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HomeMy WebLinkAboutThree Pillar Communities LLC Operating Agreement Signed Page 1 of 25 THREE PILLAR COMMUNITIES LLC LIMITED LIABILITY COMPANY AGREEMENT This LIMITED LIABILITY COMPANY AGREEMENT is made and entered into as of August 23, 2017, by and between those persons who have executed this Agreement or a counterpart hereof. The parties hereto, intending to be legally bound, do hereby agree as follows: ARTICLE I ORGANIZATION 1.1 Formation of Limited Liability Company. On August 23, 2017, the parties hereto organized a Delaware limited liability company (the “Company”) pursuant to the Act, as hereinafter defined. The Certificate of Formation as filed by John P. Feeney, is hereby adopted and ratified by the Members. In the event of a conflict between the terms of this Agreement and the terms of the Certificate of Formation, the terms of the Certificate of Formation shall prevail. 1.2 Name. The business of the Company shall be conducted under the name “Three Pillar Communities LLC ” or such other name as the Members may unanimously vote to designate in writing from time to time. 1.3 Principal Office, Registered Office and Registered Agent. The principal business office of the Company shall initially be c/o Joel Kelman, 110 Strathmore Road, PH2, Brighton MA 02135. The Company’s registered office and its initial registered agent shall be as provided in the Certificate of Formation. The Members by unanimous vote may change the principal office, registered office or registered agent of the Company or establish additional offices. 1.4 Purposes and Powers. The principal business activity of the Company shall be the real estate investment, management and operation, and any business related thereto or useful in connection therewith. However, the business and purposes of the Company shall not be limited to its initial principal activity and, unless the Managers determine otherwise, it shall have authority to engage in any other lawful business, purpose or activity permitted by a limited liability company formed under the Act, and it shall possess and may exercise all of the powers and privileges granted by the Act, including without limitation: (a) to purchase, receive, take, lease or otherwise acquire, own, hold, improve, maintain, use or otherwise deal in and with, sell, convey, lease, exchange, transfer or otherwise dispose of, mortgage, pledge, encumber or create a security interest in all of its real or personal property, or any interest therein, wherever situated; (b) to borrow or lend money or obtain or extend credit and other financial accommodations, to invest and reinvest its funds in any type of security or obligation of or interest in any public, private or governmental entity, and to give and receive interests in real and personal property as security for the payment of funds so borrowed, loaned or invested; Page 2 of 25 (c) to make contracts, including contracts of insurance, incur liabilities and give guaranties, whether or not such guaranties are in furtherance of the business and purposes of the Company, including without limitation, guaranties of obligations of other persons who are interested in the Company or in whom the Company has an interest; (d) to appoint one or more Managers of the Company, to employ officers, employees, agents and other persons, to fix the compensation and define the duties of and obligations if such personnel to the extent permitted by this Agreement and the Act; (e) to make donations irrespective of the benefit to the Company for the public welfare or for community, charitable, religious, educational, scientific, civic or similar purposes; (f) to institute, prosecute and defend any legal action or arbitration proceeding involving the Company, and to pay, adjust, compromise, settle or refer to arbitration any claim by or against the Company or any of its assets; and (g) to merge or consolidate with or into any limited liability company or other business entity in accordance with the provisions of the Act. 1.6 Foreign Qualification. The Managers shall cause the Company to comply, to the extent legally possible, with all requirements necessary to qualify the Company as a foreign limited liability company in each jurisdiction in which the Company conducts business. To the extent required by law or as the Managers determine is otherwise advisable, the Managers shall execute, acknowledge, swear to and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue and terminate the Company as a foreign limited liability company in all jurisdictions in which the Company conducts business. 1.7 Fiscal Year. The fiscal year of the Company shall be the calendar year or such other fiscal year as the Managers shall determine pursuant to the provisions of Section 706(b) of the Code. 1.8 Term. The term of the Company commenced on the date of filing of the Certificate of Formation and shall terminate in accordance with Section 10.1. ARTICLE II GENERAL DEFINITIONS As used in this Agreement, the following terms shall each have the meaning set forth in this Article (unless the context otherwise requires). For purposes of this Agreement, the term “person” shall include individuals, corporations, associations, partnerships, limited liability companies, trusts, estates and other entities. “Act” shall mean the Delaware Limited Liability Company Act (6 Del. C. §18-101 et seq.), as now in effect or as hereafter amended or revised. Page 3 of 25 “Adjusted Capital Account Deficit” shall mean with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments: (a) credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and (b) debit to such Capital Account the items described in Regulations Section 1.704- 1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. “Adjusted Capital Contribution” shall mean a Member’s Capital Contribution to the Company reduced by all distributions made to such Member under Section 5.1. “Affiliate” of a person shall mean any person directly or indirectly controlling, controlled by, or under common control with such person. “Agreement” shall mean this Limited Liability Company Agreement, as the same may be amended or supplemented from time to time in accordance with the provisions hereof. “Bankrupt” shall mean, with respect to any Member, the occurrence of any one or more of the following: (i) the making by the Member of an assignment for the benefit of creditors; (ii) the filing of an involuntary petition seeking an adjudication of bankruptcy under Chapter 7 of the Bankruptcy Code, which filing is not dismissed within sixty (60) days of the filing; (iii) the filing of a voluntary petition by the Member under Chapter 7 of the Bankruptcy Code; (iv) the filing of a voluntary or involuntary petition under Chapters 11 or 13 of the Bankruptcy Code which is not dismissed within sixty (60) days of the filing, but only if the Member is not the debtor-in- possession of his assets; (v) the entry of an order, judgment or decree by a court of competent jurisdiction providing for the liquidation of the assets of the Member or appointing a receiver, trustee or other administrator of the Member’s assets which continues in effect and unstayed for a period of sixty (60) days; (vi) the confirmation of any plan of reorganization under either Chapter 11 or 13 of the Bankruptcy Code providing for the liquidation of substantially all of the Member’s assets. For purposes of (iv) above, a Member shall not be considered a debtor-in- possession of his assets if a trustee, receiver or other person or entity is appointed to, or in fact does, control or operate the assets of the Member. “Bankruptcy Code” shall mean Title 11 of the United States Code, as now in effect or as hereafter amended. “Book Value” shall mean, with respect to any asset of the Company, such asset’s adjusted basis for Federal income tax purposes, except that: (i) the initial Book Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset (not reduced for any liabilities to which it is subject Page 4 of 25 or which the Company assumes), as such value is determined and for which credit is given to the contributing Member under this Agreement; (ii) the Book Values of all assets of the Company shall be adjusted to equal their respective gross fair market values, as determined by the Managers, at and as of