Exhibit 10.5

 

Execution Version

 

AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

C-PAK Consumer Product Holdings SPV I LLC

 

(a Delaware Limited Liability Company)

 

 

THE MEMBERSHIP INTERESTS CREATED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
JURISDICTION. NO MEMBERSHIP INTEREST MAY BE SOLD OR OFFERED FOR SALE (WITHIN THE
MEANING OF ANY SECURITIES LAWS) UNLESS A REGISTRATION STATEMENT UNDER ALL
APPLICABLE SECURITIES LAWS WITH RESPECT TO THE INTEREST IS THEN IN EFFECT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS IS THEN APPLICABLE TO
THE INTEREST. A MEMBERSHIP INTEREST ALSO MAY NOT BE TRANSFERRED OR ENCUMBERED
UNLESS THE PROVISIONS OF THIS AGREEMENT ARE SATISFIED.

 

 

Dated as of May 3, 2019

 

 

 

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

C-PAK Consumer Product Holdings SPV I LLC

 

(a Delaware Limited Liability Company)

 

This Amended and Restated Limited Liability Company Agreement is made and
entered into and shall be effective as of the 3rd day of May, 2019, by and among
C-PAK CONSUMER PRODUCT HOLDINGS SPV I LLC, a Delaware limited liability company,
and each other Person whose name is set forth on Exhibit A attached to this
Agreement, as the Members.

 

W I T N E S S E T H:

 

WHEREAS, the Company was formed on May 17, 2017 by the filing of a certificate
of formation with the Secretary of State of the State of Delaware;

 

WHEREAS, the initial limited liability company agreement of the Company was
entered into on May 17, 2017 (the “Original Company Agreement”); and

 

WHEREAS, the parties hereto desire to amend, restate and supersede the Original
Company Agreement in its entirety.

 

NOW, THEREFORE, in consideration of the premises and the agreements contained
herein and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto do hereby agree to amend and
restate the Original Company Agreement in its entirety, as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1. Certain Definitions. The terms specified in this Section 1.1 shall, for all
purposes of this Agreement, have the meanings herein specified, unless the
context expressly or by necessary implication otherwise requires.

 

“Act” means the Delaware Limited Liability Company Act, as amended to date and
as may be amended from time to time hereafter and any successor to such Act.

 

“Additional Member” means a Person who is admitted into the Company as a Member
pursuant to the terms of Section 14.4.

 

 

 

 

“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in a Member’s Capital Account as of the end of the
relevant fiscal year or other period, after giving consideration to the
following adjustments:

 

(a) There shall be credited to such Capital Account any amounts which the Member
is obligated to restore to the Company or is deemed obligated to restore
pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c) or to the
penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) or
1.704-2(i)(5); and

 

(b) There shall be debited to such Capital Account the items described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5)
and 1.704-1(b)(2)(ii)(d)(6).

 

“Affiliate” means, with respect to any Member, (a) any Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with a Member; (b) any entity of which a Member is an
officer, director, general partner or trustee, or serves in a similar capacity;
or (c) any child, grandchild (whether through marriage, adoption or otherwise),
sibling (whether through adoption or otherwise), parent, or spouse of a Member.
As used in this definition of “Affiliate,” the term “control” means possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person whether through ownership of voting
securities, by contract or otherwise.

 

“Agreement” means this Amended and Restated Limited Liability Company Agreement,
as it may be amended, modified, supplemented or restated from time to time in
accordance with the provisions of the Act and this Agreement.

 

“Applicable Tax Rate” means (i) if the Member is a partnership for U.S. federal
income tax purposes for such year, the highest effective marginal rate of
individual U.S. federal income tax and Medicare tax (imposed by Code Section
1411 on income and gain allocated by the Company) in effect at such time of
distribution and (ii) if the Member is a corporation for U.S. federal income tax
purposes for such year, the U.S. federal corporate income tax rate.

 

“Available Cash” means all cash, demand deposits and short term marketable
securities received from the conduct of Company operations or capital
transactions, less the portion thereof used to pay, or establish reserves or
cash set asides for, all reasonably foreseeable Company expenses and
contingencies, all as reasonably determined by the Board of Managers. Available
Cash shall not be reduced by depreciation, amortization, cost recovery
deductions or similar allowances, but shall be increased by any reductions of
reserves previously established.

 

“Bankruptcy” means, as to any Member, the Member’s taking, or acquiescing to the
taking, of any action seeking relief under, or advantage of, any applicable
debtor relief, liquidation, receivership, conservatorship, bankruptcy,
moratorium, rearrangement, insolvency, reorganization or similar law affecting
the rights or remedies of creditors generally, as in effect from time to time.
For the purpose of this definition, the term “acquiescing” shall include,
without limitation, the failure to file within the time specified by law, an
answer or opposition to any proceeding commenced against such Member under any
such law and a failure to file, within thirty (30) days after its entry, a
petition, answer or motion to vacate or to discharge any order, judgment or
decree providing for any relief under any such law.

 

 2 

 

 

“Bipartisan Budget Act” means the Bipartisan Budget Act of 2015, H.R. 1314, P.L.
114-74, 114th Cong. (2015).

 

“Board of Managers” means the governing body of the Company, having all of the
rights, duties and powers of the managers of a limited liability company under
the Act, subject to the terms of this Agreement.

 

“Buyout Notice” is defined in Section 15.1(a).

 

“Capital Account” means that separate Capital Account maintained by the Company
for each Member and the amount of each such Member’s Capital Account, as of any
given date, which shall be computed as follows:

 

(a) the Capital Account balance of each Member shall be credited (increased) by
(i) the amount of cash contributed by such Member to the capital of the Company,
(ii) the fair market value of property contributed by such Member to the capital
of the Company (net of liabilities secured by such property that the Company
assumes or takes subject to under Code Section 752), and (iii) such Member’s
allocable share of Company income and gain (or items thereof) including income
and gain exempt from U.S. federal income taxation and income and gain
attributable to adjustments to reflect book value pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(g), but excluding income and gain
attributable to tax items which differ as a result of the revaluation of Company
property as described in Treasury Regulations Section 1.704-1(b)(4); and

 

(b) the Capital Account balance of each Member shall be debited (decreased) by
(i) the amount of cash distributed to such Member, (ii) the fair market value of
property distributed to such Member (net of liabilities secured by such property
which the Member assumes or takes subject to under Code Section 752), (iii) such
Member’s allocable share of expenditures of the Company described in Code
Section 705(a)(2)(B), and (iv) such Member’s allocable share of Company losses,
depreciation and other deductions (or items thereof) including loss and
deduction attributable to adjustments to reflect book value pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(g) but excluding expenditures described in
(iii) above and loss or deduction attributable to tax items which differ as a
result of the revaluation of Company property or excess percentage depletion as
described in Treasury Regulations Section 1.704-1(b)(4).

 

The Board of Managers (acting in good faith and in accordance with customary
valuation methods) shall determine the fair market value of any property
contributed to the Company.

 

 3 

 

 

In the event any Units are Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the Transferred Units.

 

In determining the amount of any liability for purposes of subparagraphs (a) and
(b) above, there shall be taken into account Code Section 752(c) and any other
applicable provisions of the Code and Treasury Regulations.

 

Notwithstanding the foregoing, a Member’s Capital Account shall not be adjusted
to reflect gain or loss attributable to the disposition of property contributed
by such Member to the extent such Member’s Capital Account reflected such
inherent gain or loss in the property on the date of its contribution to the
Company.

 

The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Treasury
Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Treasury Regulations. In the event the
Board of Managers determines that it is prudent to modify the manner in which
the Capital Accounts, or any debits or credits thereto, are computed in order to
comply with such Treasury Regulations, the Board of Managers may make such
modification; provided, that it is not likely to have a material effect on the
amounts distributable to any Member upon the termination or dissolution of the
Company. The Board of Managers also shall (a) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of
the Members and the amount of Company capital reflected on the Company’s balance
sheet, as computed for book purposes in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(g), and (b) make any appropriate modifications in the
event unanticipated events might otherwise cause this Agreement not to comply
with Treasury Regulations Sections 1.704-1(b) and 1.704-2.

 

“Capital Contribution” means, with respect to any Member, the amount of cash
and/or the initial Gross Asset Value of property contributed by such Member to
the Company with respect to the Units held by such Member. In the event such
term is used in this Agreement and such Capital Contribution amount has not been
adjusted in the applicable provision to reduce the Capital Contribution amount
by the liabilities which the Company assumes or takes the property subject to
with respect to property contributed by a Member, such Member’s Capital
Contribution will be reduced by such liabilities where applicable for U.S.
federal income tax or state law purposes.

 

“Certificate of Formation” means the Certificate of Formation of the Company,
initially filed in the office of the Secretary of State of the State of Delaware
on May 17, 2017, as amended on May 3, 2019.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.
All references herein to sections of the Code shall include any provision or
corresponding provisions of succeeding law.

 

 4 

 

 

“Common Delay Condition” means the Company is prohibited from purchasing any
Common Units by any law.

 

“Common Distribution Rate” means 15%; provided, that the Common Distribution
Rate with respect to any Intended Common Put Closing Date shall increase by
2.00% on each anniversary of the Intended Common Put Closing Date.

 

“Common Interests” is defined in Section 3.3.

 

“Common Member” means a Person identified on Exhibit A hereto as a Common
Member, and such other Members that at such time hold one or more Common Units,
but excluding any Person who ceases to hold any Common Units.

 

“Common Put Notice” is defined in Section 15.2(b).

 

“Common Put Price” is defined in Section 15.2(a).

 

“Common Units” is defined in Section 3.3.

 

“Company” means C-PAK Consumer Product Holdings SPV I LLC, a Delaware limited
liability company, and its successors and assigns.

 

“Company Minimum Gain” shall have the meaning set forth in Treasury Regulations
Section 1.704-2(b)(2) and shall mean the amount determined under Treasury
Regulations Section 1.704-2(d)(1) by (i) computing for each Nonrecourse
Liability of the Company any gain the Company would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability and (ii) aggregating the separately computed
gains. If, pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(d) or
1.704-1(b)(2)(iv)(f), Company property is properly reflected on the books of the
Company at a book value that differs from the adjusted tax basis of such
property, the calculation of Company Minimum Gain pursuant to the preceding
sentence shall be made by reference to such book value. For purposes hereof, a
liability of the Company is a Nonrecourse Liability to the extent that no Member
or related Person bears the economic risk of loss for that liability within the
meaning of Treasury Regulations Section 1.752-2.

 

“Depreciation” means, for each taxable year or other period, an amount equal to
the depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such taxable year or other period, except that if the
Gross Asset Value of an asset differs from its adjusted basis for U.S. federal
income tax purposes at the beginning of the year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the U.S. federal income tax depreciation, amortization, or other cost
recovery deduction for such fiscal year or other period bears to such beginning
adjusted tax basis. If the U.S. federal income tax depreciation, amortization or
other cost recovery deduction for the year or other period is zero, Depreciation
will be determined using any reasonable method selected by the Board of
Managers.

 

 5 

 

 

“Exercise Period” means any Business Day that occurs at any time during the
twelve (12) month period ending after November 2, 2024, through and including
November 2, 2025.

 

“Governmental Authority” means any and all U.S. federal, state or local
governments, governmental institutions, public authorities and any other
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including but not limited to departments, boards,
bureaus and panels, and any divisions or instrumentalities thereof, whether
permanent or ad hoc and whether now or hereafter constituted or existing.

 

“Gross Asset Value” means with respect to any asset, the adjusted basis for U.S.
federal income tax purposes of such asset, except as follows:

 

(a) The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the gross fair market value of such asset on the date of
contribution, as determined by the Board of Managers;

 

(b) The Gross Asset Values of all Company assets shall be adjusted to equal
their respective gross fair market values, as determined by the Board of
Managers, as of the following times: (i) the acquisition of additional Units in
the Company by any new or existing Member in exchange for more than a de minimis
Capital Contribution; (ii) the distribution by the Company to a Member of more
than a de minimis amount of Company property as consideration for Units in the
Company, if the Board of Managers reasonably determines that, with respect to
adjustments pursuant to subsections (i) and (ii) above, such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Members in the Company; and (iii) the liquidation of the Company within the
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);

 

(c) The Gross Asset Value of any Company asset distributed to any Member shall
be the gross fair market value of such asset on the date of distribution; and

 

(d) The Gross Asset Values of Company assets shall be increased (or decreased)
to reflect any adjustments to the adjusted basis of such assets pursuant to Code
Sections 734(b) or 743(b), but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m) and Section 6.2(f); provided, however,
that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d)
to the extent the Board of Managers determines that an adjustment pursuant to
subparagraph (b) hereof is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subparagraph (d).

 

“Indemnified Party” is defined in Section 13.1.

 

 6 

 

 

“Independent Appraiser” means an independent certified appraiser, investment
banker or similar valuation specialist of national or international recognition
that is in the practice of evaluation businesses of the size of the Company and
is mutually agreed upon by the Company and PLC; provided, that if the Company
and PLC cannot agree on such an appraiser, bank or specialist, then the Company
and PLC shall each select an appraiser, banker or specialist meeting the
foregoing requirements, and the persons chosen by the Company and PLC shall
mutually agree and appoint an appraiser, banker or specialist meeting the
foregoing requirements, which person shall be the Independent Appraiser.

 

“Interest” means a limited liability company interest of the Company, including,
without limitation, the rights of a Member holding such Interest in
distributions from the Company and allocations of the Profits, Losses, gains,
deductions and credits of the Company and the other rights and obligations of
such Member with respect to such Interest as set forth in this Agreement.

 

“IRA” means the Investors’ Rights Agreement, dated as of May 3, 2019, entered
into by and among the Company, PrefCo and PLC.

 

“Lender” is defined in Section 4.3.

 

“Liquidator” is defined in Section 16.2(a).

 

“Loan Agreement” means the Loan Agreement, dated as of May 3, 2019, entered into
by and among C-PAK Consumer Product Holdings LLC, a Delaware limited liability
company, and C-PAK Consumer Product IP SPV LLC, a Delaware limited liability
company, as borrowers, Pak Consumer Product Holdings SPV I LLC, a Delaware
limited liability company, and its subsidiaries that are Guarantors (as defined
therein) or become Guarantors thereunder, the Lenders (as defined therein) from
time to time party thereto, and PLC as administrative agent for the Lenders and
as collateral agent for the Secured Parties (as defined therein), as in effect
on the date of this Agreement.

 

“Majority Interest” means such of the Members as shall own, at the time of any
determination, more than fifty percent (50%) of all then issued and outstanding
Common Units.

 

“Manager” means each Person who has been elected as and continues to be, a
member of the Board of Managers, and the term Manager shall for all purposes
have the same connotation as the term “manager” under the Act.

