EFTA01093471.pdf

CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT CRYPT° CURRENCY PARTNERS II, LLC LIMITED LIABILITY COMPANY OPERATING AGREEMENT THE MEMBERSHIP INTERESTS IN THIS LIMITED LIABILITY COMPANY (THE "INTERESTS") HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT') OR QUALIFIED UNDER ANY STATE SECURITIES LAW. A HOLDER OF AN INTEREST MAY NOT SELL, PLEDGE, HYPOTHECATE OR OTHERWISE TRANSFER THAT INTEREST, OR ANY INTEREST IN THAT INTEREST (A "TRANSFER'), UNLESS THE HOLDER CAN DEMONSTRATE THAT THE PROPOSED TRANSFER WILL NOT VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY ANALOGOUS REQUIREMENTS OF APPLICABLE STATE LAW. IN ADDITION, UNDER THIS AGREEMENT, TRANSFERS OF INTERESTS (EVEN TRANSFERS THAT ARE PERMISSIBLE UNDER THE SECURITIES ACT AND APPLICABLE STATE LAW) GENERALLY REQUIRE THE GENERAL PARTNER'S CONSENT. EXCEPT IN EXTRAORDINARY CIRCUMSTANCES, LIMITED PARTNERS MAY NOT WITHDRAW ANY OF THE CAPITAL ATTRIBUTABLE TO THEIR INTERESTS. ACCORDINGLY, INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ACTIVE 203887215v-2 EFTA01093471  C0NFIDENTL4L SOLELY FOR INTENDED RECIPIENT [THIS PAGE INTENTIONALLY LEFT BLANK] ACTIVE X08872I5v.2 EFTA01093472  CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT TABLE OF CONTENTS Page ARTICLE I NAME, PURPOSE AND OFFICES OF COMPANY 1.1 Name 1 1.2 Purpose 1 1.3 Principal Offices 1 1.4 Registered Agent and Office 2 ARTICLE II TERM OF COMPANY 2 2.1 Term 2 2.2 Events Affecting a Member 2 2.3 Events Affecting the Managing Member 2 ARTICLE III NAME AND ADMISSION OF MEMBERS 2 3.1 Name And Address 2 3.2 Initial Closing Date; Admission Of Additional Members 2 ARTICLE IV CAPITAL. CONTRIBUTIONS, AND NONCON'IlUBUtNG MEMBERS 3 4.1 Capital Contributions Of The Members 3 4.2 Co-investment with Parallel Fund 4 4.3 Noncontributing Members 4 4.4 Early Termination of the Investment Period 6 ARTICLE V CAPITAL ACCOUNTS AND ALLOCATIONS OF PROM'S AND LOSSES 6 5.1 Capital Accounts 6 5.2 Allocation of Profit and Loss 6 5.3 Special Allocations 7 5.4 Income Tax Allocations 8 5.5 Tax Elections 9 ARTICLE VI COMPANY EXPENSES 9 6.1 Expenses 9 ARTICLE VII WITHDRAWALS BY AND DISTRIBUTIONS TO THE MEMBERS 10 7.1 Interest 10 7.2 Withdrawals By The Members 10 7.3 Members' Obligation To Repay Or Restore 10 7.4 Distributions — General Principles 10 7.5 Amounts and Priority of Distributions 11 7.6 Tax Distributions 11 7.7 Withholding Obligations. 12 7.8 Limitation on Distributions 12 7.9 Mandatory Withdrawal. 12 7.10 Reallocation In the Event of Default or Withdrawal 13 ARTICLE VIII MANAGEMENT DUTIES AND RESTRICTIONS 13 8.1 Management 13 8.2 No Control by the Members; No Withdrawal 14 8.3 Activities of the Managing Member. 14 8.4 No Removal of Managing Member 15 ACTIVE 203887215v2 EFTA01093473 ARTICLE IX TRANSFER OF MEMBERSHIP INTERESTS 15 9.1 Transfer by Managing Member; Withdrawal 15 9.2 Transfer by Member 15 9.3 Requirements for Transfer 15 9.4 Substitution as a Member 16 9.5 Expenses of Transfer 16 ARTICLE X DIsscn.0 17UN AND LIQUIDATION OF THE COMPANY 16 10.1 Dissolution 16 10.2 Winding Up Procedures 16 10.3 Final Distribution 17 10.4 Liquidating Trust 17 ARTICLE XI FINANCIAL ACCOUNTING, REPORTS, VOTING AND CONFIDENTIALITY 17 11.1 Financial Accounting; Fiscal Year 17 11.2 Supervision; Inspection Of Books 18 11.3 Quarterly Reports 18 11.4 Annual Report; Financial Statements of the Company 18 11.5 Tax Returns and Information 18 11.6 Tax Matters Member. 18 11.7 Voting 19 11.8 Confidential Information 19 ARTICLE XII VALUATION 20 12.1 Valuation 20 ARTICLE XIII OTHER PROVISIONS 20 13.1 Governing Law 20 13.2 Limitation of Liability of the Members 20 13.3 BRISA Members 20 13.4 Private Foundation Members 21 13.5 Exculpation. 21 13.6 Indemnification. 22 13.7 Execution 22 13.8 Other Instruments and Acts 22 13.9 Binding Agreement 22 13.10 Notices 22 13.11 Power of Attorney 22 13.12 Amendment; Waiver. 23 13.13 Entire Agreement 24 13.14 Titles; Subtitles 24 13.15 Company Name 24 13.16 Legal Counsel 24 13.17 Arbitration; Jurisdiction 25 13.18 Severability 25 13.19 Interpretation 26 ARTICLE XIV CERTAIN DEFINITIONS 26 ACTIVE 2038872 5v.2 EFTA01093474  C0NFIDENTL4L SOLELY FOR INTENDED RECIPIENT CRYPTO CURRENCY PARTNERS, LLC LIMITED LIABILITY COMPANY OPERATING AGREEMENT THIS LIMITED COMPANY AGREEMENT (this "Agreement") of CRYPTO CURRENCY PARTNERS II, LLC (the "Compaty) is made and entered into as of October , 2014 (the "Effective Date'), by and among: (i) BLOCKCHAIN CAPITAL, LIZ, a Delaware limited liability company (the "Managing Membe?); and (ti) [ ] (the "Initial Non-Managing Menthes") and any other parties admitted as members of the Company in accordance with this Agreement (collectively with the Managing Member and the Initial Non-Managing Member, the "Member?). WITNESSETH: WHEREAS, the Company was formed pursuant to the provisions of the Delaware Limited Liability Company Act, as amended from time to time (the "Ad') upon the filing of a certificate of formation filed in the office of the Secretary of State of the State of Delaware dated as of October 2014. WHEREAS, the parties desire to enter into this Agreement to: (1) set forth their respective interests, rights, powers, authority, duties, responsibilities, liabilities, and obligations in and with respect to the Company, as well as the respective interests, rights, powers, authority, duties, responsibilities, liabilities; and (2) provide for the management and conduct of the business and affairs of the Company. NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I NAME, PURPOSE AND OFFICES OF COMPANY 1.1 Name. The name of the Company is "Crypto Currency Partners II, LLC". The affairs of the Company shall be conducted under the Company name or such other name as the Managing Member may, in its discretion, determine. 1.2 Purpose. The purpose of the Company is to make investments ("Portfolio Innertmentr") in privately held, early stage companies involved in the crypto currency industry (as broadly defined), as well as in other related industries, and in Crypto Currencies. The Company will have the power to do any and all acts necessary, appropriate, desirable, incidental or convenient to or for the furtherance of the purposes described in this Section 1.2, including any and all of the powers that may be exercised on behalf of the Company by the Managing Member pursuant to this Agreement. In furtherance of these purposes, the Company may exercise all rights, powers, privileges, and other incidents of ownership or possession with respect to Portfolio Investments held or owned by the Company; enter into, make, and perform all contracts and other undertakings related to the foregoing; and engage in all related activities and transactions as may be necessary, advisable, or desirable to carry out the foregoing, as determined by the Managing Member. 1.3 Principal Offices. The principal office of the Company is located at 1 Ferry Building, Suite 255, San Francisco, California 94111, or such other place or places as the Managing Member may from time to time designate. ACTIVE 2038£O215v1 CRITTO CURRENCY PARTNERS g LLC Operating Asfrenvent—Page EFTA01093475  CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT 1.4 Registered Agent and Office. The name of the registered agent for service of process of the Company and the address of the Company's registered office in the State of Delaware is Incorporating Services, Ltd., 3500 South Dupont Highway, Dover, Delaware 19901 or such other agent or office in the State of Delaware as the Managing Member may from time to time designate. ARTICLE II TERM OF COMPANY 2.1 Term. The term of the Company commenced upon the date of fling of the Certificate of Formation of the Company with the Secretary of State of Delaware and shall continue until the Company is dissolved pursuant to Section 10.1. 2.2 Events Affecting a Member. The death, temporary or permanent incapacity, insanity, incompetency, bankruptcy, liquidation, dissolution, reorganization, merger, sale of all or substantially all of the stock or assets of, or other change in the ownership or nature of a Member shall not dissolve the Company. 2.3 Events Affecting the Managing Member. Except as described in Section 10.1(c), changes in the ownership or nature of the Managing Member shall not cause the dissolution of the Company, and upon the happening of any such event, the affairs of the Company shall be continued automatically by a successor entity formed by the continuing members of the Managing Member or by the remaining manager(s) of the Company, if any. ARTICLE III NAME AND ADMISSION OF MEMBERS 3.1 Name And Address. The Managing Member shall cause the books and records of the Company to be amended from time to time to reflect the addresses of each Member and changes thereto and the transfer of Interests and changes in Capital Commitments that are accomplished in accordance with the provisions hereof. 