Exhibit 10.2

 

 

 

FUNDAMENTAL GLOBAL ASSET MANAGEMENT, LLC

 

LIMITED LIABILITY COMPANY AGREEMENT

 

Dated as of: March 31, 2020

 

 

 

INTERESTS IN THE COMPANY MAY ONLY BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
SUBJECT TO THE LIMITATIONS AND RESTRICTIONS SET FORTH HEREIN AND ONLY IN
COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS.

 

   

 

 

FUNDAMENTAL GLOBAL ASSET MANAGEMENT, LLC

LIMITED LIABILITY COMPANY AGREEMENT

 

TABLE OF CONTENTS

 

ARTICLE I FORMATION OF THE COMPANY 1 Section 1.1. Formation of the Company. 1
Section 1.2. Name. 1 Section 1.3. Business of the Company. 1 Section 1.4.
Location of Principal Place of Business. 1 Section 1.5. Registered Agent. 2
Section 1.6. Term. 2       ARTICLE II DEFINITIONS 2     ARTICLE III CAPITAL
CONTRIBUTIONS 6 Section 3.1. Capital Contributions. 6 Section 3.2. No Interest
Paid on Capital Contribution(s). 7 Section 3.3. Withdrawal and Return of Capital
Contribution(s). 7 Section 3.4. Form of Capital Contributions. 7       ARTICLE
IV ALLOCATIONS 7 Section 4.1. Allocation of Net Income and Net Loss. 7 Section
4.2. Other Allocation Provisions. 8 Section 4.3. Allocations for Income Tax
Purposes. 8 Section 4.4. Withholding. 9       ARTICLE V DISTRIBUTIONS 9 Section
5.1. Distributions Generally. 9 Section 5.2. Tax Distributions 10 Section 5.3.
Limitations on Distributions. 10 Section 5.4. Reserves. 10       ARTICLE VI
BOOKS OF ACCOUNT, RECORDS AND REPORTS; FISCAL YEAR 11 Section 6.1. Books and
Records. 11 Section 6.2. Reports. 11 Section 6.3. Fiscal Year. 11       ARTICLE
VII POWERS, RIGHTS AND DUTIES OF THE MEMBERS 11 Section 7.1. Limitations. 11
Section 7.2. Liability. 11 Section 7.3. Priority. 11       ARTICLE VIII POWERS,
RIGHTS AND DUTIES OF THE BOARD 12 Section 8.1. Authority 12 Section 8.2.
Appointment and Term of Managers 12 Section 8.3. Meetings; Quorum; Voting 12
Section 8.4. Officers, Agents and Employees; Committees of the Board 13 Section
8.5. Company Funds 13 Section 8.6. Other Activities; Transactions with
Affiliates 14 Section 8.7. Limits on the Power of the Board 15

 

 

 

 

Section 8.8. Tax Audits. 16 Section 8.9. Exculpation. 16 Section 8.10.
Indemnification of the Members. 17 Section 8.11. Expenses 17       ARTICLE IX
TRANSFERS OF INTERESTS BY MEMBERS 18 Section 9.1. General. 18 Section 9.2.
Consequences of Transfers Generally. 18 Section 9.3. Transferee to Succeed to
Transferor’s Capital Account. 19 Section 9.4. Right of First Refusal 19 Section
9.5. Additional Filings. 19       ARTICLE X WITHDRAWAL OF MEMBERS; TERMINATION
OF THE COMPANY; LIQUIDATION AND DISTRIBUTION OF ASSETS 19 Section 10.1.
Withdrawal or Removal of Members. 19 Section 10.2. Dissolution of the Company.
19 Section 10.3. Distribution in Liquidation. 20 Section 10.2. Final Statement
of Assets and Liabilities. 21 Section 10.3. No Deficit Restoration Obligation.
21 Section 10.4. Termination of the Company. 21       ARTICLE XI ADMISSION OF
ADDITIONAL MEMBERS 21 Section 11.1. Admission of Additional Members. 21      
ARTICLE XII NOTICES AND VOTING 22 Section 12.1. Notices. 22 Section 12.2.
Voting. 22       ARTICLE XIII AMENDMENT OF AGREEMENT 22 Section 13.1.
Amendments. 22 Section 13.2. Amendment of Certificate. 22       ARTICLE XIV
MISCELLANEOUS 22 Section 14.1. Entire Agreement. 22 Section 14.2. Applicable
Law. 22 Section 14.3. Effect. 23 Section 14.4. Survival. 23 Section 14.5.
Pronouns and Number. 23 Section 14.6. Captions. 23 Section 14.7. Partial
Enforceability. 23 Section 14.8. Counterparts. 23 Section 14.9. Construction 23
Section 14.10. Waiver of Partition. 23 Section 14.11. Submission to Jurisdiction
23 Section 14.12. Waiver of Trial by Jury 24 Section 14.13. Force Majeure 24
Section 14.14. Further Assurances 24 Section 14.15. No Third Party
Beneficiaries. 24

 

Schedule A - Members; Percentage Interests

 

ii

 

 

FUNDAMENTAL GLOBAL ASSET MANAGEMENT, LLC

 

lIMITED LIABILITY COMPANY AGREEMENT

 

This LIMITED LIABILITY COMPANY AGREEMENT (as amended, modified or supplemented
from time to time, this “Agreement”) of FUNDAMENTAL GLOBAL ASSET MANAGEMENT,
LLC, a Delaware limited liability company (the “Company”), is made this March
31, 2020, by and between 1347 Property Insurance Holdings, Inc., a Delaware
corporation (“PIH”), and FGI Funds Management, LLC, a Florida limited liability
company (“FGI”). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in Article II.

 

WHEREAS, the Company was organized under the Act pursuant to a Certificate of
Formation filed with the Secretary of State of the State of Delaware on March
23, 2020 (the “Certificate”).

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I

FORMATION OF THE COMPANY

 

Section 1.1. Formation of the Company. The Company was formed as a limited
liability company under the Act by the filing of the Certificate with the Office
of the Secretary of State of the State of Delaware on March 23, 2020. The
Company shall accomplish all filing, recording, publishing and other acts
necessary or appropriate for compliance with all requirements for operation of
the Company as a limited liability company under this Agreement and the Act and
under all other laws of the State of Delaware and such other jurisdictions in
which the Board determines that the Company may conduct business. Each Person
admitted to the Company as a Member shall promptly execute all relevant
certificates and other documents, as the Board shall request.

 

Section 1.2. Name. The name of the Company is “Fundamental Global Asset
Management, LLC” as such name may be modified from time to time by the Board
following notice to all Members.

 

Section 1.3. Business of the Company. Subject to the limitations on the
activities of the Company otherwise specified in this Agreement, the business of
the Company shall be the conduct of any business or activity that may be
conducted by a limited liability company organized pursuant to the Act,
including without limitation (a) to sponsor, capitalize and provide strategic
advice to Underlying Managers in connection with the launch and/or growth of
their asset management business and the investment products they sponsor and (b)
except as otherwise limited herein, to enter into, make and perform all
contracts and other undertakings, and engage in all activities and transactions
incidental to or necessary or advisable to the carrying out of the foregoing
objectives and purposes. All property owned by the Company, real or personal,
tangible or intangible, shall be deemed to be owned by the Company as an entity,
and no Member, individually, shall have any ownership of such property. PIH and
FGI have formed and intend to operate the Company as a joint venture to carry
out the business of the Company.

 

Section 1.4. Location of Principal Place of Business. The location of the
principal place of business of the Company shall be 4201 Congress Street, Suite
140, Charlotte, North Carolina 28209 or such other location as may be determined
by the Board. In addition, the Company may maintain such other offices as the
Board may deem advisable at any other place or places within or without the
United States.

 

   

 

 

Section 1.5. Registered Agent. The registered agent for the Company shall be
Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808
or such other registered agent as the Board may, from time to time upon written
notice to the Members, designate.

 

Section 1.6. Term. The term of the Company commenced upon the filing of the
Certificate with the Secretary of State of the State of Delaware, and the
Company shall remain in existence until terminated in accordance with Article X.

 

ARTICLE II

DEFINITIONS

 

“Accounting Period” means, in the case of the initial Accounting Period, the
period that begins on the date hereof and ends at the close of business on the
first Adjustment Date and, in the case of any subsequent Accounting Period, the
period that begins at the opening of business on the day immediately following
an Adjustment Date and ends at the close of business on the immediately
following Adjustment Date or, in the event that the Company is terminated, such
date of termination.

 

“Act” means the Delaware Limited Liability Company Act, 6 Del. Code §18-101 et
seq., as amended from time to time (or any succeeding law).

 

“Additional Member” has the meaning set forth in Section 11.1(a).

 

“Adjustment Date” means (i) the last day of a Fiscal Year or (ii) any other date
that the Board reasonably determines is necessary or appropriate to be an
Adjustment Date in order to accurately reflect the economic relationship of the
Members.

 

“Affiliate” means, with respect to a specified Person, any Person directly or
indirectly Controlling, Controlled by or under common Control with the specified
Person.

 

“Board” means the Board of Managers of the Company, formed pursuant to Section
8.2.