 

“Member” means any Person who has been admitted as a Member and whose name is
set forth on Exhibit A hereto, and any other Person admitted to the Company as a
Member in accordance with this Agreement, but excluding any Person who ceases to
be a Member of the Company pursuant to this Agreement.

 

“Member Loan Minimum Gain” means an amount, with respect to each Member Loan
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such
Member Loan Nonrecourse Debt were treated as a Nonrecourse Liability, determined
in accordance with Treasury Regulations Section 1.704-2(i)(3).

 

 7 

 

 

“Member Loan Nonrecourse Debt” shall have the meaning set forth in Treasury
Regulations Section 1.704-2(b)(4).

 

“Member Loan Nonrecourse Deductions” shall have the meaning set forth in
Treasury Regulations Section 1.704-2(i)(2). The amount of Member Loan
Nonrecourse Deductions with respect to a Member Loan Nonrecourse Debt for a
Company fiscal year or other period equals the excess, if any, of the net
increase, if any, in the amount of Member Loan Minimum Gain attributable to such
Member Loan Nonrecourse Debt during that fiscal year or other period over the
aggregate amount of any distributions during that fiscal year to the Member that
bears the economic risk of loss for such Member Loan Nonrecourse Debt to the
extent such distributions are from the proceeds of such Member Loan Nonrecourse
Debt and are allocable to an increase in Member Loan Minimum Gain attributable
to such Member Loan Nonrecourse Debt, determined in accordance with Treasury
Regulations Section 1.704-2(i)(2).

 

“Net Cash From Sales or Refinancings” means the net cash proceeds from all sales
and other dispositions (other than in the ordinary course of business) and all
refinancings of Company property, less any portion thereof used to establish
reserves, all as determined by the Board of Managers. Net Cash From Sales or
Refinancings shall include all principal and interest payments at the time of
receipt with respect to any note or other obligation received by the Company in
connection with sales and other dispositions (other than in the ordinary course
of business) of Company property.

 

“Nonrecourse Deductions” shall have the meaning set forth in Treasury
Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a
Company fiscal year or other period equals the excess, if any, of the net
increase in the amount of Company Minimum Gain during the fiscal year or other
period, over the aggregate amount of any distributions during such year or other
period of proceeds of a Nonrecourse Liability that are allocable to an increase
in Company Minimum Gain, determined according to the provisions of Treasury
Regulations Section 1.704-2(c).

 

“Nonrecourse Liability” shall have the meaning set forth in Treasury Regulations
Section 1.704-2(b)(3).

 

“Observer” is defined in Section 9.15.

 

“Original Company Agreement” is defined in the recitals to this Agreement.

 

“Percentage Interest” means, with respect to any Member, the number of Common
Units held by such Member expressed as a percentage of the number of Common
Units held by all Members.

 

 8 

 

 

“Permitted Transferee” means, with respect to the Units of any Member:

 

(a) any Person who is approved in writing by a Required Interest of the Members
as a transferee of Units and admission as a Member;

 

(b) a trust of which there are no principal beneficiaries other than such Member
and/or one or more of such Member’s Relatives and in which the Member controls
all management decisions;

 

(c) a partnership, corporation, limited liability company or other entity of
which there are no equity owners other than such Member and/or one or more of
such Member’s Relatives and in which the Member controls all management
decisions;

 

(d) with respect to any Member that is an entity, any transfer to a Person that
is an Affiliate of such Member; or

 

(e) with respect to PLC, any transfer to a Person (or its Affiliate) to whom PLC
is transferring notes, loans or other evidence of indebtedness for borrowed
money of the Company or its subsidiaries, including indebtedness governed by the
Loan Agreement.

 

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

 

“PLC” means Piney Lake Opportunities ECI Master Fund LP, a Cayman Islands
exempted limited partnership, together with its permitted transferees and
assigns.

 

“PLC Manager” is defined in Section 9.4(b).

 

“PrefCo” means C-PAK PREFCO SVP I, Inc., a Delaware corporation.

 

“PrefCo Managers” is defined in Section 9.4(a).

 

“Preferred Interest” is defined in Section 3.3.

 

“Preferred Member” means PrefCo in its capacity as a Preferred Member, and such
other Members that at such time hold one or more Preferred Units, but excluding
any Person who ceases to hold any Preferred Units.

 

“Preferred Units” is defined in Section 3.3.

 

“Profits and Losses”: “Profits” means, for each fiscal year of the Company or
other period, an amount equal to the Company’s taxable income for such year or
period, and “Losses” means, for each fiscal year of the Company or other period,
an amount equal to the Company’s taxable loss for such year or period, in each
case 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:

 

(a) any income of the Company that is exempt from U.S. federal income tax and
not otherwise taken into account in computing Profits and Losses for purposes of
this definition shall be added to such taxable income or loss;

 

 9 

 

 

(b) any expenditures of the Company described in Code Section 705(a)(2) (B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses for purposes of this definition shall be
subtracted from such taxable income or loss;

 

(c) in the event the Gross Asset Value of any Company asset is adjusted pursuant
to subparagraphs (b) or (d) of the definition of Gross Asset Value, the amount
of such adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or Losses;

 

(d) gain or loss resulting from any disposition of Company property with respect
to which gain or loss is recognized for U.S. federal income tax purposes shall
be computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;

 

(e) in lieu of depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such fiscal year or other period, computed
in accordance with the definition thereof; and

 

(f) notwithstanding any other provision of this definition, any items of income,
gain, loss or deduction that are specially allocated pursuant to Sections 6.2 or
6.3 shall not be taken into account in computing Profits and Losses.

 

“Proportionate Share” means a Member’s share of an item, based upon the
respective Percentage Interest of that Member as compared to the Percentage
Interests of all Members entitled to share in the item.

 

“Relative” means any of the following: spouse; natural or adoptive parent, child
or sibling; stepparent, stepchild, stepbrother or stepsister; father-in-law,
mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law;
grandparent or grandchild; and spouse of grandparent or grandchild.

 

“Securities Act” shall mean the Securities Act of 1933, as amended (or any
successor federal statute then in effect), and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such successor federal statute.

 

“Subsidiary” means, with respect to any Person, any other Person of which (i) if
a corporation, a majority of the total voting power of shares of capital stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a partnership,
limited liability company or other business entity, a majority of the
partnership or other similar ownership interests thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof.

 

 10 

 

 

“Substituted Member” means any Person admitted to the Company pursuant to
Section 14.2.

 

“TMP” is defined in Section 8.5.

 

“Transfer” means to sell, assign, transfer, pledge, hypothecate or otherwise
dispose of.

 

“Treasury Regulations” or “Regulations” means the regulations, promulgated by
the United States Department of the Treasury pursuant to and in respect of
provisions of the Code. All references herein to Sections of the Treasury
Regulations or the Regulations shall include any corresponding provision or
provisions of succeeding, similar or substitute proposed, temporary or final
regulations.

 

“Unit” or “Units” is defined in Section 3.3, and shall include the Common Units
and the Preferred Units.

 

“Valuation” is defined in Section 15.2(c).

 

1.2. Other Definitions. In addition to the terms defined in Section 1.1, certain
other terms are defined elsewhere in this Agreement, and whenever such terms are
used in this Agreement, they shall have their respective defined meanings,
unless the context expressly or by necessary implication otherwise requires.

 

1.3. Schedule A. Notwithstanding anything herein to the contrary, all articles,
sections, and definitions contained herein shall be subject to Schedule A
attached hereto, and in the event of any conflict between Schedule A hereto and
the body of or other exhibits, schedules or annexes hereto, the terms and
provisions of Schedule A shall control.

 

ARTICLE II.

FORMATION AND CONTINUATION OF THE COMPANY

 

2.1. Formation and Continuation. A Certificate of Formation of the Company was
filed in the office of the Secretary of State of the State of Delaware on May
17, 2017, as required by the Act, under the name “C-PAK Consumer Product
Holdings SPV I LLC” The Members hereby continue the existence of the Company.
Except as stated in this Agreement, the Act shall govern the rights and
liabilities of the Members.

 

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2.2. Certificates. The Company shall execute from time to time all such
certificates and other documents as may be appropriate to comply with the
requirements for the transaction of business or ownership or leasing of property
in all jurisdictions where the Company may from time to time desire to conduct
business or own or lease property. The Board of Managers shall effect all such
filing, recording, publishing, and perform such other acts as may be appropriate
to comply with all requirements for the operation of the Company.

 

2.3. Company Name. The business of the Company shall be conducted under the name
“C-PAK Consumer Product Holdings SPV I LLC” or under such other name or names as
the Board of Managers may determine. The Board of Managers or the officers of
the Company shall promptly execute and file with the proper offices in each
county in each jurisdiction in which the Company conducts business one or more
certificates as required by the fictitious name act, assumed name act, or
similar statute in effect as to each such jurisdiction.

 

2.4. Principal Office. The principal office of the Company shall be located at
8117 Preston Road, Suite 300, Dallas, Texas 75225, or at such other place or
places as the Board of Managers may from time to time determine.

 

2.5. Term. The Company shall continue in existence until the Company is
dissolved pursuant to Article XVI.

 

2.6. Registered Agent and Office. The registered agent of the Company shall be
The Corporation Trust Company, and the registered office of the Company shall be
located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The registered office or the registered agent, or both, may be changed by
the Board of Managers from time to time by filing the statement required by the
Act. The Company shall maintain at its registered office such records as may be
specified by the Act.

 

2.7. Characterization. For U.S. federal income tax purposes, the Company shall
be characterized as a partnership. However, for state law purposes, the Company
shall not be characterized as, nor treated as, a partnership, nor shall any
Member be characterized as, nor treated as, a partner. For U.S. federal income
tax purposes, the Preferred Interests shall be treated as equity. The Board of
Managers shall operate the Company in a manner consistent with such
characterizations, and neither the Board of Managers nor any Member shall take
any act, or fail to take any act, which is not consistent with such
characterizations.

 

2.8. Uncertificated Certificates; Opt-Out of Article 8. Notwithstanding any
provision to the contrary in this Agreement, the Company shall not (i)
certificate any Member’s ownership interest in the Company and any such
certificate purporting to evidence such Member’s ownership interest in the
Company shall be null and void ab initio; or (ii) opt into (or otherwise elect
that any Member’s ownership interest in the Company become a security governed
by) Article 8 of the Uniform Commercial Code in effect in the State of Delaware.

 

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ARTICLE III.

THE BUSINESS OF THE COMPANY; INTERESTS

 

3.1. Purposes. The purposes of the Company are (a) to engage in any business or
activity that may be lawfully conducted by a limited liability company organized
pursuant to the Act; and (b) to do any and all other acts and things that the
Board of Managers deems necessary, appropriate or advisable from time to time in
furtherance of the purposes of the Company as set forth in this Section 3.1.

 

3.2. Powers. Subject to the limitations contained in this Agreement and in the
Act, the Company’s purposes may be accomplished by the Board of Managers taking
any action permitted under this Agreement that, in the good faith judgment of
the Board of Managers, is customary or reasonably related to accomplishing such
purposes.

 

3.3. Interests. The Interests of the Company shall be divided into two (2)
classes referred to herein as “Common Interests” and “Preferred Interests”.
Interests shall be issued in unit increments (each a “Unit”, and, collectively,
the “Units”). The total authorized number of Units of Common Interests
(collectively, the “Common Units”) is ten thousand (10,000). The total
authorized number of Units of Preferred Interests (collectively, the “Preferred
Units”) is three thousand (3,000). The rights, preferences, privileges and
restrictions on the Common Units and the Preferred Units are as set forth in
this Agreement. The Company may issue fractional Units. The number and type of
Units owned by each Member shall be set forth on Exhibit A attached hereto, as
such Exhibit may be amended from time to time in accordance with this Agreement.

 

3.4. Preferred Units. The rights, preferences and privileges of the Preferred
Units are set forth on Schedule A to this Agreement, the terms and provisions of
which are hereby incorporated into this Agreement in their entirety. Except
where this Agreement explicitly states otherwise by specific reference to one or
more sections of Schedule A, the terms and provisions of Schedule A shall have
priority over the other terms and provisions of this Agreement, shall be deemed
to have modified all of other terms and provisions of this Agreement, and in the
event of a conflict between a term or provision set forth on Schedule A and
another term or provision of this Agreement, the term or provision on Schedule A
shall govern. Without limitation of the foregoing, it is expressly acknowledged
and agreed that the Preferred Units rank senior to the Common Units and all
other Interests of the Company with respect to the payment of any distributions
and in the liquidation, dissolution or winding up of the Company.

 

ARTICLE IV.

 

CONTRIBUTIONS OF CAPITAL

 

4.1. Initial Capital Contributions and Interests. The initial Capital
Contributions of the Members will be the amount set forth opposite each Member’s
name on Exhibit A, which is attached hereto and incorporated by reference
herein. The initial Percentage Interest of each Member is set forth opposite
each Member’s name on Exhibit A. Each Member has contributed or is deemed to
have contributed the initial Capital Contribution set forth opposite such
Member’s name on Exhibit A in return for such Member’s initial Units. Exhibit A
may be changed from time to time in accordance with this Agreement.

 

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4.2. Limitation of Liability of Members. No Member will be required to make any
additional contributions to the Company. Except as otherwise provided by
applicable law, the debts, obligations, and liabilities of the Company, whether
arising in contract, tort, or otherwise, shall be solely the debts, obligations,
and liabilities of the Company and no Member shall be obligated personally for
any such debt, obligation, or liability of the Company solely by reason of being
a Member of the Company; provided, that a Member may, solely to the extent
required by the Act, be required to return to the Company, for the benefit of
creditors, amounts previously distributed to that Member as a return of capital.
It is the intent of the Members that no distribution of cash to any Member will
be deemed a return or withdrawal of capital (even if that distribution is
treated, in whole or in part, for any purpose as a distribution out of a reserve
for depreciation or other reserve which is attributable to depreciation or any
other non-cash item accounted for as a loss or deduction from or offset to the
Company’s income), and that no Member will be obligated to pay any such amount
to or for the account of the Company or any creditor of the Company. However, if
any court of competent jurisdiction holds that, notwithstanding the provisions
of this Agreement, a Member is obligated to make any such payment, that
obligation will be the obligation of that Member.