the following times: (a) the acquisition of an additional or new interest in the Company by a new or existing Member in exchange for other than a de minimis capital contribution by such member, if the Managers reasonably determine that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members; (b) the distribution by the Company to a Member of more than a de minimis amount of any asset of the Company (including cash or cash equivalents) as consideration for all or any portion of an interest in the Company. If the Managers reasonably determine that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members; (c) the liquidation of the Company within the meaning of Regulations Section 1.704- 1(b)(2)(ii)(g); (d) when computing the portion of a Member’s interest purchased under Section 3.2 (c) (ii) herein; and (iii)the Book Value of the assets of the Company shall be increased (or decreased) to reflect any adjustment to the adjusted basis of such assets pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Book Value shall not be adjusted pursuant to this clause (iii) to the extent that the Managers determine that an adjustment pursuant to clause (ii) hereof is necessary or appropriate in connection with the transaction that would otherwise result in an adjustment pursuant to this clause (iii). If the Book Value of an asset has been determined or adjusted pursuant to the preceding clauses (i), (ii) or (iii), such Book Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Profits and Losses, and the amount of the adjustment shall thereafter be taken into account as gain or loss from the distribution of such asset for purposes of computing Profits and Losses. “Capital Account” shall mean a capital account maintained and adjusted in accordance with the Code and the Regulations, including the Regulations under Sections 704(b) and (c) of the Code. The Capital Account of each Member shall be: (i) credited with all payments made to the Company by such Member on account of capital contributions (and as to any property other than cash or a promissory note of the contributing Member, the fair market value of such property (as agreed among the Members), net of liabilities secured by such property and assumed by the Company or subject to which such contributed property is taken) and by such Member’s allocable share of Profits and items in the nature of income and gain of the Company; Page 5 of 25 (ii) charged with the amount of any distributions to such Member (and as to any distributions of property other than cash or a promissory note of a Member or the Company, by the agreed fair market value of such property, net of liabilities secured by such property and assumed by such Member or subject to which such distributed property is taken), and by such Member’s allocable share of Losses and items in the nature of losses and deductions of the Company; (iii)adjusted simultaneously with the making of any adjustment to the Book Value of the Company’s assets pursuant to the definition of Book Value, to reflect the aggregate net adjustments to such Book Value as if the Company recognized Profit or Loss equal to the respective amount of such aggregate net adjustments immediately before the event causing such adjustments; and (iv) otherwise appropriately adjusted to reflect transactions between the Company and the Members. “Capital Contribution” shall mean the amount of cash and the agreed value of any other property contributed to the Company by a Member. “Cash Flow” shall mean all cash received by the Company from all sources (including capital contributions and borrowings), less cash expended or reserved in the discretion of the Managers for liabilities not then due and owing (contingent or otherwise), expenses, capital expenditures and obligations of the Company or obligations secured by the assets of the Company. “Certificate of Formation” means the Certificate of Formation of the Company, as amended from time to time. “Code” shall mean the Internal Revenue Code of 1986, as now in effect or as hereafter amended. “Company” shall mean Three Pillar Communities LLC, the limited liability company formed by the filing of the Certificate of Formation, as constituted from time to time. “Majority in Interest” shall mean a majority of the profits interests and a majority of the capital interests as provided in Revenue Procedure 94-46, I.R.B. 1994-28. “Managers” shall mean Joel David Kelman and Daniel Weisfield, or their successors and replacements, appointed in accordance with Article VII, in such person’s capacity as a Manager. “Members” shall mean the persons set forth on Schedule A attached hereto, and any person admitted as an additional or substitute Member in accordance with Article VIII, in such person’s capacity as a Member. “Membership Interest” shall mean, with respect to a Member, the percentage of ownership interest in the Company of such Member, as set forth on Schedule A. Each Member’s Membership Interest in the Company shall be based on his relative capital contributions to the Company. “Minimum Gain” shall have the meaning set forth in Regulations Section 1.704-2(d). Page 6 of 25 “Non-Managing Member” shall mean a Member who is not a Manager. “Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704- 2(b)(1). The amount of Nonrecourse Deductions for a fiscal year or other period equals the net increase, if any, in the Minimum Gain during that fiscal year or other period, over the aggregate amount of any distributions during that fiscal year from the proceeds of nonrecourse debt included in the computation of the Minimum Gain, as determined according to the provisions of Regulations Section 1.704-2(c). “Partner Minimum Gain” shall mean “partner nonrecourse debt minimum gain” as set forth in Regulations Section 1.704-2(i)(3). “Partner Nonrecourse Debt” shall have the meaning set forth in Regulations Section 1.704- 2(b)(4). “Partner Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(i)(2). The amount of Partner Nonrecourse Deductions for a fiscal year or other period equals the excess, if any, of the amount of the net increase in the Partner Minimum Gain during that fiscal year or other period, over the amount of any distributions during that fiscal year or other period to the Member which bears the economic risk of loss for the nonrecourse debt, from the proceeds of the nonrecourse debt, as determined according to the provisions of Regulations Section 1.704-2(i)(2). “Profits and Losses” shall mean, for each year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments: (i) Any income of the Company that is exempt from Federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this provision shall be added to such taxable income or loss; (ii) 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 Regulations Section 1.704- 1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this provision, shall be subtracted from such taxable income or loss; (iii)Gain or loss from a disposition of property of the Company with respect to which gain or loss is recognized for Federal income tax purposes shall be computed by reference to the Book Value of such property, rather than its adjusted tax basis; (iv) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing taxable income or loss, there shall be taken into account the depreciation on the assets for such fiscal year or other period; and (v) Any items which are separately allocated pursuant to Sections 5.5 or 5.6 which otherwise would have been taken into account in calculating Profits and Losses pursuant to the Page 7 of 25 above provisions shall not be taken into account and, as the case may be, shall be added to or deducted from such amounts so as to be not part of the calculation of the Profits or Losses. If the Company’s taxable income or loss for such year, as adjusted in the manner provided above, is a positive amount, such amount shall be the Company’s Profits for such year; and if negative, such amount shall be the Company’s Losses for such year. “Property” shall mean, at any time, all property, whether real or personal, interests, assets, or rights owned or held by or on behalf of the Company at such time. “Regulations” shall mean the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). “Terminating Capital Transaction” shall mean a sale or other disposition of all or substantially all of the assets of the Company. ARTICLE III CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS 3.1 Capital Accounts. A separate Capital Account shall be maintained for each Member, including any Member who shall hereafter acquire an interest in the Company. 