Free Operating Agreement Form

I. The Parties

This Operating Agreement ("Agreement") is entered into as of Month Day, Yearby and between Shareholder A Namewith a primary place of business at Shareholder A Address ("Shareholder A"), and Shareholder B Name with a primary place of business at Shareholder B Address ("Shareholder B") of [Your Company Name] with its principal place of business at [Your Company Address] ("Company"). Shareholder A and Shareholder B of the Company may collectively be referred to as the ("Parties") or individually as a ("Party").

WHEREAS, the Parties wish to set forth their understanding and agreements regarding the management and operation of the Company;

WHEREAS, the Parties intend to define their respective rights, duties, and obligations as shareholders in the Company;

WHEREAS, the Parties desire to establish certain restrictions and limitations with respect to their dealings with the Company and with each other;

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the Parties hereby agree as follows:

II. Capital Contributions

A. Shareholder A

Shareholder A shall contribute Number shares to the Company, with a monetary equivalent of Amount. The contribution shall be made by Month Day, Year, and is intended to reflect Shareholder A's ownership interest in the Company.

B. Shareholder B

Shareholder A shall contribute Number shares to the Company, with a monetary equivalent of Amount. The contribution shall be made by Month Day, Year, and represents Shareholder B's commitment to the initial capitalization of the Company.

III. Distribution of Profit

The profits of the Company shall be distributed to the Parties in proportion to their respective shares in the Company. Shareholder A and Shareholder B shall receive their share of profits based on the percentage of their ownership interest in the Company. Such distributions will occur on a quarterly basis, unless otherwise determined by a unanimous vote of the Parties. All distributions shall be subject to the availability of funds after the payment of the Company's expenses, taxes, and any other obligations. The Parties agree that no distribution shall be made that would render the Company unable to pay its debts as they become due.

IV. Representation

Each Party represents and warrants that they have full power and authority to enter into this Agreement and to perform their obligations hereunder. The Parties agree to act in good faith and to undertake their roles with due care, diligence, and competence. No Party shall engage in any activity that would harm the reputation or financial standing of the Company. The Parties agree to consult with each other before making any significant decisions affecting the Company. Each Party acknowledges that they have had the opportunity to seek independent legal advice regarding the terms of this Agreement.

V. Non-Compete

Each Party agrees not to engage in, directly or indirectly, any business or activity that competes with the business of the Company for a period of Number years following the termination of this Agreement or their association with the Company, whichever is later. This non-compete obligation applies to any geographic area where the Company conducts business or has plans to conduct business in the foreseeable future. The Parties acknowledge that the restrictions set forth in this section are fair and reasonable in all respects. In the event of a breach of this non-compete clause, the non-breaching Party shall be entitled to seek injunctive relief in addition to any other remedies available under the law. Each Party agrees to execute any additional documents necessary to effectuate the terms of this non-compete agreement.

VI. Dissolution

The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events:

(i) mutual written agreement of the Parties;

(ii) a determination by a court of competent jurisdiction; or

(iii) any event that makes it unlawful for the business of the Company to continue.

Upon dissolution, the assets of the Company shall be liquidated and distributed in the following order:

(a) to pay any debts and liabilities of the Company;

(b) to establish any reserves necessary for contingent liabilities; and

(c) to distribute any remaining assets to the Parties in accordance with their ownership interests.

The Parties shall cooperate fully in the dissolution process and ensure that it is conducted in an orderly and efficient manner.

VII. Documentation and Reporting

The Parties agree to maintain accurate and complete records of all transactions, minutes of meetings, and other documentation as required by law or as reasonably requested by either Party. These records shall be kept at the principal place of business of the Company or at another agreed-upon location and shall be accessible to both Parties at all reasonable times.

In addition, the Company shall provide each Party with regular financial reports, including quarterly profit and loss statements, balance sheets, and cash flow statements. The Parties shall review these reports in a timely manner and make any necessary decisions or adjustments to ensure the continued financial health of the Company. Each Party shall have the right to inspect the Company's books and records and to request an independent audit if deemed necessary.

VIII. Miscellaneous Provisions

A. Notices

All notices required or permitted under this Agreement shall be in writing and shall be delivered personally, sent by certified mail, return receipt requested, or sent by a recognized overnight courier service to the address of each Party as set forth above, or to such other address as a Party may designate in writing.

B. Waiver

No waiver by any Party of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any waiver be effective unless in writing and signed by the Party to be charged.

C. Severability

If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. The Parties shall negotiate in good faith to replace the invalid or unenforceable provision with a valid and enforceable provision that achieves, as nearly as possible, the original intent of the Parties.

D. Amendment

This Agreement may be amended only by a written document signed by both Parties. Any such amendment shall be effective as of the date stated therein and shall not affect any actions taken or obligations incurred prior to such date unless expressly provided otherwise.

E. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State Name, without regard to its conflict of laws principles. Any legal proceedings arising out of or in connection with this Agreement shall be brought exclusively in the courts of State Name.

F. Entire Agreement

This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, discussions, understandings, and agreements, whether written or oral, between the Parties. No other representations, promises, or agreements, expressed or implied, shall be binding upon the Parties unless reduced to writing and signed by both Parties.

IX. Signatures

By signing below, each Party acknowledges that they have read and understood this Agreement and agree to be bound by its terms and conditions.

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