 

“Book Value” means, with respect to any asset of the Company as of any date,
such asset’s adjusted basis for Federal income tax purposes as of such date,
except as follows: (i) the initial Book Value of any Company asset contributed
by a Member to the Company shall be the fair value of such Company asset on the
date of such contribution (i.e., its Contribution Value); (ii) on the date
immediately preceding the admission of an additional Member to the Company or
otherwise in the Tax Matters Partner’s reasonable discretion in accordance with
Regulation §1.704-1(b)(2)(iv)(f), the Book Value of each asset of the Company
may be adjusted to equal its fair value (as determined by the Board) on such
date; and (iii) if the Book Value of an asset has been determined pursuant to
clauses (i) or (ii) above, such Book Value shall thereafter be adjusted by the
depreciation, cost recovery and amortization attributable to such asset,
assuming that the adjusted basis for Federal income tax purposes of such asset
was equal to its Book Value determined pursuant to the methodology described in
Regulation §1.704-1(b)(2)(iv)(g)(3).

 

“Business Day” means any day on which the NASDAQ is open for regular trading and
on which commercial banks in North Carolina and Florida are open for business.

 

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“Capital Account” means, with respect to each Member, the single and separate
account established and maintained for such Member on the books of the Company
in compliance with Regulation §§ 1.704-1(b)(2)(iv) and 1.704-2, as amended.
Subject to the preceding sentence, each Member’s Capital Account shall initially
equal the amount of cash initially contributed by such Member to the Company.
Throughout the term of the Company, each Member’s Capital Account will be (i)
increased by (A) the amount of income and gains of the Company allocated to such
Member pursuant to Article IV and (B) the amount of any cash or the Contribution
Value of any property subsequently contributed by such Member to the Company and
(ii) decreased by (A) the amount of losses and deductions of the Company
allocated to such Member pursuant to Article IV and (B) the amount of cash and
the Distribution Value of any other property distributed to such Member by the
Company pursuant to Article V or Article X.

 

“Capital Call Notice” has the meaning set forth in Section 3.1(e).

 

“Capital Contribution” means a contribution to the capital of the Company.

 

“Capital Income” and “Capital Loss,” respectively, of the Company for any
Accounting Period means the Net Income or Net Loss for such Accounting Period
that is attributable, in the reasonable determination of the Board, to amounts
earned or lost by the Company, as applicable, on capital provided by the Company
to a Sponsored Fund on a pro rata basis (not taking into account any Revenue
Share Proceeds or any earnings related to any Revenue Share Proceeds that have
not been withdrawn by, or distributed to, the Company from a Sponsored Fund or
an Underlying Manager) with other investors in such Sponsored Fund based on the
Company’s capital in such Sponsored Fund, together with any amounts earned on
any Returned Capital while retained by the Company (and reduced by any amounts
lost on any Returned Capital while retained by the Company).

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time (or
any succeeding law).

 

“Contribution Value” means the fair value of any property (as determined by the
Board) (net of liabilities secured by such property that the Company is treated
as assuming or taking subject to pursuant to the provisions of section 752 of
the Code) contributed or deemed contributed by a Member to the Company.

 

“Control” means the possession, directly or indirectly, of the power to direct
the management or policies of a Person, whether through ownership or voting of
Securities or other voting ownership interests, by contract or otherwise.
“Controlled” or “Controlling” shall have correlative meanings.

 

“Distribution Value” means the fair value of a Company asset (as determined by
the Board) distributed to a Member by the Company (net of liabilities secured by
such distributed asset that such Member is treated as assuming or taking subject
to pursuant to the provisions of section 752 of the Code).

 

“Fiscal Year” has the meaning set forth in Section 6.3.

 

“Indemnified Party” has the meaning set forth in Section 8.10(a).

 

“Interest” means the entire ownership interest of a Member in the Company at any
particular time, including without limitation such Member’s interest in the
capital, profits and losses of, and in any distributions from, the Company.

 

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“Liquidator” has the meaning set forth in Section 10.2(b).

 

“Manager” means each Person appointed as a Manager pursuant to Section 8.2.

 

“Member” means each Person listed as a Member on Schedule A hereto, each Person
admitted as a substituted Member pursuant to Article IX, each Person admitted as
an Additional Member pursuant to Article XI and, with respect to those
provisions of this Agreement concerning a Member’s rights to receive a share of
profits or other distributions as well as the return of a Member’s Capital
Contribution, any Transferee in respect of a Member’s Interest (except that a
Transferee who is not admitted as a substituted Member shall have only those
rights specified by the Act that are consistent with the terms of this
Agreement).

 

“Net Income” and “Net Loss,” respectively, of the Company for any period means
the income or loss of the Company for such period as determined (a) in the case
of any income, gain, loss, expense, appreciation or depreciation allocated to
the Company by an Underlying Manager or a Sponsored Fund, in the same manner as
net income, net profits or net capital appreciation and net expense, net loss or
net capital depreciation are determined pursuant to the applicable governing
documents of the Underlying Manager or Sponsored Fund and (b) in the case of all
other income or loss of the Company, in accordance with the method of accounting
followed by the Company for Federal income tax purposes, including, for all
purposes, any income exempt from tax and any expenditures of the Company which
are described in Code section 705(a)(2)(B); provided, however, that in
determining Net Income and Net Loss and every item entering into the computation
thereof, solely for the purpose of adjusting the Capital Accounts of the Members
(and not for tax purposes), (i) any income, gain, loss or deduction attributable
to the disposition of any Company asset shall be computed as if the adjusted
basis of such Company asset on the date of such disposition equaled its Book
Value as of such date, (ii) if any Company asset is distributed in kind to a
Member, the difference between its value and its Book Value on the date of such
distribution shall be treated as gain or loss to the Company and (iii) any
depreciation, cost recovery and amortization as to any Company asset shall be
computed by assuming that the adjusted basis of such Company asset equaled its
Book Value determined under the methodology described in Regulation
§1.704-1(b)(2)(iv)(g)(3); and provided, further, that any item (computed with
the adjustments in the preceding proviso) allocated under Section 4.2 shall be
excluded from the computation of Net Income and Net Loss.

 

“Partnership Representative” has the meaning set forth in Section 8.8(b).

 

“Percentage Interest” means, with respect to any Member, the percentage set
forth opposite such Member’s name on Schedule A hereto under the column headed
“Percentage Interest”.

 

“Person” means any individual, partnership, limited liability company,
association, corporation, trust or other entity.

 

“Presumed Applicable Tax Rate” means, with respect to any Fiscal Year and net
income or capital gain recognized during such Fiscal Year, the highest effective
combined United States federal, state and local income tax rate applicable to
net income or capital gain recognized during such Fiscal Year by a natural
person residing in North Carolina, taxable at the highest marginal United States
Federal income tax rate and the highest marginal North Carolina income tax
rates, taking into account the nature of such net income or capital gain and the
holding period of the assets the disposition of which gave rise to the capital
gain.

 

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“Presumed Tax Liability” for any Member for any Fiscal Year means an amount
equal to the tax liability of such Member with respect to net income and capital
gain allocated to such Member with respect to such Fiscal Year assuming such
income was taxable at the Presumed Applicable Tax Rates associated with such
income and giving effect to the deductions and capital losses allocated to such
Member during such Fiscal Year.

 

“Regulation” means a Treasury Regulation promulgated under the Code.

 

“Returned Capital” means amounts received by the Company that, in the reasonable
determination of the Board, represent a return of capital provided by the
Company to a Sponsored Fund or earnings allocated to the Company on a pro rata
basis (not taking into account any Revenue Share Proceeds or any earnings
related to any Revenue Share Proceeds that have not been withdrawn by, or
distributed to, the Company from a Sponsored Fund or an Underlying Manager) with
other investors in such Sponsored Fund based on the Company’s capital in such
Sponsored Fund, together with any amounts earned on such received amounts while
retained by the Company (and reduced by any amounts lost on any such received
amounts while retained by the Company).

 

“Revenue Share Proceeds” means, with respect to an Underlying Manager, amounts
paid or distributed to the Company by such Underlying Manager and/or its
Affiliates in connection with any profits or other “carried interest” in respect
of the relevant Sponsored Fund(s) (including any proceeds received from revenue
shares or ownership interests in such Underlying Manager).

 

“Security” or “Securities” means securities and other financial instruments of
United States and foreign entities, including, without limitation, capital
stock; shares of beneficial interest; partnership interests and similar
financial instruments; interests in equipment (including, without limitation,
ships, airplanes, containers, railcars and other leasable equipment), real
estate and real estate-related and other assets; royalties and interests in
royalties; litigation claims; intellectual property; bonds, notes and debentures
(whether subordinated, convertible or otherwise); commodities; currencies;
interest rate, currency, commodity, equity and other derivative products,
including, without limitation, (i) futures contracts, (ii) swaps, options,
warrants, caps, collars, floors and forward rate agreements, (iii) spot and
forward currency transactions and (iv) agreements relating to or securing such
transactions; equipment lease certificates; equipment trust certificates; loans;
accounts and notes receivable and payable held by trade or other creditors;
trade acceptances; contract and other claims; executory contracts;
participations; mutual funds; money market funds; obligations of the United
States, any state thereof, foreign governments and instrumentalities of any of
them; commercial paper; certificates of deposit; bankers’ acceptances; trust
receipts; and other obligations and instruments or evidences of indebtedness of
whatever kind or nature; in each case, of any Person, corporation, government or
other entity whatsoever, whether or not publicly traded or readily marketable.

