EFTA00283336.pdf

LIMITED LIABILITY COMPANY AGREEMENT OF 11 BELDEN, LLC Dated as of May 1, 2014 71910601.7 EFTA00283336  LIMITED LIABILITY COMPANY AGREEMENT OF CACTII INVESTMENTS LLC ARTICLE I DEFINITIONS 1 ARTICLE II FORMATION; PURPOSES; OFFICES; AGENT; TERM; FEES AND EXPENSES; SECURITIES LAW 5 2.1 Formation and Name of Company 5 2.2 Purpose 5 2.3 Principal Place of Business; Offices 5 2.4 Registered Office; Registered Agent 6 2.5 Term 6 2.6 Payment of Costs and Expenses 6 2.7 Securities Law 6 ARTICLE III MEMBERS; VOTING RIGHTS; MEMBERSHIP INTERESTS; CONFLICTS OF INTEREST; CONFIDENTIALITY AND NONDISCLOSURE OBLIGATIONS; RIGHT OF FIRST REFUSAL; MEETINGS OF MEMBERS 6 3.1 Members 6 3.2 Voting Rights 6 3.3 Membership Interests 6 3.4 Conflicts of Interest 7 3.5 Confidentiality and Nondisclosure Obligations 7 3.6 Meetings of the Members. 8 ARTICLE IV MANAGEMENT RIGHTS AND DUTIES 8 4.1 Management Generally 8 4.2 Authority of Managers 8 4.3 Limitations on Authority 10 4.4 Compensation of the Managers II 4.5 Reliance by Third Parties II 4.6 Removal and Resignation of Managers; Appointment of Successor Managers 11 /191060IJ EFTA00283337  4.7 Conflicts of Interest; Confidentiality and Nondisclosure Obligations; Right of First Refusal 12 4.8 Officers; Delegation of Authority 12 4.9 Annual Budget 12 ARTICLE V CAPITAL CONTRIBUTIONS 12 5.1 Initial Capital Contribution 12 5.2 Additional Mandatory Capital Contributions 12 5.3 Additional Voluntary Capital Contributions 13 5.4 Capital Accounts 14 5.5 Member Loans 14 ARTICLE VI TAX AND ACCOUNTING MATTERS 14 6.1 Allocations - General 14 6.2 Special Allocations 14 6.3 Tax Allocations 15 ARTICLE VII DISTRIBUTIONS AND WITHDRAWALS 15 7.1 Distributions - General 15 7.2 Withdrawal of Capital 16 7.3 Source of Distributions 16 ARTICLE VIII TAX STATUS AND REPORTS t6 8.1 Tax Status and Returns 16 8.2 Accounting Matters 17 ARTICLE IX ASSIGNMENT OF INTERESTS AND ADMISSION OF NEW MEMBERS 17 9.1 Restrictions on Assignment of Interests 17 9.2 Assignment to Member or in a Permitted Transfer 17 9.3 Other Assignments; Rights of First Refusal 17 9.4 Determination of Purchase Price 18 9.5 Payment Terms 18 9.6 Closing; Payment of Purchase Price 19 9.7 Manner of Assignment 19 9.8 Involuntary Assignment by a Member 20 9.9 Admission of New Members 21 9.10 Repurchase Upon Event of Dissociation 21 /191060IJ EFTA00283338  9.11 Repurchase Upon Divorce 21 9.13 Members' Representative and Successors 22 9.14 Withdrawal of Members 22 ARTICLE X DISSOLUTION 22 10.1 Dissolution 22 10.2 Liquidation 22 10.3 Liabilities 22 10.4 Settling of Accounts 23 10.5 Distribution of Assets of the Company 23 10.6 Filing 23 ARTICLE XI CERTIFICATES EVIDENCING INTERESTS 23 ARTICLE XII INDEMNIFICATION 23 12.1 Exculpation 23 12.2 Indemnification 23 12.3 Continuing Rights 24 ARTICLE XIII INSPECTION OF COMPANY RECORDS 24 13.1 Records to be Kept 24 13.2 Inspection of Company Records 25 ARTICLE XIV MISCELLANEOUS 25 14.1 Amendments 25 14.2 Successors and Assigns 25 14.3 Seal 25 14.4 Entire Agreement 25 14.5 Third Parties 25 14.6 Governing Law 25 14.7 Titles and Subtitles; Form of Pronouns; Construction and Definitions 26 14.8 Severability 26 14.9 Notices 26 14.10 No Waiver 26 14.11 Counterparts 26 Schedule A Names, Addresses, Initial Capital Contributions, Class A Interests, Class B Interests, Percentage Interests of Members and Voting Percentage; Managers /191060IJ EFTA00283339 Exhibit I Certificate of Formation -iv- 71910601.7 EFTA00283340  LIMITED LIABILITY COMPANY AGREEMENT OF 11 BELDEN, LLC THIS AGREEMENT is made and entered into as of the day of May, 2014 by the Persons whose names and addresses are set forth in Schedule A hereto and whose signatures appear on the signature pages attached hereto, as all of the members of 11 Belden, LLC (the "Company"). WITNESSETH WHEREAS, the Members have caused to be formed, or intend to be formed, a limited liability company under and pursuant to the Act (as defined below) for the purpose of conducting the Business (as defined below). WHEREAS, the Members agree that their respective rights, powers, duties and obligations as Members of the Company, and the management, operations and activities of the Company, shall be governed by this Agreement. NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions contained herein, the Members hereby agree as follows: ARTICLE I Definitions Capitalized terms used in this Agreement without other definition shall, unless expressly stated otherwise, have the meanings specified in this Article I. "Accountants" shall have the meaning set forth in Section 9.4(b). "Act" means the Connecticut Limited Liability Company Act, as amended from time to time, or any corresponding provision of any succeeding or successor acts of the State of Connecticut. "Agreement" means this Limited Liability Company Agreement, as originally executed and as amended, modified or supplemented from time to time. "Annual Budget and Operating Plan" shall have the meaning set forth in Section 4.9. "Assign" means to effect an Assignment, by whatever means. 