 

4.3. Loans. Any Member or any Affiliate of any Member, with the consent of the
Board of Managers, may lend money to the Company or its Subsidiaries. If any
Member or any Affiliate of any Member makes any loan or loans to the Company or
its Subsidiaries, the amount of any such loan shall not be treated as a
contribution to the capital of the Company, but shall be a debt due from the
Company. None of the Members, or any of their Affiliates, shall be obligated to
loan money to the Company. Notwithstanding anything herein to the contrary,
nothing contained in this Agreement shall affect, limit or impair the rights and
remedies of PLC or its Permitted Transferees in its capacity as a lender to the
Company or any of its Subsidiaries pursuant to any agreement, instrument or
document, including the Loan Agreement, under which the Company or any of its
Subsidiaries has borrowed or may borrow money or has incurred indebtedness (in
such capacity, a “Lender”). Without limiting the generality of the foregoing,
any Lender, while exercising its right as a Lender, subject to the doctrine of
good faith and fair dealing, will have no duty to consider (i) its status as a
direct or indirect Member of the Company, (ii) the interests of the Company or
(iii) any duty it may have to any other direct or indirect Members of the
Company, except as may be required under the applicable loan documents or by
commercial law applicable to creditors generally.

 

ARTICLE V.

 

CAPITAL ACCOUNTS

 

5.1. No Interest on Capital Contributions. No Member will be paid interest on
any Capital Contribution.

 

5.2. Treatment of Capital Contributions and Restrictions on the Right to
Withdraw or to be Redeemed from the Company. Except as specifically provided in
this Agreement, the Company will not be required to redeem or repurchase any
Units, and no Member will have the right or power to withdraw, or receive any
return of such Member’s Capital Contribution, and except as specifically
provided in Section 16.2, no Capital Contribution may be returned in the form of
property other than cash.

 

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5.3. Capital Accounts. A Capital Account will be established for each Member on
the books and records of the Company and will be maintained for each Member in
accordance with this Agreement, the Code and the Treasury Regulations.

 

5.4. Capital Accounts Upon Transfer. In the event any Units are Transferred in
accordance with the terms of this Agreement, the transferee will succeed to the
Capital Account of the transferor to the extent it relates to the Transferred
Units, except as provided in the Treasury Regulations.

 

5.5. Adjustment of Capital Accounts. In the event the Gross Asset Values of
Company assets are adjusted pursuant to this Agreement, the Capital Accounts of
all Members will be adjusted simultaneously to reflect the aggregate net
adjustment as if the Company recognized gain or loss equal to the amount of such
aggregate net adjustment. The foregoing provisions and the other provisions of
this Agreement relating to the maintenance of Capital Accounts are intended to
comply with Section 1.704-1(b) of the Treasury Regulations, and will be
interpreted and applied in a manner consistent with such Treasury Regulations.

 

ARTICLE VI.

 

ALLOCATIONS

 

6.1. General Profits and Loss Allocations. After giving effect to the
allocations set forth in Section 6.2, Profits and Losses (and to the extent
necessary to achieve the resulting Capital Account balances described below, any
allocable items of gross income, gain, loss and expense includable in the
computation of Profits and Losses) for each taxable period shall be allocated
among the Members during such taxable period, in such a manner as shall cause
the Capital Accounts of the Members (as adjusted to reflect all allocations set
forth in Section 6.2 and all distributions through the end of such taxable
period) to equal, as nearly as possible, (a) the amount such Member would
receive if all assets of the Company on hand at the end of such taxable period
were sold for cash equal to their Gross Asset Values, all liabilities of the
Company were satisfied in cash in accordance with their terms (limited in the
case of non-recourse liabilities to the Gross Asset Value of the property
securing such liabilities), and all remaining or resulting cash (including any
withheld amounts) were distributed to the Members under Section 7, minus (b)
such Member’s share of Company Minimum Gain and Member Loan Minimum Gain,
computed immediately prior to the hypothetical sale of assets.

 

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6.2. Special Allocations.

 

(a) Company Minimum Gain Chargeback. Notwithstanding any other provision of this
Article VI, if there is a net decrease in Company Minimum Gain during any
Company fiscal year or other period for which allocations are made, prior to any
other allocation under this Agreement, each Member shall be specially allocated
items of Company income and gain for that period (and, if necessary, subsequent
periods) in proportion to, and to the extent of an amount equal to such Member’s
share of the net decrease in Company Minimum Gain during such year, determined
in accordance with Regulations Section 1.704-2(g)(2). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The items to be so
allocated shall be determined in accordance with Regulations Section
1.704-2(g)(2). This Section 6.2(a) is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith. To the extent permitted by such section of
the Regulations and for purposes of this Section 6.2(a) only, each Member’s
Adjusted Capital Account Deficit shall be determined prior to any other
allocations pursuant to this Article VI with respect to such fiscal year and
without regard to any net decrease in Member Loan Minimum Gain during such
fiscal year.

 

(b) Member Loan Minimum Gain Chargeback. Notwithstanding any other provision of
this Article VI except Section 6.2(a), if there is a net decrease in Member Loan
Minimum Gain attributable to a Member Loan Nonrecourse Debt during any Company
fiscal year, each Member who has a share of the Member Loan Minimum Gain
attributable to such Member Loan Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company
income and gain for such year (and, if necessary, subsequent years) in an amount
equal to such Member’s share of the net decrease in Member Loan Minimum Gain
attributable to such Member Loan Nonrecourse Debt that is allocable to the
disposition of Company property subject to such Member Loan Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Regulations Section
1.7042(j)(2). This Section 6.2(b) is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith. Solely for purposes of this Section 6.2(b),
each Member’s Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to this Article VI with respect to such fiscal year,
other than allocations pursuant to Section 6.2(a).

 

(c) Qualified Income Offset. In the event any Member unexpectedly receives any
adjustments, allocations, or distributions described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6)
which results in an Adjusted Capital Account Deficit of a Member, items of
Company income and gain shall be specially allocated to each such Member in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Member as quickly as
possible, provided, that an allocation pursuant to this Section 6.2(c) 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 VI have
been tentatively made as if this Section 6.2(c) were not in this Agreement.

 

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(d) Gross Income Allocation. In the event any Member has an Adjusted Capital
Account Deficit at the end of any Company fiscal year, each such Member shall be
specially allocated items of Company income and gain in the amount of such
excess as quickly as possible; provided, that an allocation pursuant to this
Section 6.2(d) shall be made if and only to the extent that such Member would
have an Adjusted Capital Account Deficit in excess of such sum after all other
allocations provided for in this Article VI have been tentatively made as if
Section 6.2(c) and this Section 6.2(d) were not in this Agreement. If the amount
of Losses for any taxable period that would otherwise be allocated to a Member
under Section 6.1 would cause or increase an Adjusted Capital Account Deficit
for such Member as of the last day of such taxable period, then a proportionate
part of such Losses, equal to such excess shall be allocated to the other
Members, and the remainder of such Losses, if any, shall be allocated to such
Member.

 

(e) Member Loan Nonrecourse Deductions. Any Member Loan Nonrecourse Deductions
for any fiscal year or other period shall be specially allocated to the Member
who bears the economic risk of loss with respect to the Member Loan Nonrecourse
Debt to which such Member Loan Nonrecourse Deductions are attributable in
accordance with Regulations Section 1.704-2(i)(2).

 

(f) Section 754 Adjustment. To the extent an adjustment to the adjusted tax
basis of any Company asset pursuant to Code Section 734(b) or Code Section
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 specially 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.

 

6.3. Curative Allocations. Subject to the Code and the Regulations, any
allocations of items of income, gain or loss pursuant to Sections 6.2(a)-(f)
shall be taken into account in computing subsequent allocations pursuant to this
Article VI, so that the net amount of any items so allocated and the income,
losses and other items allocated to each Member pursuant to this Article VI
shall, to the extent possible, be equal to the net amount that would have been
allocated to each Member had no allocations ever been made pursuant to Sections
6.2(a)-(f).

 

6.4. Other Allocation Rules.

 

(a) Except as otherwise provided in this Agreement, all items of Company income,
gain, loss, deduction, and any other allocations not otherwise provided for
shall be divided among the Members in the same proportions as such Members share
Profits or Losses pursuant to Section 6.1 for the fiscal year.

 

(b) The Members are aware of the income tax consequences of the allocations made
by this Article VI and hereby agree to be bound by the provisions of this
Article VI in reporting their share of Company income and loss for income tax
purposes.

 

(c) Solely for purposes of determining a Member’s proportionate share of the
“excess nonrecourse liabilities” of the Company within the meaning of
Regulations Section 1.752-3(a)(3), the Members’ interests in Company profits are
in the same proportions as they share Profits pursuant to Section 6.1 for the
fiscal year.

 

 17 

 

 

(d) To the extent permitted by Sections 1.704-2(h) and 1.704-2(i)(6) of the
Regulations, the Board of Managers shall endeavor to treat distributions of
Available Cash or Net Cash from Sales or Refinancings as having been made from
the proceeds of a Nonrecourse Liability or a Member Loan Nonrecourse Debt, only
to the extent that such distributions would cause or increase an Adjusted
Capital Account Deficit for any Member.

 

(e) Notwithstanding anything to the contrary contained herein, items of income,
gain, loss and deduction with respect to property, other than cash, contributed
to the Company by a Member shall be allocated among the Members so as to take
into account the variation between the basis of the property to the Company and
its fair market value at the time of contribution as provided in Section 704(c)
of the Code and Treasury Regulations Section 1.704-1(b)(2)(iv)(g).

 

6.5. Tax Allocations.

 

(a)

 

(i) In the event the Gross Asset Value of any Company property is adjusted in
accordance with the definition thereof in Article I, subsequent allocations of
income, gain, loss, and deduction with respect to such asset shall take account
of any variation between the adjusted basis of such asset for U.S. federal
income tax purposes and its Gross Asset Value in the same manner as under Code
Section 704(c) and the Regulations thereunder.

 

(ii) Any elections or other decisions relating to such allocations shall be made
by the Board of Managers in any manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this Section 6.5(a) are
solely for purposes of U.S. 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, or other items or distributions pursuant to
any provision of this Agreement.

 

(iii) As long as consistent with the other provisions of this Article VI, to the
extent that gain from the disposition of any Company property is, for U.S.
federal income tax purposes, taxable as ordinary income by reason of recapture
of depreciation or cost recovery deductions taken with respect to such property,
such depreciation recapture shall be allocated among the Members in proportion
to the depreciation or cost recovery deductions previously allocated among them
with respect to such property; provided, however, that in the event the
depreciation recapture is less than the aggregate amount of depreciation or cost
recovery deductions giving rise to the depreciation recapture allocated among
such Members with respect to such property, the depreciation recapture will be
allocated among such Members based on the order in time the Members have been
allocated such deductions with respect to such property.

 

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6.6. Assignment During Fiscal Year. If a Member’s Units are Transferred at any
time other than the end of a fiscal year of the Company, the allocable share of
the various items of Company Profit, Loss and credit will be allocated between
the transferor and the transferee in the same ratio as the number of days in the
fiscal year, respectively, before and after the Transfer is recognized by the
Company, as such number of days bears to the number of days in the entire year
or will be allocated as if the books of the Company closed on the day of the
Transfer. Such method of allocation will be determined by the transferor and
transferee of such Units.

 

ARTICLE VII.

 

DISTRIBUTIONS

 

7.1. Distributions of Available Cash. Except as otherwise provided in this
Article VII and subject to Schedule A, Available Cash shall be distributed to
the Common Members in such amounts and at such times as shall be determined by
the Board of Managers in accordance with their respective Percentage Interests.
Except as otherwise provided herein, there will be no obligation by the Company
to return to the Members, or to any one of them, any part of their Capital
Contributions to the Company, for so long as the Company continues in existence.
Notwithstanding any other provision of this Article VII, following PLC’s
exercise of its right to sell Common Units pursuant to Section 15.2, no
distributions shall be declared or paid upon, or any sum set apart for the
payment of distributions upon, any Interests, including distributions pursuant
to Sections 7.2 and 7.3, until the Common Put Price is paid in full in cash on
all Common Units subject to sale pursuant to Section 15.2.

 

7.2. Distribution for Taxes. Subject to Schedule A and the last sentence of
Section 7.1, the Board of Managers shall make cash distributions to the Members
each year in an aggregate amount not less than (i) the estimated taxable income
of the Company allocated to such Member pursuant to Article VI, multiplied by
(ii) the Applicable Tax Rate and, in the case of a Member that is a corporation
for U.S. federal income tax purposes, less (iii) any deductions available to
such Member that will reduce such Member’s U.S. federal income tax liability.
Such distributions attributable to a specific year will be made by the Board of
Managers to the Members on or before March 31 of the year following such year
and shall be proportionate to their respective Percentage Interests.

 

7.3. Distributions of Net Cash from Sales or Refinancings. Subject to Schedule A
and the last sentence of Section 7.1 and except as provided in Section 16.2, all
Net Cash From Sales or Refinancings shall be distributed to the Common Members,
as soon as practicable, in accordance with their respective Percentage
Interests.

 

ARTICLE VIII.

 

BANK ACCOUNTS, BOOKS OF ACCOUNT,
TAX COMPLIANCE AND FISCAL YEAR

 

8.1. Bank Accounts; Investments. The Board of Managers or officers of the
Company may establish one or more bank accounts into which all Company funds
shall be deposited. Funds deposited in the Company’s bank accounts may be
withdrawn only to pay Company debts or obligations or to be distributed to the
Members under this Agreement; provided, further, that the Board of Managers or
officers of the Company may, in the aggregate, pay or caused to be paid on
behalf of the Company those ordinary administrative and operating expenses of
the Company in an amount not to exceed $50,000 in any twelve month period if the
payment thereof would not trigger a default or an Event of Default under the
Loan Agreement. Company funds, however, may be invested in such securities and
investments as the Board of Managers or officers of the Company may select,
until withdrawn for Company purposes. The funds of the Company may not be
commingled with the assets of any other Person.

 

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8.2. Books and Records. The officers of the Company, subject to the oversight of
the Board of Managers, shall keep books of account and records relative to the
Company’s business. The books shall be prepared in accordance with generally
accepted accounting principles consistently applied. The cash method of
accounting shall be used by the Company for income tax purposes. The Company’s
books and records shall at all times be maintained at the principal business
office of the Company or its accountants (and to the extent required by the Act,
at the registered office of the Company) and such books and records (or copies
thereof) shall be available for inspection at the principal office of the
Company (or such other location as shall be determined by the Board of Managers)
by the Members or their duly authorized representatives during reasonable
business hours. The books and records shall be preserved for at least four (4)
years after the term of the Company ends.

