Self Storage- LLC Operating Agreement

[Henry Clark]

Along with creating an LLC entity and creating a "Certificate of Organization", you need to have an "Operating Agreement".

Attached below is a redacted copy.  Virtually anything can be written in to this agreement.  Who can open bank accounts.  Who can do loans.  Double approval of all documents., Sale of interest.,  Etc.  Always make sure you have a "way" out.

Use the below just as a reference.  Your Attorney should already have a stock copy on hand.  Keep a copy on hand, for future bank/legal transactions.

OPERATING AGREEMENT

OF

Test Storage, LLC

Table of Contents

Page

Article I ‑ Definitions 1

Article II ‑ Structure of the Limited Liability Company 3

Article III ‑ Business of the Limited Liability Company 4

Article IV‑ Capital Contributions 4

Article V ‑ Allocations and Distributions 4

Article VI ‑ Management of the Limited Liability Company 7

Article VII ‑ Transfer of Membership Interests 12

Article VIII ‑ Amendments, Voting and Meetings 13

Article IX ‑ Resignation, Removal of the Manager 15

Article X ‑ Records; Financial and Tax Reporting 15

Article XI ‑ Fiscal Affairs 15

Article XII ‑ Termination and Dissolution 16

Article XIII ‑ Miscellaneous 17

OPERATING AGREEMENT AMONG THE MEMBERS

OF

Test Storage, LLC,

ARTICLE I

DEFINITIONS

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

1.01 - "Act" shall mean the Iowa Limited Liability Company Act, as amended from time to time.

1.02 - "Affiliate" shall mean, in the case of any Person (the "Specified Person"), any other Person (a) that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Specified Person, or (b) that owns or controls 10% or more of the outstanding voting securities of the Specified Person, or (c) that is an officer, director, employee or agent of, partner in, or trustee of, or serves in a similar capacity with respect to, the Specified Person or an Affiliate of the Specified Person or (d) of which the Specified Person is an officer, director, employee, agent, partner or trustee, or serves in a similar capacity.

1.03 - "Agreement" shall mean this Operating Agreement, as originally executed or as amended, modified, supplemented or restated from time to time.

1.04 - "Capital Account Balance" shall have the meaning set forth in Section 5.01.

1.05 - "Capital Contribution" shall mean in the case of any Member as of any date of determination, the aggregate amount of cash, property, or services rendered, or a promissory note or other binding obligation to contribute cash or property or perform services that such Member shall have contributed to the Limited Liability Company on or prior to such date and a Member's share of any of the Limited Liability Company's liabilities as determined in accordance with the Code and Treasury Regulations (or, if such Member is not the original holder of the Interest of such Member, the Capital Contribution with respect to the Interest of such Member held by the original holder of such Interest). In the event that any capital is returned to a Member, such Member's Capital Contribution shall be adjusted to reflect such return.

1.06 - "Capital Interest" shall mean an Interest that would give the Member a share of the proceeds if the Limited Liability Company's assets were sold at fair market value and then the proceeds were distributed in a complete liquidation of the Limited Liability Company.

1.07 - "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and any successor statute or subsequent codification or recodification of the federal income tax laws of the United States.

1.08 - "Deficit Account Balance" shall have the meaning set forth in Section 5.05.

1.09 - "Distribution" shall mean any distribution pursuant to Section 5.04 by the Limited Liability Company of cash to the Members or any Distribution in Kind.

1.10 - "Distribution in Kind" shall have the meaning set forth in paragraph (b) of Section 5.04.

1.11 - "Interest" shall mean, in the case of any Member at any time, such Member's share of the profits and losses of the Limited Liability Company at such time and the right of such Member to receive distributions of Limited Liability Company assets to which such Member may be entitled as provided in this Agreement and applicable law as represented by such Member's Capital Interest or Profits Interest.

1.12 - "Limited Liability Company" shall mean Test Storage, LLC, as such Limited Liability Company may from time to time be constituted.

1.13 - "Losses" shall mean the net loss of the Limited Liability Company for a given reporting period.

1.14 - "Manager" shall mean one or more Persons designated by the Members to manage the Limited Liability Company as provided in Section 6.01.

1.15 - "Member" shall mean any Person who, at the time referenced, owns an Interest in the Limited Liability Company.

1.16 - "Person" shall mean an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an estate, an unincorporated organization or any other entity or a government or any department or agency thereof.

1.17 - "Profits" shall mean the net income of the Limited Liability Company for a given reporting period.

1.18 - "Profits Interest" shall mean an Interest other than a Capital Interest which entitles the holder to a share of the Limited Liability Company's profits.

1.19 - "Substituted Member" shall have the meaning set forth in paragraph (a) of Section 7.01.

1.20 - "Treasury Regulations" shall mean the regulations of the United States Department of the Treasury pertaining to the income tax, as from time to time in force.

1.21 - "Unit" shall mean the capital units issued by the Limited Liability Company to its Members in exchange for Capital Contributions, which represent the Member's Interest in the Company.

1.22 - "Value" shall mean, with respect to any Distribution, if cash, the amount of such cash, or if not cash, the value of such Distribution calculated to paragraph (d) if Section 5.04.