71910601.7 EFTA00283341  "Assignment" means any sale, inter vivos transfer or gift, assignment, pledge, grant of security interest, or transfer by will or trust, by operation of law or otherwise, in or of all or any part of an Interest. "Authorized Person" means the Person who filed the Certificate of Formation with the Secretary of State. "Bankrupt" means that the Person referenced is subject to a Bankruptcy. "Bankruptcy" means any proceeding in federal bankruptcy court in which the Person referenced is a debtor or any similar proceeding or action in any other forum or context, whether or not supervised by a court and whether or not finally concluded or adjudicated. "Book Value" means, with respect to any Company property, the Company's adjusted basis for federal income tax purposes, adjusted from time to time to reflect the adjustments required or permitted by Treasury Regulations § 1.704-1(b)(2)(iv)(d)-(g). "Business" shall have the meaning set forth in Section 2.2. "Capital Account" means the account established for each Member and maintained in accordance with the principles set forth in the Treasury Regulations under Code Section 704, which shall generally be credited with the Capital Contributions of each Member plus the Member's distributive share of Company Income and decreased by the Member's share of Company distributions and the Member's distributive share of Company Losses. "Capital Contribution(s)" means the total amount of cash and the fair market value of any other property (net of any liabilities secured by such property that the Company assumes or takes subject to) at any given time contributed to the Company by each Member as an initial Capital Contribution or an additional Capital Contribution. Any reference in this Agreement to the Capital Contribution of a then Member shall include a Capital Contribution previously made by any prior Member with respect to the Interest of such then Member. "Cause" shall have the meaning set forth in Section 4.6(a). "Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State, as amended, modified, or supplemented from time to time. "Class A Member" means a Member holding Class A Interests and any Person who becomes an additional, substitute or replacement Class A Member as permitted by this Agreement, in each such Person's capacity as a Class A Member of the Company. "Class A Interests" has the meaning set forth in Section 3.3. "Class B Member" means a Member holding Class B Interests and any Person who becomes an additional, substitute or replacement Class B Member as permitted by this Agreement, in each such Person's capacity as a Class B Member of the Company. "Class B Interests" has the meaning set forth in Section 3.3. -2- 71910601.7 EFTA00283342  "Code" means the Internal Revenue Code of 1986, as amended. "Company" means the limited liability company named in the first paragraph of this Agreement. "Confidential Information" shall mean information not generally known or available outside the Company and information entrusted to the Company in confidence by third parties. Confidential Information with respect to the Company and its subsidiaries includes, without limitation, all inventions, technical data, trade secrets, know-how, research, product or service ideas or plans, developments, processes, formulas, techniques, mask works, designs and drawings, information relating to employees and other service providers of the Company (including, but not limited to, their names, contact information, jobs, compensation and expertise), information relating to suppliers and customers, information relating to Members or lenders, price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, historical financial data, budgets or other business information. "Contributing Members" shall have the meaning set forth in Section 5.2(b). "Disability" or "Disabled" shall have the meaning set forth in Section 4.6(d). "Distribution Date" shall have the meaning set forth in Section 10.3. "Economic Interest" means that portion of an Interest consisting of the right to participate in allocations of Income and Loss(es) of the Company and the right to receive distributions from the Company. "Event of Dissociation" shall mean the death, Disability, Bankruptcy, expulsion or dissolution of a Member; material breach of this Agreement by a Member; the Member has been arraigned, convicted or pleaded no contest to a felony, or any crime punishable by imprisonment; a change in control of more than fifty-one percent (51%) of the ownership interests of a Member that is partnership, joint venture, association, corporation, limited liability company, or other entity, in one transaction or a series of transaction; a change to the beneficiaries of a trust that is