 

8.3. Determination of Profit and Loss; Financial Statements. All items of
Company income, expense, gain, loss, deduction and credit shall be determined
with respect to, and allocated in accordance with, this Agreement for each
Member for each Company fiscal year. Within one hundred and twenty (120) days
after the end of each Company fiscal year, the Board of Managers shall cause to
be prepared and delivered to each Member of record as of the last day of such
fiscal year, at the Company’s expense, unaudited financial statements of the
Company for the preceding fiscal year, including, without limitation, a balance
sheet, profit and loss statement, statement of cash flows and statement of the
balances in the Members’ Capital Accounts, prepared in accordance with the terms
of this Agreement and generally accepted accounting principles consistently
applied. In addition, as soon as practicable, but in no event later than
forty-five (45) days after the close of each fiscal quarter, except the last
fiscal quarter of each fiscal year, the Board of Managers shall deliver to each
Member of record on the closing date of that fiscal quarter a quarterly report
for the fiscal quarter containing such financial and other information with
respect to the Company as the Board of Managers deems appropriate including,
without limitation, a balance sheet, profit and loss statement, and statement of
cash flows, each prepared in accordance with generally accepted accounting
principles consistently applied. In addition, the Company shall provide such
other information regarding the Company and its Subsidiaries at the reasonable
request of any Member.

 

8.4. Tax Returns and Information. The Members intend for the Company to be
treated as a partnership, rather than as an association taxable as a
corporation, for U.S. federal income tax purposes. The officers of the Company,
subject to the oversight of the Board of Managers, shall prepare or cause to be
prepared all U.S. federal, state and local income and other tax returns which
the Company is required to file and shall furnish such returns to the Members,
together with any other information which any Member may reasonably request
relating to such returns, within ninety (90) days after the end of each Company
fiscal year.

 

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8.5. Tax Audits. PrefCo (or such person designated by the Board of Managers
pursuant to Section 9.1) shall be the tax matters partner of the Company under
Section 6231(a)(7) of the Code (prior to amendment by the Bipartisan Budget Act)
and, for tax years ending after December 31, 2017, the partnership
representative of the Company under Section 6223(a) of the Code (as amended by
the Bipartisan Budget Act) (in each such capacity, the “TMP”). The TMP shall
have the authority to designate from time to time a “designated individual” (the
“Designated Individual”) to act on behalf of the TMP, and such Designated
Individual shall be subject to replacement by the TMP in accordance with
Treasury Regulations Section 301.6223-1. For taxable years ending on or before
December 31, 2017, the TMP and the Designated Individuals, as applicable, shall
have all of the rights, duties, powers and obligations provided for in Sections
6221 through 6232 of the Code (as in effect before amendment by the Bipartisan
Budget Act) with respect to the Company subject, in all cases, to the consent of
the Board of Managers. For taxable years ending after December 31, 2017, all
decisions regarding elections under Section 6221(b) or Section 6226 of the Code
(as amended by the Bipartisan Budget Act) shall be made by the Board of Managers
pursuant to Section 9.1. Neither the TMP, the Designated Individual, nor the
Board of Managers shall make any tax elections without the prior written consent
of PLC if any such election made by the TMP, the Designated Individual, or by
the Board of Managers would adversely affect in any material respect PLC in a
manner that is disproportionate to the other Members (such consent not to be
unreasonably withheld). The TMP shall inform the Members of all matters which
may come to its attention in its capacity as TMP by giving the Members notice
thereof within thirty (30) days after becoming so informed. The TMP and the
Designated Individual, as applicable, shall not take any action contemplated by
Sections 6222 through 6232 of the Code (prior to amendment by the Bipartisan
Budget Act) unless the TMP or the Designated Individual has first given the
Members prior written notice of the contemplated action. This provision is not
intended to authorize the TMP or the Designated Individual to take any action
that is left to the determination of the individual Member under the Code.

 

8.6. Fiscal Year. The Company fiscal year shall be the calendar year.

 

8.7. Bipartisan Budget Act. The Members acknowledge that the Bipartisan Budget
Act repeals the currently existing audit provisions for tax partnerships
effective for taxable years beginning after December 31, 2017, and potentially
makes tax partnerships liable for income taxes attributable to adjustments of
partnership items of income, gain, loss, deduction or credit. The Board of
Managers is hereby authorized to address the audit provisions of the Bipartisan
Budget Act as the Board of Managers deems appropriate. This authority shall
include the authority to amend this Agreement; for tax years beginning after
December 31, 2017; to designate a person to act as TMP, and to make (or cause
the TMP or the Designated Individual to make) any election under the Bipartisan
Budget Act provisions including requiring Members and assignees or former
Members and assignees to file amended tax returns to reflect any such
adjustments as provided in Code Section 6225(c)(2), to elect under Code Section
6226 to cause Members and assignees to take such adjustments into account on
their own tax returns or, if applicable, in accordance with Code Section
6221(b), to cause the Company to elect out of treatment under revised subchapter
C of Chapter 63 of the Code; provided, that the Board of Managers shall not make
any election under Code Section 6226 or Code Section 6221(b) without first
notifying the Members and obtaining the approval of a Required Interest of the
Members; provided, further, that the TMP or the Designated Individual shall not
make any tax elections or settle or compromise any tax liability or tax audit
without the prior written consent of PLC if any such election, settlement or
compromise made by the TMP or the Designated Individual would adversely affect
in any material respect PLC in a manner that is disproportionate to the other
Members (such consent not to be unreasonably withheld).

 

 21 

 

 

ARTICLE IX.

BOARD OF MANAGERS

 

9.1. Management by the Board of Managers. Subject to the consent of the Members
where required by this Agreement or by the Act, the Company will be managed by
the Board of Managers. Unless otherwise set forth herein, all decisions relating
to the business and affairs of the Company shall be made by the Board of
Managers or by the officers of the Company, subject to the oversight of the
Board of Managers. Except as otherwise expressly provided in this Agreement, all
decisions required or permitted to be made by the Board of Managers under this
Agreement may be made and any necessary action taken upon the majority vote of
the Board of Managers. In making such decisions, the Board of Managers will
exercise ordinary, prudent business judgment. The Managers shall be subject,
with respect to the Company and the Members, to the same fiduciary duties as the
board of directors of a Delaware corporation owes to the corporation and its
stockholders, except that the PLC Manager shall not have such duties except that
at all times it shall act in accordance with standards of good faith and fair
dealing and shall otherwise be entitled to act in the best interests of PLC.

 

9.2. No Control By Members. No Member (except a Member who may also be a Manager
or officer, and then only in such capacity within the scope of his, her or its
authority hereunder) will participate in or have any control over the Company
business or will have any authority or right to act for or bind the Company. All
Members hereby consent to the exercise by the Board of Managers of the powers
conferred on the Board of Managers by this Agreement.

 

9.3. Number; Election. There shall be up to five (5) Managers of the Company,
who need not be a Member or a resident of the State of Delaware. The number of
Managers may be increased or decreased from time to time by amendment to this
Agreement, subject to Section 9.4.

 

9.4. Nomination. PrefCo and PLC shall be entitled to nominate Managers as set
forth below:

 

(a) PrefCo shall be entitled to nominate up to four (4) Managers (the “PrefCo
Managers”) so long as PrefCo continues to hold any Interest.

 

(b) PLC shall be entitled to nominate one (1) Manager (the “PLC Manager”) so
long as PLC continues to hold any Interest.

 

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9.5. Initial Board of Managers. The initial Board of Managers of the Company
shall consist of the following Managers:

 

Name   Type of Nominee       Eric Blue   PrefCo Manager       Todd White  
PrefCo Manager       Michael C. Cassetta   PLC Manager

 

Each of such individuals shall hold his office until his or her death,
resignation or removal or until his or her successor shall thereafter have been
duly elected and qualified. Each of the parties by signing this Agreement
consents to the election of the nominees to the initial Board of Managers as
listed above, effective immediately as of the date of this Agreement.

 

9.6. Removal of Managers. Except as otherwise provided in this Section 9.6 or in
Section 9.7, each Member agrees not to take any action to remove, with or
without cause, any Manager of the Company. Notwithstanding the foregoing:

 

(a) If any nominator or nominators would no longer be entitled to nominate a
Manager pursuant to Section 9.4, such nominator or nominators shall immediately
remove such Manager or cause such Manager to, and such Manager shall, resign.

 

(b)

 

(i) PrefCo shall at all times have the right to cause the other Members to
remove and/or replace, with or without cause, any of the PrefCo Managers.

 

(ii) PLC shall at all times have the right to cause the other Members to remove
and/or replace, with or without cause, any of the PLC Managers.

 

If a Manager shall fail to resign as contemplated by clause (a) above or if any
of the Members determine to remove any Manager as contemplated in clause (b)
above and any such Manager shall fail to resign, then the Members shall
immediately cause a special meeting of Members of the Company to be called or
shall act by written consent without a meeting, for the purpose of removing any
such Manager, and each Member agrees to vote, in person or by proxy, his, her or
its Units which are entitled to vote at such meeting, or to execute a written
consent in respect of such Units, as the case may be, in favor of such removal
and to take all other necessary and appropriate action to cause such removal.

 

9.7. Vacancies. If a vacancy is created on the Board of Managers by reason of
the death, disability, removal (in accordance with Section 9.6) or resignation
of any Manager, the party which, under Section 9.4 is entitled to nominate the
Manager whose death, disability, removal or resignation resulted in such vacancy
shall be entitled to designate in writing a new Manager in accordance with the
nomination procedures set forth in Section 9.4, and such nominated Manager shall
be deemed to fill such vacancy upon the Company’s receipt of such written
designation.

 

9.8. Action by Members to Reconstitute Board of Managers. If at any time and for
any reason, no Managers have been nominated, designated or are otherwise
available to serve under this Article IX, then, at the request of any Member,
the Company shall cause a special meeting of Members to be held or shall act by
written consent of Members without a meeting for the purpose of taking whatever
action may be necessary to assure that the Board of Managers is constituted as
set forth in this Article IX as promptly as practicable.

 

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9.9. Certain Covenants. Each Member entitled to vote on such matters agrees to
vote, in person or by proxy, all Units over which he, she or it may exercise
voting power, at any annual meeting of Members of the Company called for the
purpose of voting on the election of Managers or to execute written consents of
Members without a meeting with respect to the election of Managers, or, if
necessary, to cause its nominee or nominees on the Board of Managers, if any, to
vote in favor of the election of each Manager nominated in accordance with
Sections 9.4 and 9.7 and against any other nominees and in favor of the removal
of any Manager who is required to be removed or resign pursuant to Section 9.6
or 9.7 and to take all other necessary and appropriate actions to cause such
events to occur. The Company shall use its best efforts to cause individuals to
be so nominated, elected or removed, as the case may be, in accordance with the
applicable provisions of this Agreement. Each Member shall vote all Units over
which he, she or it may exercise voting power and shall take all other actions
necessary and appropriate (including, without limitation, removing any Manager)
to ensure that the Certificate of Formation (as amended) does not at any time
conflict with the provisions of this Agreement and shall not vote to approve (or
consent to the approval of) any amendment to the Certificate of Formation (as
amended) which would be inconsistent with this Agreement.

 

9.10. Meetings of the Board of Managers. Meetings of the Board of Managers may
be called by any Manager; provided, that the Board of Managers shall meet no
less frequently than quarterly. The notice of a meeting shall state the nature
of the business to be transacted at such meeting. Notice of any meeting shall be
given to all Managers not less than ten (10) and not more than thirty (30) days
prior to the date of the meeting. Except as otherwise expressly provided in this
Agreement or required by the express provisions of the Act, the majority vote of
the Managers shall control all decisions for which the vote of the Board of
Managers is required hereunder. The presence of any Manager at a meeting shall
constitute a waiver of notice of the meeting with respect to such Manager,
unless such Manager is present solely to challenge the validity of the meeting.
The Managers may, at their election, participate in any regular or special
meeting by means of conference telephone or similar communications equipment by
means of which all Persons participating in the meeting can hear each other. A
Manager’s participation in a meeting pursuant to the preceding sentence shall
constitute presence in person at such meeting for all purposes of this
Agreement.

 

9.11. Action Without a Meeting. Notwithstanding anything to the contrary in this
Agreement, any action that may be taken at a meeting of the Board of Managers
may be taken without a meeting if a consent in writing setting forth the action
so taken is approved by the number of Managers required pursuant to this
Agreement, which consent may be executed in multiple counterparts, and shall
take effect when such consent is delivered to any Managers who did not so
consent in writing. In the event any action is taken pursuant to this Section
9.11, it shall not be necessary to comply with any notice or timing requirements
set forth in Section 9.10.

 

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9.12. Restrictions on Certain Board Actions. Notwithstanding anything contained
in this Agreement to the contrary, the Board of Managers shall not take any
action with respect to any of the following matters except upon the prior
approval of the PLC Manager:

 

(a) amend this Agreement (except as provided in Section 17.8);

 

(b) liquidate or dissolve the Company;

 

(c) change or reorganize the Company into any other legal form; or

 

(d) do any act in contravention of this Agreement

 

9.13. Liability. The Managers shall perform their duties under this Agreement
with ordinary prudence and in a manner reasonable under the circumstances. A
Manager shall not be liable to the Company or the Members for any loss or
liability caused by any act, or by the failure to do any act, unless such loss
or liability arises from the Manager’s intentional misconduct, gross negligence
or fraud. In no event shall any Manager be liable by reason of a mistake in
judgment made in good faith, or action or lack of action in reasonable reliance
on the advice of legal counsel.

 

9.14. Compensation. The Managers shall not be entitled to receive compensation
from the Company for services rendered on behalf of or for the benefit of the
Company. Each Manager shall, however, be reimbursed at any reasonable time and
from time to time for all reasonable out-of-pocket costs and expenses that such
Manager incurs in connection with performing services as a Manager of the
Company.

 

9.15. Board Observer. PLC shall have the right to appoint a single observer to
the Board of Managers (the “Observer”), which Person shall be entitled to attend
(or at the option of the Observer, monitor by telephone) all meetings of the
Board of Managers (other than any portions of any meetings which involve the
exchange of privileged attorney-client information or work product) but shall
not be entitled to vote on, or consent to or otherwise approve any activity or
policy taken of adopted by the Board of Managers. The Observer shall receive all
reports, meeting materials, notices, written consents, and other materials,
provided to the Board of Managers including, but not limited to, consents in
lieu of meetings (in each case other than any portions of such reports or
materials that contain or attorney-client privileged information or work
product) as and when provided to the Board of Managers. The Observer shall be
subject to and required to sign a mutually acceptable confidentiality and
non-disclosure agreement before attending the initial meeting of the Board of
Managers or reviewing any information provided thereby or pertaining thereto.
For the avoidance of doubt, in no event shall the Observer have any fiduciary
duties or be considered or deemed to be a manager of the Company or be required
to be present for purposes of a quorum. The Company shall reimburse PLC for the
reasonable travel expenses incurred by the Observer in connection with
attendance at or participation in meetings in person or by telephone to the same
extent as Managers are reimbursed for such expenses. The initial Observer shall
be Adam Gittes.

 

ARTICLE X.