3.2 Capital Contributions. (a) On or prior to the date of this Agreement, each of the Members has made a Capital Contribution to the Company as set forth opposite his, her or its name in Schedule A. (b) No Member shall be entitled, obligated or required to make any loan or any Capital Contribution to the Company in addition to his, her or its Capital Contribution made under Section 3.2(a). No loan made to the Company by any Member shall constitute a Capital Contribution to the Company for any purpose. 3.3 No Interest on Capital. No interest or prior or preferred return shall accrue or be paid on any Capital Contribution or Capital Account or any loan from a Member or a Manager to the Company, except pursuant to Sections 5.1 and 5.2. 3.4 Managers as Members. The Managers may hold interests in the Company as a Members. 3.5 Limited Liability. The Members shall not have any personal liability for liabilities or obligations of the Company except to the extent of their Capital Contribution set forth in Section 3.2, and the Members shall not be required to make any further or additional contribution to the Company or to lend or advance funds to the Company for any purpose. Notwithstanding the foregoing, (i) if any court of competent jurisdiction holds that distributions (or any part thereof) received by a Member pursuant to the provisions hereof constitute a return of capital and directs Page 8 of 25 that a Member pay such amount (with or without interest thereon) to or for the account of the Company or any creditor thereof, such obligation shall be the obligation of said Member and not of any other Member or the Company, and (ii) a Member shall indemnify and hold harmless the Company and each Member from any liability or loss incurred by virtue of the assessment of any tax with respect to such Member’s allocable share of the profits or gain of the Company. ARTICLE IV COMPANY FUNDS All funds received by the Company shall be utilized for Company purposes as determined by the Managers in the best interests of the Company. Until required for the Company’s business, all Company funds shall be deposited and maintained in such accounts in such banks or other financial institutions as shall be selected by the Managers or shall be invested in securities of the United States government, certificates of deposit or money market funds designated by the Managers. The Managers or their designees shall have the right to draw checks payable in such funds and make, deliver, accept and endorse negotiable instruments in connection with the Company’s business. Company funds shall not be commingled with the funds of any other person. ARTICLE V ALLOCATIONS AND DISTRIBUTIONS 5.1 Distribution of Company Funds. Except as provided in Section 5.2 and Section 5.9, all Company funds, which are determined by the Managers to be available for distribution, shall be distributed to the Members as follows: (i) First, to repay and satisfy any outstanding interest and principal of loans made by Members (with such distributions allocated pro rata to the lending Members), and thereafter to repay and satisfy the Members’ Capital Contributions (with such distributions allocated pro rata to the Members); (ii) Second, to the Members in proportion to their Capital Accounts until their Capital Accounts are reduced to zero; and (iii)Third, the balance to the Members in proportion to their respective Membership Interests. 5.2 Distribution Upon Dissolution. Proceeds from a Terminating Capital Transaction and amounts available upon dissolution, and after payment of, or adequate provision for, the debts and obligations of the Company, and liquidation of any remaining assets of the Company, shall be distributed and applied in the following priority: (i) First, to fund reserves for liabilities not then due and owing and for contingent liabilities to the extent deemed reasonable by the Liquidator (as defined in Section 10.2) provided that, upon the expiration of such period of time as the Liquidator shall deem advisable, the balance of such reserves remaining after payment of such Page 9 of 25 contingencies shall be distributed in the manner hereinafter set forth in this Section 5.2; and (ii) Second, to the Members, an amount sufficient to reduce the Members’ Capital Accounts to zero, in proportion to the positive balances in such Capital Accounts (after reflecting in such Capital Accounts all adjustments thereto necessitated by (A) all other distributions and allocations of Profits and Losses and items of income, gain, deduction, and loss and (B) such Terminating Capital Transaction). 5.3 Distribution of Assets in Kind. No Member shall have the right to require any distribution of any assets of the Company in kind. If any assets of the Company are distributed in kind, such assets shall be distributed on the basis of their fair market value as determined by the Managers. 5.4 Allocation of Profits and Losses. (a) After giving effect to the allocations set forth in Sections 5.5 and 5.6, Profits shall be allocated in the following order and priority: (i) First, to the extent Losses have previously been allocated pursuant to clauses (ii) or (iii) of Section 5.4(b) for any prior period, Profits shall be allocated to the Members first to offset any Losses allocated pursuant to said clause (iii) of Section 5.4(b), and then to offset any Losses allocated pursuant to said clause (ii) of Section 5.4(b), (in each case pro rata among the Members in proportion to their shares of the Losses to be offset under such clause), and to the extent any allocations of Losses are offset pursuant to this clause (i) such allocations of Losses shall be disregarded for purposes of computing subsequent allocations pursuant to this clause (i); and (ii) Second, any remaining Profits shall be allocated among the Members in proportion to their respective Membership Interests. (b) After giving effect to the allocations set forth in Sections 5.5 and 5.6, Losses shall be allocated in the following order and priority; (i) First, to the extent Profits have previously been allocated pursuant to clause (ii) of Section 5.4(a) for any prior period, Losses shall be allocated to the Members first to offset any Profits allocated pursuant to said clause (ii) of Section 5.4(a), (in each case pro rata among the Members in proportion to their shares of the Profits to be offset under such clause), and to the extent any allocations of Profits are offset pursuant to this clause (i), such allocations of Profits shall be disregarded for purposes of computing subsequent allocations pursuant to this clause (i); (ii) Second, Losses shall be allocated among the Members in proportion to the respective amounts of their capital contributions until the cumulative Losses allocated pursuant to this clause (ii) of Section 5.4(b) are equal to the aggregate amount of all such capital contributions; and Page 10 of 25 (iii)Third, any remaining Losses shall be allocated among the Members in proportion to their respective Membership Interests. 