protections," "Fiduciary Duties, Conflicts of Interest and Related Party Transactions," "Books, Records, Information and Inspection Rights" and "Restrictions on Transfer of Membership Interests." Such relief may be sought without first exhausting the procedures set forth in this Section and without the posting of any bond. For such purposes, each party irrevocably submits to the non-exclusive jurisdiction of the state and federal courts located in [county, State].

In any arbitration or judicial proceeding arising out of or relating to this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees, expert fees and costs from the non-prevailing party. Where the Minority Member brings a proceeding on behalf of the Company or to enforce its rights under this Agreement, and substantially prevails, its reasonable fees and costs shall be reimbursed by the Company or by the Member in breach, at the Minority Member's election.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE COMPANY.

Pending the final resolution of any Dispute, the parties shall continue to perform their respective obligations under this Agreement. The Company shall continue to make all distributions and provide all information required hereunder, except to the extent that the Dispute specifically concerns such distribution or information.

All notices, consents, approvals and other communications under this Agreement shall be in writing and shall be deemed duly given in the following circumstances:

(a) when delivered personally;

(b) one (1) Business Day after deposit with a reputable overnight courier, charges prepaid; or

(c) when sent by email with confirmation of transmission, provided that a copy is also sent by one of the foregoing methods within [number] Business Days.

Notices shall be addressed to a Member at the address set forth for such Member in the signature block of this Agreement, and to the Company at its principal office with copies to each Member. Any party may change its notice address by notice given in accordance with this Section.

This Agreement, together with the Certificate of Formation, constitutes the entire agreement among the Members and the Company with respect to its subject matter. It supersedes all prior and contemporaneous agreements, understandings, negotiations, term sheets and representations, whether written or oral, with respect to such subject matter.

This Agreement may be amended, modified or supplemented only by a written instrument executed by all Members. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the party against which such waiver is asserted. No failure or delay in exercising any right shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise of such right.

If any provision of this Agreement is held invalid, illegal or unenforceable in any respect, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions shall continue in full force and effect. Where any provision protecting the Minority Member is held unenforceable, the Members shall negotiate in good faith a valid substitute provision that affords the Minority Member protection as nearly equivalent as possible.

This Agreement shall be binding upon and inure to the benefit of the Members and their respective successors and permitted assigns. Except for the Covered Persons with respect to the Section entitled "Exculpation, Indemnification and Insurance," nothing in this Agreement shall confer any right, benefit or remedy upon any Person other than the Members and the Company. No creditor of the Company or of any Member shall have any right to enforce any provision of this Agreement.

Each Member shall, and shall cause its designated Manager to, execute and deliver such further instruments and take such further actions as may reasonably be required to carry out the intent and purposes of this Agreement. In particular, each Member shall exercise its voting rights so as to give full effect to the rights of the Minority Member set forth herein.

The rights and remedies provided in this Agreement are cumulative and not exclusive of any other rights or remedies available at law or in equity. Each party acknowledges that monetary damages may not be an adequate remedy for breach of this Agreement and that each non-breaching party shall be entitled to specific performance and injunctive relief.

Each party shall bear its own costs and expenses incurred in connection with the negotiation, preparation and execution of this Agreement, except that the Company shall reimburse each Member for its reasonable and documented legal fees incurred in connection therewith up to a maximum of [amount in currency] per Member.

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by facsimile, portable document format or other electronic means shall be deemed original signatures and shall be fully binding for all purposes.