OFFICERS

 

10.1. Officers. If the Board of Managers determines the Company should have
officers, the officers of the Company shall be elected by a majority vote of the
Managers. An officer of the Company may also be a Manager. The Board of Managers
may choose a President, one or more Vice Presidents, a Chief Operating Officer,
a Chief Financial Officer, a Secretary, one or more Assistant Secretaries and
such other officers as the Board of Managers may determine. Any two or more
offices may be held by the same individual.

 

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10.2. President. The President shall be the principal executive officer of the
Company and, subject to the control of the Board of Managers, shall in general
supervise and control all of the business and affairs of the Company. He or she
shall, when present, preside at all meetings of the Members. He or she may sign
any contracts or other instruments except those which shall be required by law,
by this Agreement or by the Board of Managers to be otherwise signed or
executed, and in general shall perform all duties as may be prescribed by the
Board of Managers from time to time.

 

10.3. Vice Presidents. Each Vice President shall have such powers and duties as
the Board of Managers or the President may prescribe or delegate to him or her.

 

10.4. Chief Operating Officer. The Chief Operating Officer shall, subject to the
control of the Board of Managers and the President, supervise and control the
day-to-day administrative affairs of the Company. He or she may sign any
contracts or other instruments except those which shall be required by law, by
this Agreement or by the Board of Managers or the President to be otherwise
signed or executed, and in general shall perform all duties as may be prescribed
by the Board of Managers and the President from time to time.

 

10.5. Chief Financial Officer. The Chief Financial Officer shall, subject to the
control of the Board of Managers and the President, have the custody of the
Company’s funds, shall keep full and accurate accounts of receipts and
disbursements, and shall deposit all monies in the name and to the credit of the
Company in such depositories as may be designated by the Board of Managers or
the President. The Chief Financial Officer shall also have the duties and
responsibilities as the treasurer of the Company and shall disburse the funds
thereof as may be ordered by the Board of Managers or the President. He or she
shall render to the Board of Managers at its regular meetings, or at such other
times as the Board of Managers so requires, an account of all his or her
transactions as Chief Financial Officer, and of the financial condition of the
Company. The Chief Financial Officer shall perform such other duties and have
such other powers as the Board of Managers or the President may from time to
time prescribe.

 

10.6. Secretary. The Secretary shall: (i) prepare and keep the minutes of the
meetings of the Board of Managers and the Members in one or more books provided
for that purpose; (ii) see that all notices are duly given in accordance with
the provisions of this Agreement or as required by law; (iii) be custodian of
the Company records; (iv) keep a register of the post office address of each
Member; (v) have general charge of the membership books of the Company; (vi)
authenticate records of the Company; and (vii) in general perform all duties
incident to the office of the Secretary and such other duties as from time to
time may be assigned to him or her by the President or by the Board of Managers.
In the absence of the Secretary, or in the event of his or her inability or
refusal to act, the Assistant Secretary, if any, shall perform all duties
incident to the office of the Secretary and such other duties as from time to
time may be assigned to him or her by the President or by the Board of Managers.

 

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10.7. Compensation. The officers of the Company shall be entitled to receive
such compensation, if any, from the Company for services rendered on behalf of
or for the benefit of the Company as shall be determined from time to time by
the Board of Managers. In addition, each officer of the Company shall be
reimbursed at any reasonable time and from time to time for all out-of-pocket
costs and expenses that such officer incurs in connection with performing
services as an officer of the Company.

 

10.8. Removal and Vacancies. Each officer of the Company shall hold office until
his or her successor is chosen and qualified in his or her stead or until his or
her death or until his or her resignation or removal from office. Any officer
elected or appointed by the Board of Managers may be removed either for or
without cause by the Board of Managers, but such removal shall be without
prejudice to the contract rights, if any, of the individual so removed. If the
office of any officer becomes vacant for any reason, the vacancy may be filled
by the Board of Managers.

 

ARTICLE XI.

 

RIGHTS, STATUS AND COVENANTS OF MEMBERS

 

11.1. General. Except to the extent expressly otherwise provided in this
Agreement, the Members shall not take part in the management or control of the
Company business, or sign for or bind the Company, such powers being vested
exclusively in the officers and the Board of Managers.

 

11.2. Voting Rights. The Members shall have the right to vote on all Company
matters specified under the Act. Any matter submitted to a vote of the Members
hereunder shall require the approval of the PLC Manager only as specifically
provided herein. When voting, Members shall not vote per capita, but based upon
the Percentage Interest held by each Member.

 

11.3. Limitation of Liability. Except as otherwise specified in Article IV of
this Agreement or the Act, no Member shall have any personal liability
whatsoever solely by reason of his, her or its status as a Member of the
Company, whether to the Company, the Board of Managers or any creditor of the
Company, for the debts of the Company or any of its losses beyond the amount of
the Member’s obligation, if any, to contribute his, her or its Capital
Contribution not previously contributed to the Company.

 

11.4. Bankruptcy; Death; Etc. None of the Bankruptcy, death, disability,
declaration of incompetence or incapacity, or dissolution of a Member shall
dissolve the Company, but the rights of a Member to share in the Profits and
Losses of the Company and to receive distributions of Company funds shall, on
the happening of such an event, devolve upon the Member’s estate, legal
representative or successor in interest, as the case may be, subject to this
Agreement, and the Company shall continue as a limited liability company under
the Act. The Member’s estate, representative or successor in interest shall be
entitled to receive distributions and allocations with respect to such Member’s
Units and shall be liable for all of the obligations of the Member.

 

11.5. Other Activities of the Members. Each Member will be free to own or
otherwise participate directly or indirectly in the ownership or operation of
any activity of any Person. Neither the Company nor any Member shall have any
rights, by virtue of this Agreement, in or to the other business ventures of any
other Member (or any officers, directors, employees or Affiliates of any Member)
or to the income or profits derived therefrom by any such Persons.

 

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ARTICLE XII.

 

MEETINGS AND MEANS OF VOTING

 

12.1. Meetings of the Members.

 

(a) Meetings of the Members may be called by the Board of Managers and shall be
promptly called upon the written request of any Member. The notice of a meeting
shall state the nature of the business to be transacted at such meeting, and
actions taken at any such meeting shall be limited to those matters specified in
the notice of the meeting. Notice of any meeting shall be given to all Members
not less than ten (10) and not more than thirty (30) days prior to the date of
the meeting. Members may vote in person or by proxy at such meeting.

 

(b) Except as otherwise expressly provided in this Agreement or required by the
express provisions of the Act, the vote of a Majority Interest of the Members
shall control all decisions for which the vote of the Members is required
hereunder. Each Member’s voting power shall be the same as that Member’s
Percentage Interest at the time of the vote. The presence of any Member at a
meeting shall constitute a waiver of notice of the meeting with respect to such
Member, unless such Member is present solely to challenge the validity of the
meeting. The Members may, at their election, participate in any regular or
special meeting by means of conference telephone or similar communications
equipment by means of which all Persons participating in the meeting can hear
each other. A Member’s participation in a meeting pursuant to the preceding
sentence shall constitute presence in person at such meeting for all purposes of
this Agreement.

 

12.2. Vote By Proxy. Each Member may authorize any Person to act on the Member’s
behalf by proxy on all matters in which a Member is entitled to participate,
whether by waiving notice of any meeting, or voting or participating at a
meeting. Every proxy must be signed by the Member authorizing such proxy or such
Member’s attorney-in-fact.

 

12.3. Conduct of Meeting. Each meeting of Members shall be conducted by a Person
appointed by the Board of Managers. The meeting shall be conducted pursuant to
such rules as may be adopted by the Person appointed by the Board of Managers
conducting the meeting unless the Board of Managers adopts other such rules.

 

12.4. Action Without a Meeting. Notwithstanding anything to the contrary in this
Agreement, any action that may be taken at a meeting of the Members may be taken
without a meeting if a consent in writing setting forth the action so taken is
approved by a Majority Interest or otherwise as set forth herein, as
appropriate, which consent may be executed in multiple counterparts. In the
event any action is taken pursuant to this Section 12.4, it shall not be
necessary to comply with any notice or timing requirements set forth in Section
12.1. Prompt written notice of the taking of any action without a meeting shall
be given to the Members who have not consented in writing to such action.

 

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12.5. Closing of Transfer Record; Record Date. For the purpose of determining
the Members entitled to notice of or to vote at any meeting of Members, any
reconvening thereof, or to act by consent, the Board of Managers may provide
that the transfer record shall be closed for at least two (2) days immediately
preceding such meeting (or such shorter time as may be reasonable in light of
the period of the notice) or the first solicitation of consents in writing. If
the transfer record is not closed and if no record date is fixed for determining
the Members entitled to notice of or to vote at a meeting of Members or by
consent, the date on which the notice of the meeting is mailed or the first
written consent is received by the Board of Managers shall be the record date
for such determination.

 

ARTICLE XIII.

INDEMNIFICATION AND INSURANCE

 

13.1. Indemnification. To the fullest extent permitted by law, the Company (but
not the Members) will indemnify each Member, its Affiliates, the directors,
managers, officers, employees and agents of each Member or its Affiliates, and
each Manager, officer, employee and agent of the Company and the Liquidator
(each an “Indemnified Party” and collectively the “Indemnified Parties”), and
save and hold each Indemnified Party harmless, from and in respect of (i) all
fees, costs and expenses incurred in connection with or resulting from any
claim, action or demand against an Indemnified Party (including any claim,
action or demand arising under common law or statute), including attorneys’
fees, that arise out of or in any way relate to the Company or its Subsidiaries,
or their respective properties, business or affairs, or that arise by reason of
any of them being a Manager, officer, employee or agent of a Member or the
Company (provided, that, in such capacity, such Person was performing services
on behalf of the Company) or a director, manager, officer or employee of any
Affiliate of a Member (whether or not such Person continues to serve in such
capacity at the time such claim, action or demand is brought or threatened; and
provided, that, in such capacity, such Person was performing services on behalf
of the Company), and (ii) all claims, actions and demands and any resulting
losses or damages (including all claims, actions and demands arising under
common law or statute), including amounts paid in settlement or compromise of
any claim, action or demand; provided, however, that this indemnity will not
extend to conduct by an Indemnified Party if it is determined by a court of
competent jurisdiction that the Person acted so as to be liable for actual
fraud, willful misfeasance, gross negligence or reckless disregard of the duties
involved in the conduct of his, her or its office, which liability will survive
the Person’s ceasing to serve in such capacity and any dissolution of the
Company. The foregoing is intended to satisfy any requirements of applicable law
that indemnification be authorized prior to indemnifying any Person. The
foregoing right of indemnification will be in addition to any rights to which
the Indemnified Parties may be entitled under the Act or otherwise and will
inure to the benefit of the executors, administrators, personal representatives,
successors or assigns of each Indemnified Party.

 

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13.2. Expenses. The Company shall pay the expenses incurred by an Indemnified
Party in defending a civil or criminal action, suit or proceeding, other than an
action brought by the Company, upon receipt of an undertaking by the Indemnified
Party to repay payments made by the Company if the Indemnified Party is
determined not to be entitled to indemnification as provided herein. The Board
of Managers will have the power on behalf of the Company to indemnify, on terms
generally consistent with this Article XIII, any other Person who serves at the
request of a Member as a director, manager, officer, employee or agent of an
Affiliate of the Company or a Member or Manager, against any liabilities that
may be incurred by reason of the Person’s being a director, manager, officer,
employee or agent of an Affiliate of the Company or a Member or Manager. Any
right of indemnity granted under this Article XIII may be satisfied only out of
the assets of the Company and no Member will be personally liable with respect
to any claim for indemnification

 

13.3. Insurance. The Company will have the power to purchase and maintain
insurance in reasonable amounts on behalf of the Company, as determined by the
Board of Managers and the Indemnified Parties against any liability incurred by
them in their capacities as such, whether or not the Company has the power to
indemnify them against such liability. The Company may also purchase and
maintain insurance for the protection of any Indemnified Party against similar
liabilities, whether or not the Company has the power to indemnify such Person
against such liabilities.

 

13.4. No Third-Party Beneficiaries. The indemnification provided in this Article
XIII is for the benefit of the Indemnified Parties and their respective
executors, administrators, personal representatives, successors and assigns, and
shall not be deemed to create any right to indemnification for any other
Persons.

 

13.5. Savings Clause. If all or any portion of this Article XIII shall be
invalidated on any ground by a court of competent jurisdiction, then the Company
shall nevertheless indemnify and hold harmless a Person to be indemnified
pursuant to this Article XIII as to costs, charges and expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative, to the full extent permitted by any applicable portion of this
Article XIII that shall not have been invalidated and to the fullest extent
permitted by applicable law.

 

ARTICLE XIV.

TRANSFER OF UNITS AND SUBSTITUTED/ADDITIONAL MEMBERS

 

14.1. Transfers by Members. Except for a Transfer to a Permitted Transferee of a
Member, and except as otherwise set forth in this Article XIV and Article XV, no
Member may Transfer all or any part of his, her or its Units without the prior
written consent of the Board of Managers; provided, however, that PrefCo shall
not be entitled to Transfer all or any part of its Units for so long as any
preferred equity remains outstanding at PrefCo. The Board of Managers may
withhold their consent to any Transfer, except for Transfers otherwise permitted
under this Agreement, for which consent is required, with or without reasonable
cause. If a Member receives the prior consent of the Board of Managers, he, she
or it may Transfer his, her or its Units if the following conditions are
satisfied:

 

(a) the Member and his, her or its transferee execute, acknowledge and deliver
to the Board of Managers such instruments of transfer and assignment with
respect to such transaction as are in form and substance satisfactory to the
Board of Managers;

 

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(b) unless waived in writing by the Board of Managers, the Member delivers to
the Board of Managers an opinion of counsel satisfactory to the Board of
Managers, covering such securities and tax laws and other aspects of the
proposed Transfer as the Board of Managers may reasonably request; and

 

(c) the Member has furnished to the transferee a written statement showing the
name and taxpayer identification number of the Company in such form and together
with such other information as may be required under Section 6050K of the Code
and the Regulations thereunder.

 

Any Member who thereafter Transfers all or any portion of his, her or its Units
as authorized in accordance with this Section 14.1 shall promptly notify the
Board of Managers of such Transfer and shall furnish to the Board of Managers
the name and address of the transferee and such other information as may be
required under Section 6050K of the Code and the Regulations thereunder.

 

14.2. Substituted Member. Except for a Transfer to a Permitted Transferee of a
Member, no Person taking or acquiring, by whatever means, the Units of any
Member in the Company, shall be admitted as a Substituted Member without the
prior approval of the Board of Managers at the time the proposed Substituted
Member is being considered for approval. In addition, no Person (including any
Permitted Transferee) shall be admitted as a Substituted Member unless such
Person:

 

(a) Elects to become a Substituted Member by delivering notice of such election
to the Company; and

 

(b) Executes, acknowledges and delivers to the Company such other instruments as
the Board of Managers may reasonably request to effect the admission of such
Person as a Substituted Member, including, without limitation, the written
acceptance and adoption by such Person of the provisions of this Agreement.