3.2 Initial Closing Date; Admission Of Additional Members. (a) As of the Effective Date, the Managing Member and the Initial Non- Managing Member were the sole members of the Company. Additional persons may be admitted as Members, and existing Members may increase their Capital Commitment to the Company (in each case, a "later-admitted Mond) at one or more closings (each, a "Cksing') only with the consent of both the Managing Member and the Initial Non-Managing Member. (b) Any later-admitted Member may be required to make a Capital Contribution of up to such later-admitted Member's pro rata share, based on the Members' respective Capital Commitments, of all Capital Contributions made by earlier-admitted Members (taking into account the Capital Commitments of other later-admitted Members admitted at the applicable Closing and any distributions made to the earlier-admitted Members) ("Catch-Up Contributions"). Catch-Up Contributions may (in the Managing Member's discretion) be retained by the Fund, or distributed (in whole or in pan) to the Members in proportion to their Percentage Interests. Catch- Up Contributions distributed to Members shall be added back to their respective Unfunded Capital Commitments and be subject to recall by the Managing Member pursuant to Article IV. (c) Each later-admitted Member shall participate in all of the Company's Portfolio Investments and bear its share of all Organizational Expenses and Company Expenses in accordance with its Percentage Interest, as if such later-admitted Member had been admitted as of CRMID CURRENCY PARTNERI Operating Agnomen/ —Page 2 ACTIVE 3138872I 5v.2 EFTA01093476  CONFIDENTL4L SOLELY FOR INTENDED RECIPIENT the Initial Closing Date. The Managing Member shall adjust the Percentage Interests of the Members as necessary to take into account Capital Commitments from later-admitted Members. (d) Each additional person admitted as a Member shall execute and deliver to the Company any document(s) deemed appropriate by the Managing Member, including a counterpart of this Agreement. ARTICLE IV CAPITAL CONTRIBUTIONS, AM) NONCONTRIBUTING MEMBERS 4.1 Capital Contributions Of The Members. (a) The Managing Member may require each Member to make one or more Capital Contributions in an amount equal to all or any portion of such Member's Unfunded Capital Commitment by providing a written notice to such Member pursuant to Section 4.1(b) (a "Capita/ Call') prior to the date on which such Capital Contribution shall be due (the "Ca!/ Date"). All Capital Contributions must be submitted by wire transfer or check in the form of cash; provided that the Managing Member may permit Members to contribute Crypto Currencies or other non-cash assets in the Managing Member's discretion. The Managing Member shall determine the value of any non- cash assets contributed in accordance with Section 12.1 as of the applicable Call Date; provided, that the value of any non-cash assets contributed by the Managing Member pursuant to Section 4.2 shall be determined in accordance with that section. The Company may assess a special charge against the Member contributing non-cash assets equal to the actual costs the Company incurs in connection with accepting such assets, including the costs of liquidating those assets, adjusting the Company's portfolio to accommodate them, or performing special tax-related accounting functions. Any such special charge may be assessed as of the Call Date on which the assets are contributed or as of the end of the Period in which the Company incurred them. Such special charge shall not be treated as a Capital Contribution and shall not reduce the contributing Member's Unfunded Capital Commitment. Each Member's Capital Commitment may be used for all Company purposes permitted herein. Except as otherwise provided in Section 4.1(c) below, no Capital Calls shall be issued after the expiration of the Investment Period. (b) A Capital Call shall be in the form of a written notice given to all Members in any manner permitted by Section 13.10 at least 10 Business Days before the Call Date, provided, that such prior written notice shall not be required in connection with any Capital Contribution to be made at a Closing. A Capital Call shall specify, the dollar amount required to be contributed by the relevant Member, and the Call Date, and each Member shall be required to make a Capital Contribution in the amount specified on that Call Date. The Managing Member may amend, delay or rescind Capital Calls at any time prior to the relevant Call Date. The amendment, delay or rescission of a Capital Call shall not affect or abridge the right of the Managing Member to issue any subsequent Capital Call. The Managing Member will generally be entitled to determine each Member's share of each Capital Call in its discretion; provided, that (for the avoidance of doubt, and notwithstanding anything to the contrary contained in this Agreement) no Member will be required to contribute more than his, her or its Unfunded Capital Commitment in response to any Capital Call. In addition, the Managing Member generally intends to "normalize" the Members' Capital Contributions so that the aggregate amount of capital contributed by the Members over the Investment Period will be in proportion to their respective Percentage Interests by the end of the Investment Period. Accordingly, any Member who, as of any Call