06 74 OPERATING AGREEMENT (LIMITED LIABILITY COMPANY) (MEMBER-MANAGED)

• Jurisdiction: Arkansas
• Library: Arkansas Form Book - Complete (2023 Ed.)

06-74 OPERATING AGREEMENT (LIMITED LIABILITY COMPANY) (MEMBER-MANAGED)

OPERATING AGREEMENT OF [NAME], LLC

THIS OPERATING AGREEMENT OF [NAME], LLC (the "Company"), a limited liability company organized pursuant to the laws of the state of Arkansas, and particularly the Uniform Limited Liability Company Act (Act 1041 of 2021 of the Arkansas General Assembly), as amended, is entered into effective as of the "Effective Date," as hereinafter defined, by and among the Company and the undersigned Persons executing this Agreement as Members. Unless otherwise provided herein, initially capitalized terms shall have the meanings set forth in Article I.

WITNESSETH:

WHEREAS, the undersigned desire to form a limited liability company pursuant to the laws of the state of Arkansas and upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I DEFINITIONS

For purposes of this Agreement, the capitalized terms used herein shall have the following meanings, unless the context otherwise specifically requires:

1.1. "Act" shall mean and refer to Act 1041 of 2021 of the Arkansas General Assembly (Ark. Code Ann. §§ 4-38-101 et seq.), as amended.

1.2. "Agreement" shall mean and refer to this Operating Agreement and all amendments hereto.

1.3. "Assignee" shall mean and refer to a transferee of a Membership Interest who has not been admitted as a Member.

1.4. "Certificate of Organization" shall mean and refer to the Certificate of Organization of the Company filed with the Arkansas Secretary of State, as properly amended from time to time by the Members.

1.5. "Code" shall mean and refer to the Internal Revenue Code of 1986, as amended.

1.6. "Company" shall mean and refer to [name], LLC, the Arkansas limited liability company formed pursuant to the Certificate of Organization and this Agreement.

1.7. "Confidential Information" shall mean and refer to the confidential, proprietary, and trade secret information concerning the Company's services, processes, techniques, and equipment which was developed at considerable effort and expense to the Company for its sole and exclusive use, and which could be misappropriated by the Company's competitors to give them an unfair business advantage, including but not limited to recipes, confidential market studies, pricing, marketing strategies, business projections, financial statements and information, special processes, procedures, and services, customer databases, manuals, contracts and fee arrangements, activity reports, and/or other similar information and materials.

1.8. "Disposition" shall mean and refer to any sale, exchange, assignment, gift, mortgage, pledge, grant, hypothecation or other transfer, either voluntarily or involuntarily, by judicial order, operation of law or otherwise.

1.9. "Dissociated Member" shall mean and refer to any Member who ceases to be a Member in the Company by reason of the occurrence of an Event of Dissociation with respect to such Member.

1.10. "Dissociation" or "Event of Dissociation" shall mean and refer to any event or other action that causes a Member to cease to be a Member as provided herein.

1.11. "Event of Dissolution" shall mean and refer to any event, the occurrence of which will result in the dissolution of the Company as provided in this Agreement, unless the Members agree to the contrary in the manner set forth herein.

1.12. "Effective Date" shall mean and refer to the later of (a) the date on which the Certificate of Organization was filed with and accepted by the Arkansas Secretary of State, or (b) the effective date, if any, indicated in the Certificate of Organization. This Agreement shall become effective as of such Effective Date.

1.13. "Fair Market Value" shall mean and refer to the price at which the property would change hands between a willing buyer and willing seller, neither under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts. In the event it becomes necessary to determine the Fair Market Value of a Membership Interest, the Members agree that the Fair Market Value of a Membership Interest shall be determined by the Members in good faith and in compliance with all applicable rules, laws, and regulations. In the event the Members are unable to agree on the Fair Market Value of a Membership Interest, the Members shall engage a mutually acceptable independent third party to determine the Fair Market Value of the Membership Interest, the cost associated therewith to be borne equally by the Company and the owner of the Membership Interest. In the event the Members are unable to agree on the individual appraiser or firm to perform the valuation, each party shall select an appraiser, and such appraisers shall first attempt to jointly determine the Fair Market Value of the property by mutual agreement, but if they are unable to agree on such valuation, such appraisers shall select a third appraiser, and the Fair Market Value shall be determined by the average of the two closest appraisals. Any valuation so determined shall be binding and conclusive on the parties absent manifest error.