 

14.3. Basis Adjustment. Upon the Transfer of all or part of any Units, at the
request of the transferee of the Units, the Board of Managers may, with the
written consent of PLC, cause the Company to elect, pursuant to Section 754 of
the Code or the corresponding provisions of subsequent law, to adjust the basis
of the Company properties as provided by Sections 734 and 743 of the Code.

 

14.4. Admission of Additional Members. The Board of Managers is authorized to
issue additional Units and to admit additional Persons to the Company as
Additional Members, which in all instances shall comply with applicable
securities laws. The Board of Managers shall have discretion in determining the
consideration (which must be fully paid in cash or property at the time of
subscription), and the terms and conditions with respect to the Company for
admitting Additional Members. The Board of Managers will not permit any Person
to become an Additional Member unless such Person certifies in writing to the
Board of Managers that the Person agrees to be bound by the terms of this
Agreement. The Board of Managers shall do all things necessary to comply with
the Act and is authorized to do all things it deems to be necessary or advisable
in connection with the Company for admitting any Additional Member, including,
but not limited to, complying with any statute, rule, regulation or guideline
issued by any Governmental Authority.

 

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14.5. Transfer Procedures. The Board of Managers shall establish a Transfer
procedure consistent with this Article XIV to ensure that all conditions
precedent to the admission of a Substituted Member or Additional Member have
been complied with.

 

14.6. Invalid Transfer. No Transfer of Units that is in violation of this
Article XIV shall be valid or effective, and the Company shall not recognize any
improper Transfer for the purposes of making allocations, payments of profits,
return of Capital Contributions or other distributions with respect to such
Units, or part thereof. The Company may enforce the provisions of this Article
XIV either directly or indirectly or through its agents by entering an
appropriate stop transfer order on its books or otherwise refusing to register
or transfer or permit the registration or transfer on its books of any proposed
Transfers not in accordance with this Article XIV.

 

14.7. Distributions and Allocations in Respect of a Transferred Units. If any
Member Transfers any part of his, her or its Units during any accounting period
in compliance with the provisions of this Article XIV, Company income, gain,
deductions and losses attributable to such Units for the respective period shall
be divided and allocated between the transferor and the transferee by taking
into account their varying interests during the appropriate accounting period in
accordance with Code Section 706(d), using the daily proration method. All
Company distributions on or before the effective date of such Transfer shall be
made to the transferor, and all such Company distributions thereafter shall be
made to the transferee. Solely for purposes of making Company tax allocations
and distributions, the Company shall recognize a Transfer on the day following
the day of such Transfer. Neither the Company nor the Board of Managers shall
incur any liability for making Company allocations and distributions in
accordance with the provisions of this Section 14.7, whether or not the Board of
Managers or the Company have knowledge of any Transfer of any Units or part
thereof where the transferee is not admitted as a Substituted Member.

 

14.8. Additional Requirements of Admission to Company. No Transfer of any Units
shall be effective or valid and no Person shall be admitted as a Member if such
Transfer or admission would have the effect of causing the Company to be
re-classified for U.S federal income tax purposes as an association (taxable as
a corporation under the Code), or would not meet applicable exemptions from
securities registration and securities disclosure requirements provided under
U.S. federal and state securities laws.

 

14.9. Amendment to Exhibit A. The Board of Managers shall amend Exhibit A
attached to this Agreement from time to time to reflect the admission of any
successor Member, Substituted Members or Additional Members, or the increase,
reduction or termination of any Member’s Interest.

 

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14.10. Pledge of Company Units to a Lender.

 

(a) Notwithstanding any provision, including Sections 14.1 and 14.2, to the
contrary in this Agreement, the Units issued hereunder may be assigned, pledged,
hypothecated, encumbered or transferred to a lender (or agent acting for a group
of lenders) as collateral for PrefCo’s indebtedness under the Loan Agreement or
for any other Member’s indebtedness, liabilities and obligations to such lender
(or agent and group of lenders), and any such assigned, pledged, hypothecated,
encumbered or transferred Units shall be subject to the rights under any
collateral documentation governing or pertaining to such assignment, pledge,
hypothecation, encumbrance or transfer of such lender, agent, lender or group of
lenders. Upon the transfer of all of its Units in the Company to such lender,
agent, lender or group of lenders, the Member shall cease to be a Member of the
Company and shall have no further rights or obligations under this Agreement.
For the avoidance of doubt, any such sale, assignment, pledge, hypothecation,
encumbrance, transfer or disposition of Units in the Company shall be inclusive
of economic, management and voting rights (including, without limitation, the
rights to participate in the management of the business and the business affairs
of the Company, to share profits and losses, to receive distributions, and to
receive allocations of income, gain, loss, deduction, credit or similar item).

 

(b) Without limiting the foregoing, the right of such agent, lender or group of
lenders to enforce their rights and remedies under such collateral documentation
is hereby acknowledged and any such action taken in accordance therewith shall
be valid and effective under this Agreement. Any assignment, sale or other
disposition of the Units by such agent, lender or group of lenders pursuant to
any such collateral documentation in connection with the exercise of any rights
and powers of such agent, lender or group of lenders shall be valid and
effective for all purposes to transfer all right, title and interest of the
applicable Member hereunder to the assignee of such Member in accordance with
such collateral documentation and applicable law (including, without limitation,
the rights to participate in the management of the business and the business
affairs of the Company, to share profits and losses, to receive distributions
and to receive allocation of income, gain, loss, deduction, credit or similar
item) and such assignee shall be a Member of the Company with all rights and
powers of a Member. Further, no such agent, lender or group of lenders or any
such assignee shall be liable for the obligations of any Member assignor to make
capital contributions. So long as any assignment, pledge, hypothecation,
encumbrance or transfer of any Member’s Units is in effect, this provision shall
inure to the benefit of such assignee, pledgee, transferee, etc. and its
successors, assigns and/or designated agents, as an intended third party
beneficiary, and no amendment, modification or waiver of, or consent with
respect to, this provision shall in any event be effective without the prior
written consent of such assignee, pledgee, transferee, etc.

 

ARTICLE XV.

DRAG ALONG AND PUT RIGHTS

 

15.1. Drag-Along Rights.

 

(a) If, at any time the Company, with the prior approval of the Board of
Managers, enters into an agreement with respect to a liquidity event and the
proposed purchaser desires to purchase all of the Units then issued and
outstanding in connection therewith, then the Company shall have the right to
require each Member to participate in such Transfer and sell all of his, her or
its Common Units to the proposed purchaser on the same terms and conditions as
have been approved by the Board of Managers, including, without limitation, the
price per Common Unit. At least ten (10) days prior to the date of any such
proposed Transfer, the Company, shall provide all of the Members with a notice
of the proposed Transfer, stating the intent of the Board of Managers to make
such Transfer, the kind and amount of consideration to be paid for the Units and
the name of the proposed purchaser (the “Buyout Notice”).

 

 33 

 

 

(b) All Members shall take all such reasonable actions as may be necessary or
appropriate to effect the transactions contemplated by this Section 15.1 and the
purpose and intent hereof.

 

(c) Each Member hereby irrevocably and severally appoints and constitutes each
Manager as such Member’s true and lawful attorney in fact, with full power and
authority, on such Member’s behalf and in such Member’s name, to execute,
acknowledge, swear to, and deliver such documents and filings, including,
without limitation, consents, and assignments, that such attorney in fact, in
its sole and absolute discretion deems necessary to accurately effectuate the
exercise of any options and the Transfer of the Member’s Units, and to otherwise
reflect a Transfer of such Member’s Units pursuant to Section 15.1(a). This
power of attorney is a special power coupled with an interest and is
irrevocable, and may be exercised by the attorney described herein at any time
that is appropriate or necessary to consummate the transaction contemplated in
the Buyout Notice. Such power of attorney shall survive the death or legal
disability of a Member and any resulting Transfer of such Member’s Units.

 

(d) In connection with any Transfer pursuant to this Section 15.1: (i) PLC shall
not be required to make any representations or warranties in connection
therewith other than with respect to title and ownership to the Units being
conveyed by PLC and its authority with respect thereto; (ii) PLC’s
indemnification obligations shall be limited to the lesser of (x) the amount of
consideration received by PLC in such Transfer and (y) PLC’s pro rata portion of
such indemnification obligation; (iii) PLC shall only be responsible for any
indemnification obligation on a several (and not joint and several) basis; (iv)
unless PLC has violated its obligations or good faith and fair dealing, PLC’s
indemnification obligations shall be limited to representations and warranties
it makes regarding ownership of its equity in the Company; and (v) PLC shall not
be required to enter into or be bound by any restrictive covenants (including
non-competition and non-solicitation provisions) in connection with such
Transfer pursuant to this Section 15.1.

 

15.2. Put Right.

 

(a) At any time during the Exercise Period, PLC may, at its election, sell to
the Company all of PLC’s Common Units for a purchase price, per Common Unit,
equal to the fair market value of such Common Units as determined in accordance
with Section 15.2(c) (the “Common Put Price”). The Common Put Price shall be
determined based on the value of the Common Units of the Company that would be
extrapolated from the enterprise value of the Company as if sold in an orderly
auction process intended to maximize value, multiplied by the Percentage
Interest of the Common Units to be sold.

 

 34 

 

 

(b) If PLC desires to exercise its right to sell Common Units pursuant to this
Section 15.2, PLC shall provide notice (a “Common Put Notice”) requesting that
the Company repurchase all of Common Units then held thereby.

 

(c) Promptly following receipt by the Company of a Common Put Notice, PLC and
the Company shall negotiate in good faith to mutually agree on the Common Put
Price. If PLC and the Company are unable to mutually agree on the Common Put
Price within twenty (20) days of the delivery of the Common Put Notice, then
promptly thereafter, but in no event later than thirty (30) days following such
delivery of the Common Put Notice, the parties shall retain an Independent
Appraiser to determine the Common Put Price by determining the enterprise value
of the Company and calculating the amount that would be distributed to PLC if
such enterprise value was applied to the outstanding capital structure of the
Company (a “Valuation”), which determination by the Independent Appraiser shall
be provided to PLC and the Company within thirty (30) days of the Independent
Appraiser’s engagement and shall be final and binding on the parties. The cost
of the Valuation will be borne fifty percent (50%) by PLC and fifty percent
(50%) by the Company. The sale of the Common Units contemplated hereby shall be
completed on the seventh (7) Business Days after completion of the Valuation,
payable in cash by wire transfer of immediately available funds. PLC shall have
the right to irrevocably rescind its decision to sell its Common Units to the
Company pursuant to this Section 15.2 for a period of five (5) Business Days
following completion of the Valuation.

 

(d) Notwithstanding the provisions of Section 15.2(c), the Company shall not be
obligated to purchase any Common Units pursuant to this Section 15.2 to the
extent there exists a Common Delay Condition. In such event, the Company shall
notify PLC in writing as soon as practicable of such Common Delay Condition and
shall permit PLC, within ten (10) days of receipt thereof, to rescind its
decision to sell its Common Units to the Company pursuant to this Section 15.2.
If PLC does not rescind its decision to sell its Common Units to the Company
pursuant to this Section 15.2, the Company shall consummate the purchase of
Common Units on the applicable date set forth in Section 15.2(c) with respect to
as many Common Units as can be purchased without running afoul of the Common
Delay Condition and thereafter pay the Common Put Price with respect to as many
of the other Common Units to be purchased as can be purchased without running
afoul of the Common Delay Condition at the earliest practicable date or dates,
in which case, the Common Put Price shall accrue interest at the Common
Distribution Rate.

 

(e) At the closing of any sale and purchase pursuant to this Section 15.2, PLC
shall deliver to the Company a reasonable instrument of transfer against receipt
of the Common Put Price.

 

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ARTICLE XVI.

LIQUIDATION AND DISSOLUTION OF THE COMPANY

 

16.1. Dissolution Events. The Company will be dissolved upon the happening of
any of the following events:

 

(a) all or substantially all of the assets of the Company are sold; or

 

(b) a document is signed by a Required Interest of the Members which states
their election to dissolve the Company.

 

16.2. Method of Liquidation.

 

(a) Generally. Upon the happening of any of the events specified in Section
16.1, the Board of Managers or any liquidating trustee elected by the Board of
Managers including the PLC Manager, will commence to wind up the Company’s
affairs as promptly as practicable, unless the Board of Managers or the
liquidating trustee (either, the “Liquidator”) determines that an immediate
liquidation of Company assets would cause undue loss to the Company, in which
event the liquidation may be deferred for a time determined by the Liquidator to
be appropriate. Assets of the Company may be liquidated or distributed in kind,
as the Liquidator determines to be appropriate. The Members will continue to
share Profits and Losses, Available Cash and Net Cash From Sales or Refinancings
during the period of liquidation in the manner set forth in Article VI and
Article VII.

 

(b) Distribution of Liquidation Proceeds. The proceeds from liquidation of the
Company, including repayment of any debts of Members to the Company and any
Company assets that are not sold in connection with the liquidation will be
applied in the following order of priority:

 

(i) first, to payment of the debts and satisfaction of the other obligations of
the Company, including without limitation debts and obligations to Members;

 

(ii) second, to the establishment of any reserves deemed appropriate by the
Liquidator for any liabilities or obligations of the Company, which reserves
will be held for the purpose of paying liabilities or obligations and, after the
expiration of a period the Liquidator deems appropriate, will be distributed to
the Members in proportion to their respective Percentage Interests; and

 

(iii) third, to the Members in accordance with Schedule A and Article VII.

 

Upon liquidation, prior to making any liquidating distributions hereunder, the
Liquidator is hereby authorized and directed to make any and all special
allocations of Profits, Losses and items of Company gain and deduction in a
manner which results in the Members’ respective Capital Accounts having balances
equal to (or as close thereto as possible) the aggregate liquidating
distribution that each such Member shall receive hereunder.

 

 36 

 

 

16.3. Member’s Deficit Capital Account. If any Member has a deficit balance in
his, her or its Capital Account (after giving effect to all contributions,
distributions, and allocations for all taxable years, including the year during
which such liquidation occurs), such Member will have no obligation to make any
contribution to the capital of the Company with respect to such deficit, and
such deficit will not be considered a debt owed to the Company or any other
Person for any purpose whatsoever.

 

16.4. Liquidator Appointed by Court. If within thirty (30) days following the
date of dissolution, or other time period provided in Section 16.2, a Liquidator
has not been appointed in the manner provided therein, any Member shall have the
right to make application to the appropriate court in the jurisdiction in which
the Company is located for appointment of such Liquidator, and the said court
shall be fully authorized to appoint and designate such Liquidator who shall
have all the powers, duties, rights and authorities of the Liquidator herein
provided.