ARTICLE II

STRUCTURE OF THE LIMITED LIABILITY COMPANY

2.01 - Formation. The parties to this Agreement have organized a Limited Liability Company under the provisions of the Act by delivering Certificates of Organization to the Secretary of State of the State of Iowa for filing. The Manager may take such further actions as he deems necessary or advisable to permit the Limited Liability Company to conduct business as a limited liability company in any jurisdiction. The rights and liabilities of the Members under this Agreement shall be as provided by Iowa law.

2.02 - Name. The name of the Limited Liability Company shall be "Test Storage, LLC" or any other name permitted by the Act as the Members shall afterwards designate by appropriate amendment to the Limited Liability Company's Articles of Organization.

2.03 - Principal Office. The principal office of the Limited Liability Company shall be atXXXXXXXXXXXXX, XX 61007, or such place as the Members may, from time to time, designate by appropriate amendment to the Limited Liability Company's Articles of Organization. The Manager may establish additional places of business for the Limited Liability Company when and where required by the business of the Limited Liability Company.

2.04 - Names and Addresses of Members. The names and addresses of the Members are as set forth on Appendix A to this Agreement.

2.05 - Fiscal Year. The fiscal year of the Limited Liability Company shall begin on January 1 and end on December 31 of each year. The fiscal year in which the Limited Liability Company shall terminate shall end on the date of termination of the Limited Liability Company.

2.06 - Possible Restrictions. Notwithstanding anything to the contrary contained in this Agreement, in the event of (a) the enactment (or imminent enactment) of any legislation, (b) the publication of any temporary or final regulation by the United States Department of the Treasury, (c) any ruling by the Internal Revenue Service or (d) any judicial decision, that, in any such case, in the opinion of counsel for the Limited Liability Company, would result in the taxation of the Limited Liability Company as an association taxable as a corporation or would otherwise result in the Limited Liability Company being taxed as an entity for federal income tax purposes, then the Manager may impose such restrictions as may be required, in the opinion of counsel, to prevent the Limited Liability Company for federal income tax purposes from being taxed as an association taxable as a corporation or otherwise as an entity, including, without limitation, making any amendments to this Agreement as the Manager in his sole discretion may determine to be necessary or appropriate to impose such restrictions.

ARTICLE III

BUSINESS OF THE LIMITED LIABILITY COMPANY

The Limited Liability Company may engage in any lawful business.

ARTICLE IV

CAPITAL CONTRIBUTIONS

4.01 - Initial Paid‑In Capital. The Members listed on the Appendix to Section 2.04 have contributed the consideration to the capital of the Limited Liability Company and have received the Units representing either a Capital Interest or Profits Interest as set forth on Appendix A.

4.02 - Limitation. No Member shall be required to make any additional contributions to the capital of the Limited Liability Company nor be obligated to satisfy any negative Capital Account Balance. No Member shall have the right to demand or receive the return of such Members Capital Contribution to the Limited Liability Company. No Member shall be entitled to interest on any Capital Contribution or on such Member's Capital Account Balance.

4.03 - Compromise. The Manager may compromise any obligation of a Member to make a contribution or return money or other property paid or distributed in violation of the Act.

ARTICLE V

ALLOCATIONS AND DISTRIBUTIONS

5.01 - Capital Accounts. A capital account shall be established for each Member on the books of the Limited Liability Company and maintained in accordance with Section 1.704‑l(b)(2) of the Treasury Regulations. Each Member's Capital Account Balance shall be determined after the capital account of such Member shall have been (a) credited with (i) the amount of any Capital Contribution of such Member and (ii) such Member's share of Limited Liability Company Profits as set forth in this Article V, and (b) debited with (i) such Member's share of Limited Liability Company Losses, as set forth in this Article V, (ii) the amount of any cash distributions to such Member pursuant to Section 5.04, and (iii) the aggregate Values, on the date of distribution, of any property distributed to such Member pursuant to Section 5.04, all of the foregoing to be determined in accordance with the rules set forth in Section 1.704‑l(b)(2)(iv of the Treasury Regulations. In the case of any assignment of an Interest, the assignee of such Interest shall have an opening Capital Account Balance with respect to such Interest equal to the Capital Account Balance of the assignor of such Interest on the effective date of the assignment (determined in accordance with Section 7.02).

5.02 - Allocation of Profits. The Profits of the Limited Liability Company shall be allocated to the Members as follows:

Test 1 – 50%

Test 2 – 50%

5.03 Allocation of Losses. The Losses of the Limited Liability Company shall be allocated to the Members as follows:

Test 1 – 50%

Test 2 – 50%

5.04 - Distribution of Cash, Securities. Warrants or Options.

(a) The Manager may distribute to the Members any cash of the Limited Liability Company in excess of working capital requirements or other amounts that they determine shall be necessary or appropriate for the operation of the business of the Limited Liability Company or its winding up and dissolution. All such cash distributions shall be made to the Members in accordance with paragraph (c) of this Section 5.04.