 

“SF Seed Capital” means the amount of capital required to be contributed,
directly or indirectly through an Underlying Manager, to a Sponsored Fund in
connection with a Sponsored Fund Transaction.

 

“SF Seed Capital Contribution” means, with respect to each Sponsored Fund and
each Member, the Capital Contributions made to the Company pursuant to Section
3.1(b) to fund the SF Seed Capital requirements of such Sponsored Fund.

 

“SF Working Capital” means the amount of capital required to be contributed to
the Company in connection with a Sponsored Fund Transaction that does not
constitute SF Seed Capital, which working capital may be used to acquire
interests in an Underlying Manager or to extend a working capital facility to an
Underlying Manager in connection with such Sponsored Fund Transaction.

 

 5 

 

 

“SF Working Capital Contribution” means, with respect to any Sponsored Fund
Transaction and each Member, the Capital Contributions made to the Company
pursuant to Section 3.1(c) to fund the SF Working Capital requirements of the
Underlying Manager in connection with such Sponsored Fund Transaction.

 

“Sponsored Fund” means, with respect to each Underlying Manager, each investment
fund, investment vehicle, separately managed account or similar arrangement
sponsored by the Underlying Manager in respect of which the Company is, directly
or indirectly, entitled to Returned Capital and/or Revenue Share Proceeds.

 

“Sponsored Fund Transaction” means a transaction pursuant to which the Company,
directly or indirectly, provides SF Seed Capital, SF Working Capital and/or
strategic assistance to an Underlying Manager in connection with the launch of a
Sponsored Fund and/or launch and/or growth of the Underlying Manager’s business
in exchange for Returned Capital and/or Revenue Share Proceeds.

 

“Tax Matters Partner” has the meaning set forth in Section 8.8.

 

“Transfer,” “Transferee” and “Transferor” have the respective meanings set forth
in Section 9.1(a).

 

“Underlying Manager” means an investment manager or adviser that has entered
into a Sponsored Fund Transaction with the Company.

 

“Void Transfer” has the meaning set forth in Section 9.1(a).

 

ARTICLE III

CAPITAL CONTRIBUTIONS

 

Section 3.1. Capital Contributions.

 

(a) Operating Capital Contributions. Upon the determination by the Board that
the Company requires additional capital other than any SF Seed Capital or SF
Working Capital, the Members shall contribute an amount equal to such additional
capital requirement in proportion to their Percentage Interests (“Operating
Capital Contributions”).

 

(b) SF Seed Capital Contributions. Upon the determination by the Board that the
Company requires SF Seed Capital in respect of a Sponsored Fund, unless
otherwise agreed, PIH shall contribute an amount to the Company equal to 100% of
such SF Seed Capital requirement. To the extent that the Company is required to
return any Returned Capital related to a Sponsored Fund pursuant to the
governing documents of such Sponsored Fund or related Underlying Manager, each
Member shall return such Returned Capital in the same proportions that they were
distributed to such Member pursuant to Section 5.1(a).

 

(c) SF Working Capital Contributions. Upon the determination by the Board that
the Company requires SF Working Capital in respect of a Sponsored Fund, unless
otherwise agreed, PIH shall contribute an amount to the Company equal to 100% of
such SF Working Capital requirement.

 

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(d) Underlying Manager Clawback Amounts. To the extent that the Members have
received distributions of Revenue Share Proceeds pursuant to Section 5.1(b) that
are attributable to a Sponsored Fund and the Company is obligated to return
distributions, indirectly through an Underlying Manager, to such Sponsored Fund
with respect to a clawback obligation or other liability (including any
indemnification obligations in respect of such Sponsored Fund but not including
any contribution obligations to fund investments or expenses (other than, for
the avoidance of doubt, any such other liabilities) of such Sponsored Fund in
connection with any SF Seed Capital Contribution requirements and, in each case,
as required pursuant to the governing documentation of such Sponsored Fund) in
excess of any reserves maintained therefor by the Company pursuant to Section
5.4, the Members shall contribute to the Company an amount equal to 100% of the
amount required to be returned to such Sponsored Fund, but only in proportion to
the amount of distributions with respect to such Sponsored Fund previously
received by such Members (i.e., severally, not jointly); provided, that no
Member shall be obligated to contribute an amount in excess of the aggregate
amount of such distributions with respect to such Sponsored Fund previously
received by such Member (less any Presumed Tax Liability with respect to such
distributions and less any amounts previously contributed by such Member with
respect to such Sponsored Fund pursuant to this Section 3.1(d)).

 

(e) Capital Contributions shall be made from time to time no later than 12:00
noon (New York time) on the fifth Business Day following written notice from the
Company (a “Capital Call Notice”) of the amounts to be contributed by each
Member and the general purposes to which such contributions will be applied.

 

(f) Except as specified in Section 3.1, no Member shall at any time be required,
and no Member shall have any right, to make any additional Capital
Contributions, except as may be required by law or as otherwise specified in
this Agreement.

 

Section 3.2. No Interest Paid on Capital Contribution(s). No Member shall be
entitled to interest on or with respect to such Member’s Capital
Contribution(s).

 

Section 3.3. Withdrawal and Return of Capital Contribution(s). Except as
provided in this Agreement, no Member shall be entitled to withdraw any part of
such Member’s Capital Contribution(s) or to receive any distributions from the
Company.

 

Section 3.4. Form of Capital Contributions. All Capital Contributions shall be
made in immediately available funds in U.S. dollars.

 

ARTICLE IV

ALLOCATIONS

 

Section 4.1. Allocation of Net Income and Net Loss. The Members agree to treat
the Company as a partnership and the Members as partners for Federal income tax
purposes. Except as provided in Section 4.2, the Company’s Net Income or Net
Loss, as the case may be, and each item of income, gain, loss and deduction
entering into the computation thereof, for each Accounting Period shall be
allocated as follows:

 

(a) Capital Income (Loss). Capital Income or Capital Loss, as the case may be,
and each related item of income, gain, loss and deduction, for each Accounting
Period that is attributable to any Sponsored Fund shall be allocated to the
Members in proportion to their respective SF Seed Capital Contributions with
respect to such Sponsored Fund at the beginning of such Accounting Period.

 

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(b) Other Net Income and Net Loss. Net Income or Net Loss, as the case may be,
and each related item of income, gain, loss and deduction (not including any
Capital Income or Capital Loss or any items of income, gain, loss and deduction
related thereto), for any Fiscal Year shall be allocated among the Members in a
manner such that the Capital Account of each Member, immediately after giving
effect to such allocation as increased by the amount of such Member’s share of
partnership minimum gain (as defined in Regulation § 1.704-2(g)(1) and (3)) and
the amount of such Member’s share of partner nonrecourse debt minimum gain (as
defined in Regulation § 1.704-2(i)(5)), is, as nearly as possible, equal
(proportionately) to the amount of distributions that would be made to such
Member during such Fiscal Year pursuant to Section 5.1, if at the end of such
Fiscal Year (i) the Company were dissolved and terminated, (ii) its affairs were
wound up and each Company asset was sold for cash equal to its Book Value, (iii)
all Company liabilities were satisfied (limited with respect to each nonrecourse
liability to the Book Value of the assets securing such liability), and (iv) the
net assets of the Company were distributed in accordance with Section 5.1 to the
Members immediately after giving effect to such allocation. The Tax Matters
Partner may, in its reasonable discretion, make such other assumptions as it
deems necessary or appropriate in order to effectuate the intended economic
arrangement of the Members.

 

Section 4.2. Other Allocation Provisions.

 

(a) The allocations set forth in this Agreement are intended to comply with Code
sections 704(b) and 704(c) and the Regulations promulgated thereunder. If the
Tax Matters Partner in its reasonable discretion determines that any allocations
of items of Company income, gain, loss, deduction, and credit pursuant to this
Agreement do not satisfy the requirements of such provisions (including the
non-recourse deductions requirement of the Regulation §1.704-2(i), the minimum
gain chargeback requirement of Regulation §1.704-2(f), and the qualified income
offset requirement of Regulation §1.704-1(b)(ii)(d)), then notwithstanding
anything to the contrary contained in this Agreement, such items of income,
gain, loss, deduction or credit shall be allocated in such manner as the Tax
Matters Partner reasonably determines to be required by such provisions. To the
extent that the Tax Matters Partner reasonably determines that it would be
permissible under Code sections 704(b) and (c) and the Regulations thereunder to
make allocations in a subsequent year to offset the effects of the allocations
in the preceding sentence, the Tax Matters Partner shall be permitted to do so.
If a Member unexpectedly receives any adjustments, allocations or distributions
described in Regulation §1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Member
has a Capital Account deficit, items of income and gain shall be specially
allocated to such Member in an amount and manner sufficient to eliminate such
deficit as quickly as possible.

 

(b) Except to the extent otherwise required by the Code and Regulations, if an
Interest or part thereof is Transferred in any Fiscal Year, the items of income,
gain, loss, deduction and credit allocable to such Interest for such Fiscal Year
shall be apportioned between the transferor and the transferee in proportion to
the number of days in such Fiscal Year the Interest is held by each of them,
except that, if they agree between themselves and so notify the Tax Matters
Partner within 30 days after the transfer, then at their option and expense, (i)
all items or (ii) extraordinary items, including capital gains and losses, may
be allocated to the Person who held the Interest on the date such items were
realized or incurred by the Company.