 

16.5. Date of Termination. The Company will terminate when all of the cash and
property available for application under Section 16.2 above have been applied in
accordance with Section 16.2.

 

ARTICLE XVII.

MISCELLANEOUS

 

17.1. Notices. All notices given pursuant to this Agreement shall be in writing
and shall be deemed effective when personally delivered or upon being placed in
the United States mail, registered or certified with return receipt requested,
or when received, if delivered by hand, sent by overnight courier, guaranteed
next day delivery or by email. For purposes of notice, the addresses of the
Members shall be as stated under their names on the attached Exhibit A and the
address of the Managers shall be the address of the Member authorized to appoint
him or her; provided, however, that each Member shall have the right to change
his, her or its address with notice hereunder to any other location by the
giving notice to the Board of Managers in the manner set forth above.

 

17.2. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Members, and their respective heirs, legal
representatives, successors and permitted assigns; provided, however, that
nothing contained herein shall negate or diminish the restrictions set forth in
Articles XIV or XV.

 

17.3. Governing Law. This Agreement shall be governed by the internal law of the
State of Delaware without regard to any choice of law principles.

 

17.4. Jurisdiction. Any legal proceedings arising out of any of the transactions
or obligations contemplated by this Agreement may be brought in the Court of
Chancery of the State of Delaware or the United States District Court for the
District of Delaware, and appellate courts therefrom. The parties hereto
irrevocably and unconditionally: (a) submit to the jurisdiction of such courts
and agree to take any and all future action necessary to submit to such
jurisdiction; (b) waive any obligation which they may now or hereafter have to
the venue of any suit, action or proceeding brought in such courts; and (c)
waive any claim that any such suit, action or proceeding brought in such court
has been brought in an inconvenient forum.

 

 37 

 

 

17.5. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT,
OTHER RELATED DOCUMENTS, THE INTERESTS OR THE SUBJECT MATTER HEREOF OR THEREOF.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS
(INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES
HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY
HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL

 

17.6. Construction. Every covenant, term, and provision of this Agreement shall
be construed simply according to its fair meaning and not strictly for or
against any Member. The failure by any party to specifically enforce any term or
provision hereof or any rights of such party hereunder shall not be construed as
the waiver by that party of its rights hereunder. The waiver by any party of a
breach or violation of any provision of this Agreement shall not operate as, or
be construed to be, a waiver of any subsequent breach of the same or other
provision hereof.

 

17.7. Entire Agreement. This Agreement contains the entire agreement among the
Members relating to the subject matter hereof, and all prior agreements relative
hereto which are not contained herein are terminated. Notwithstanding the
foregoing, the Members have entered into and are subject to the terms and
conditions of the IRA, the terms of which supplement this Agreement, and to the
extent there is any conflict or inconsistency with this Agreement (other than
Schedule A hereto), govern and shall be enforceable as if set forth herein and
made a part of this Agreement.

 

17.8. Amendments. Except as otherwise expressly provided in this Section 17.8,
amendments or modifications may be made to this Agreement only by setting forth
such amendments or modifications in a document approved by the Board of Managers
including, where provided, the PLC Manager, and any alleged amendment or
modification herein which is not so documented and approved shall not be
effective as to any Member. The Board of Managers may amend any provision of
this Agreement and execute, swear to, acknowledge, deliver, file and record
whatever documents may be required in connection therewith to reflect:

 

(a) a change in the location of the principal place of business of the Company
not inconsistent with the provisions of Section 2.4, or a change in the
registered office or the registered agent of the Company; or

 

(b) admission of a Member into the Company or any increase, decrease or
termination of any Member’s Interest in accordance with this Agreement.

 

 38 

 

 

However, no amendment or modification which disproportionately affects any
particular Member relative to any other Member shall be effective against such
Member unless approved in writing by such Member.

 

17.9. Severability. This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances,
rules and regulations. If any provision of this Agreement or the application
thereof to any Person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, but the extent of such invalidity or
unenforceability does not destroy the basis of the bargain among the Members as
expressed herein, then the remainder of this Agreement and the application of
such provision to other Persons or circumstances shall not be affected thereby,
but rather shall be enforced to the greatest extent permitted by law.

 

17.10. Gender and Number. Whenever required by the context, as used in this
Agreement, the singular number shall include the plural and the neuter shall
include the masculine or feminine gender, and vice versa.

 

17.11. Section Headings. The section headings appearing in this Agreement are
for convenience of reference only and are not intended, to any extent or for any
purpose, to limit or define the text of any section.

 

17.12. Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original but all of which shall constitute but one document.

 

(Signature page follows)

 

 39 

 

 

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

 

COMPANY:

C-PAK CONSUMER PRODUCT HOLDINGS SPV I LLC, a Delaware limited liability company

        By: /s/ Eric Blue‎ ‎   Name: Eric C. Blue   Title: Manager       COMMON
MEMBERS:

C-PAK PREFCO SVP I, INC.,

a Delaware corporation

        By: /s/ Eric Blue‎   Name: Eric C. Blue   Title: President        

PINEY LAKE OPPORTUNITIES ECI MASTER FUND LP, a Cayman Islands exempted limited
partnership

        By: Piney Lake Capital Management LP as Advisor         By: /s/ Michael
Lazar‎   Name: Michael B. Lazar   Title: President       PREFERRED MEMBER: C-PAK
PREFCO SVP I, INC.,   a Delaware corporation         By: /s/ Eric Blue‎ ‎  
Name: Eric C. Blue   Title: President

 

 

 

 

SCHEDULE A

 

PREFERRED UNITS

 

Section 1. Distributions.

 

(a) Subject to Section 1(b), Preferred Members shall be entitled to receive,
when, as and if distributions are declared by the Board of Managers, out of
funds legally available therefor, cumulative preferential distributions
(“Preferred Distributions”) from the date of issuance of their respective
Preferred Units, which distributions shall accrue on the Liquidation Preference
at the rate per Unit equal to the Preferred Distribution Rate. Preferred
Distributions shall accrue daily whether or not declared, whether or not the
Company has earnings or profits and whether or not there are funds legally
available for the payment of such Preferred Distributions and shall be computed
on the basis of a 360-day year consisting of twelve 30-day months.

 

(b) Preferred Distributions on any Preferred Units shall be paid on each March
31, June 30, September 30 and December 31 of each year (each, a “Distribution
Payment Date”), beginning June 30, 2019, to the extent declared by the Board of
Managers and subject to the limitations set forth in this Section 1(b), for the
period beginning on the date after the prior Distribution Payment Date and
ending on such dividend Payment Date. To the extent that all or some portion of
the Preferred Distributions are not declared and paid, in cash, on any
Distribution Payment Date for the calendar quarter ending on such Distribution
Payment Date, the amount of such Preferred Distributions that was not paid in
cash shall be added to the Liquidation Preference and shall thereafter accrue
and compound at the Preferred Distribution Rate. Notwithstanding anything to the
contrary herein, the Company may not declare or pay Preferred Distributions in
cash except that on each Distribution Payment Date up to fifty percent (50%) of
any Preferred Distributions accrued during the quarter ending on such
Distribution Payment Date may be declared and paid in cash.

 

(c) So long as any Preferred Units are outstanding, without the consent of the
Required Preferred Holders: (i) except for distributions made in accordance with
Section 7.2 or 7.3 of the Agreement and distributions permitted by both Section
9.06(f) of the Loan Agreement and the Management Agreement (as defined in the
Loan Agreement), no distribution shall be declared or paid upon, or any sum set
apart for the payment of distributions upon, any Interests other than
distributions permitted by Section 1(b) above; (ii) no Interests other than
Preferred Units shall be purchased, redeemed or otherwise acquired or retired
for value by the Company or any of its Subsidiaries; (iii) no warrants, rights,
calls or options to purchase any Interests other than Preferred Units shall be
directly or indirectly purchased by the Company or any of its Subsidiaries; and
(iv) no monies shall be paid into or set apart or made available for a sinking
or other like fund for the purchase, redemption or other acquisition or
retirement for value of any Interests other than Preferred Units by the Company
or any of its Subsidiaries. Without limiting the rights of Preferred Members to
receive the Redemption Price upon a Liquidation Event as set forth in Section 3
or pursuant to Sections 5, 6 or 8, Preferred Members shall not be entitled to
any distributions, whether payable in cash, property, or equity interests, in
respect of their Preferred Units in excess of the full cumulative distributions
as described in this Schedule A.

 

 Schedule A-1  

 

 

(d) Following a Liquidation Event, a Mandatory Redemption Event or a Preferred
Member’s exercise of its right to sell Preferred Units pursuant to Section 8, no
distributions shall be declared or paid upon, or any sum set apart for the
payment of distributions upon, any Interests, including distributions pursuant
to Section 7.2 or 7.3 of the Agreement, until the Redemption Price is paid in
full in cash on all Preferred Units pursuant to Section 3, 5, 6 or 8, as
applicable.

 

Section 2. Voting Rights; Coordination with PrefCo Preferred Stock.

 

(a) Preferred Members will have no voting rights with respect to their Preferred
Units except as required by the Act or as specifically set forth in this
Schedule A. When voting, the Members shall not vote per capita but based upon
the Percentage Interest held by each Member and unless required to vote by
class, Preferred Members shall vote on an as-converted basis assuming a 1:1
conversion of Preferred Units into Common Units.

 

(b) Except with regard to the nomination of the Managers as set forth in Article
IX of the Agreement, PrefCo hereby agrees to, and whether or not it takes such
action shall be deemed to, exercise any and all rights with respect to the
Preferred Units held by it in the same manner and at the same time as the
holders of Preferred Stock of PrefCo take with respect to the corresponding
rights of the Preferred Stock of PrefCo, including, without limitation, any
waiver, consent or approval and any exercise of rights to cause the issuer
thereof to repurchase the Preferred Stock of PrefCo or Preferred Units of the
Company, as applicable. PrefCo shall take such actions with respect to its
Preferred Units only if and to the extent the holders of Preferred Stock of
PrefCo take such actions respect to the corresponding rights of the Preferred
Stock of PrefCo. All amounts received by PrefCo on account of its Preferred
Units shall be immediately paid to the holders of Preferred Stock of PrefCo in
the same manner, such that, for example, distributions made pursuant to Section
7 of the Agreement shall be distributed by PrefCo as dividends on Preferred
Stock and the Redemption Price paid to PrefCo shall be paid as the Redemption
Price on Preferred Stock of PrefCo and, in furtherance thereof, (i) any exercise
of redemption rights or declaration of distributions or dividends by PrefCo with
respect to Preferred Stock shall be taken at the same time and to the same
extent by the Company with respect to Preferred Units and (ii) any exercise of
redemption rights or declaration of distributions or dividends by the Company
with respect to Preferred Units shall be taken at the same time and to the same
extent by PrefCo with respect to Preferred Stock of PrefCo.

 

Section 3. Liquidation Rights.

 

(a) Upon the occurrence of a Liquidation Event, each Preferred Member shall be
entitled to receive and to be paid out of the assets of the Company legally
available for distribution to the Members, before any distribution or payment
may be made on any Common Units or other Interests of the Company, an amount per
Preferred Unit equal to the Redemption Price as of such time payable at the time
of such Liquidation Event. If, upon any such Liquidation Event, the assets of
the Company legally available for distribution to the Members are insufficient
to pay the Preferred Members the full amount of such Redemption Price for each
outstanding Preferred Unit, the Preferred Members will share ratably in any such
distribution of the assets of the Company in proportion to the full respective
amounts (if any) to which they are entitled with respect to their Preferred
Units. After payment the Preferred Members of the full amount of such Redemption
Price to which they are entitled, Preferred Members as such will have no right
or claim to any of the assets of the Company. No Member shall receive any cash
or other consideration upon a Liquidation Event by reason of their ownership of
Common Units or Interests of the Company other than Preferred Units unless the
full amount of such Redemption Price to which Preferred Members are entitled in
respect of all outstanding Preferred Units have been paid in full.

 

 Schedule A-2  

 

 

(b) Notwithstanding the provisions of this Section 3, the Company shall not be
obligated to pay distributions pursuant to this Section 3 to the extent there
exists a Preferred Delay Condition. In such event, the Company shall notify any
the Preferred Members in writing as soon as practicable of such Preferred Delay
Condition. The Company shall then pay the distributions on the applicable date
set forth in this Section 3(b) with respect to as to as many of the Preferred
Units entitled to such distributions without running afoul of the Preferred
Delay Condition and thereafter pay the Redemption Price with respect to as many
of the other Preferred Units entitled to such distribution without running afoul
of the Preferred Delay Condition at the earliest practicable date or dates, in
which case, the Redemption Price shall accrue interest at the Preferred
Distribution Rate.

 

Section 4. Protective Provisions.