(b) The Manager may agree to distribute to the Members in kind any property held by the Limited Liability Company. Any such distribution of property shall be referred to herein as a "Distribution in Kind." The value of any such Distribution in Kind at the time of such distribution shall be determined in accordance with paragraph (d) of this Section 5.04 and such distribution shall be made to the Members in accordance with paragraph (c) of this Section 5.04. Distributions in Kind, made pursuant to this paragraph (b), shall be subject to such restrictions and conditions as the Members shall have determined are necessary or appropriate in order for such distributions to be made in accordance with applicable law.

(c) Any distribution of cash pursuant to paragraph (a) of this Section 5.04 or Distribution in Kind pursuant to paragraph (b) of Section 5.04, shall be made to the Members in proportion to their Interests.

(d) The value of any Distribution in Kind as of any date of determination (or in the event such date is a holiday or other day that is not a business day, as of the next preceding business day) shall be the estimated fair value of any property distributed as determined by the Members.

5.05 - Special Allocations to Capital Accounts. No allocations of loss, deduction, and/or expenditures described in Code 0705 (a)(2)(B) shall be charged to the capital accounts of any Member if such allocation would cause such Member to have a Deficit Capital Account. The amount of the loss, deduction, or Code 705(a)(2)(B) expenditure which would have caused a Member to have a Deficit Capital Account shall instead be charged to the capital account of any Members which would not have a Deficit Capital Account as a result of the allocation, in proportion to their respective Capital Contributions, or, if no such Members exist, then to the Members in accordance with their interests in the Limited Liability Company profits pursuant to section 5.02 above.

(a) If any member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations § 1.704‑1(b)(2)(ii)(d)(4), (5), or (6), which create or increase a Deficit Capital Account of the Member, then items of the Limited Liability Company income and gain (consisting of a pro rata portion of each item of Limited Liability Company income, including gross income, and gain for such year and, if necessary, for subsequent years) shall be specially credited to the capital account of the Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Deficit Capital Account so created as quickly as possible. It is the intent that this section 5.05(a) be interpreted to comply with the alternate test for economic effect set forth in Treasury Regulations § 1.704‑1(b)(2)(ii)(d).

(b) If any Member would have a Deficit Capital Account at the end of any Limited Liability Company taxable year which is in excess of the sum of any amount that the Member is obligated to restore to the Limited Liability Company under Treasury Regulations § 1.704‑1(b)(2)(ii)(c) and the Member's share of minimum gain as defined in Treasury Regulations § 1.704‑2(9)(1) (which is also treated as an obligation to restore in accordance with Treasury Regulations § 1.704‑1(b)(2)(ii)(d)), the capital account of the Member shall be specially credited with items of Limited Liability Company income (including gross income) and gain in the amount of the excess as quickly as possible.

(c) Notwithstanding any other provision of this section 5.05, if there is a net decrease in the Limited Liability Company's minimum gain as defined in Treasury Regulations § 1.704‑2(d) during a taxable year of the Limited Liability Company, the capital accounts of each Member shall be allocated items of income (including gross income) and gain for such year (and if necessary for subsequent years) equal to that Member's share of the net decrease in the Limited Liability Company minimum gain. This section 5.05(c) is intended to comply with the minimum gain chargeback requirement of Treasury Regulations § 1.704‑2 and shall be interpreted consistently therewith. If in any taxable year that the Limited Liability Company has a net decrease in the Limited Liability Company's minimum gain, if the minimum gain chargeback requirement would cause a distortion in the economic arrangement among the Members and it is not expected that the Limited Liability Company will have sufficient other income to correct that distortion, the Managers may in their discretion (and shall, if required to do so by a Member) seek to have the Internal Revenue Service waive the minimum gain chargeback requirement in accordance with Treasury Regulations § 1.704‑2(f)(4).

(d) Items of Limited Liability Company loss, deduction, and expenditures described in Code § 705(a)(2)(B) which are attributable to any nonrecourse debt of the Limited Liability Company and are characterized as partner (Member) nonrecourse deductions under Treasury Regulations § 1.704‑2(i) shall be allocated to the Members' capital accounts in accordance with Treasury Regulations § 1.704‑2(i).

(e) Beginning in the first taxable year in which there are allocations of "nonrecourse deductions" (as described in Treasury Regulations § 1.704‑2(b)) those deductions shall be allocated to the Members in accordance with, and as a part of, the allocations of Limited Liability Company profit or loss for that period.

(f) In accordance with Code § 704(c)(1)(A) and Treasury Regulations § 1.704‑1(b)(2)(i), (iv), if a Member contributes property with a fair market value that differs from its adjusted basis at the time of contribution, income, gain, loss, and deductions for the property shall, solely for federal income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of the property to the Limited Liability Company and its fair market value at the time of contribution.

(g) Pursuant to Code § 704(c)(1)(B), if any contributed property is distributed by the Limited Liability Company other than to the contributing Member within five years of being contributed, then, except as provided in Code § 704(c)(2), the contributing Member shall be treated as recognizing gain or loss from the sale of the property in an amount equal to the gain or loss that would have been allocated to the Member under Code § 704(c)(1)(A) if the property had been sold at its fair market value at the time of the distribution.