Date, has contributed aggregate amounts in excess of his, her or its Percentage Interest of all Capital Contributions previously made by the Members may be excused (by the Managing Member, in its discretion) from making additional Capital Contributions until that excess is eliminated; similarly, any Member who has contributed less 01191D CURRENCI" PARTNERI' it Operating Agrertni —Page 3 ACTIVE 20.3887215v1 EFTA01093477  CONFIDENTL4L SOLELY FOR INTENDED RECIPIENT than his, her or its Percentage Interest of all such Capital Contributions may be required to make Capital Contributions in excess of his, her or its Percentage Interest until that shortfall is eliminated. (c) During the Harvesting Period, the Managing Member may only issue Capital Calls for the purpose of: (i) paying ongoing Organizational Expenses, Company Expenses and liabilities (or the establishment of reserves for such amounts); (ii) making investments that are in process as of the end of the Investment Period; (iii) making follow-on investments in existing Portfolio Investments; or (iv) enabling the Company to acquire a Defaulting Member's Interest pursuant to Section 4.2(b) below. 4.2 Co-investment with Para/lel Fund. For so long as the Investment Period and Harvesting Period coincide with the investment period and harvesting period of the Parallel Fund, respectively, the Managing Member will use commercially reasonable efforts to cause the Company to make Portfolio Investments, and to dispose of Portfolio Investments, contemporaneously and on part pasta terms with the Parallel Fund (with the understanding that the Company and the Parallel Fund will, to the extent practicable, participate in each such Portfolio Investment pro rata based on their available capital at the time of investment, as reasonably determined by the Managing Member). 4.3 Noncontributing Members. (a) The Company shall be entitled to enforce the obligations of each Member to make cash contributions up to the total amount of such Member's Capital Commitment and to pay back distributions as required herein, and the Company shall have all remedies available at law or in equity in the event any such contribution or payment is not so made, including the right for the Company to apply proceeds that otherwise would be distributed to a noncontributing Member toward any delinquent contributions or required return of distributions (the "Wendt Amount'), or any costs or expenses described below. The Members agree that the Company's choice of remedies, including the remedies set forth in Sections 4.3(b) and 4.3(d) below, shall be at the Managing Member's sole discretion and shall be binding upon the other Members and the Company without any liability to the Managing Member. A noncontributing Member may, at the Managing Member's discretion, be required to pay all costs and expenses incurred by the Company in enforcing such Member's contribution obligation, including attorneys' fees. Amounts so paid pursuant to the immediately preceding sentence shall not be treated as Capital Contributions and shall not reduce the noncontributing Member's Unfunded Capital Commitment. (b) Without limiting any right of the Company pursuant to Section 4.3(a) above, if any Member fails to make any of the contributions or payments when due, the Managing Member may, at its option, declare the Member to be in default (such event, an "Event of Default' and such Member, a "Defaulting Member"). The Managing Member shall provide such Defaulting Member notice of its default, which may give rise to the consequences set forth in this Section 4.3(b) and Section 4.3(d). In such case, the Managing Member, in its sole discretion, may elect one or more of the following remedies (or any combination thereof): (i) cause the Defaulting Member to forfeit its right to participate in any Portfolio Investments made after the Event of Default•, cause the Defaulting Member to transfer all of its Interest to one or more Non-Defaulting Members selected by the Managing Member, which have agreed to purchase such Interest, effective immediately, at a transfer price equal to the lesser of (A) 50% of such Defaulting Member's Capital Account or (B) 50% of the Fair Market Value of the Defaulting Member's Interest, determined by the Managing Member in accordance with Section 12.1. In such case, the Defaulting Member shall be treated as having no further Interest, and shall no longer be a Member; CRITMD CURRENCY PARTNERS II, LW Operating Agnomen/ —Page 4 ACTIVE 3138872 I 5v.2 EFTA01093478  C0NFIDENTL4L SOLELY FOR INTENDED RECIPIENT cause the Defaulting Member to sell all of its Interest to one or more third parties at a price determined by the Managing Member in its sole discretion to be fair and reasonable under the circumstances (which determination shall be final and binding on the Defaulting Member). Such Person or Persons shall, after executing such instruments and delivering such opinions and other documents as are in form and substance satisfactory to the Managing Member, be admitted to the Company as a substituted Member or Members with respect to such Interest, and shown as such on the books and records of the Company. In the case of a forced sale pursuant to this Section 4.3(b)(iii), the Defaulting Member shall be entitled to receive 50% of the proceeds of such forced sale, after deduction for any expenses incurred by the Company resulting from its default, and the Company shall be entitled to receive the remaining portion of such proceeds for distribution to the Non-Defaulting Members in a fair and equitable manner as determined in good faith by the Managing Member. After giving effect to any forced sale pursuant to this Section 4.3(b)(iii), the Defaulting Member shall be treated as having no further Interest, and shall no longer be a Member; and/or (iv) cause the Defaulting Member to (x) forfeit up to 50% of its Capital Account balance and (y) limit any future distributions of Current Proceeds and Disposition Proceeds to the Defaulting Member to amounts attributable to that reduced Capital Account balance and any future Capital Contributions. The amount of the Capital Account balance forfeited (and the right to future distribution of Capital Proceeds and Disposition Proceeds attributable thereto) shall be reallocated to the Non-Defaulting Members in accordance with their respective Percentage Interests. If the Managing Member exercises its remedies under this Section 4.3(b)(iv) in respect of an Event of Default, the Defaulting Member shall not be relieved of its obligation to make Capital Contributions subsequent to such Event of Default. (c) Any distribution or payment to a Defaulting Member pursuant to Section 4.3(b) may, in the sole discretion of the Managing Member, be made in cash, in the form of a promissory note of the Company (bearing no interest), or any combination thereof. (d) At any time after an Event of Default, the Managing Member may, in its sole discretion, take any or all of the following actions with respect to the Default Amount•. (i) cause the Members to make additional Capital Contributions (not in excess of their Unfunded Capital Commitment) in proportion to their respective Percentage Interests to fund the Default Amount•, cause the Company to borrow funds to cover the Default Amount (including from the Managing Member); Oil) increase its own Capital Contribution to fund the Default Amount; or (iv) institute proceedings on behalf of the Company to recover the Default Amount, in which case the Defaulting Member shall be liable for all costs and expenses incurred by the Company in enforcing such the Default Amount, including attorneys fees. (e) If the Managing Member elects to take the action specified in Section 4.3(d)(i), the Managing Member shall make an additional Capital Call in accordance with Section 4.1 to the Non-Defaulting Members. (1) Each Member hereby agrees that the charging of expenses to a Defaulting Member and/or the buy-out or transfer of a Defaulting Member's Capital Account pursuant to the CRYPT° CURRENCY PARTNERIit 11-C Operating Agrertni —Pages ACTIVE 203887215v1 EFTA01093479  C0NFIDENTL4L SOLELY FOR INTENDED RECIPIENT above provisions of this Section 4.3 represent liquidated and agreed upon current damages to the Non-Defaulting Members for the default (it being agreed that it would be difficult to fix the actual damages to the Non-Defaulting Members). Each Member further agrees that the aforesaid liquidated damages provision constitutes reasonable compensation to the Company and its Non- Defaulting Members for the additional risks and damages sustained by them when and if any Member shall default on an obligation to pay any Capital Contribution when due. 4.4 Barbi Termination of the Investment Period. The Managing Member at any time may terminate the Investment Period if, in the good faith judgment of the Managing Member, changes in applicable law, regulation, case law, judicial or administrative order or decree or governmental license or permit, or any interpretation thereof by any governmental or regulatory authority or court of competent jurisdiction, or in business conditions, make such termination necessary or advisable in the interests of the Company or any of the Members. ARTICLE V CAPITAL ACCOUNTS AND ALLOCATIONS OF PROFITS AND LOSSES 5.1 Capital Accounts. (a) A separate capital account (the "Capital Account') shall be established and maintained for each Member. The Capital Account of each Member shall be credited with such Member's Capital Contributions