 

Section 4.3. Allocations for Income Tax Purposes. The income, gains, losses,
deductions and credits of the Company for Federal, state and local income tax
purposes shall be allocated in the same manner as the corresponding items
included in the computation of Net Income and Net Loss were allocated pursuant
to Sections 4.1 and 4.2; provided that solely for Federal, state and local
income and franchise tax purposes and not for book or Capital Account purposes,
income, gain, loss and deduction with respect to property properly carried on
the Company’s books at a value other than its tax basis shall be allocated in
accordance with the requirements of Code section 704(c) and Regulation §
1.704-3. Notwithstanding the foregoing, the Tax Matters Partner in its
reasonable discretion shall make such allocations solely for tax purposes as may
be needed to ensure that allocations are in accordance with the interests of the
Members, within the meaning of the Code and Regulations.

 

 8 

 

 

Section 4.4. Withholding. To the extent that the Company is required to withhold
and pay over any amounts to any governmental authority with respect to
distributions or allocations to any Member, the amount withheld shall be treated
as a distribution to that Member. In the event of any claimed over-withholding,
Members shall be limited to an action against the applicable jurisdiction and
not against the Company (unless the Company has not yet paid such amounts over
to such jurisdiction). If any amount required to be withheld was not, in fact,
actually withheld from one or more distributions, the Company may (i) require
such Member to reimburse the Company for the corresponding withholding payments
made by the Company or (ii) reduce any subsequent distributions to such Member
by the amount of such withholding payments, in each case plus reasonable
interest. Each Member agrees to furnish the Company with such documentation as
shall reasonably be requested by the Company to assist it in determining the
extent of, and in fulfilling, its withholding obligations. Each Member will
indemnify the Tax Matters Partner and the Company against any losses and
liabilities (including interest and penalties) related to any withholding
obligations with respect to allocations or distributions made to such Member by
the Company. At the request of any Member, the Company will use commercially
reasonable efforts to take such action as is requested to minimize the amount
that the Company is required to withhold with respect to such Member; provided,
that the foregoing shall not be deemed to prohibit the Company from making
distributions.

 

ARTICLE V

DISTRIBUTIONS

 

Section 5.1. Distributions Generally. Subject to Sections 5.2, 5.3 and 5.4, the
Company shall make distributions to the Members at such times and in such
amounts as the Board shall determine, in its sole discretion, as follows:

 

(a) Returned Capital. Returned Capital attributable to any Sponsored Fund shall
be distributed to the Members in proportion to their respective SF Seed Capital
Contributions with respect to such Sponsored Fund.

 

(b) Revenue Share Proceeds. Revenue Share Proceeds with respect to any
Underlying Manager and the related Sponsored Fund Transaction shall be
distributed to the Members as follows:

 

(i) first, 100% to each Member in proportion to its Operating Capital
Contributions until such Member has received pursuant to this Section 5.1(b)(i)
cumulative distributions (taking into account all prior distributions made or
deemed made to such Member pursuant to this clause (i)) equal to its aggregate
Operating Capital Contributions;

 

(ii) second, 100% to each Member in proportion to its SF Working Capital
Contributions with respect to such Underlying Manager and Sponsored Fund
Transaction until such Member has received pursuant to this Section 5.1(b)(ii)
cumulative distributions (taking into account all prior distributions made or
deemed made to such Member pursuant to this clause (ii)) equal to its aggregate
SF Working Capital Contributions;

 

(iii) third, 100% to each Member until it has received, without duplication,
distributions pursuant to this Section 5.1(b)(iii) equal to a five percent (5%)
per annum cumulative return, compounded annually on the weighted daily average
of the unreturned amounts set forth in clause (ii) above; and

 

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(iv) thereafter, to the Members in proportion to their Percentage Interests.

 

In the event that distributions are made in kind, each Member shall receive its
pro rata share of such distribution in kind, and such distribution shall be
based on the amount such Member would have received if the asset being
distributed were liquidated for its Distribution Value, unless otherwise agreed
between the Board and such Member.

 

Section 5.2. Tax Distributions. Subject to the limitations on distributions set
forth herein (including Sections 5.3 and 5.4), the Company shall, to the extent
of available cash, make tax distributions (“Tax Distributions”) to each Member
with respect to each Fiscal Year, in an aggregate amount equal to the sum of:

 

(a) the excess of (i) the aggregate Presumed Tax Liability of such Member for
such Fiscal Year attributable to Capital Income allocated to such Member over
(ii) the aggregate amount of distributions of Returned Capital to such Member
during such Fiscal Year (not including any Tax Distribution with respect to a
prior Fiscal Year); and

 

(b) the excess of (i) the aggregate Presumed Tax Liability of such Member for
such Fiscal Year attributable to Net Income (other than Capital Income)
allocated to such Member over (ii) the aggregate amount of Revenue Share
Proceeds distributed to such Member during such Fiscal Year (not including any
Tax Distribution with respect to a prior Fiscal Year).

 

Any distributions pursuant to clause (a) shall be deemed to be advances of
distributions to be made pursuant to Section 5.1(a) and any distributions
pursuant to clause (b) shall be deemed to be advances of distributions to be
made pursuant to Section 5.1(b).

 

Section 5.3. Limitations on Distributions.

 

(a) Notwithstanding anything herein to the contrary:

 

(i) no distribution shall be made that would violate the Act or other applicable
law; and

 

(ii) no distribution shall be made that would violate the terms of any agreement
or any other instrument to which the Company is a party.

 

(b) The Company shall make all such distributions as soon as such distributions
are no longer prohibited by Section 5.3(a).

 

Section 5.4. Reserves. The Board may cause the Company to establish such
reserves as the Board deems reasonably necessary for any contingent or
unforeseen Company liabilities (including any “clawback” obligation of the
Company to recontribute profits previously distributed from an Underlying
Manager). For the avoidance of doubt, any reserves shall be applied on a pro
rata basis among the Members based on the amounts otherwise distributable to
them. At the expiration of such period as shall be deemed advisable by the
Board, the balance remaining in any reserve account(s) shall be distributed to
the Members who, in the reasonable determination of the Board, would have
received such amounts had they not been reserved in the first instance.

 

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ARTICLE VI

BOOKS OF ACCOUNT, RECORDS

AND REPORTS; FISCAL YEAR

 

Section 6.1. Books and Records. The Company shall keep proper and complete
records and books of account in which shall be entered fully and accurately all
transactions and other matters relating to the Company’s business as are
customarily entered into records and books of account maintained by Persons
engaged in businesses of a like character, including the Capital Account
established for each Member. The Company books and records shall be kept in
accordance with generally accepted accounting principles in the United States
(or such other method as may be approved by the Board). The Company books and
records shall at all times be maintained at the principal office of the Company
and shall be open during reasonable business hours to the inspection and
examination of the Members or their duly authorized representatives for any
proper purpose relating to their status as Members at the sole cost and expense
of the inspecting or examining Member and upon reasonably advance notice. The
Company shall maintain at its principal office and make available to the Members
or their duly authorized representatives a list of the names and addresses of
all Members.

 

Section 6.2. Reports. The Company shall send to each Person who was a Member at
any time during each Fiscal Year as soon as reasonably practicable following the
end of such Fiscal Year a report setting forth in sufficient detail such
information as shall enable such Person to prepare its federal income tax
returns in accordance with the applicable laws, rules and regulations then
prevailing.

 

Section 6.3. Fiscal Year. The fiscal year of the Company (the “Fiscal Year”)
shall be the calendar year; provided that the first Fiscal Year began on the
date that the Certificate was filed with the Secretary of State of the State of
Delaware, and the last Fiscal Year shall end on the date on which the Company is
terminated.

 

ARTICLE VII

POWERS, RIGHTS AND DUTIES OF THE MEMBERS

 

Section 7.1. Limitations. Except as expressly required by the Act or as
expressly provided in this Agreement, the Members shall not participate in the
management or control of the Company’s business nor shall they transact any
business for the Company, nor shall they have the power to act for or bind the
Company, or otherwise vote on any matter affecting the Company or its business,
said powers being vested solely and exclusively in the Board and the Persons, if
any, to whom the Board delegates such powers in accordance with the provisions
of this Agreement.

 

Section 7.2. Liability. Subject to the provisions of the Act, no Member shall be
liable for the repayment, satisfaction or discharge of any liabilities of the
Company except to the extent of the balance of its Capital Account.

 

Section 7.3. Priority. Except as otherwise set forth in this Agreement, no
Member shall have priority over any other Member as to Company property,
allocations or distributions.

 

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ARTICLE VIII

POWERS, RIGHTS AND DUTIES OF THE BOARD

 

Section 8.1. Authority. Subject to the limitations provided in this Agreement
and except as specifically contemplated by this Agreement, the Board shall have
exclusive and complete authority and discretion to manage the operations and
affairs of the Company and to make all decisions regarding the business of the
Company. Except as otherwise specifically provided herein, the Board shall have
all rights and powers in the management of the Company business to do any and
all other acts and things necessary, proper, convenient or advisable to
effectuate the purposes of this Agreement. Each Person that is appointed as a
Manager is hereby designated as a “manager” of the Company for purposes of the
Act. Any action taken by the Board collectively in accordance with this Article
VIII shall constitute the act of and serve to bind the Company. Except as set
forth herein or unless expressly authorized by the Board pursuant to Section
8.3, no action taken by any Manager individually shall constitute the act of or
serve to bind the Company. In dealing with the Board acting on behalf of the
Company, no Person shall be required to inquire into the authority of such Board
to bind the Company. Persons dealing with the Company are entitled to rely
conclusively on the power and authority of the Board as set forth in this
Agreement.