Deficit Capital Account shall mean with respect to any Member, the deficit balance, if any, in such Member's capital account as of the end of the taxable year, after giving effect to the following adjustments:

(a) Credit to such capital account any amount which such Member is obligated to restore under Treasury Regulations § 1.704‑1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentence of Treasury Regulations §§ 1.704‑2(g)(1) and (i)(5), after taking into account thereunder any changes during such year in partnership minimum gain (as determined in accordance with Treasury Regulations § 1.704‑2(d)) and in the minimum gain attributable to any partner (Member) nonrecourse debt (as determined under Treasury Regulations § 1.704­2(i)(3)); and

(b) Debit to such capital account the items described in Treasury Regulations §§ 1.704‑1 (b)(2)(ii)(d)(4), (5) and (6).

(c) This definition of Deficit Capital Account is intended to comply with the provision of Treasury Regulations §§ 1.704‑1 (b)(2)(ii)(d) and 1.704‑2, and will be interpreted consistently with those provisions.

ARTICLE VI

MANAGEMENT OF THE LIMITED LIABILITY COMPANY

6.01 - Management.

(a) The Limited Liability Company shall be managed by both parties separately or together. The conduct of the Limited Liability Company's business shall be controlled and conducted solely by the Manager in accordance with this Agreement. The Manager shall make all decisions affecting Limited Liability Company affairs, and shall have the exclusive right to act for the Limited Liability Company. The Manager in accordance with this Agreement may act for and on behalf of the Limited Liability Company and execute all agreements on behalf of the Limited Liability Company and otherwise bind the Limited Liability Company as to third parties without the consent of the Members.

(b) The Manager shall be reimbursed for the expenses incurred in carrying out their duties as Manager. The salary and other compensation of the Manager shall be fixed from time to time by the majority vote of the Members.

(c) The Manager shall serve until his death, resignation or removal by a vote of the Members representing at least 60% percent of all Units.

6.02 - Authority of the Manager. In addition to and not in limitation of any rights and powers conferred by law or other provisions of this Agreement, and except as limited, restricted or prohibited by the express provisions of this Agreement, the Manager shall have and may exercise on behalf of the Limited Liability Company, all powers and rights necessary, proper, convenient or advisable to effectuate and carry out the purposes, business and objectives of the Limited Liability Company. Such powers shall include, without limitation, the power to:

(a) Expend Limited Liability Company funds in connection with the operation of the Limited Liability Company's business or otherwise pursuant to this Agreement;

(b) Employ and dismiss from employment any and all employees, agents, independent contractors, attorneys and accountants;

(c) Prosecute, settle or compromise all claims against third parties, compromise, settle or accept judgment on claims against the Limited Liability Company and execute all documents and make all representations, admissions and waivers in connection therewith;

(d) Borrow money on behalf of the Limited Liability Company from any Person, issue promissory notes, drafts and other negotiable and non‑negotiable instruments and evidences of indebtedness, secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge, property of the Limited Liability Company, whether at the time owned or thereafter acquired;

(e) Hold, receive, mortgage, pledge, lease, transfer, exchange, otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all right: powers, privileges and other incidents of ownership or possession with respect to a property of whatever nature held or owned by, or licensed to, the Limited Liability Company;

(f) Lend any of the Limited Liability Company property with or without ­security;

(g) Have and maintain one or more offices within or without the State of Iowa;

(h) Open, maintain and close bank accounts and money market mutual fund accounts, and draw checks and other orders for the payment of monies;

(i) Engage accountants, custodians, consultants and attorneys and any and all other agents and assistants (professional and nonprofessional) and pay such compensation in connection with such engagement that the Manager determines is appropriate;

(j) Maintain such insurance relating to the business of the Limited Liability Company, and upon such terms, as the Manager determines is appropriate;

(k) Enter into, execute, make, amend, supplement, acknowledge, deliver and perform any and all contracts, agreements, licenses, and other instruments, undertakings and understandings that the Manager determines are necessary, appropriate or incidental to carrying out the business of the Limited Liability Company.

In exercising their powers, the Manager may (i) rely upon and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, or document believed by them to be genuine and to have been signed or presented by the proper party or parties; (ii) consult with counsel, accountants, and other experts selected by them and any opinion of an independent counsel, accountant or expert shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by the Manager in good faith and in accordance with such opinion; and (iii) execute any of his powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys. The foregoing is qualified by Section 706 of the Act. Any misconduct or negligence on the part of any agent or attorney appointed by a Manager shall not affect the protection afforded an Indemnitee (as defined in Section 6.07(b)) pursuant to paragraphs (a) and (b) of Section 6.07;

6.03 - Limitations on the Manager's Authority. The Manager shall have no authority to do any act prohibited by law or in contravention of this Agreement, nor shall the Manager have any authority to do any of the following without the prior written consent of the Members holding at least a majority of the Units:

(a) Permit or cause the Limited Liability Company to make any loan to any Manager or any of their Affiliates;

(b) Permit or cause the funds of the Limited Liability Company to be commingled with the funds of any other person;

(c) Permit any creditor who makes a no recourse loan to the Limited Liability Company to acquire, at any time as a result of making such loan, any direct or indirect interest in the profits, capital or property of the Limited Liability Company other than as a secured creditor;

(d) Perform any act which would impair or make impossible the ordinary conduct of the Limited Liability Company's business;

(e) Sell all or substantially all of the assets of the Limited Liability Company other than in the ordinary course of business or merge the Limited Liability Company with any other entity.