to the Company, all Profits allocated to such Member pursuant to Section 5.2 and any items of income or gain that are specially allocated pursuant to Section 5.3 or otherwise pursuant to this Agreement; and shall be debited with all Losses allocated to such Member pursuant to Section 5.2, any items of loss or deduction of the Company specially allocated to such Member pursuant to Section 5.3 or otherwise pursuant to this Agreement, and all cash and the Adjusted Asset Value of any property (net of liabilities assumed by such Member and the liabilities to which such property is subject) distributed by the Company to such Member. To the extent not provided for in the preceding sentence, the Capital Accounts of the Members shall be adjusted and maintained in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(v), as the same may be amended or revised, and the provisions of this Agreement shall be interpreted consistently therewith; provided, howder that such adjustment and maintenance does not have a material adverse effect on the economic interests of the Members. Any references in any section of this Agreement to the Capital Account of a Member shall be deemed to refer to such Capital Account as the same may be credited or debited from time to time as set forth above. In the event of any transfer of any Interest in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest. (b) Except as may arise solely by reason of the operation of Section 13.6(b), no Member shall be required to pay to the Company or to any other Member the amount of any negative balance that may exist from time to time in such Member's Capital Account, including at the time of liquidation of the Company. 5.2 Allocation of Profit and Loss. Except as otherwise provided in this Agreement, Profits and Losses (and, to the extent necessary, individual items of income, gain, loss and deduction) for any Fiscal Period shall be allocated among the Members in a manner such that the Capital Account of each Member, immediately after making such allocation and after taking into account amounts specially allocated pursuant to Section 5.3 or any other provision of this Agreement, is, as nearly as possible, equal (proportionately) to (i) the distributions that would be made to such Member pursuant to Section 7.5 if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Adjusted Asset Value, all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Adjusted Asset Value of the assets securing such liability), norm CURRENCY PARTNERS11, tic °Attains Agawam/ —Pay 6 ACTIVE 3138872 I 5v.2 EFTA01093480  CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT and the net assets of the Company were distributed in accordance with Section 7.5 to the Members immediately after making such allocation, mimes 00 such Member's share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets. The Managing Member shall be entitled to adjust the allocations of Profits and Losses (and items thereof) to take into account any of the economic provisions of this Agreement, including the timing and amount of actual distributions to the Members; provided, &mem that any such adjustment shall not affect the amount distributable to a Member pursuant to this Agreement. 5.3 Special Allocations. Notwithstanding the foregoing, the allocations provided in this Article V shall be subject to the following exceptions: (a) Minimum Gain Chmgeback. Notwithstanding any other provision in this Article V, if there is a net decrease in Company Minimum Gain or Member Nonrecourse Debt Minimum Gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(0) during any Company taxable year, the Members shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to their respective shares of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2® and 1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(0. This Section 5.3(a) is intended to comply with the minimum gain chargeback requirements in such Treasury Regulations Sections and shall be interpreted consistently therewith; including that no chargeback shall be required to the extent of the exceptions provided in Treasury Regulations Sections 1.704-20) and 1.704-2(i)(4). (b) Quabfied Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation Section 1.704- 1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the deficit balance in his Capital Account created by such adjustments, allocations or distributions as promptly as possible. This Section 5.3(b) is intended to comply with the "qualified income offset" requirement in such Regulation section shall be interpreted consistently therewith. (c) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Fiscal Period that is in excess of the sum of: (i) the amount such Member is obligated to restore, if