 

Section 8.2. Appointment and Term of Managers. The Board shall consist of four
Managers. FGI and PIH shall each have the right to appoint two of the four
Managers (the “Managers”). The Board shall from time to time by majority vote
elect one or more Chairmen of the Board (each, a “Chairman of the Board”) who
shall preside at all meetings of the Board and shall have such other powers and
duties as may be delegated to him or her by the Board. Each Manager shall hold
office from the time of his, her or its appointment until his, her or its
resignation or removal. Any Member appointing a Manager may at any time with or
without cause remove any Manager appointed by it and may appoint a successor
Manager by written notice to the other Member. Any Manager may resign at any
time upon written notice to the Company. Any such resignation shall take effect
at the time specified therein or, if the time be not specified, upon receipt
thereof, and the acceptance of such resignation, unless required by the terms
thereof, shall not be necessary to make such resignation effective. Managers may
receive compensation for services to the Company in their capacities as Managers
or otherwise in such manner and in such amounts as may be fixed from time to
time by the unanimous approval of the Members. Managers shall be reimbursed by
the Company for any reasonable out-of-pocket expenses incurred in connection
with attending any meeting of the Board.

 

Section 8.3. Meetings; Quorum; Voting.

 

(a) Meetings of the Board, regular or special, may be held at any place within
or without the State of Delaware. Managers may participate in a meeting of the
Board 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 in a meeting by such means shall constitute presence in person at
such meeting. The Board may fix times and places for regular meetings of the
Board and no notice of such meetings need be given. A special meeting of the
Board shall be held whenever called by any Manager then in office, at such time
and place as shall be specified in the notice or waiver thereof. Notice of each
special meeting and the purpose thereof shall be given by the person calling the
meeting to each Manager personally or by faxing and telephoning the same not
later than three Business Days before the meeting.

 

(b) Managers having the ability to approve a certain action pursuant to the
voting requirements of Section 8.3(c) shall constitute a quorum of the Board for
the purposes of taking such action. Any action required or permitted to be taken
at any meeting of the Board may be taken without a meeting if Managers having
the ability to approve a certain action pursuant to the voting requirements of
Section 8.3(c) to take such action on behalf of the Company consent thereto in
writing; provided that any request for such a written consent is simultaneously
delivered to all Managers.

 

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(c) Except as otherwise expressly provided by this Agreement, any proposed vote,
consent or action by the Board shall require the favorable vote, consent or
approval of a majority of the Managers.

 

(d) Each Manager entitled to vote at a meeting of the Board may authorize
another person or persons to act for him or her by proxy. Each proxy shall be
signed by the Manager giving such proxy.

 

Section 8.4. Officers, Agents and Employees; Committees of the Board.

 

(a) Appointment and Term of Office. The Board may appoint, and may delegate
power to appoint, such officers, agents and employees as it may deem necessary
or proper, who shall hold their offices or positions for such terms, have such
authority and perform such duties as may from time to time be determined by or
pursuant to authorization of the Board. Except as may otherwise be prescribed by
the Board in a particular case, all such officers, agents and employees shall
hold their offices at the pleasure of the Board for an unlimited term and need
not be reappointed annually or at any other periodic interval. Any action taken
by an officer, agent or employee of the Company pursuant to authorization of the
Board shall constitute the act of and serve to bind the Company. Persons dealing
with the Company are entitled to rely conclusively on authority of such
officers, agents or employees set forth in the authorization of the Board.

 

(b) Resignation and Removal. Any officer may resign at any time upon written
notice to the Company. Unless otherwise agreed, any officer, agent or employee
of the Company may be removed by the Board with or without cause at any time.

 

(c) Committees of the Board. The Board may from time to time designate one or
more committees, each committee to consist of one or more Managers of the
Company. The Board may designate one or more Managers as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee. Any such committee, to the extent provided in the resolution
of the Board, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the Company and may take
any action required or permitted to be taken by the Board under this Agreement;
provided, that, unless otherwise set forth in a board resolution, the Managers
on such committee would have the ability to cause the Board to take such action
pursuant to the voting requirements of Section 8.3. Any such committee may adopt
rules governing the method of calling and time and place of holding its
meetings. Managers that are not members of a specific committee of the Board
shall have the right to attend meetings of such committee but will have no right
to vote on any matter presented at any such meeting. Any or all members of any
such committee may be removed, with or without cause, by resolution of the
Board.

 

Section 8.5. Company Funds. Company funds shall be held in the name of the
Company and shall not be commingled with those of any other Person. Company
funds shall be used only for the business of the Company.

 

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Section 8.6. Other Activities; Transactions with Affiliates.

 

(a) None of the Members, Managers or any of their respective Affiliates shall be
required to manage the Company as its, his or her sole and exclusive function.
Except as set forth in Section 8.6(b), nothing contained in this Agreement shall
be deemed to preclude any Member or Manager or any shareholder, Affiliate,
officer, director, member, employee or agent of any Member or Manager from
engaging in or pursuing, directly or indirectly, any interest in other business
ventures of every kind, nature or description, independently or with others,
whether such ventures are competitive with the business of the Company or
otherwise, and, without limiting the foregoing but subject to Section 8.6(b),
each Member, Manager and any shareholder, Affiliate, officer, director, member,
employee or agent of any Member or Manager shall be entitled to serve as the
general partner (or the equivalent) of or manage any other partnership, company
or account of any kind whether or not such other partnership, company or account
engages in the same activities as the activities of the Company. Each Member
authorizes, consents to and approves of such present and future activities by
such Persons. Neither the Company nor any Member shall have any right by virtue
of this Agreement or the Company relationship created hereby in or to other
ventures or activities of the other Members or to the income or proceeds derived
therefrom.

 

(b) Neither FGI nor any of its Affiliates shall participate in a transaction
that would otherwise constitute a Sponsored Fund Transaction (an “Opportunity”)
other than through the Company, unless FGI has first presented the Opportunity
to the Company and either the Board or PIH has rejected the Opportunity.
Notwithstanding the foregoing, if the Opportunity requires in excess of $5
million in SF Seed Capital, FGI may offer amounts in excess of $5 million to a
third party (including Affiliates or beneficial owners of FGI); provided, that
the terms offered to such third party are no more favorable than the terms
offered to the Company, unless the third party invests more capital in the
Opportunity than the Company.

 

(c) Nothing in this Agreement shall preclude the Company from contracting for
the performance of services by or purchasing or leasing any property from any
Member or any Affiliate of a Member, provided that either (i) the transaction
has been approved by the Members and the compensation, price or rental therefor
is competitive with the compensation, price or rental paid to other Persons in
the area engaged in the business of rendering comparable services or selling or
leasing comparable property that could reasonably be made available to the
Company or (ii) the transaction is contemplated by this Agreement. Nothing
herein contained shall be construed as a guarantee by any such Member of the
performance by any such Affiliate of its obligations under any contract between
any such Affiliate and the Company. Subject to the provisions of this Section
8.6 and Section 8.7, any Member and any Affiliate of a Member may be employed or
retained by the Company in any capacity. Except as provided in this Section 8.6
and in Section 8.7, the validity of any transaction, agreement or payment
involving the Company and any Member or any Affiliate of a Member otherwise
permitted by this Agreement shall not be affected by reason of the relationship
between any Member and such Affiliate or the approval of such transaction,
agreement or payment by the Members.

 

(d) It is acknowledged and understood that FGI is a registered investment
adviser engaged in the business of managing private investment funds and that
affiliates of FGI provide investment advisory and wealth management services to
high net worth individuals, and as a result, that situations may arise in which
the interests of the Company, on the one hand, may conflict with the interests
of FGI and its Affiliates, on the other hand. No activity by FGI or any of its
Affiliates in connection with managing private investment funds (including with
respect to the allocation of investment opportunities) shall be considered a
violation of any duty (including any fiduciary duty) that may be owed by FGI (or
any of its designated Managers) to the Company or PIH. Without limiting the
generality of the foregoing, it is understood and agreed that it is intended
that (1) Underlying Managers will engage one or more Affiliates of FGI to
provide trade execution and other fund management services and shall compensate
such Affiliates of FGI in a manner approved by the Board (including a majority
of the Managers appointed by PIH), (2) Underlying Managers may be “relying
advisors” of FGI and (3) portfolio managers of Underlying Managers may be
employees of an Affiliate of FGI. In connection with any conflict of interest
(including any affiliate transaction) that is not contemplated by this Agreement
and that involves a transaction between the Company or an Underlying Manager, on
the one hand, and FGI or one of its Affiliates, on the other hand, FGI may
consult the Board with respect to any such conflict of interest. Provided that
FGI fully discloses all material facts related to such conflict, if the Board
(including a majority of the Managers appointed by PIH) waives any such conflict
of interest or prescribes standards or procedures with which FGI and/or its
Affiliates comply, then neither FGI (or any of its designated Managers) shall
have any liability to the Company or PIH for any actions giving rise to such
conflict of interest.