6.04 - Obligations of the Manager. The Manager shall:

(a) Devote to the Limited Liability Company and apply to the accomplishment of Limited Liability Company purposes so much of the Manager's time and attention as they determine to be necessary or advisable to manage properly the affairs of the Limited Liability Company.

(b) Maintain accounting records from which a Limited Liability Company Capital Account Balance can be determined for each Member;

(c) Execute, file, record or publish all certificates, statements and other documents and do all things appropriate for the formation, qualification and operating of the Limited Liability Company and for the conduct of its business in all appropriate jurisdictions;

(d) Employ attorneys to represent the Limited Liability Company when necessary or appropriate;

(e) Use his best efforts to maintain the status of the Limited Liability Company as a "limited liability company" for state law purposes, and as a "partnership" for federal income tax purposes;

(f) Have fiduciary responsibility for the safekeeping and use of all funds and assets of the Limited Liability Company, and not employ or permit others to employ such funds or assets (including any interest earned thereon) in any manner except for the benefit of the Limited Liability Company including, among other things, the utilization of Limited Liability Company funds and assets as compensating balances for the benefit of the Manager; and

(g) Maintain a current list of the names and last known addresses of, and number of Units owned by, each Member and the other Limited Liability Company records described in section 709 of the Act at the Limited Liability Company's principal office. Upon request, for any purpose reasonably related to the Member's interest as a Member, the Manager will furnish a copy of such information to a Member or its representative upon payment of the cost of reproduction and mailing; provided, however, that the information furnished to the Member will not, in any event, be used for commercial purposes. Any Member may inspect and copy or obtain from the Manager upon the payment of the costs of reproduction and mailing the financial records of the Limited Liability Company and its tax returns. A Member shall give the Manager at least ten business days' prior written notice for any inspection and copying permitted pursuant to this paragraph (g) by the Member or its authorized attorney or agent.

6.05 - Tax Matter Partner. is hereby appointed and authorized to perform all duties imposed by Sections 6221 and 6232 of the Code as "tax matter partner" of the Limited Liability Company. The Limited Liability Company shall indemnify, to the full extent permitted by law, from and against any damages and losses (including attorney fees) arising out of or incurred in connection with any action taken or omitted to be taken by him/her in carrying out his/her responsibilities as tax matters partner, provided such action taken or omitted to be taken does not constitute fraud, gross negligence or willful misconduct.

6.06 - Indemnification of the Manager, his Affiliates and Control Persons.

(a) Neither the Manager nor any of his Affiliates shall be liable to the Limited Liability Company or any Member for any act or omission based upon errors of judgment or other fault in connection with the business or affairs of the Limited Liability Company if the Manager, or such Affiliate determined that such course of conduct was in the best interest of the Limited Liability Company; except such indemnification shall not be available for any such liability for losses, claims, damages, liabilities or expenses that a court of competent jurisdiction by final judgment shall determine resulted from the gross negligence or willful misconduct of the Manager or Affiliate.

(b) To the fullest extent permitted by law, the Manager (such person being referred to herein as "Indemnitee"), shall be indemnified and held harmless by the Limited Liability Company from and against any and all losses, claims, damages, settlements and other amounts arising from any and all claims (including attorneys' fees and expenses, as such fees and expenses are incurred), demands, actions, suits or proceedings (civil, criminal, administrative or investigative), in which he may be involved, as a party or otherwise, by reason of their management of the affairs of the Limited Liability Company, whether or not he continues to be such at the time any such liability or expense is paid or incurred; provided that no Indemnitee shall be entitled to the foregoing indemnification if a court of competent jurisdiction shall have determined that such losses, claims, damages, liabilities, expenses or such other amounts resulted primarily from the gross negligence or willful misconduct of such Indemnitee. The termination of a proceeding by judgment, order, settlement or conviction upon a plea of nolo contendere, or its equivalent, shall not, of itself, create any presumption that such losses, claims, damages, liabilities, expenses or such other amounts resulted primarily from the gross negligence or willful misconduct of any Indemnitee or that the conduct giving rise to such liability, was not in the best interest of the Limited Liability Company. The Limited Liability Company shall also indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending or completed action by or in the right of the Limited Liability Company to procure a judgment in its favor by reason of the fact that such Indemnitee is or was an agent of the Limited Liability Company, against any losses, claims, damages, liabilities, expenses or any other amounts incurred by such Indemnitee in connection with the defense or settlement of such action; provided that no Indemnitee shall be entitled to the foregoing indemnification if a court of competent jurisdiction shall have determined that any such losses, claims, damages, liabilities, expenses or such other amounts resulted from the gross negligence or willful misconduct of such Indemnitee. The Limited Liability Company may advance any Indemnitee any expenses (including, without limitation, attorneys' fees and expenses) incurred as a result of any demand, action, suit or proceeding referred to in this paragraph (b) provided that (i) the legal action relates to the performance of duties or services by the Indemnitee on behalf of the Limited Liability Company; and (ii) the Indemnitee gives a full recourse promissory note to the Limited Liability Company for the amounts of such advances payable in the event that the Indemnitee is determined to be not entitled to indemnification hereunder.