5.5 Required Regulatory Allocations. (a) Limitation on and Reallocation of Losses. At no time shall any allocations of Losses, or any item of loss or deduction, be made to a Member if and to the extent such allocation would cause such Member to have, or would increase the deficit in, any Adjusted Capital Account Deficit of such Member at the end of any fiscal year. To the extent any Losses or items are not allocated to one or more Members pursuant to the preceding sentence, such Losses shall be allocated to the Members to which such losses or items may be allocated without violation of this Section 5.5(a). (b) Minimum Gain Chargeback. If there is a net decrease in the Minimum Gain of the Company during any fiscal year, then items of income or gain of the Company for such fiscal year (and, if necessary, subsequent fiscal years) shall be allocated to each member in an amount equal to such Member’s share of the net decrease in the Minimum Gain, determined in accordance with Regulations Section 1.704-2(d)(1). A Member’s share of the net decrease in the Minimum Gain of the Company shall be determined in accordance with Regulations Section 1.704-2(g). The items of income and gain to be so allocated shall be determined in accordance with Regulations Section 1.704-2(j)(2)(i). (c) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or other period (not including any Partner Nonrecourse Deductions allocated pursuant to Section 5.5(d)) shall be allocated among the Members in proportion to their respective Membership Interests. Solely for purposes of determining each Member’s proportionate share of the “excess nonrecourse liabilities” of the Company, within the meaning of Regulations Section 1.752-3(a)(3), each Member’s interest in Company profits shall be equal to his, her or its Membership Interest. The items of losses, deductions and Code Section 705(a)(2)(b) expenditures to be so allocated shall be determined in accordance with Regulations Section 1.704-2(j)(1)(ii). (d) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any fiscal year or other period shall be allocated to the Member who bears the economic risk of loss with respect to the nonrecourse liability, as determined and defined under Regulations Section 1.704- 2(b)(4) to which such Partner Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1). The items of losses, deductions and Code Section 705(a)(2)(b) expenditures to be so allocated shall be determined in accordance with Regulations Section 1.704-2(j)(1)(ii). (e) Partner Minimum Gain Chargeback. Notwithstanding any contrary provisions of this Article V, other than Section 5.5(b) above, if there is a net decrease in Partner Minimum Gain attributable to Partner Nonrecourse Debt during any fiscal year, then each Member who has a share of such Partner Minimum Gain, determined in accordance with Regulations Section 1.704- 2(i), shall be allocated items of income and gain of the Company, determined in accordance with Regulations Section 1.704-2(j)(2)(ii), for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to each such Member’s share of the net decrease in such Partner Minimum Gain, determined in accordance with Regulations Sections 1.704-(2)(i)(3) and 2(i)(5). Page 11 of 25 (f) Qualified Income Offset. If any Member unexpectedly receives an item described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of income and gain shall be allocated to each such Member in an amount and manner sufficient to eliminate, as quickly as possible and to the extent required by Regulations Section 1.704-1(b)(2)(ii)(d), the Adjusted Capital Account Deficit of such Member, provided that an allocation pursuant to this Section 5.5(f) shall be made if and only to the extent that such member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article V have been tentatively made as if this Section 5.5(f) were not in the Agreement. (g) Basis Adjustment. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to either of Code Sections 734(b) or 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations. (h) Gross Income Allocation. In the event any Member has a Capital Account deficit at the end of any Company fiscal year, which is in excess of the sum of the items to be credited to a Member’s Capital Account under clause (a) of the definition of Adjusted Capital Account Deficit, then each such Member shall be allocated items of income and gain in the amount of such excess as quickly as possible provided that an allocation pursuant to this Section 5.5(h) shall be made if and only to the extent that such member would have a Capital Account deficit in excess of such sum after all other allocations provided for in this Article V have been tentatively made as if this Section 5.5(h) were not in this Agreement. As among Members having such excess if there are not sufficient items of income and gain to eliminate all such excesses, such allocations shall be made in proportion to the amount of any such excess. 5.6 Curative Allocations. The allocations set forth in Section 5.5 are intended to comply with certain requirements of Regulations Sections 1.704-1(b) and 1.704-2 and shall be interpreted consistently therewith. Such allocations may not be consistent with the manner in which the Members intend to divide Company distributions and to make Profit and Loss allocations. Accordingly, by approval of the Managers other allocations of Profits, Losses and items thereof shall be divided among the Members so as to prevent the allocations in Section 5.5 from distorting the manner in which Company distributions will be divided among the Members pursuant to Sections 5.1 and 5.2 hereof. In general, the Members anticipate that this will be accomplished by specially allocating other Profits, Losses and items of income, gain, loss and deduction among the Members so that the net amount of allocations under Section 5.5 and allocations under this Section 5.6 to each such Member is zero. However, the Managers shall have discretion to accomplish this result in any reasonable manner. 5.7 Tax Allocations and Book Allocations. Except as otherwise provided in this Section 5.7, for Federal income tax purposes, each item of income, gain, loss and deduction shall, to the extent appropriate, be allocated among the Members in the same manner as its correlative item of “book” income, gain, loss or deduction has been allocated pursuant to the other provisions of this Article V. Page 12 of 25 In accordance with Code Section 704(c) and the Regulations thereunder, depreciation, amortization, gain and loss, as determined for Federal income tax purposes, with respect to any property whose Book Value differs from its adjusted basis for Federal income tax purposes shall, 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 Book Value, such allocation to be made by approval of the Manager in any manner which is permissible under said Code Section 704(c) and the Regulations thereunder and the Regulations under Code Section 704(b). In the event the Book Value of any property of the Company is subsequently adjusted, subsequent allocations of income, gain, loss and deduction with respect to any such property shall take into account any variation between the adjusted basis of such assets for Federal income tax purposes under Section 704(c) of the Code and the Regulations thereunder. Allocations pursuant to this Section 5.7 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement. 5.8 General Allocation and Distribution Rules. (a) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Managers using any permissible method under Code Section 706 and the Regulations thereunder. Except as otherwise provided in this Agreement, all items of income, gain, loss, and deduction shall be allocable among the Members in the same proportions as the Profits or Losses for the fiscal year in which such item is included is allocated. (b) Upon the admission of a new Member or the Transfer of an interest, the new and old Members or the transferor and transferee shall be allocated shares of Profits and Losses and other allocations and shall receive distributions, if any, based on the portion of the fiscal year that the new or transferred interest was held by the new and old Members, or the transferor and transferee, respectively. For the purpose of allocating Profits and Losses and other allocations and distributions, (i) such admission or Transfer shall be deemed to have occurred on the first day of the month in which it occurs, or if such date shall not be permitted for allocation purposes under the Code or the Regulations, on the nearest date otherwise permitted under the Code or the Regulations, and (ii) if required by the Code or the Regulations, the Company shall close its books on an interim basis on the last day of the previous calendar month. 