 

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Section 8.7. Limits on the Power of the Board. Anything in this Agreement to the
contrary notwithstanding, no action shall be taken by the Board, or by any
Manager, officer, agent or employee of the Company, without the written consent
or ratification of the specific act by all of the Members, which would cause or
permit the Company to:

 

(a) enter into a Sponsored Fund Transaction, including agreeing to fund any SF
Seed Capital and/or SF Working Capital requirements in connection therewith;

 

(b) start or acquire a new business (other than in connection with a Sponsored
Fund Transaction approved in accordance Section 8.7(a));

 

(c) admit a new Member to the Company other than in accordance with Article IX
or require any Operating Capital Contributions by the Members;

 

(d) remove any Member from the Company;

 

(e) make any fundamental corporate changes to the Company’s structure (including
any recapitalization or other restructuring thereof);

 

(f) merge or consolidate with or into, or sell substantially all of its assets
to, any other Person.

 

(g) commence (or agree to settle) any legal action on behalf of the Company;

 

(h) modify the accounting procedures or internal controls of the Company;

 

(i) change the tax classification of the Company for U.S. tax purposes;

 

(j) make any public statements about the Company;

 

(k) make any material changes to the scope or nature of the Company’s business;

 

(l) amend and restate any employment agreements or service contracts in respect
of the Company;

 

(m) acquire another business;

 

(n) settle or compromise any audit or litigation relating to the Company’s tax
matters;

 

(o) enter into any agreement that is or purports to be binding upon any Member;

 

(p) enter into any transactions or agreements with any Member or its Affiliates
except as contemplated by this Agreement; and

 

(q) amend this Agreement in accordance with Section 13.1.

 

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Section 8.8. Tax Audits.

 

(a) For purposes of this Agreement, the “Tax Matters Partner” shall be PIH as
long as it remains a Member. The Board shall have the authority to appoint a
replacement or successor Tax Matters Partner. To the extent authorized or
permitted under applicable law, the Tax Matters Partner (with the consent of the
Board) shall represent the Company and each Member in connection with any audit
or other tax proceeding relating to the Company’s affairs. The Tax Matters
Partner shall notify the Members and keep them reasonably informed in the event
of any material audit or tax proceeding. Each Member agrees to cooperate with
the Tax Matters Partner and the Board and to do or refrain from doing any and
all such things reasonably required by the Tax Matters Partner or the Board to
conduct such proceedings

 

(b) For purposes of the Code provisions enacted under the Bipartisan Budget Act
of 2015 (and any Regulations or administrative guidance promulgated thereunder),
the Tax Matters Partner (with the consent of the Board) is hereby authorized to
(i) allocate any audit adjustments or assessments among the Members (or former
Members) as it reasonably determines to be appropriate and permitted under such
provisions; and (ii) make (or cause to be made) any election available to the
Company under such provisions, including to issue statements of adjustment
(under Section 6226(a) of such provisions) reflecting such allocations to any
person who was a Member during the taxable year under audit. Any imputed
underpayment amount allocated to a Member (or former Member) as a result of such
audit shall be treated as an amount deemed distributed to, and indemnifiable by,
such Member, consistent with Section 4.4 hereof. The Tax Matters Partner shall
act as the “Partnership Representative” for each taxable year of the Company in
accordance with Code section 6223(a). The Partnership Representative shall have
the sole authority to participate in any Federal income tax audit, or litigation
stemming from an audit, of such taxable year. Subject to Section 8.7(n), actions
taken and decisions made by the Partnership Representative (with the consent of
the Board) shall be binding upon the Company and each Member. All reasonable
expenses incurred by the Partnership Representative or the Board in connection
with any tax audit, investigation, settlement or review shall be borne by the
Company. The provisions of this Section 8.8(b) shall survive the termination of
a Member’s Interest, this Agreement, and the Company, and shall remain binding
on each Member for the period of time necessary to resolve with the Internal
Revenue Service all income tax matters relating to the Company and for Members
to satisfy their indemnification obligations, if any.

 

Section 8.9. Exculpation. No Manager, Member, officer, agent or employee of the
Company nor any of their respective Affiliates (other than the Company) shall be
liable for the return of any portion of the Capital Contributions (or any return
thereon) of any Member. The return of such Capital Contributions (or any return
thereon) shall be made solely from the Company’s assets. No Manager, Member,
officer, agent or employee of the Company shall be required to pay to the
Company or to any Member any deficit in the Capital Account of any Member upon
dissolution of the Company or otherwise. No Member shall have the right to
demand or receive property other than cash in respect of its Interest. No
Manager, Member, officer, agent or employee of the Company nor any of their
respective Affiliates shall be personally liable, responsible or accountable in
damages or otherwise to the Company or any Member for any claims, demands,
costs, liabilities and expenses, including amounts paid in satisfaction of
judgments, awards, settlement, in compromise or as fines and penalties, and
reasonable attorneys’ fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim
incurred (“Losses”) as a result of any act or failure to act by such Person on
behalf of the Company that such Person reasonably believed at the time was in
the best interests of the Company unless there has been a determination by a
final decision on the merits by a court or other body of competent jurisdiction
that such Losses resulted from such Person’s bad faith, fraud, gross negligence,
reckless disregard or willful misconduct.

 

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Section 8.10. Indemnification of the Members.

 

(a) The Company shall indemnify and hold harmless the Managers, the Members,
their Affiliates and their respective members, partners, officers, directors,
employees and agents (each, an “Indemnified Party”), from and against any Losses
suffered or sustained by an Indemnified Party, by reason of any acts, omissions
or alleged acts or omissions arising out of such Indemnified Party’s activities
on behalf of the Company or in furtherance of the interests of the Company,
except that the Company shall not be responsible under this Section 8.10(a) to
an Indemnified Party for any Losses to the extent such Losses have been
determined by a final decision on the merits by a court or other body of
competent jurisdiction to have resulted from such Indemnified Party’s bad faith,
fraud, gross negligence, reckless disregard or willful misconduct.
Notwithstanding the indemnification provided in this Section 8.10, the Company
may, but shall not be obligated to, carry such liability insurance for its
Managers and officers as the Board determines necessary or appropriate.

 

(b) Expenses (including attorneys’ fees) incurred by an Indemnified Party in a
civil or criminal action, suit or proceeding shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding, as
incurred; provided that if an Indemnified Party is advanced such expenses and it
is later determined that such Indemnified Party was not entitled to
indemnification with respect to such action, suit or proceeding, then such
Indemnified Party shall reimburse the Company for such advances; and provided,
further, such expenses shall be advanced by the Company only upon the execution
and delivery by the Indemnified Party of a recourse promissory note, in a
principal amount equal to the amount of the requested advance, to the Company,
having a payment date of 10 Business Days following the final disposition of the
action, suit or proceeding with respect to which such advance is being requested
in order to secure the return following final disposition of the action, suit or
proceeding with respect to which such advance is being requested, of any amount
which represents an advance of expenses for which the Indemnified Party is not
entitled to indemnification under this Section 8.10.

 

(c) No Indemnified Party shall be entitled to any punitive, consequential,
special, or exemplary damages.

 

(d) All covered Losses shall be net of insurance recoveries from insurance
policies of the Company to the extent that any proceeds of such policies, less
any costs, expenses or premiums incurred by the Company in connection therewith,
are distributed by the Company to an Indemnified Party.

 

Section 8.11. Expenses. The Company shall pay all expenses related to the
operations of the Company. Each Member shall be entitled to reimbursement
(without interest) for any such documented expenses paid by such Member for or
on behalf of the Company.

 

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ARTICLE IX

TRANSFERS OF INTERESTS BY MEMBERS

 

Section 9.1. General.

 

(a) No Member may sell, assign, pledge or in any manner dispose of, or create,
or suffer the creation of, a security interest in or any encumbrance on all or
any portion of its Interest (any such act being referred to as a “Transfer,” any
Person who effects a Transfer being referred to as a “Transferor” and any Person
to which a Transfer is effected being referred to as a “Transferee”), without
the prior written consent of the other Members, which consent may be given or
withheld in the other Members’ sole discretion and may include such terms and
conditions as the other Members may deem appropriate in its sole discretion;
provided that a Member shall have the right to Transfer 100% of its Interest to
an Affiliate thereof without the consent of any other Member. In connection with
any Transfer, the Transferor shall deliver to the Company and the Board a fully
executed copy of certain transfer documents relating to the Transfer, in form
and substance satisfactory to the Board, executed by both the Transferor and the
Transferee, and the agreement in writing of the Transferee to (i) be bound by
any terms imposed upon such Transfer by the other Members and by the terms of
this Agreement; and (ii) assume all obligations of the Transferor under this
Agreement relating to the Interest that is the subject of such Transfer. No
Transfer of an Interest shall be effective until such date as all requirements
of this Article IX in respect thereof have been satisfied. Any Transfer or
purported Transfer not made in accordance with this Agreement (a “Void
Transfer”) shall be null and void and of no force or effect whatsoever. Any
amounts otherwise distributable to a Member pursuant to Article V, in respect of
a direct or indirect interest in the Company that has been Transferred in
violation of this Section 9.1(a), may be withheld by the Company following the
occurrence of a Void Transfer until the Void Transfer has been rescinded,
whereupon the amount withheld shall be distributed without interest to the
Member that initially made such Void Transfer.