(c) The indemnification provided by paragraph (b) of this Section 6.06 shall not be deemed to be exclusive of any other rights to which any Indemnitee may be entitled under any agreement, as a matter of law, in equity or otherwise, and shall continue as to an Indemnitee who has ceased to have an official capacity and shall inure to the benefit of the heirs, successors and administrators of such Indemnitee.

(d) Any indemnification pursuant to this section will be payable only from the assets of the Limited Liability Company.

6.07 - Transactions with the Manager or his Affiliates. The Manager, on behalf of the Limited Liability Company, may enter into contracts with himself or any of his Affiliates, provided that any such transactions shall be on terms no more favorable to the Manager or his Affiliates than generally afforded to unrelated parties in a similar transaction and the requirements of section 708 of the Act are satisfied, if applicable.

ARTICLE VII

TRANSFER OF MEMBERSHIP INTERESTS

7.01 - Transfer of Member's Interest.

(a) Subject to any restrictions on transferability under applicable law, or contained elsewhere in this Agreement, each Member may assign some or all of the Interest of such Member. Such assignee shall become a substituted member ("Substituted Member") in the Limited Liability Company entitled to all the rights and benefits under this Agreement only if all of the Members consent to the assignment in writing or approve of the assignment by a vote taken at a meeting of the Members, which consent or approval may be withheld in the absolute discretion of any of the Members. An assignee who is not a Substituted Member shall only be entitled to the distributions the assignor would be entitled. No Member shall in any event assign an Interest, or any portion thereof, if such assignment would result in a termination of the Limited Liability Company for Federal income tax purposes or jeopardize the classification of the Limited Liability Company as a partnership for Federal income tax purposes, or violate or cause the Limited Liability Company to violate, any applicable law or governmental rule or regulation, including, without limitation, any applicable Federal or state securities law. An assigning Member shall remain liable to the Limited Liability Company as provided in the Act, regardless of whether the assignee becomes a Substitute Member.

(b) Notwithstanding anything to the contrary in this Section 7.01, in no event shall any assignment of an Interest be made to a minor (except as a beneficiary of a trust or pursuant to the Uniform Transfers to Minors Act) or an incompetent (except as a beneficiary of a trust).

(c) Each Member agrees that, after any assignment by a Member of such Member's Interest, such Member shall, upon request of the Manager, execute such certificates or other documents and perform such acts as the Manager deems appropriate in connection with such assignment.

(d) Each assignor, upon request of the Manager, shall pay all reasonable expenses, including attorneys' fees (as such fees are incurred) incurred by the Limited Liability Company in connection with such assignment.

(e) Each Substituted Member, as a condition to the admission of such Substituted Member as a Member, shall execute and acknowledge such instruments as the Manager shall determine to be necessary or appropriate to effectuate such admission and to confirm the agreement of such Substituted Member to be bound by all the terms and provisions of this Agreement with respect to such Substituted Member's Interest. All reasonable expenses, including attorneys' fees (as such fees are incurred) incurred by the Limited Liability Company in connection with such admission shall be borne by such Substituted Member to the extent such expenses shall not have been paid by any assignor of the Interest of such Substituted Member.

(f) Any Person admitted to the Limited Liability Company as a Substituted Member shall be subject to and bound by all the provisions of this Agreement as if such Person were an original Member under this Agreement.

(g) Any purported assignment of an Interest that is not made in accordance with this Agreement is hereby declared to be null and void and of no force or effect whatsoever.

7.02 - Assignee's Rights. The effective date of admission to the Limited Liability Company of a Substituted Member shall be the first day of the month following the month in which all of the Members shall have given their written consent to such admission.

7.03 - Indemnification and Terms of Admission. Each Member ("Transferor") shall indemnify and hold harmless the Limited Liability Company, each other Member and any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of or arising from any actual or alleged misrepresentation or misstatement of fact or omission to represent or state any fact made by such Transferor in connection with any assignment, transfer, encumbrance or other disposition of all or any part of such Transferor's Interest, or with the admission to the Limited Liability Company of a Substituted Member, against losses, liabilities and expenses for which the Limited Liability Company, any other Member or any Indemnitee has not otherwise been reimbursed (including, without limitation, attorneys' fees, judgments, fines and amounts paid in settlement) actually and reasonably incurred by the Limited Liability Company, any other Member or any Indemnitee, as the case may be, in connection with such action, suit or proceeding.

7.04 - Withdrawal. No Member may withdraw from the Limited Liability Company.

ARTICLE VIII

AMENDMENTS, VOTING AND MEETINGS

8.01 - Amendment by Members. A unanimous vote is required to amend this Agreement.

8.02 - Voting Power. Each Member shall have one vote for each Unit held by such Member. Unless otherwise expressly provided in this Agreement, the affirmative vote of a majority of the Members shall be required for approval of any action of the Limited Liability Company by the Members; including, without limitation, (i) dissolution and winding up of the Limited Liability Company; (ii) the sale, exchange, lease, mortgage, pledge or other transfer of all or substantially all of the assets of the Limited Liability Company other than in the ordinary course of business; and (iii) the merger of the Limited Liability Company with another entity.