a Member that does not consist of one or more members of the immediate family of the Members (a Member's spouse, descendants (either by birth or adoption prior to age twelve (12) and ancestors) set forth on Schedule A as of the date hereof; or the retirement, resignation or other termination of employment of a Member who is also a Manager or an employee of the Company, or the occurrence of any other event that terminates the continued membership of a Member. "Income" and "Loss(es)" means taxable income or loss plus income exempt from federal income tax and reduced by any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), determined in accordance with the accounting methods followed by the Company for federal income tax purposes, adjusted to reflect book-tax disparities as required by Treasury Regulations §1.704-1(b)(2)(iv)(g). "Interest" means the entire ownership interest of a Member in the Company, including, without limitation, the Voting Percentage, if any, and Economic Interest of such Member, the -3- 71910601.7 EFTA00283343 right to act on matters submitted to the Members for action, the right to inspect books and records of the Company and any and all other rights and benefits to which a Member may be entitled. "Majority in Interest" means, unless the context otherwise requires, holders of a majority of the Voting Percentages of the Class A Members. "Manager(s)" means Jason Milligan and any other Person who becomes a substitute or replacement manager as permitted by this Agreement, in each such Person's capacity as a Manager of the Company. The plural term "Managers" shall include the singular and when only one Manager is serving the use of such plural term shall not require the appointment of one or more additional Managers. "Member(s)" means the Class A Member(s) and the Class B Member(s). The plural term "Members" shall include the singular, and when the Company only has one Member the use of such plural term shall not require the admission of one or more additional Members. "Non-Contributing Member" shall have the meaning set forth in Section 5.2(b). "Note" shall have the meaning set forth in Section 9.5(b). "Offer Notice" shall have the meaning set forth in Section 9.3(4. "Offered Interest" shall have the meaning set forth in Section 9.3(a). "Partnership Minimum Gain" means the aggregate of the amount of Income, if any, with respect to each nonrecourse liability of the Company, that would be realized by the Company if it disposed of (in a taxable transaction) the property subject to the liability in full satisfaction thereof, determined pursuant to Treasury Regulations § 1.704-2(d). "Percentage Interest" means, for each Member, that percentage determined by adding the Class A Interests held by such Member, as set forth on Schedule A annexed hereto, and the Class B Interest held such Member, as set forth on Schedule A. The sum of the Percentage Interests shall equal one hundred percent (100%). "Permitted Transfer" means a gift, bequest, sale or other transfer of an Interest or a part thereof to a member of the immediate family of a Member (defined for purposes of this Agreement as a Member's spouse, descendants (either by birth or adoption prior to age twelve (12) and ancestors) or to an express trust for the benefit of one or more members of the immediate family of a Member or to the beneficiaries of any trust that is a Member. "Permitted Transferee" means any Person who acquires an Interest in the Company in a Permitted Transfer as set forth in Article IX. "Person" means any individual, partnership, joint venture, association, corporation, limited liability company, trust or other entity. -4- 719109)1.7 EFTA00283344  "Restoration Amount" means the amount of any unconditional obligation of the Member to contribute additional amounts to the capital of the Company in the future, provided such obligation is required to be satisfied no later than the end of the Company taxable year in which such Member's interest is liquidated (or, if later, within ninety (90) days of such liquidation). "Secretary of State" means the Secretary of State of the State of Connecticut. "Supermajority in Interest" means, unless the context otherwise requires, holders of 66%% of the Voting Percentages. "Tax Matters Partner" shall have the meaning set forth in Section 8.1(b). "Transferred Interest" shall have the meaning set forth in Section 9.11(a). "Transferee" shall have the meaning set forth in Section 9.II(a). "Treasury Regulations" means the regulations (including any temporary regulations) issued under the Code by the Department of the Treasury, as they may be amended from time to time, or any applicable successor regulations. Reference herein to any particular section of the Treasury Regulations shall be deemed to refer to the corresponding provision of any applicable successor regulations. "Voting Percentage" shall have the