 

(b) A Transferee shall be admitted to the Company as a substituted Member upon
the request of the Transferor and the approval of the Board. Unless a Transferee
is admitted as a substituted Member pursuant to this Section 9.1(b), such
Transferee shall have none of the powers of a Member hereunder and shall only
have such rights of an assignee under the Act as are consistent with the other
terms and provisions of this Agreement.

 

(c) Upon the Transfer of the entire Interest of a Member and effective upon the
admission of such Member’s Transferee(s) to the Company pursuant to Section
9.1(b) above, the Transferor shall be deemed to have withdrawn from the Company
as a Member.

 

(d) The Company shall reflect each Transfer and admission authorized under this
Article IX in the books and records of the Company, including Schedule A hereto.

 

(e) Notwithstanding anything in this Agreement to the contrary, no Member may
Transfer an Interest if such Transfer would (i) violate or cause the Company to
violate any applicable Federal or state securities law, rule or regulation (or
conflict with any applicable exemption from registration under such securities
law), (ii) cause the Company to be treated as an association taxable as a
corporation for Federal income tax purposes, (iii) cause the Company to fail to
qualify for the safe harbor from “publicly traded partnership” status set forth
in Regulations §1.7704-1(h) or (iv) require the Company to register as an
investment company under the Investment Company Act of 1940, as amended. Any
such purported Transfer shall be null and void and of no force or effect
whatsoever.

 

Section 9.2. Consequences of Transfers Generally.

 

(a) In the event of any Transfer permitted under this Article IX, the Transferor
and the Interest that is the subject of such Transfer shall remain subject to
all of the terms and provisions of this Agreement, and the Transferee shall hold
such Interest subject to all unperformed obligations of the Transferor and shall
agree in writing to the foregoing if requested to do so by the Board. Any
successor or Transferee hereunder shall be subject to and bound by all the terms
and provisions of this Agreement as if a Member originally a party to this
Agreement.

 

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(b) Unless a Transferee becomes a substituted Member, such Transferee shall have
no right to obtain or require any information concerning, or any account of,
Company transactions, or to inspect the Company’s books, or to vote on Company
matters. Such a Transfer shall entitle the Transferee only to receive the share
of distributions, income and losses to which the transferring Member otherwise
would be entitled. Each Member agrees that such Member will, upon request of the
Board, execute such certificates or other documents and perform such other acts
as the Board may deem necessary or advisable after a Transfer of all or a part
of that Member’s Interest (whether or not the Transferee becomes a substituted
Member) to preserve the limited liability of the Members under the laws of the
jurisdictions in which the Company is doing business.

 

(c) Neither the Transfer of an Interest nor the admission of a substituted
Member shall be cause for dissolution of the Company.

 

Section 9.3. Transferee to Succeed to Transferor’s Capital Account. Any
Transferee pursuant to the provisions of this Article IX shall succeed to the
Capital Account (or portion thereof) so Transferred to such Person.

 

Section 9.4. Right of First Refusal. In the event that any Member intends to
Transfer all or a portion of its Interests to a third party pursuant to Section
9.1, except for Transfers to such Member’s Affiliates, such Member shall,
subject to any additional notice period as may be required by the following
sentence, first provide the Board with thirty (30) days’ written notice setting
forth the terms and conditions of such Transfer prior to making such offer.
During such thirty (30) day period, such Member shall provide the other Members
with thirty (30) days’ written notice prior to making the Transfer (the “ROFR
Notice”). During such thirty (30) day period (the “ROFR Period”), such Members
shall have the exclusive right to negotiate the sale or transfer of all or any
portion such Interests for their own account. If such sale or transfer of
Interests is not agreed within the ROFR Period, such Member may then offer and
sell such Interests to a third party. Within two (2) days after the expiration
of the ROFR Period, the selling Member shall provide a notice to the Company and
each Member setting forth the final proposed amount of Interests to be sold to a
third party after the exercise of rights by the Members pursuant to this Section
9.4.

 

Section 9.5. Additional Filings. Upon acceptance of a Transferee for admission
as a substituted Member under Section 9.1(b), the Company shall cause to be
executed, filed and recorded with the appropriate governmental agencies such
documents (including amendments to this Agreement, if necessary) as are required
to accomplish such admission.

 

ARTICLE X

WITHDRAWAL OF MEMBERS; TERMINATION OF THE COMPANY;

LIQUIDATION AND DISTRIBUTION OF ASSETS

 

Section 10.1. Withdrawal or Removal of Members. Subject to the provisions of
Article IX, no Member shall at any time retire or withdraw from the Company. Any
Member retiring or withdrawing in contravention of this Section 10.1 shall
indemnify, defend and hold harmless the Company and all other Members from and
against any losses, expenses, judgments, fines, settlements or damages suffered
or incurred by the Company or any other Member arising out of or resulting from
such retirement or withdrawal. No transfer of all or a portion of a Member’s
interest in accordance with Article IX shall constitute a retirement or
withdrawal within the meaning of this Section 10.1.

 

Section 10.2. Dissolution of the Company.

 

(a) Except as expressly provided herein or as otherwise required by the Act, the
Members shall have no power to dissolve the Company. The Company shall be
dissolved, wound up and terminated as provided herein upon the first to occur of
the following:

 

(i) the bankruptcy or dissolution of either Member;

 

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(ii) entry of a decree of judicial dissolution of the Company under Section
18-802 of the Act; or

 

(iii) the determination to do so by either Member following 180 days’ prior
written notice given to the other Member.

 

(b) In the event of the dissolution of the Company, a liquidating agent or
committee appointed by the Board (the “Liquidator”), shall commence to wind up
the affairs of the Company and to liquidate the Company’s assets. The Members
shall continue to share all income, losses and distributions of the Company
during the period of liquidation in accordance with Articles IV and V. The
Liquidator shall have full right and discretion to determine the time, manner
and terms of any sale or sales of Company assets pursuant to such liquidation,
giving due regard to the activity and condition of the relevant markets and
general financial and economic conditions.

 

(c) The Liquidator shall have all of the rights and powers with respect to the
assets and liabilities of the Company in connection with the liquidation and
termination of the Company that the Board would have with respect to such assets
and liabilities during the term of the Company, and the Liquidator is hereby
expressly authorized and empowered to execute any and all documents that the
Liquidator considers to be necessary or advisable in order to effectuate the
liquidation and termination of the Company and the transfer of any assets
belonging to the Company.

 

(d) Notwithstanding the foregoing, if the Liquidator is not a Member, it shall
not be deemed a Member and shall not have any of the interests in the Company of
a Member; and the Liquidator shall be compensated by the Company for its
services to the Company at normal, customary and competitive rates.

 

Section 10.3. Distribution in Liquidation.

 

(a) The Liquidator shall, as soon as practicable following an event giving rise
to the dissolution, winding up and termination of the Company, wind up the
affairs of the Company and sell and/or distribute the assets of the Company. The
assets of the Company shall be applied in the following order of priority:

 

(i) first, to pay the costs and expenses of the dissolution, winding up and
termination of the Company;

 

(ii) second, to creditors of the Company (other than any Members in their
capacity as Members but including any liabilities to the Members for any
expenses of the Company paid by the Members or their Affiliates, to the extent
the Members are entitled to reimbursement hereunder) in the order of priority
provided by law;

 

(iii) third, to establish reserves reasonably adequate to meet any and all
contingent or unforeseen liabilities or obligations of the Company; provided,
however, that all or part of the balance of such reserves shall be distributed
as hereinafter provided from time to time as the Liquidator may deem appropriate
in view of the satisfaction, elimination or reduction of such contingencies and
obligations and the reserves deemed prudent by the Liquidator to cover
unforeseen liabilities;

 

 20 

 

 

(iv) fourth, to the Members for loans, if any, made by them to the Company; and

 

(v) fifth, to the Members in accordance with Section 5.1.

 

(b) If the Liquidator determines that Company assets other than cash are to be
distributed, then the fair value of such assets shall be determined. Any such
assets shall be retained or distributed by the Liquidator as follows:

 

(i) The Liquidator shall retain assets belonging to the Company having a value
(net of any associated liabilities) equal to the amount by which the net
proceeds of the Company’s assets are insufficient to satisfy the requirements of
paragraphs (i), (ii), (iii) and (iv) of Section 10.3(a); and

 

(i) The remaining assets belonging to the Company shall be distributed to the
Members in the manner specified in paragraph (v) of Section 10.3(a).

 

The Liquidator shall distribute to each Member its allocable share of each asset
belonging to the Company that is distributed in kind unless all Members
otherwise agree. Any distributions in kind shall be subject to such conditions
relating to the disposition and management thereof as the Liquidator deems
reasonable and equitable.

 

Section 10.1. Final Statement of Assets and Liabilities. Within a reasonable
time following the completion of the liquidation of the Company’s assets, the
Liquidator shall deliver to each of the Members a statement, audited by the
Company’s accountant, which shall set forth the assets and liabilities of the
Company as of the date of complete liquidation and the distributions due or made
to each Member’s from the Company pursuant to Section 10.3.