8.03 - Meetings of Members. Upon the written request of any Member or Members owning at least ten percent of all Units, the Manager shall call a meeting of the Members. Notice of such meeting shall be given, by certified mail, to each Member within ten days after receipt by the Manager of such request. The Manager may also call a meeting of the Members on the Manager's own initiative by giving notice of such meeting to each Member not less than ten nor more than thirty days prior to such meeting. Any such notice shall state briefly the purpose of the meeting, which shall be held at a reasonable time and place. Upon written request, any Member may obtain from the Manager a list of the names, currently known addresses and Unit holdings of the Members. Such Member shall pay any reasonable expense associated with such request.

8.04 - Place of Meeting. The Manager may designate any place, either in or out of the State of Iowa, as the place of meeting for any meeting. If no designation is made the place of meeting shall be the Limited Liability Company's principal office. Telephonic meetings are permitted.

8.05 - Notice of Meetings. Written notice stating the date, time and place of the meeting and a description of the purpose or purposes for which the meeting is called, shall be mailed, unless oral notice is reasonable under the circumstances, not fewer than ten nor more than thirty days before the date of the meeting, by or at the direction of the Manager to each Member of record entitled to vote at the meeting. If mailed, such notice is effective when mailed addressed to the Member's address shown in the Limited Liability Company's current record of Members, with postage prepaid.

8.06 - Action Without a Meeting. Any action required or permitted to be taken by the Members by vote may be taken without a meeting on written consent. The consent shall set forth the actions so taken and be signed by all of the Members.

8.07 - Waiver of Notice.

(a) A Member may waive any notice required by this Agreement before or after the date and time stated in the notice. The waiver must be in writing, be signed by the Member entitled to the notice, and be delivered to the Manager.

(b) A Member's attendance at a meeting: (i) waives objection to lack of notice or defective notice of the meeting, unless the Member at the beginning of the meeting or promptly upon the Member's arrival objects to holding the meeting or transacting business at the meeting, and (ii) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the Member objects to considering the matter when it is presented.

ARTICLE IX

RESIGNATION, REMOVAL OF THE MANAGER

9.01 - Resignation of the Manager. The Manager may resign as a Manager of the Limited Liability Company upon 30 days prior written notice to all Members. The Members shall meet to elect a Manager to replace the resigning Manager at a meeting called for that purpose within 30 days of delivery of the notice of resignation by the Manager.

9.02 - Removal of the Manager. The Manager may be removed at any time with or without cause by an affirmative vote of the Members owning at least 60 percent of the Units.

ARTICLE X

RECORDS: FINANCIAL AND TAX REPORTING

10.01 - Records and Accounting. The books of account of the Limited Liability Company shall be maintained at the Limited Liability Company's principal place of business. Each Member or its duly authorized representative shall have access to such books, as provided in Section 6.04(9). The Limited Liability Company shall prepare its financial statements using generally accepted accounting principles, consistently applied.

10.02 - Tax Information. The Manager will use his best efforts to cause to be delivered, as soon as practical after the end of each fiscal year of the Limited Liability Company, to the Members and Persons who were Members during such fiscal year all information concerning the Limited Liability Company necessary to enable such Member to prepare such Member's Federal and state income tax returns for such fiscal year, including a statement indicating such Member's share of Profits, Losses, deductions and credits for such fiscal year for Federal and state income tax purposes, and the amount of any Distribution made to or for the account of such Member during such fiscal year pursuant to this Agreement.

10.03 - Tax Returns. The Manager shall cause income tax returns for the Limited Liability Company to be prepared and timely filed in accordance with applicable law.

ARTICLE XI

FISCAL AFFAIRS

11.01 - Elections.

a) The Manager, in his discretion, may elect to adjust the basis of the assets of the Limited Liability Company for Federal income tax purposes in accordance with Section 754 of the Code in the event of a distribution of Limited Liability Company property as described in Section 734 of the Code or a transfer by any Member of the Interest of such Member in the Limited Liability Company as described in Section 743 of the Code.

(b) The Manager, at any time and from time to time may also make such other tax elections as he deems necessary or desirable, in his discretion.

11.02 - Interim Closing of the Books. There shall be an interim closing of the books of account of the Limited Liability Company (i) at any time a taxable year of the Limited Liability Company shall end pursuant to the Code, and (ii) at any other time determined by the Manager to be required by good accounting practice or otherwise appropriate under the circumstances.

ARTICLE XII

TERMINATION AND DISSOLUTION

12.01 - Events Requiring Termination and Dissolution. The Limited Liability Company shall be dissolved upon the happening of any of the following events:

(a) Termination in accordance with expiration of its period of duration as provided in its Articles of Organization;

(b) The occurrence of any event which would make unlawful the continuing existence of the Limited Liability Company;

(c) The majority vote of the Members;

(d) The withdrawal, expulsion, bankruptcy, or dissolution of any Member or any other event which under the Act shall result in the dissolution or termination of the Limited Liability Company unless the business of the Limited Liability Company is continued by the consent of all of the remaining Members.