5.9 Tax Withholding. If the Company incurs a withholding tax obligation with respect to the share of income allocated to any Member, (a) any amount which is (i) actually withheld from a distribution that would otherwise have been made to such Member and (ii) paid over in satisfaction of such withholding tax obligation shall be treated for all purposes under this Agreement as if such amount had been distributed to such Member, and (b) any amount which is so paid over by the Company, but which exceeds the amount, if any, actually withheld from a distribution which would otherwise have been made to such Member, shall be treated as an interest-free advance to such Member. Amounts treated as advanced to any Member pursuant to Page 13 of 25 this Section 5.9 shall be repaid by such Member to the Company within 30 days after the Managers give notice to such Member making demand therefor. Any amounts so advanced and not timely repaid shall bear interest, commencing on the expiration of said 30 day period, compounded monthly on unpaid balances, at an annual rate equal to the Applicable Federal Rate, as defined in Section 1274 of the Code, as in effect for short-term obligations, as of such expiration date. The Company shall collect any unpaid amounts from any Company distributions that would otherwise be made to such Member. ARTICLE VI MANAGEMENT: RIGHTS, POWERS AND OBLIGATIONS OF THE MANAGERS 6.1 Management and Control in General. The Managers shall have full and exclusive power to manage and control the business and affairs of the Company, and the Members shall have no right to act on behalf of or bind the Company. Each of the Managers shall have all the rights, powers and obligations of a Manager as provided in the Act and as otherwise provided by law. Any action taken by any Manager as a Manager of the Company shall bind the Company and any other Managers and shall be deemed to be the action of the Company and of any other Managers. The signature of any Manager on any agreement, contract, instrument or other document shall be sufficient to bind the Company in respect thereof and conclusively evidence the authority of such Manager and the Company with respect thereto, and no third party need look to any other evidence or require joinder or consent of any other party. Any person dealing with the Company may always rely upon a certificate signed by any of the Members or Managers of the Company as to (i) the identity of the Members or Managers of the Company, (ii) the existence or nonexistence of any fact or facts that constitute conditions precedent to any acts by the Company or are in any other manner germane to its affairs, (iii) the authority and incumbency of any Manager, officer or agent of the Company executing any instrument or document on behalf of the Company, (iv) the authenticity of this Agreement and any amendments thereto, and (v) any act or failure to act by the Company or as to any other matter whatsoever involving the Company. 6.2. Number of Managers. (a) The initial number of the Managers of the Company shall be fixed at two. (b) A Manager may resign at any time upon prior written notice to the Company. 6.3 Officers. The Managers may from time to time appoint one or more persons to serve as officers of the Company upon such terms and conditions (including compensation) as the Managers may determine. Any officer shall hold his or her respective office until removed by the Managers. An officer may, but need not, be a Manager or a Member. Two or more offices may be held by the same person. 6.4 Employment of Others, Including Affiliates. Nothing contained in this Agreement shall preclude the employment by the Managers, on behalf of and at the expense of the Company, of any agent or third party to operate and manage all or any portion of the Property or to provide any service relating to the business, subject to the control of the Managers. The Managers may, on behalf of the Company, engage one or more Affiliates of a Manager to render Page 14 of 25 services to the Company, provided that any such engagement shall be upon terms and conditions no less favorable to the Company than could be obtained from an independent third party. Neither the Company nor any of the Members shall have, as a consequence of the relationship created hereby, any right in or to any income or profits derived by an Affiliate of a Manager from any business arrangements with the Company which are consistent with this Section. 6.5 Compensation of Managers. Managers may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Managers may from time to time determine. No such payment shall preclude any Manager from serving the Company or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service. 6.6 Expenses. The Company shall pay all costs and expenses arising from or relating to the organization of the Company, the acquisition of Property and the commencement and continuation of Company operations. The Company shall not reimburse the Managers or their Affiliates for overhead expenses incurred by them in providing services to the Company, but shall be required to reimburse such parties for reasonable out-of-pocket expenses so incurred by them. 6.7 Other Activities. The Managers, the Members and any Affiliate of any thereof may engage in or possess an interest in other business ventures or investments of any kind, independently or with others, including but not limited to ventures engaged in owning, operating or managing businesses or properties similar to those businesses or properties owned or operated by the Company. The fact that a Manager, a Member or such Affiliate may avail itself of such opportunities, either by itself or with other persons, including persons in which it has an interest, and not offer such opportunities to the Company or to a Member, shall not subject the Manager, the Member or such Affiliate to liability to the Company or to any other Member on account of lost opportunity. Neither the Company nor any Member shall have any right by virtue of this Agreement or the relationship created hereby in or to such opportunities, or to the income or profits derived therefrom, and the pursuit of such opportunities, even though competitive with the business of the Company, shall not be deemed wrongful or improper or in violation of this Agreement. 6.8 Title to Property. Title to Property shall be taken in the name of the Company or in the name or names of a nominee or nominees designated by the Managers. 6.9 Liability of a Manager. No Manager or Affiliate of a Manager, or their respective officers, shareholders, controlling persons, directors, agents and employees, shall be liable, responsible or accountable in damages or otherwise to the Company or to any of the Members, their successors or permitted assigns, except by reason of acts or omissions due to gross negligence or willful misconduct. Any action taken in good faith in reliance upon and in accordance with the advice or opinion of counsel shall be conclusively deemed not to constitute gross negligence or willful misconduct. 6.10 Indemnification. The Company shall indemnify, defend and hold harmless any person (the “Indemnified Party”) 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, Page 15 of 25 administrative or investigative, against losses, damages, claims or expenses actually and reasonably incurred by it for which such Indemnified Party has not otherwise been reimbursed (including reasonable attorneys’ fees, judgments, fines and amounts paid in settlement) in connection with such action, suit or proceeding, by reason of any acts, omissions or alleged acts or omissions arising out of the Indemnified Party’s activities as a Manager or Member, or as an officer, shareholder, director, agent or employee of a Manager or Member, on behalf of the Company or in furtherance of the interests of the Company, so long as the Indemnified Party did not act in a manner constituting gross negligence or willful misconduct. The termination of any action, suit or proceeding by judgment, order, settlement, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the Indemnified Party’s conduct constituted gross negligence or willful misconduct. ARTICLE VII MEETINGS AND VOTING 7.1 Meetings. Meetings of the Managers may be held without notice at such time and place, either within or without The Commonwealth of Massachusetts, as shall be determined from time to time by both Managers by unanimous agreement. 7.2 Meetings by Telephone Conference Calls. Managers may participate in a meeting of the Managers by means of conference telephone or similar communications equipment, by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting. 7.3 Action at Meeting. At any meeting of the Managers, the vote of both Managers by unanimous agreement shall be sufficient to take any action (unless a different vote is specified by law, the Certificate or the express provisions of this Agreement.) 