meaning set forth in Section 3.3(O ARTICLE II Formation; Purposes; Offices; Agent; Term; Fees and Expenses; Securities Law 2.1 Formation and Name of Company. The undersigned Members do hereby agree to form and ratify the formation of a Connecticut limited liability company under the name "II Belden, LLC" pursuant to the Act. The actions of the Authorized Person in filing or causing to be filed with the Secretary of State the Certificate of Formation substantially in the form annexed hereto as Exhibit I are hereby ratified and approved. The Managers shall execute and file or record with the proper offices any other certificates or instruments required by any limited liability company act, fictitious name act or similar statute in effect from time to time. 2.2 Purpose. The purpose of the Company is to (i) acquire, own, hold, encumber, mortgage, invest in, operate, manage, maintain, repair, improve, lease, transfer, and sell real property in Connecticut, (ii) engage in all acts and activities incidental to the activities set forth in Sections 2.2(i), and (iiii) engage in any other lawful act or activity for which limited liability companies may be formed under the Act and as may be approved by the unanimous consent or vote of the Class A Members holding all of the Voting Percentages (collectively, the "Business"). 2.3 Principal Place of Business: Offices. The principal place of business for the Company shall be 9 Mott Avenue, Suite 107 Norwalk CT 06851, or such other place as the Managers may determine from time to time upon notice to the Members. The Managers may at any time establish other business offices within or without the State of Connecticut. -5- 71910601.7 EFTA00283345  2.4 Registered Office: Registered Agent. The address of the Company's registered office in the State of Connecticut is 9 Mott Ave, Suite 107, Norwalk CT 06850, or such other office as the Managers may designate from time to time. The registered agent for service of process shall be Corporation Service Company or such other Person as the Managers may designate from time to time. 2.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation with the Secretary of State. The existence of the Company shall be perpetual unless the Company is earlier dissolved in accordance with either the provisions of the Act or this Agreement. 2.6 Payment of Costs and Expenses. The Company shall pay all legal, accounting and administrative fees incurred in connection with the structuring and organization of the Company. 2.7 Securities Law. EACH MEMBER ACKNOWLEDGES THAT THE INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AS THEY ARE BEING ACQUIRED IN A TRANSACTION NOT INVOLVING A PUBLIC OFFERING, AND, UNDER SUCH LAWS, MAY NOT BE RESOLD OR TRANSFERRED BY ANY MEMBER WITHOUT APPROPRIATE REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH REQUIREMENTS. ARTICLE III Members; Voting Rights; Membership Interests; Conflicts of Interest; Confidentiality and Nondisclosure Obligations; Right of First Refusal; Meetings of Members 3.1 Members. Each of the Members shall be Members of the Company until they cease to be Members in accordance with the provisions of this Agreement or the Act. 3.2 Voting Rights. Except as may otherwise be provided by this Agreement, the Certificate of Formation and the Act, the Members shall not participate in the control or management of the business of the Company (except for any Member who is also a Manager). Except as may otherwise be provided by this Agreement, the Members are not agents of the Company and do not have the authority to act for, or bind, the Company in any matter. The voting rights of Class A Members and Class B Members shall be as set forth in Section 3.3. 3.3 Membership Interests. The Company shall initially have two classes of membership Interests: (i) class A limited liability company interests (the "Class A Interests"), and (ii) class B limited liability company interests (the "Class B Interests"). Subject to the unanimous vote or written consent of the Class A Members holding all of the Voting Percentages, the Managers may create additional classes of limited liability company interests. The Managers shall determine the characteristics, terms and conditions of any new classes of limited liability company interests, subject to the unanimous vote or written consent of the Class A Members holding all of the Voting Percentages. The rights and obligations of the holders of Class A Interests and Class B Interests shall be set forth in this Agreement. -6- 71910601.7 EFTA00283346  (a) The Company is authorized to issue Class A Interests to the Persons identified on Schedule A hereto as Class A Members, as set forth therein. Class A Interests shall be voting Interests, with the owners thereof entitled to vote generally with respect to all matters to be voted on by the Members as permitted under the Act and pursuant to the terms of