any, pursuant to any provision of this Agreement•, and (i) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1) and 1.704-20)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided, however that an allocation pursuant to this Section 5.3(c) shall be made only if and to the extent that a Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Section 5.3(c) have been tentatively made as if Section 5.3(b) and this Section 5.3(c) were not in this Agreement. (d) Nonrecourse Deductions. Nonrecourse Deductions shall be allocated to the Members in proportion to their Capital Contributions with respect to the related Portfolio Investment. (e) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any Fiscal Period shall be allocated to the Member who bears the economic risk of loss with respect to the liability to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(j). CRYPTD CURRENCI" PARTNERT 11,11-C Operating Agirentatt —Page 7 ACTIVE 203887215n2 EFTA01093481  CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT Curative Allocations. If any special allocations are made under Sections 5.3(a), (b), (c), (d), or (e) (the "Regulate°, Allocations') the Managing Member may take such Regulatory Allocations into account in making subsequent allocations of Profits or Losses (or items thereof), and may make such further special allocations as may be necessary or appropriate so as to prevent such Regulatory Allocations from distorting the manner in which Company distributions will be divided among the Members pursuant to this Agreement. (g) Managing Member Expenses. To the extent, if any, that Managing Member Expenses and any items of loss, expense or deduction resulting therefrom are deemed to constitute items of Company loss or deduction rather than items of loss or deduction of the Managing Member, such Managing Member Expenses and other items of loss, expense or deduction shall be allocated 100% to the Managing Member. (h) Psyee Allocation. In the event any payment to any person that is treated by the Company as the payment of an expense is recharacterized by a taxing authority as a Company distribution to the payee as a partner, such payee shall be specially allocated an amount of Company gross income and gain as quickly as possible equal to the amount of the distribution. 5.4 Income Tax Allocations. (a) Except as otherwise provided in this Section 5.4 or as otherwise required by the Code and the rules and Treasury Regulations promulgated thereunder, a Member's distributive share of Company income, gain, loss, deduction, or credit for income tax purposes shall be the same as the adjustments to the Member's Capital Account pursuant to this Agreement. (b) In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any asset contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Adjusted Asset Value, using any method under Treasury Regulation 1.704-3 as the Managing Member determines to be fair and reasonable. (c) In the event the Adjusted Asset Value of any Company asset is adjusted pursuant to the terms of this Agreement, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Adjusted Asset Value in the same manner as under Code Section 704(c) and the Treasury Regulations thereunder, in a manner that the Managing Member determines to be fair and reasonable. (d) No Member shall fde a notice with the Internal Revenue Service under Section 6222(6) of the Code in connection with such Member's intention to treat an item on such Member's federal income tax return in a manner which is inconsistent with the treatment of such item on the Company's federal income tax return unless such Member has, not less than 30 days prior to the filing of such notice, provided the tax matters partner with a copy of the notice and thereafter in a timely manner provides such other information related thereto as the tax matters partner shall reasonably request. (e) All matters concerning the determination and allocation among the Members of the amounts to be determined and allocated pursuant to this Agreement, including the items of income, gain, deduction, loss and credit to be determined and allocated pursuant to Sections 5.2, 5.3 and 5.4, and including the taxes thereon and accounting procedures applicable thereto, shall be determined by the Managing Member unless specifically and expressly otherwise Cauca CURRENCY PARTNERS ll, [IC Operating Agawam/ —Page 8 ACTIVE 3B5872 I 5v.2 EFTA01093482  CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT provided for by the provisions of this Agreement, and such determinations and allocations shall be final and binding on all the Members. 