7.4 Action by Consent. Any action required or permitted to be taken by the Managers, may be taken without a meeting by unanimous written consent of both Managers. 7.5 Removal and Replacement of Managers. (a) Joel David Kelman as Manager serves the interest of Beinoni Wannabe LLC as a Member and shall be referred to, along with any successor, as the “Beinoni Wannabe Manager”. Beinoni Wannabe LLC as a Member shall at all times have the right to remove the Beinoni Wannabe Manager and in the case of a removal or vacancy, appoint a successor as the replacement Beinoni Wannabe Manager. (b) Daniel Weisfield as Manager serves the interest of Clerestory Capital LLC as a Member and shall be referred to, along with any successor, as the “Clerestory Capital Manager”. Clerestory Capital LLC as a Member shall at all times have the right to remove the Clerestory Capital Manager and in the case of a removal or vacancy, appoint a successor as the replacement Clerestory Capital Manager. Page 16 of 25 7.6 Unanimous Approval Requirements. Unless otherwise specifically stated in this Agreement, (i) any actions or decisions to be made by the Managers shall be made with the unanimous agreement of both Managers acting together, and (ii) the Members shall have no voting rights (unless a different vote is specified by law, the Certificate or the express provisions of this Agreement.) Any reference to an action to be taken by the “Manager” or “Managers” shall be deemed to require the unanimous agreement of both Managers acting together (unless a different vote is specified by law, the Certificate or the express provisions of this Agreement.) 7.7 Vacancy / Incapacity. In the event of a vacancy in the role of either the Beinoni Wannabe Manager, or the Clerestory Capital Manager; or if either Manager is incapacitated, then the remaining Manager is authorized to continue the management and operation of the LLC in the ordinary course of business until such vacancy or incapacity is resolved. ARTICLE VIII TRANSFERS OF MEMBERSHIP INTERESTS; ADMISSION OF NEW MEMBERS 8.1 Restrictions on Transfer. (a) No Member may assign, transfer, pledge or grant a security interest in all or any part of its interest in the Company except as provided in Section 8.5, 8.6 and 8.7 without the written approval of all of the remaining Members, which approval is within their sole and unrestricted discretion. (b) In no event may any person obtaining an interest in the Company by assignment, transfer, pledge or other means from an existing Member be admitted as a successor Member without the unanimous approval of the Members, which approval is within their sole and unrestricted discretion. (c) The Company and its Members shall be entitled to treat the record owner of an interest in the Company as the absolute owner thereof in all respects, and shall incur no liability for distributions of cash or other property made in good faith to such owner until such time as a written assignment of such interest has been received and accepted by the Members and recorded on the books of the Company. The Members may refuse to accept and record an assignment until the end of the next successive quarterly accounting period of the Company. 8.2 Requirements for Transfer. Every transfer of an interest in the Company permitted hereunder, including transfers permitted by Section 8.5, shall be subject to the following requirements: (a) The transferee shall establish that the proposed transfer will not cause or result in a breach of any agreement binding upon the Company or any violation of law, including without limitation, federal or state securities laws, and that the proposed transfer would not cause the Page 17 of 25 Company to be an investment company as defined in the Investment Company Act of 1940, as amended; (b) The transferee shall establish to the satisfaction of the Managers that the transferee is financially responsible and of good character and that the transfer would not adversely affect the classification of the Company as a partnership for Federal income tax purposes, terminate its classification as a partnership under the Code Section 708, or have a substantial adverse effect with respect to federal income taxes payable to the Company; and (c) The transferee shall execute a counterpart of this Agreement and such other documents or instruments as may be required by the Members to reflect the provisions hereof. Until the foregoing requirements are met, the Company need not recognize the transferee for any purpose under this Agreement; and until the Members have unanimously approved the transaction, which approval is within their sole and unrestricted discretion, the transferee shall be entitled only to the rights of a transferee who is not a Member under the Act. 8.3 Effect of Transfer. (a) If the transferee is admitted as a Member or is already a Member, the Member transferring the interest shall be relieved of liability with respect to the transferred interest arising or accruing under this Agreement on or after the effective date of the transfer, unless the transferor affirmatively assumes such liability; provided, however, that the transferor shall not be relieved of any liability for prior distributions unless the transferee affirmatively assumes such liabilities. (b) Any person who acquires in any manner an interest or any part thereof in the Company, whether or not such person has accepted and assumed in writing the terms and provisions of this Agreement or been admitted as a Member, shall be deemed by the acquisition by the acquisition of such interest to have agreed to be subject to and bound by all of the provisions of this Agreement with respect to such interest, including without limitation, the provisions hereof with respect to any subsequent transfer of such interest. 8.4 Prohibited Transfers. Any transfer in violation of any provisions of this Agreement shall be null and void and ineffective to transfer any interest in the Company and shall not be binding upon or be recognized by the Company, and any such transferee shall not be treated as or deemed to be a Member for any purpose. In the event that any Member shall at any time transfer its interest in violation of any of the provisions of this Agreement, the Company and the other Members, in addition to all rights and remedies at law and equity, shall have and be entitled to an order restraining or enjoining such transaction, it being expressly acknowledged and agreed that damages at law would be an inadequate remedy for a transfer in violation of this Agreement. 8.5 Permitted Transfers. The following transfers of interest in the Company shall be permitted without the approval of the Members under Section 8.1, but shall be subject to the requirements of Section 8.2 hereof, and if the transferee is to be admitted as a successor Member, shall also be subject to the unanimous approval of the Members, which approval is within their sole and unrestricted discretion: Page 18 of 25 (a) An interest of a Member may be transferred from time to time in connection with (i) any proceeding under the federal bankruptcy laws or any applicable federal or state laws relating to bankruptcy, insolvency, or the relief of debtors and subject to the requirements and provisions thereof, or (ii) a tax free reorganization, merger or consolidation of the Company; and (b) An interest of a Member may be transferred from time to time to (i) the spouse, children or grandchildren of that Member, or a trust for their benefit, or (ii) the duly-appointed executor, guardian or other legal representative of a Member in case of his death or incapacity. 8.6 Admission of Additional or Substitute Members. No person may be admitted as an additional or substitute Member without the written consent of all of the non-transferring Members. 