this Agreement. The percentage voting interests of the Class A Members shall be as set forth on Schedule A hereto (the "Voting Percentage"). The sum of the Voting Percentages shall equal one hundred percent (100%). (b) The Company is authorized to issue Class B Interests to the Persons identified on Schedule A hereto as Class B Members, as set forth therein. Class B Interests shall be non-voting Interests, except as may be otherwise required under the Act. 3.4 Conflicts of Interest. (a) No Member shall use the Confidential Information of the Company for any purpose but the Business of the Company, the administration of the Member's Interest in the Company and the protection of the Member's rights as a Member. (b) Subject to the provisions of Sections 3.5 below, each of the Members may engage independently or with others in other business ventures of every nature and description, and neither the Company nor any other Member shall have any rights in and to such independent ventures or the income or profits derived therefrom. 3.5 Confidentiality and Nondisclosure Obligations. Each Member as a condition of membership in the Company and by the execution and delivery of this Agreement to the Company hereby agrees as follows: (a) During the period in which a Member is a Member of the Company, or at any time thereafter, the Member shall not disclose or make available to any Person any Confidential Information and shall not use or cause to be used any Confidential Information for any purpose other than fulfilling the Member's obligations or rights as a Member of the Company, without the express prior written authorization of the Company and a Supermajority in Interest. All records, files, and materials containing Confidential Information obtained by the Member are confidential and proprietary and shall remain the exclusive property of the Company or its affiliates, as the case may be. Upon the withdrawal of membership from the Company or at any time that the Member ceases to own any membership Interests of the Company (including Economic Interests), or at any time upon the request of the Company, the Member (or the Member's heirs, personal representatives, legal representatives or successors, as applicable) shall deliver to the Company all documents and materials containing Confidential Information. Any Confidential Information held in electronic form, including without limitation e-mails, electronic documents and images, shall be deleted and destroyed by the Member and the Member shall certify such deletion and destruction to the Company. (b) If the Member is required to disclose any Confidential Information by law or by administrative or judicial order or other legal process, then the Member shall (a) give the Company reasonable notice prior to disclosure to permit the Company to intercede with respect to such disclosure and (b) inform the recipient of the confidential and sensitive nature of the -7- 11910601.7 EFTA00283347 information sought and use reasonable efforts to cause the recipient to treat such information as confidential. (c) The Member acknowledges and agrees that Confidential Information is vital to the operations of the Company and its affiliates and that the loss suffered by breach of any of the provisions of this Section 3.5 cannot be reasonably or adequately compensated for by damages. In the event that the Member breaches any provision of this Section 3.5, the Company shall be entitled to equitable relief by way of injunction or otherwise, in addition to any other remedies the Company may have at law or in equity. (d) The provisions of this Section 3.5 shall be binding upon, and shall inure to the benefit of, the Company and the Members, and their respective heirs, personal and legal representatives, successors and permitted assigns. 3.6 Meetings of the Members. (a) The Annual Meeting of the Members shall be held on the third (3s) Tuesday of every May, or as determined from time to time by the Members, at the place, on the day, and at the hour designated in the call therefore. At such meeting, the Members shall transact such business as shall properly come before them. (b) Special meetings of the Members may be called by a Majority in Interest of the Members on at least five (5) days' prior notice. Notice of each special meeting of the Members shall be given by the Manager and shall state the place, date and hour of the meeting. Neither the business to be transacted at, nor the purpose of, the meeting of the Members need be specified in the notice or waiver of notice. The notice of meeting shall be given personally, by telephone, facsimile, email or other form of electronic transmission. (c) Any Member may participate in any meeting of the Members by conference telephone or similar communications equipment by which all persons participating in the meeting can hear each other and such Member will be deemed present in person at the meeting and all acts taken by him or her during his or her participation shall be deemed taken at the meeting. ARTICLE IV Management Rights and Duties 4.1 Management Generally. Subject to the provisions of this Agreement, the Certificate of Formation and the Act, the business and affairs of the Company shall be conducted, and all its powers shall be exercised, by or under the direction of the Managers. 