1.14. "Majority in Interest of the Members" shall mean any Member (or group of Members), whose Sharing Ratio(s) exceed(s) 50%, individually or in the aggregate.

1.15. "Majority" or "Majority in Interest of the Remaining Members" shall mean any Remaining Member (or group of Remaining Members) whose Sharing Ratio(s) exceed(s) 50% of the Sharing Ratios of all Remaining Members, individually or in the aggregate.

1.16. "Members" shall mean and refer to the persons listed as such on Exhibit A hereto, and such other persons hereafter admitted to the Company as Members in accordance with the terms of this Agreement. The term "Member" shall mean and refer to any of the Members, individually.

1.17. "Membership Interest" shall mean and refer to a Member's ownership interest and rights in the Company as a Member. Membership Interests may be represented by an ownership ratio, which is evidenced by certificates of interest.

1.18. "Net Income" and "Net Loss" for any period shall mean the Company's income or loss as determined for such period for federal income tax reporting purposes, plus any income exempt from federal income tax, and reduced by any expenditures that are neither deductible nor chargeable to a capital account for federal income tax purposes.

1.19. "Non-Fully Funding Member" shall mean any Member that fails to fully fund his pro rata share of any call for additional capital by the Company as set forth herein.

1.20. "Person" shall mean any natural person, corporation, partnership, limited liability company, trust or other entity.

1.21. "Remaining Members" shall mean and refer to the Members who would be remaining after the occurrence of an Event of Dissociation with respect to another Member or Members. The term "Remaining Member" shall mean and refer to any of the Remaining Members, individually.

1.22. "Sharing Ratio" shall mean and refer to each respective Member's ownership interest in the Company expressed as a percentage. The initial Sharing Ratio for each Member is set forth opposite such Member's name on Exhibit A hereto.

ARTICLE II ORGANIZATION

2.1. Formation. The Members hereby organize the Company as a limited liability company pursuant to the terms of this Agreement, the provisions of the Act, and other applicable laws of the state of Arkansas.

2.2. Certificate of Organization. The Certificate of Organization is hereby ratified and confirmed in all respects as the Certificate of Organization of the Company.

2.3. Name. The name of the Company shall be [name], LLC, and all business of the Company shall be conducted under this name and/or such other names approved in writing by a Majority in Interest of the Members. The name of the Company may be changed from time to time by the affirmative vote of a Majority in Interest of the Members.

2.4. Purpose. The Company may engage in any other lawful business or activity unanimously approved by the Members. In the event that no Member meets the qualifications set forth herein, then the primary purpose of the company will be to hold and engage in all activities and transactions regarding assets, investments, properties and all other rights and interests and all activities related thereto.

2.5. Powers. The Company shall have all the powers conferred by applicable law upon limited liability companies, including the power and authority to do all things necessary or convenient to accomplish its purposes and to operate its business in any lawful manner.

2.6. Registered Agent and Office. The registered agent and registered office of the Company shall be as set forth in the Certificate of Organization. The registered agent and/or registered office of the Company may be changed from time to time by the affirmative vote of a Majority in Interest of the Members, and any such change shall be promptly reflected in an appropriate filing with the Arkansas Secretary of State. In the event the registered agent becomes unable or unwilling to serve as registered agent, and/or the registered office of the Company changes, the Members shall promptly designate a successor registered agent and/or registered office, as the case may be, and shall promptly reflect such change of registered agent and/or office through an appropriate filing with the Arkansas Secretary of State.

2.7. Principal Office. The principal office of the Company shall be located at the address set forth in the Certificate of Organization or at such other place approved from time to time by a Majority in Interest of the Members.

2.8. Operating Agreement. The Members hereby adopt this Agreement, as it may from time to time be amended according to its terms, as the Operating Agreement of the Company. In the...