12.02 - Distribution.

(a) Upon dissolution of the Limited Liability Company, the affairs of the Limited Liability Company shall be wound up in accordance with this Section 12.02. The fair market value of the assets of the Limited Liability Company shall be determined by the Manager, with the Value of any property held by the Limited Liability Company being determined in accordance with paragraph (d) of Section 5.04 and the fair market value of any other assets held by the Limited Liability Company (other than cash) being determined by an independent appraiser selected by the Manager. Thereupon, the assets of the Limited Liability Company shall be distributed in the following manner and order: (i) to the claims of all creditors of the Limited Liability Company, including Members who are creditors, to the extent permitted by law, in satisfaction of liabilities of the Limited Liability Company, other than liabilities for distributions to Members, (ii) to Members and former Members in satisfaction of liabilities for distributions pursuant to section 805 of the Act, and (iii) to the Members with positive Capital Account Balances in accordance with the ratio of their Capital Account Balances. Each such Member entitled to a distribution of any assets of the Limited Liability Company, pursuant to clause (iii) of this paragraph (a, shall receive such Member's share of such assets in cash or in kind, and the portion of such share that is received in cash may vary from Member to Member, all as the Manager in his discretion may decide. If distributions to any Member upon termination of the Limited Liability Company are insufficient to return to such Member the full amount of such Member's Capital Contribution, such Member shall have no recourse against the Manager, the Limited Liability Company or any other Member.

(b) The winding up of the affairs of the Limited Liability Company and the distribution of its assets shall be conducted exclusively by the Manager and his assignees, who are hereby authorized to do all acts authorized by law to effectuate such purposes Without limiting the generality of the foregoing, the Manager and their assignees, in carrying out such winding up and distribution, shall have full power and authority to sell the Limited Liability Company's assets, or any part thereof, or to distribute the same in kind to the Members. Any assets distributed in kind shall be subject to all agreements relating thereto that, by the terms thereof, survive the termination of the Limited Liability Company.

12.03 - Deficit Capital Account Balance. The Members shall have no liability to the Limited Liability Company, to the other Members, or to the creditors of the Limited Liability Company on account of any deficit balance in such Member's Capital Account Balance except to the extent such deficit arises from the failure of the Member to contribute the full amount of its Capital Contribution.

ARTICLE XIII

MISCELLANEOUS

13.01 - Notices. Any notice, offer, consent or other communication required or permitted to be given or made hereunder shall be in writing and, except for reports required by Article X hereto (which reports shall be deemed to have been sufficiently given or made when mailed by first‑class mail, postage prepaid), shall be deemed to have been sufficiently given or made when delivered personally to the party (or an officer of the party) to whom the same is directed, or (except in the event of a mail strike) five days after being mailed by first‑class mail, postage prepaid, if to the Limited Liability Company to or if to the Manager or a Member, to the address set forth in the records of the Limited Liability Company, as amended from time to time. Any Member may change such Member's address for the purpose of this Section 13.01 by giving notice of such change to the Limited Liability Company, such change to become effective on the fifth day after such notice shall have been given.

13.02 - Authority to Act. Notwithstanding anything to the contrary contained herein, any act of the Manager, in accordance with this Agreement, in carrying out the business of the Limited Liability Company, shall bind the Limited Liability Company.

13.03 - Governing Law. Successors. Severability. This Agreement shall be governed by and construed in accordance with the laws of the State of Iowa and, subject to the restrictions on transferability set forth in this Agreement, shall bind and inure to the benefit of the heirs, executors, personal representatives, successors and assigns of the parties hereto. If any provision of this Agreement shall be held to be invalid, the remainder of this Agreement shall not be affected thereby.

13.04 - Entire Agreement. This Agreement is the sole operating agreement of the Limited Liability Company and constitutes the entire agreement among the parties; it supersedes any prior agreements or understandings among the parties, oral or written, all of which are hereby canceled. This Agreement may not be modified or amended other than in accordance with Article VIII.

13.05 - Headings. etc. The Article and Section headings in this Agreement, and the Table of Contents included herewith, are inserted for convenience of reference only and shall not affect interpretation of this Agreement. Whenever the context shall require, each term stated in either the singular or plural shall include the singular and the plural, and masculine or neuter pronouns shall include the masculine, the feminine and the neuter.

13.06 - No Waiver. No failure or delay on the part of any Member in exercising any rights under this Agreement, or in insisting on strict performance of any covenant or condition contained in this Agreement, shall operate as a waiver of any of such Member's rights hereunder.

13.07 - Legends. If any certificate evidencing a Member's Interest shall be issued, such certificate shall bear such legend or legends as may be required by applicable Federal or state laws, or as may be deemed necessary or appropriate by the Manager to reflect restrictions upon transfer contemplated herein.

13.08 - Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

13.09 - Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Limited Liability Company.

IN WITNESS WHEREOF, all of the Members have executed this Agreement effective as of the ____________ day of _____________________, 2018.

____________________________________

Test 1

APPENDIX A

Type of Interest

Name Consideration Capital Profits Units

Test 1 50%

Test 2 50%