4.2 Authority of Managers. Except as otherwise provided in this Agreement, the Certificate of Formation and the Act, the Managers shall have exclusive control of the business of the Company. If at any time the number of Managers is two (2), then any action to be taken by the Managers may be taken only by their unanimous approval, and if the number of Managers is three (3) or greater, any action to be taken by the Managers may be taken only upon the vote of a majority in number of the Managers. Jason Millihan is hereby appointed as the initial -8- 71910601.7 EFTA00283348 Manager of the Company until its successor has been elected and qualified or until its earlier resignation or removal by the Members. Without limiting the generality of the foregoing, but subject to Section 4.3 the Managers shall have the power and authority, on behalf of the Company, to take the following actions on behalf of the Company: (a) supervise and manage the business of the Company; (b) hire, appoint and remove at pleasure agents and employees of the Company, define their duties, fix their compensation, and enter into written agreements with such agents and employees; (c) enter into, make, perform and carry out all types of contracts, and execute any and all other instruments as they shall deem necessary or appropriate; (d) purchase, lease or otherwise acquire, or sell or dispose of any personal property in connection with or relating to the Business of the Company; (e) purchase, lease or otherwise acquire any real property or interest therein; (f) prepare all reports required by any governmental or administrative agency; (g) file, on behalf of the Company, all required local, state and federal tax returns, annual reports, and other documents relating to the Company; (h) cause the Company to carry such property and casualty, liability and other insurance as the Managers may deem necessary or appropriate; (i) cause the Company to purchase or bear the cost of any insurance covering the potential liabilities of the agents, officers and employees of the Company in carrying out their responsibilities for the Company; (j) make disbursements of money in the ordinary course of business; open, maintain, and close bank accounts and draw checks or other orders for the payment of monies; (k) open and close bank accounts; deposit any available cash with such banks, thrift institutions or other associations as the Managers may deem appropriate; invest any available cash in such other investments as the Managers may deem appropriate, and withdraw, pay, retain and distribute the Company's funds in a manner consistent with the purposes of this Agreement; (1) make such elections under the Code and other relevant tax laws as to the treatment of items of Company income, gain, loss and deduction, and as to all other relevant matters, as the Managers deem necessary or appropriate, including, without limitation, elections referred to in Section 754 of the Code, determination of which items of cash outlay are to be capitalized or treated as current expenses, and selection of the method of accounting and bookkeeping procedures to be used by the Company; -9- 71910601.7 EFTA00283349  (m) cause the Company to make distributions from time to time in accordance with Section 7.1; and (n) take any and all other action that is permitted under the Act and that is customary or reasonably related to the ordinary business of the Company; provided, however, that so long as there are two (2) Managers, either Manager shall have the authority to individually take the actions set forth in subsections (c), (d) and (j) in the annual aggregate amount of $5,000 without the consent of the other Manager. 4.3 Limitations on Authority. (a) Notwithstanding anything to the contrary in Section 4.2, the Managers shall not have the authority to take any of the following actions on behalf of the Company without the unanimous written consent or vote of the Class A Members holding all of the Voting Percentages: (1) issue any additional Interests or admit any new Members to the Company, except as set forth in Section 9.2 of this Agreement in connection with transfers to Permitted Transferees; (2) receive, buy, sell, exchange or otherwise dispose of Company interests; (3) amend the Certificate of Formation; provided, however, that any amendments that adversely affects the Class A Members or Class B Members shall not be amended without the approval of a majority of the issued and outstanding