8.7 Termination of Member’s Interest in Company. A Member’s death, a Member becoming Bankrupt or the termination of a Member’s Interest in the Company (by withdrawal or otherwise) shall dissolve the Company as provided in Article X, and such Member’s legal representative shall have all the rights of the Member for the purpose of settling the Member’s estate and such power as the Member possessed to transfer his Membership Interest and to join with the transferee thereof in satisfying the conditions precedent to such transferee becoming a substitute Member which are set forth in this Article VIII. 8.8 Substitute or Additional Member. (a) A person shall only be admitted as a substitute or additional Member under this Agreement in compliance with the following: (i) a transfer contemplated by Section 8.1 shall be made only by written document, signed by the transferor Member and accepted in writing by the transferee, and a duplicate original of such document shall be delivered to the Company and consented to by all of the non-transferring Members (which consent may be withheld in the sole and unrestricted discretion of any Member); (ii) the transferee shall execute and deliver to the Company a written agreement, in form reasonably satisfactory to the Managers, pursuant to which said person agrees to be bound by this Agreement and grants the power of attorney contained in this Agreement; and (b) The costs incurred by the Company associated with the admission of a substitute or additional Member contemplated by this Article (including reasonable attorneys’ fees) shall be borne by the transferee. ARTICLE IX REPORTS AND TAX MATTERS 9.1 Books, Records and Reports. Page 19 of 25 (a) Accurate books, records and reports shall be maintained by the Company showing its assets, liabilities, operations, transactions and financial condition, as well as the names and addresses of the Members. The Company books and records may be kept under such permissible method of accounting as the Managers may determine. The Company books shall be maintained at the principal office of the Company, and each Member shall have the right upon reasonable notice given to the Company to inspect, extract and copy such books and records as provided in the Act during regular business hours of the Company. (b) The Managers shall cause income tax returns for the Company to be prepared and filed with the appropriate authorities. Within ninety (90) days after the close of each fiscal year of the Company, the Managers shall send to each person who was a Member at any time during such fiscal year such information as will be sufficient to prepare documents which may be required to be filed under relevant Federal and state income tax laws. (c) Within ninety (90) days after the close of the Company’s fiscal year, the Managers shall use their best efforts to cause each Member to receive financial statements of the Company for the fiscal year then ended (including a balance sheet and statement of income). 9.2 Section 754 Election. In the event of a distribution of property made in the manner provided in Section 734 of the Code, or in the event of a transfer of any Membership Interest permitted by this Agreement made in the manner provided in Section 743 of the Code, the Managers, on behalf of the Company, may, but shall not be required to, file an election under Section 754 of the Code in accordance with the procedures set forth in the applicable regulations promulgated thereunder. ARTICLE X DISSOLUTION AND TERMINATION 10.1 Dissolution of the Company. The Company shall dissolve and be terminated as provided under the Act, or upon the earlier happening of any one of the following: (a) upon written agreement of all Members; (b) upon the death, insanity, retirement, resignation, expulsion, Bankruptcy, or dissolution of, a Member, unless within ninety (90) days after the event there are at least two (2) remaining Members and not less than a Majority of the remaining Members agree to continue the business of the Company; (c) upon the sale of substantially all of the Property or other conversion of substantially all the Company’s assets to cash; or (d) upon the occurrence of any other event other than one specified in this section which, under the Act or as otherwise provided by law, causes a dissolution and termination of the Company . Page 20 of 25 10.2 Liquidator. (a) Upon dissolution of the Company, the Managers, or if there is no Manager, such person as the Members holding a Majority of the Membership Interests may designate, shall act as liquidator of the Company (in either case, the “Liquidator”). The Liquidator shall, with reasonable speed, wind up the affairs of the Company and liquidate the Property. The Liquidator shall have unlimited discretion to determine the time, manner and terms of any sale of Property having due regard to the activity and condition of the relevant market and general financial and economic conditions. (b) If any Member shall be indebted to the Company, then until payment of such amount by him, the Liquidator shall retain such Member’s distributive share of Property and apply the same to the liquidation of such indebtedness. (c) The Liquidator shall comply with all requirements of the Act and other applicable law pertaining to the winding up of a limited liability company, following which the Company shall stand liquidated and terminated. 10.3 Source of Distributions. Each Member shall look solely to the assets of the Company for all distributions with respect to the Company, the return of his capital contribution thereto and his share of Profits or Losses thereof, and shall have no recourse therefor (upon dissolution or otherwise) against any other Member or Manager. 10.4 Distributions upon Dissolution. Amounts available upon dissolution, and after payment of, or adequate provision for, the debts and obligations of the Company, and liquidation of any remaining assets of the Company, shall be distributed by the Liquidator to the Members in an amount sufficient to reduce the Members’ Capital Accounts to zero, in proportion to the positive balances in such Capital Accounts (after reflecting in such Capital Accounts all adjustments thereto necessitated by all other distributions and allocations of Profits and Losses and items of income, gain, deduction and loss). ARTICLE XI MISCELLANEOUS PROVISIONS 11.1 Notices. All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given: (i) in the case of a report to be given to a Member, if personally delivered or if mailed by United States first-class mail, postage prepaid, addressed to such Member at his address on the records of the Company; and (ii) in the case of notices or communications to be given to any Member, if personally delivered or if mailed by United States first-class certified or registered mail, return receipt requested, postage prepaid, or if sent by prepaid telegram or telex, addressed to such Member at his address on the records of the Company. A Member may change his address for notices by giving notice in like manner. Any notice or other communication shall be deemed to have been given to, or received by, the appropriate party as of the date on which it is personally delivered or, if mailed, on the seventh business day after the date on which it is deposited in the United States mail, or if telegraphed or telexed, on the business day after it is transmitted. Page 21 of 25 11.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of The State of Delaware. 11.3 Successors and Assigns. Subject to the restrictions on transfer contained herein, this Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of the Members and their respective heirs, executors, administrators, successors and permitted assigns. Any person acquiring or claiming an interest in the Company, in any manner whatsoever, shall be subject to and bound by all the terms, conditions and obligations of this Agreement to which his predecessor in interest was subject or bound, without regard to whether such person has executed this Agreement or a counterpart hereof or any other document contemplated hereby. No person shall have any rights or obligations relating to the Company greater than those set forth in this Agreement, and no person shall acquire an interest in the Company or become a Member thereof except as permitted by the terms of this Agreement. 11.4 Counterparts. This Agreement may be executed in any number of identical counterparts, each of which, for all purposes, shall be deemed an original, and all of which constitute, collectively, one and the same Agreement. In addition, this Agreement may contain more than one counterpart signature page and may be executed by the affixing of the signature of each of the Members to one of such counterpart signature pages, and all such counterpart signature pages shall be read as one and shall have the same force and effect as though all the signers had signed the same signature page. 11.5 Additional Assurances. Upon the request of the Managers, each Member agrees to perform all further acts and execute, acknowledge and deliver any documents which the Managers deem reasonably necessary to effectuate the provisions of this Agreement. 