 

Section 10.2. No Deficit Restoration Obligation. Notwithstanding any other
provision of this Agreement to the contrary, no Member shall have any liability
to restore any deficit in its Capital Account, whether upon liquidation of the
Company or otherwise. In addition, no allocation to any Member of any loss shall
create any asset of or obligation to the Company, even if such allocation
creates or increases a deficit in such Member’s Capital Account; and no Member
shall be obligated to pay the amount of any such deficit to or for the account
of the Company or any creditor of the Company. The obligations of any Member to
make Capital Contributions pursuant to Article III are for the exclusive benefit
of the Company and not of any creditor of the Company.

 

Section 10.3. Termination of the Company. The Company shall terminate when all
property owned by the Company shall have been disposed of and the assets of the
Company shall have been distributed as provided in Section 10.3. The Liquidator
shall then execute and cause to be filed a certificate of cancellation of the
Company.

 

ARTICLE XI

ADMISSION OF ADDITIONAL MEMBERS

 

Section 11.1. Admission of Additional Members. One or more Persons may be
admitted as additional Members (each, an “Additional Member”), upon such terms
as the Board shall determine in its sole discretion, only with the prior written
approval of all of the Members. Each Additional Member shall execute such
documentation as may be requested by the Board pursuant to which such Additional
Member agrees to be bound by the terms and provisions of this Agreement. The
Company shall reflect each admission authorized under this Article XI by
preparing an amendment to this Agreement, including Schedule A, dated as of the
date of such admission to reflect such admission.

 

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ARTICLE XII

NOTICES AND VOTING

 

Section 12.1. Notices. All notices, demands or requests required or permitted
under this Agreement must be in writing, and shall be made by hand delivery,
certified mail, Federal Express or a similarly reputable overnight courier
service or other electronic means to the address set forth on Schedule A hereto
for the Member receiving such notice, demand or request, but any Member may
designate a different address by a notice similarly given to the Company and
each other Member. Any such notice or communication shall be deemed given: (a)
when delivered by hand, if delivered on a Business Day; (b) the next Business
Day after delivery by hand if delivered by hand on a day that is not a Business
Day; (c) four Business Days after being deposited in the United States mail by
certified mail; (d) on the next Business Day after being deposited for next day
delivery with Federal Express or by a similar reputable overnight courier
service; (e) when receipt is confirmed, if faxed or delivered by other
electronic means on a Business Day; and (f) the next Business Day after the day
on which receipt is confirmed, if faxed or delivered by other electronic means
on a day that is not a Business Day.

 

Section 12.2. Voting. Any action requiring the affirmative vote of the Members
under this Agreement may, unless otherwise specified herein, be taken by vote at
a meeting or, in lieu thereof, by written consent of the Members holding the
required Percentage Interests for such affirmative vote.

 

ARTICLE XIII

AMENDMENT OF AGREEMENT

 

Section 13.1. Amendments. No amendments may be made to this Agreement except in
writing executed by all of the Members.

 

Section 13.2. Amendment of Certificate. In the event that this Agreement is
amended pursuant to this Article XIII, the Company shall, to the extent that the
Board deems necessary or advisable, amend the Certificate to reflect any such
change.

 

ARTICLE XIV

MISCELLANEOUS

 

Section 14.1. Entire Agreement. This Agreement (including the schedules and
exhibits hereto) constitutes the entire agreement among the Members with respect
to the subject matter hereof. The foregoing supersede any prior agreements or
understandings among the Members with respect to the subject matter hereof, and
the foregoing may not be modified or amended in any manner other than as set
forth herein.

 

Section 14.2. Applicable Law. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the law of the
State of Delaware, without regard to the conflicts of law provisions thereof.

 

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Section 14.3. Effect. Except as herein otherwise specifically provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
the Persons indemnified hereunder and their legal representatives, successors
and permitted assigns.

 

Section 14.4. Survival. The indemnity and dispute resolution provisions hereof
shall survive the termination of this Agreement and the dissolution of the
Company, as shall the obligation to settle accounts hereunder.

 

Section 14.5. Pronouns and Number. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in any of the masculine,
feminine or neuter shall include the masculine, feminine and neuter.

 

Section 14.6. Captions. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.

 

Section 14.7. Partial Enforceability. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.

 

Section 14.8. Counterparts. This Agreement may contain more than one counterpart
of the signature page and this Agreement may be executed by the affixing of the
signatures of each of the Members to one of such counterpart signature pages.
All of such counterpart signatures pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.

 

Section 14.9. Construction. The language in all parts of this Agreement shall be
in all cases construed simply according to its fair meaning and not strictly for
or against any Person.

 

Section 14.10. Waiver of Partition. The Members hereby agree that the Company’s
assets are not and will not be suitable for partition. Accordingly, each of the
Members hereby irrevocably waives any and all rights that such Member might
otherwise have to maintain any action for the partition of any of such assets.

 

Section 14.11. Submission to Jurisdiction.

 

(a) Each of the Members hereby irrevocably acknowledges and consents that any
legal action or proceeding brought with respect to any of the obligations
arising under or relating to this Agreement may be brought in the Court of
Chancery of the State of Delaware, provided that if jurisdiction is not then
available in the Court of Chancery of the State of Delaware, then any such legal
action or proceeding may be brought in any federal court located in the State of
Delaware and each of the Members hereby irrevocably submits to and accepts with
regard to any such action or proceeding, for itself and in respect of its
property, generally and unconditionally, the exclusive jurisdiction of the
aforesaid courts. Each Member hereby further irrevocably waives any claim that
any such courts lack jurisdiction over such Member, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or the
transactions contemplated hereby brought in any of the aforesaid courts, that
any such court lacks jurisdiction over such Member. Each Member irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such Member, at its address for notices set forth in Section 12.1; such service
to become effective ten (10) days after such mailing. Each Member hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other documents contemplated hereby that
service of process was in any way invalid or ineffective. The foregoing shall
not limit the rights of any Member to serve process in any other manner
permitted by applicable law. The foregoing consents to jurisdiction shall not
constitute general consents to service of process in the State of Delaware for
any purpose except as provided above and shall not be deemed to confer rights on
any Person other than the respective Members.

 

 23 

 

 

(b) Each of the Members hereby waives any right it may have under the laws of
any jurisdiction to commence by publication any legal action or proceeding with
respect this Agreement. To the fullest extent permitted by applicable law, each
of the Members hereby irrevocably waives the objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement in any of the courts referred to in
this Section 14.10 and hereby further irrevocably waives and agrees not to plead
or claim that any such court is not a convenient forum for any such suit, action
or proceeding.

 

(c) The Members agree that any judgment obtained by any Member or its successors
or assigns in any action, suit or proceeding referred to above may, in the
discretion of such Member (or its successors or assigns), be enforced in any
jurisdiction, to the extent permitted by applicable law.

 

(d) The Members agree that the remedy at law for any breach of this Agreement
may be inadequate and that should any dispute arise concerning any matter
hereunder, this Agreement shall be enforceable in a court of equity by an
injunction or a decree of specific performance. Such remedies shall, however, be
cumulative and nonexclusive, and shall be in addition to any other remedies
which the Members may have.

 

Section 14.12. Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH MEMBER HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTER-CLAIM, ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY MATTER ARISING HEREUNDER.

 

Section 14.13. Force Majeure. No Member shall be liable for damages resulting
from delayed or defective performance when such delays arise out of causes
beyond the control and without the fault or negligence of the offending Member.
Such causes may include acts of God or of the public enemy, acts of the United
States in its sovereign capacity, fires, floods, power failure, disabling
strikes, epidemics, quarantine restrictions and freight embargoes.

 

Section 14.14. Further Assurances. Each Member shall execute such additional
documents and perform such further acts as may be reasonable and necessary to
carry out the provisions of this Agreement.

 

Section 14.15. No Third Party Beneficiaries. The provisions of this Agreement
are not intended to be for the benefit of any creditor (other than a Member who
is a creditor and then only in its capacity as a Member) or other Person (other
than a Member (and only in its capacity as a Member)) to whom any debts,
liabilities or obligations are owed by (or who otherwise has any claim against)
the Company or any of the Members. Moreover, notwithstanding anything contained
in this Agreement, no such creditor or other Person shall obtain any rights
under this Agreement or shall, by reason of this Agreement, make any claim in
respect of any debt, liability or obligation (or otherwise) against the Company
or any Member.

 

[Signature Page Follows]

 

 24 

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

 

  MEMBERS:         FGI FUNDS MANAGEMENT, LLC         By: /s/ Kyle Cerminara  
Name: Kyle Cerminara   Title: Manager         1347 Property Insurance Holdings,
Inc.         By: /s/ John S. Hill   Name: John S. Hill   Title: EVP, CFO &
Secretary

 

[Signature Page to the Limited Liability Company Agreement of

Fundamental Global Asset Management, LLC]

 

   

 

 

Schedule A

 

Members; Percentage Interests

 

Member  Percentage Interests        FGI Funds Management, LLC
4201 Congress Street, Suite 140
Charlotte, North Carolina 28209   50%        1347 Property Insurance Holdings,
Inc.
970 Lake Carillon Dr., Suite 314
Saint Petersburg, FL 33716   50%