Class A Interests or Class B Interests, as the case may be; provided, further, that any amendment or modification that materially and adversely affects the rights of a Member in a manner that discriminates against such Member disproportionately vis-à-vis the other Members shall require the prior written consent of such Member; (4) modify, amend or alter the Business of the Company or engage in business activities not otherwise set forth in Section 2.2 of this Agreement; (5) purchase, lease or otherwise acquire any real property or interest therein in excess of Ten Thousand Dollars ($10,000) in any fiscal year; and (6) sell, lease, exchange or otherwise dispose of all or substantially all of the Company's assets; (7) merge, consolidate or otherwise provide for any business combination of the Company with any other limited liability company, corporation or other business entity; (8) dissolve the Company, except that the consent to dissolve the Company shall not be required if a Supermajority in Interest consents or votes to sell, lease, exchange or otherwise dispose of all or substantially all of the Company's assets; -10- /1910601./ EFTA00283350  (9) reorganize or convert to a form of entity other than a limited liability company; (10) make any election to be taxed as a corporation; (11) make any voluntary filing or consent to any involuntary filing against the Company under any Bankruptcy or insolvency law, or make a general Assignment for the benefit of creditors, or admit that the Company cannot pay its debts as they become due; and (12) bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust claims or demands of or against the Company. 4.4 Compensation of the Managers. The Managers shall be reimbursed for all reasonable and necessary expenses incurred on behalf of the Company. 4.5 Reliance by Third Parties. Persons dealing with the Company are entitled to rely conclusively upon the certificate of the Managers to the effect that the Managers are then acting as the Managers and upon the power and authority of the Managers as herein set forth. 4.6 Removal and Resignation of Managers; Appointment of Successor Managers. The Members agree as follows regarding the succession of Managers: (a) Each Manager shall hold office until death, dissolution, Bankruptcy, Disability, change of control of more than fifty-one percent (51%) of the ownership interest of a Manager (in one transaction or series of transactions), resignation, or removal for Cause by a Supermajority in Interest (excluding the vote or consent of the Manager to be removed, if a Member of the Company). "Cause" shall be defined as a determination by a Supermajority in Interest (excluding the vote or consent of the Manager to be removed, if a Member of the Company) that a Manager has (i) committed an act of embezzlement against the Company or any of its affiliates or employees of the Company, (ii) committed an act of fraud against the Company or any of its affiliates or employees of the Company, or any customers of or vendors to, the Company, (iii) materially violated the terms of Section 3.5, Confidentiality and Nondisclosure Obligations, or, (iv) been arraigned, convicted or pleaded no contest to a felony, or any crime punishable by imprisonment. (b) Any Manager may resign effective upon giving thirty (30) days written notice to the Members of the Company, unless the notice specifies a later time for the effectiveness of such resignation. Upon receipt of notice of resignation from the resigning Manager, the remaining Managers or, if none, a Majority in Interest, may notify the Manager of an earlier effective date for the resignation. (c) If any Manager is unable or unwilling to continue to serve as Manager, and one or more Managers remains, then the remaining Managers shall continue to serve as Managers. If at any time no Manager remains, then a Supermajority in Interest shall appoint one or more successor Managers. If no Person then holds Class A Interests, then holders of a majority of the issued and outstanding Class B Interests shall appoint one or more successor -II- 71910601.7 EFTA00283351 Manager. If at any time the Company has no Managers, then the Members shall act on behalf of the Company by a Supermajority in Interest. (d) For purposes of this Agreement, an individual shall be deemed to be "Disabled" or under a "Disability" if two (2) physicians certify in writing that the individual is incapable of managing his or her affairs. If a Manager dies or becomes Disabled, and such Manager is a Member, then such Manager's Interest in the Company shall automatically convert into a Class B Membership Interest (if is not already), without further action by the Members or the Manager. 4.7 Conflicts of Interest; Confidentiality and Nondisclosure Obligations; Right of First Refusal. Each Manager hereby agrees that that the obligations set forth in Sections 3.4 and 33, shall also apply to the Manager and that the term "Member" shall be replaced by "Manage?' as the context may require. 