11.6 Amendments. Except as otherwise specifically provided herein, to be effective, any amendment to this agreement must be approved by an act of the Members reflecting unanimous approval of the Members. 11.7 Modification to be in Writing. This Agreement constitutes the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes any and all prior negotiations, understandings and agreements in regard hereto. No amendment, modification or alteration of the terms hereof shall be binding unless the same is in writing and is effected in accordance with this Agreement. 11.8 No Waiver. Failure or delay of any party in exercising any right or remedy under this Agreement, or any other agreement between the parties, or otherwise, will not operate as a waiver thereof. The express waiver by any party of a breach of any provision of this Agreement by any other party shall not operate or be construed as a waiver of any subsequent breach by said party. No waiver will be effective unless and until it is in written form and signed by the waiving party. 11.9 Gender and Number. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in either the masculine, the feminine or the neuter gender shall include the masculine, feminine and neuter. Page 22 of 25 11.10 Headings. The captions in this Agreement are inserted for convenience of reference only and shall not affect the construction of this Agreement. References in this Agreement to any Article, Section, Paragraph, Subparagraph or Schedule are to the same contained in this Agreement. 11.11 Validity and Severability. If any provision of this Agreement contravenes any law and such contravention would thereby invalidate this Agreement, or if the operation of any provision hereof is determined by law, administrative regulation or otherwise to result in classification of the Company as an association taxable as a corporation for federal income tax purposes, or to make a Member generally liable for the obligations of the Company, then such provision is declared to be invalid and subject to severance from the remaining portion of this Agreement and this Agreement shall be read and construed as though it did not contain such provision in a manner to give effect to the intention of the parties to the fullest extent possible. 11.12 No Third Party Rights. This Agreement and the covenants and agreements contained herein are solely for the benefit of the parties hereto and their Affiliates. No other person shall be entitled to enforce or make any claims, or have any right pursuant to the provisions of this Agreement. 11.13 Certain Representations. Each Member represents and warrants that he is acquiring his interest in the Company for his own account for investment and not with a view to the distribution thereof and that such interest will not be transferred in the absence of an opinion of counsel satisfactory to the Managers that registration is not required under the Securities Act of 1933, as then in effect, or under applicable State securities laws, if any. Each Member who is an individual represents and warrants that he is over the age of twenty-one (21) years. 11.14 Dispute Resolution, Jurisdiction and Venue. Any dispute among the parties hereto involving any matter arising under this Agreement shall be resolved by binding arbitration held in Boston, Massachusetts, by a single arbitrator in accordance with the then current rules of Judicial Arbitration and Mediation Services (“JAMS”). The arbitrator shall have authority to fashion such just, equitable and legal relief as the arbitrator, in his sole discretion, may determine. The decision of any arbitrator pursuant to this Section shall be made in accordance with the laws of the State of Delaware (without reference to any conflict of laws rules and principles) and shall include the determination of a prevailing party. To the extent that the parties mutually determine that any dispute is not to be resolved through arbitration, the parties hereby irrevocably agree that any suit, action or proceeding must be brought in Boston Massachusetts. All parties hereby consent to the exercise of personal jurisdiction by any such court with respect to any such suit, action or proceeding. With respect to any proceeding covered by this Section, the prevailing party shall be entitled to recover all costs and expenses, including any amounts necessary to enforce the final determination and reasonable attorneys’ fees incurred in connection with such proceedings. Discovery shall be permitted in any arbitration to the same extent permitted in a civil action of a like kind before a superior court. 12. Personal Obligations / Negotiated Resolution / Sale of Assets: Page 23 of 25 (a) Personal Obligations. The intentions of the Managers and Members in entering into this Agreement are based on the obligation of both Joel David Kelman and Daniel Weisfield (the “Initial Managers”) to personally dedicate their full time efforts to the development, operation, and growth of the LLC and its subsidiaries and affiliates as a real estate investment enterprise as their primary employment. The death or incapacity of an Initial Manager, or the failure of an initial Manager to dedicate their full time efforts to the LLC as their primary employment shall all be deemed a “Triggering Event”. (b) Negotiated Resolution. If a Triggering Event has occurred, or if either Initial Manager gives notice that they intend that a Triggering Event will occur; then both Members shall enter into a process of mediation and negotiation for the following one hundred and eighty (180) days to attempt to resolve the absence (or pending absence) of the Initial Manager that caused (or will cause) the Triggering Event. Final agreement on resolution will be made by unanimous agreement of the Members. In connection with the negotiation of this Agreement, the Members have discussed the following non-exclusive and non-binding mechanisms to possibly resolve a Triggering Event as examples to guide future discussions and negotiations. (i) The absent Initial Manager could be replaced by a salaried employee[s] of the LLC, with an adjustment of economic allocations between the two Members to appropriately reduce the economic allocation to the Member who no longer provides an Initial Manager to the LLC. (ii) The Member who provides the remaining Initial Manager can purchase the Membership Interest of the Member who no longer provides an Initial Manager to the LLC for a negotiated price based on third party appraisals. (iii) The Members can agree on a distribution-in-kind of the assets of the LLC with an allocation to reflect the value of their respective interests in the LLC and based on third party appraisals. (c) Sale of Assets. In the event that the Members are unable to resolve the Triggering Event after one hundred and eighty (180) days of negotiation, then either Member shall have the option to require a Terminating Capital Transaction to be carried out by a Liquidator pursuant to the provisions of this Agreement. Page 24 of 25 IN WITNESS WHEREOF, the Managers and Members have caused this Agreement to be executed as of the date first set forth above. ______________________ Joel David Kelman, Manager ______________________ Daniel Weisfield, Manager Beinoni Wannabe LLC By: ____________________ Joel David Kelman, Manager Clerestory Capital LLC By: ____________________ Daniel Weisfield, Manager Page 25 of 25 SCHEDULE A Members of Three Pillar Communities LLC Name and Address Initial Capital Contribution Percentage Membership Interest Beinoni Wannabe LLC Attn: Yoel Kelman 110 Strathmore Road, PH2 Brighton, MA 02135 $500.00 50% Clerestory Capital LLC Attn: Daniel Weisfield 1232 19th St, Unit 17 Oakland, CA 94607 $500.00 50% Dated: August 23, 2017 Approved: ______________________ Joel David Kelman, Manager ______________________ Daniel Weisfield, Manager Beinoni Wannabe LLC By: ____________________ Joel David Kelman, Manager Clerestory Capital LLC By: ____________________ Daniel Weisfield, Manager