5.5 Tax Elections. Each Member hereby agrees and covenants that it shall not make an election under Code Section 732(d) with respect to property distributed to it by the Company without the prior written consent of the Managing Member. The Managing Member may, but shall not he obligated to, cause the Company to make an election under Code Section 754 or an election to be treated as an "electing investment partnership" within the meaning of Code Section 743(e) or any other election for the Company as determined in the Managing Member's sole discretion. If the Company elects to be treated as an electing investment partnership, each Member shall (a) reasonably cooperate with the Company to maintain such status, (b) not take any action that would be inconsistent with such election, (c) provide the Managing Member with any information necessary to allow the Company to comply with its obligations under Sections 734 or 743 of the Code and its tax reporting and other obligations as an electing investment partnership and (d) provide the Managing Member and such Member's transferee, promptly upon request, with the information required to be furnished to the Company or such transferee, including such information as is necessary to enable the Company and such transferee to compute the amount of losses disallowed under Code Section 743(e), but in no event shall such Member be required to provide such information prior to its receipt of its Schedule K-1 for such taxable year, except to the extent of information, if any, required by the Company to complete its Schedule K-ls. Regardless whether the Company makes the election to be an electing investment partnership, promptly upon request, each Member shall provide the Managing Member with any information related to such Member necessary to allow the Company to (i) make any tax basis adjustments under Sections 734 or 743 of the Code (in the event the Managing Member makes a Code Section 754 election) and (i) to comply with any other tax reporting obligations of the Company. ARTICLE VI COMPANY EXPENSES 6.1 Expenses. (a) The Managing Member shall bear all normal operating expenses incurred by it and the Company in connection with the management of the Company. Such normal operating expenses shall include expenditures on account of salaries, compensation or fringe benefits for its direct employees, overhead expenses of the Managing Member or its direct employees, including rent and general office expenses, and other expenses incurred with respect to the Company's operations. (b) The Company shall bear all costs and expenses incurred in connection with carrying on the business of the Company (collectively, "Compnig Expense!), including: (i) all out-of- pocket fees, costs and expenses (including legal, accounting and other professional fees) directly related to the negotiation, consummation, making, management, valuation, holding and disposition of Portfolio Investments; (i) all out-of-pocket expenses directly related to the purchase or sale of proposed Portfolio Investments that are not consummated; (ii) all administrative expenses of the Company such as the costs of the annual audit and the preparation and distribution of financial, tax and other reports to Members and other legal and accounting expenses; (iv) expenses relating to meetings of Members; (v) insurance, indemnification or litigation expenses; (w) any taxes, fees or other governmental charges levied against the Company; (vii) expenses of liquidating the Company; (vii) expenses incurred by the tax matters partner; (ix) any other expenses incurred by the Managing Member for or on behalf of the Company. To the extent that any such costs or expenses are incurred for the benefit of the Company, the Parallel Fund and/or any other client of the Managing Member (or any of its Affiliates), the Managing Member shall make a good faith allocation of such costs or expenses between the Company, the Parallel Fund and/or such clients. Onvm CURRENCI" PARTNERI it Operafing Agnratestt —Page 9 ACTIVE 203887215v-2 EFTA01093483  CONFIDENTIAL SOLELY FOR INTENDED RECIPIENT (c) The Company and the Parallel Fund shall each bear their pro rain share (as determined in good faith by the Managing Member) of all organizational and syndication costs, placement and other fees, and expenses incurred by or on behalf of the Managing Member, the Company or the Parallel Fund in connection with the formation and organization of the Company and the Parallel Fund, including legal, accounting and any other fees or expenses incident thereto ("Organizational Expense!). ARTICLE VII WITHDRAWALS BY AND DISTRIBUTIONS TO THE MEMBERS 7.1 Interest. No interest shall be paid to any Member on account of its interest in the capital of or on account of its investment in the Company. 7.2 Withdrawals By The Members. No Member may withdraw any amount from its Capital Account unless such withdrawal is made pursua