4.8 Officers; Delegation of Authority. The Managers may delegate their power and authority to one or more officers, employees or agents of the Company. The Managers may appoint a President, Secretary, Treasurer and such other officers as the Managers from time to time may deem appropriate and may set their compensation. The compensation of any officer who is also a Manager shall be approved by consent of a Majority in Interest. The duties of the officers of the Company shall be such as are traditionally associated with their respective offices in a Connecticut corporation and as may be prescribed from time to time by the Managers. Except to the extent officers are appointed and authority delegated hereunder, management authority shall remain with the Managers. The Managers may remove and replace officers at any time for any reason or for no reason. Any number of offices may be held by the same person, and the Managers may hold any such offices. 4.9 Annual Budget. The Managers shall develop for each fiscal year of the Company, a written budget and operating plan for such fiscal year. This applies once properties are stabilized. Prior to stabilization a working budget will be presented to all members prior to funding and will be amended periodically. ARTICLE V Capital Contributions 5.1 Initial Capital Contribution. The initial Capital Contribution of the Members as of the date of this Agreement are set forth on Schedule A hereto. 5.2 Additional Mandatory Capital Contributions. (a) Should the Company require additional funds for the Business of the Company in the determination of the Managers, then the Managers, in the manner of acting as set forth in Section 4.2(a), shall have the right to call upon the Members, subject to the limitations contained in this Section 5.2(a), to make additional Capital Contributions to the Company in proportion to their respective Percentage Interests at the time of such call. Notice of a call for additional capital shall be given to the Members not less than thirty (30) days prior to the date the capital is required. Such Capital Contributions shall require the approval of a -12- 71910601.7 EFTA00283352 Supermajority in Interest. Notwithstanding the foregoing, if there are two Managers, either Manager may call for Capital Contributions, which call shall not require the approval of a Supermajority in Interest, (i) to be used for repayment of bank loans approved by a Supermajority in Interest, or (ii) in amounts not to exceed $500,000 by all Members in the aggregate annually, to sustain the operations of the Business in the ordinary course of business. For the avoidance of doubt, the amounts that may be called in subsection (ii) above shall not exceed $500,000 in the aggregate for all calls in a year by either Manager regardless of which Manager makes such call. (b) The additional Capital Contributions contemplated under Section 5.2(a) shall be paid to the Company in immediately available funds within thirty (30) days of the date of written notice of the amount due. If any Member fails to contribute one hundred percent (100%) of such Member's required additional Capital Contributions within such thirty (30) day period (a "Non-Contributing Member") pursuant to Section 5.2(a), then the Members contributing one hundred percent (100%) of their required additional Capital Contributions (the "Contributing Members") may, in their sole discretion, by unanimous consent elect to loan to the Company in proportion to their respective Interests (excluding the Non-Contributing Member's Interest), unless otherwise agreed to by the Contributing Members, the capital of the Non- Contributing Member. The interest rate of such loan shall equal to five (5) percentage points over the prime rate as reported from time to time by The Wall Sweet Journal, Eastern Edition (or the average of such reported rates, if more than one), such rate to be adjusted on the first day of each month. Such loan shall be evidenced by a promissory note of the Company. If the Non- Contributing Member fails to pay the Company the full amount of such loan and accrued interest within one year of such loan, then the Non-Contributing Member's Interest in the Company shall automatically convert into a Class B Membership Interest (if is not already), without further action by the Members or the Manager. If the Non-Contributing Member pays to the Company the full amount of such loan and accrued interest within one year of such loan, then the Company shall immediately pay such amount over to the lending Members in proportion to their respective loans. If the Non-Contributing Member fails to pay to the Company the full amount of such loan and accrued interest within one year of such loan, the principal amount of such loan shall be autom