 

(a) For so long as any Preferred Units are outstanding, the prior vote or
written consent of the PLC Manager shall be required for the following,
including any such actions effected pursuant to or as a result of a merger,
consolidation or business combination, and the Company shall not take, and shall
cause its Subsidiaries not to take, any such action without such prior vote or
written consent:

 

(i) the entry into by the Company or any Subsidiary of any contract that imposes
restrictions or limitations on the amounts payable to Preferred Members in
accordance with this Schedule A;

 

(ii) the issuance by the Company of any Capital Stock that is senior to or pari
passu with the Preferred Units (including issuance of additional Preferred Units
but excluding increases in Liquidation Preference pursuant to Section 1);

 

(iii) the issuance or sale of any Capital Stock of any Subsidiary, other than to
the Company or a wholly owned Subsidiary, or the creation or ownership of any
Subsidiary, other than a wholly owned Subsidiary; provided, however, that this
Section 4(a)(iii) shall not apply in connection with the Company’s entry into a
bona fide joint venture transaction with an unaffiliated third party so long as
such unaffiliated third party agrees to subordinate its interest in such joint
venture to the Preferred Units in a manner satisfactory to the holders of
Preferred Units;

 

(iv) the incurrence of any Indebtedness other than as permitted under Section
9.01 the Loan Agreement;

 

(v) the commencement of an Insolvency Event;

 

 Schedule A-3  

 

 

(vi) the amendment, modification or waiver of this Agreement, the Company’s
Certificate of Formation or any other organizational documents that (A) amends,
modifies or waives in any respect the powers, preferences, or other rights of
the Preferred Units or (B) has an adverse effect on Preferred Members in their
capacity as such;

 

(vii) the declaration or payment of distributions upon, or any sum set apart for
the payment of distributions upon, any classes or series of Capital Stock of the
Company other than the Preferred Units as contemplated by this Agreement or the
last sentence of Section 1(c) above;

 

(viii) the purchase, redemption, acquisition or retirement for value by the
Company or any of its Subsidiaries, of any classes or series of Capital Stock of
the Company other than the Preferred Units as contemplated by this Agreement or
pursuant to a Plan to the extent not prohibited by Section 9.06(e) of the Loan
Agreement and so long as no Redemption Breach has occurred and is not
continuing;

 

(ix) the direct or indirect purchase of warrants, rights, calls or options of
any classes or series of Capital Stock by the Company other than Preferred Units
unless undertaken under a Plan to the extent not prohibited by Section 9.06(e)
of the Loan Agreement and so long as no Redemption Breach has occurred and is
not continuing;

 

(x) the payment into or set apart or made available for a sinking or other like
fund monies for the purchase, redemption or other acquisition or retirement for
value of any classes or series of Capital Stock of the Company other than
Preferred Units by the Corporation or any of its Subsidiaries or pursuant to a
Plan to the extent not prohibited by Section 9.06(e) of the Loan Agreement and
so long as no Redemption Breach has occurred and is not continuing;

 

(xi) any transaction or series of transactions that would result in a Change of
Control unless the Preferred Units are redeemed in full in cash upon the
consummation of such Change of Control; or

 

(xii) the taking of any act or omission that would result in a failure of the
Company or any of its Subsidiaries to comply with their obligations under
Section 8 (other than Sections 8.01(d), 8.10, 8.11, 8.12, 8.13, 8.14, 8.16,
8.17, 8.20, 8.21, 8.22 and 8.23) or Section 9 (other than (A) Sections 9.02,
9.07, 9.11, 9.13, 9.15, 9.16 and 9.20, (B) in the case of Section 9.03, any
transaction where the Preferred Units are redeemed in full in cash upon the
consummation of such transaction, (C) in the case of Section 9.06, Restricted
Payments payable solely in Common Units pursuant to Section 7.2 of the Agreement
and (D) in the case of Section 9.14, becoming liable in respect of any
obligation (contingent or otherwise) to purchase, redeem, retire, acquire or
make any other payment in respect of the Preferred Units pursuant to this
Schedule A) of the Loan Agreement, treating the Company in the same manner as
the “Borrower” thereunder, and each Subsidiary of the Company as a “Subsidiary”
thereunder, but giving effect to all baskets, thresholds, limitations, and
qualifications set forth therein and for purposes hereof, treating the Company
and each of its Subsidiaries as “Loan Parties”; provided, that the foregoing
shall not be interpreted to alter the treatment of the Borrower or any other
Loan Party under the Loan Agreement); it being understood that if any failure to
comply with any of such provisions of Section 8 or Section 9 of the Loan
Agreement is cured in accordance with the terms thereof, such provisions shall
be deemed (with retroactive effect to the first date of any such failure to so
comply) to have been complied with for purposes of this Schedule A.

 

 Schedule A-4  

 

 

(b) For the avoidance of doubt, each of the foregoing clauses (i) through (xii)
is an independent covenant and any action or transaction involving the Company
or its Subsidiaries, as applicable, requiring the vote or consent of the PLC
Manager under any such clause shall require such consent, notwithstanding that
such action or transaction may be permitted without such vote or consent by any
other clause in Section 4.

 

Section 5. Sale Trigger Event.

 

(a) Notwithstanding anything to the contrary contained herein, upon the
occurrence of, and during the continuation of, any Sale Trigger Event, PLC shall
have the right to cause the Company to effect a Sale of the Company (any such
sale, an “Exit Sale”). PLC may exercise such right by delivering written notice
(a “Sale Notice”) thereof to the Company at any time, and from time to time,
after the occurrence of and during the continuation of a Sale Trigger Event.

 

(i) If PLC elects to cause an Exit Sale pursuant to this Section 5, then the
Company and each Member shall take all necessary and desirable actions as
directed by PLC in connection with the consummation of any Exit Sale, including:
(a) in the case of the Company, engaging a nationally recognized investment bank
selected by PLC (the “Investment Bank”) to establish procedures to effect the
Exit Sale with the objective of achieving the highest practicable value within a
reasonable period of time on terms and conditions satisfactory to PLC in its
reasonable discretion; (b) cooperating with the Investment Bank in accordance
with such procedures, including by preparing customary marketing materials
approved by PLC; (c) in the case of the Company, hiring independent nationally
recognized legal counsel as may be selected by PLC to act on behalf of the
Company and the Members as legal counsel in connection with such Exit Sale (the
“Law Firm”); (d) cooperating with proposed bidders and their financing sources
and each of their respective representatives and advisors (collectively
“Bidders”), and also with PLC and the Law Firm, in the evaluation of an Exit
Sale; (e) facilitating the due diligence process in respect of any such Exit
Sale, including by (A) establishing, populating and maintaining an online “data
room”, (B) causing the senior management team to participate in customary
management presentations, site visits, bank meetings and presentations, road
shows, ratings agency presentations, and all such other meetings and conference
calls with Bidders requested by PLC to facilitate the evaluation, structuring,
negotiation, documentation, financing and closing of such Exit Sale; (f)
executing a sale contract and other customary documents approved by PLC
consistent with this Agreement; (g) making required governmental filings and
taking all other actions necessary to obtain necessary governmental approvals
and third party consents; (h) providing any financial or other information or
audit required by the Bidders, including with respect to “KYC” and other legal
compliance matters; and (i) taking all necessary or desirable actions to effect
such Exit Sale to the fullest extent permitted by law.

 

 Schedule A-5  

 

 

(ii) The Company shall bear, and promptly pay, all of the costs and expenses
(other than taxes) of any actual or proposed Exit Sale or related process
conducted in accordance with the foregoing to the extent such costs are incurred
at the direction of PLC by the Company or any Member. The Company shall also
provide the Preferred Members with the opportunity to participate in the Exit
Sale process, including participation in all material meetings, conversations
and correspondence with the Investment Bank, Law Firm, Bidders and/or any
applicable governmental or regulatory agencies.

 

(b) Exercise. If PLC elects to exercise its rights under this Section 5, and
such exercise of rights results in an offer for the Sale of the Company to one
or more Bidders, PLC shall thereafter select and designate a single Bidder as
the prospective buyer (the “Prospective Buyer”); provided, however, that in the
event that (i) there are multiple Bidders and (ii) two or more Bidders submit
offers which provide for the payment in full, in cash, of all amounts then due
and owing by the Company to PLC and are otherwise equivalent in terms of
committed financing and certainty of closure, then the PrefCo Managers shall
designate the Prospective Buyer and thereafter, the Company shall furnish a
written notice of the Prospective Buyer (the “Drag Along Notice”) to each other
Member. The Drag Along Notice shall set forth the principal terms of the
proposed Sale of the Company insofar as it relates to such Units or Member,
including, as applicable (x) the Units or assets to be acquired by the
Prospective Buyer, (y) the per Unit consideration to be received in the proposed
Sale of the Company and (z) the name and address of the Prospective Buyer. If
the Prospective Buyer consummates the proposed Sale of the Company to which
reference is made in the Drag Along Notice by purchase of Units, each other
Member (each a “Participating Seller”, and, together with the Preferred Members,
collectively, the “Drag Along Sellers”) shall be bound and obligated to sell its
Units in the proposed Sale of the Company on the same terms and conditions
(other than price, which shall be as set forth in Section 5(c)) and, if
applicable, to vote all such Units in favor of such transaction.

 

(c) Application of Proceeds. The proceeds of any Sale of the Corporation to
which this Section 5 applies shall be first be allocated to the Preferred
Members so that each Preferred Member receives an amount per Preferred Unit
equal to the Redemption Price as of the time of the closing of such Sale of the
Company, and then to the holders of the Common Units on a pro rata basis in
proportion to the number of Common Units held by each Common Member.

 

 Schedule A-6  

 

 

(d) Irrevocable Proxy. In order to secure each Member’s obligation to vote his,
her or its Units in accordance with the provisions of this Section 5, each
Member hereby appoints the PLC Manager (the “Attorney-In-Fact”) as such Member’s
true and lawful proxy, representative, agent and attorney-in-fact, with full
power of substitution, to vote at any annual or special meeting of the Members,
or to take any action by written consent in lieu of such meeting with respect
to, or to otherwise take action in respect of, all of the Units owned or held of
record by such Member for all such matters as expressly provided for in this
Section 5. Each Attorney-In-Fact, after PLC has elected to exercise its rights
under this Section 5, subject to the termination of the Sale of the Company
under Section 5(f), may exercise the irrevocable proxy granted to them hereunder
at any time any Member fails to comply with any of the provisions of this
Section 5. Each of the proxies and powers granted by each Member pursuant to
this Section 5(d) is coupled with an interest and is given to secure the
performance of such Member’s obligations under this Agreement. Such proxies and
powers shall be irrevocable, shall terminate upon the termination of this
Agreement and shall survive the death, incompetency, disability, bankruptcy or
dissolution of such Member and the subsequent holders of his, her or its Units.
To effectuate the provisions of this Section 5(d), the Secretary of the Company
and of each of its subsidiaries, or, if there shall be no Secretary, then such
other officer or employee of the Company or such subsidiary as the Board of
Managers may appoint to fulfill the duties of the Secretary, shall not record
any vote or consent or other action contrary to the terms of this Agreement. The
Members shall severally, but not jointly, on a pro rata basis, indemnify and
hold harmless, each Attorney-In-Fact from any and all losses, liabilities and
expenses (including the reasonable fees and expenses of counsel) arising out of
or related to such Attorney-In-Fact’s service as the Attorney-In-Fact.

 

(f) Waiver of Appraisal Rights. Each Member hereby waives, and hereby agrees not
to demand or exercise, all appraisal rights, dissenters rights or similar rights
under any applicable law with respect to a transaction subject to this Section 5
as to which any such appraisal rights, dissenters rights or similar rights are,
or may be, available.

 

(g) Closing. At the closing of any Exit Sale effected as a sale of Units, such
Preferred Member shall deliver to the Company a reasonable instrument of
transfer against receipt of the proceeds.

 

Section 6. Redemption and Repurchases.

 

(a) Optional Redemption. Subject to Section 2(b) above, the Company may elect to
redeem any or all of the Preferred Units at any time, and from time to time,
then held by the holders of Preferred Units, for cash, in an amount per
Preferred Unit being redeemed equal to the Redemption Price as of such time.

 

(b) Mandatory Redemption upon Mandatory Redemption Event. Upon the occurrence of
a Mandatory Redemption Event, to the extent not prohibited by applicable law or
postponed in writing by the Required Preferred Holders, in their sole and
absolute discretion, the Company shall redeem all then outstanding Preferred
Units for cash in an amount per Preferred Unit equal to the Redemption Price as
of such time. Any such redemption shall occur concurrently with the consummation
of any Mandatory Redemption Event, or if postponed by the Required Preferred
Holders, within five (5) Business Days following written notice from such
Required Preferred Holders ending such postponement. If the Company does not
have sufficient funds legally available to redeem all Preferred Units, the
Company shall redeem the maximum number of Preferred Units that can be redeemed
at such time out of funds legally available therefor and shall redeem the
remaining Preferred Units as soon as practicable after the Company has funds
legally available therefor.

 

 Schedule A-7  

 

 

(c) Notice of Redemption. The Company shall provide notice of any redemption
pursuant to this Section 6, at least ten (10) days but not more than sixty (60)
days prior to such redemption, to each Member. Each such notice shall state (i)
the date fixed for such redemption, (ii) the Redemption Price, and (iii) that if
fewer than all of the Preferred Units owned by such Preferred Member are to be
redeemed, the number of Preferred Units that are to be redeemed.

 

(d) Delay Condition. Notwithstanding the provisions of this Section 6, the
Company shall not be obligated to redeem any Preferred Units pursuant to this
Section 6 to the extent there exists a Preferred Delay Condition. In such event,
the Company shall notify the Preferred Members in writing as soon as practicable
of such Preferred Delay Condition. The Company shall then consummate the
redemption of Preferred Units on the applicable date set forth in this Section
6(d) with respect to as many Preferred Units as can be redeemed without running
afoul of the Preferred Delay Condition and thereafter redeem as many of the
Preferred Units as can be redeemed without running afoul of the Preferred Delay
Condition at the earliest practicable date or dates, in which case, the
Redemption Price shall accrue interest at the Preferred Distribution Rate.

 

(f) Pro Rata Redemption. In the event that at any time fewer than all of the
outstanding Preferred Units are to be redeemed pursuant to this Section 6, the
redemption shall be made pro rata among all Preferred Members in proportion to
the number of Preferred Units then held by them.

 

Section 7. Written Consent. Any action as to which the approval of the PLC
Manager is required pursuant to the terms of this Agreement may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the PLC Manager.

 

Section 8. Preferred Unit Put Right.

 

(a) Each Preferred Member may, at its election, elect to sell to the Company at
any time following May 2, 2024, no less than all of the Preferred Units then
held thereby, for a purchase price per Preferred Unit equal to the Redemption
Price.

 

(b) If any Preferred Member desires to exercise its right to sell Preferred
Units pursuant to this Section 8, such Preferred Member shall provide notice (a
“Preferred Put Notice”), which notice may be delivered prior to May 2, 2024,
requesting that the Company repurchase Preferred Units and setting forth the
number of Preferred Units that are to be so repurchased. The Company shall
consummate the purchase of Preferred Units pursuant to this Section 8, within
forty five (45) days of receipt of the Preferred Put Notice, but in no event
prior to May 2, 2024.

 

(c) Notwithstanding the provisions of this Section 8, the Company shall not be
obligated to purchase any Preferred Units pursuant to this Section 8 to the
extent there exists a Preferred Delay Condition. In such event, the Company
shall notify the Preferred Members in writing as soon as practicable of such
Preferred Delay Condition and shall permit such Preferred Members, within ten
(10) days of receipt thereof, to rescind its decision to sell their Preferred
Units to the Company pursuant to this Section 8. If such Preferred Members do
not rescind their decision to sell their respective Preferred Units to the
Company pursuant to this Section 8, the Company shall consummate the purchase of
Preferred Units on the applicable date set forth in this Section 8(c) with
respect to as many Preferred Units as can be purchased without running afoul of
the Preferred Delay Condition and thereafter pay the Redemption Price with
respect to as many of the other Preferred Units to be purchased as can be
purchased without running afoul of the Preferred Delay Condition at the earliest
practicable date or dates, in which case, the Redemption Price shall accrue
interest at the Preferred Distribution Rate.

 

 Schedule A-8  

 

 

(d) At the closing of any sale and purchase pursuant to this Section 8, such
Preferred Member shall deliver to the Company a reasonable instrument of
transfer against receipt of the Preferred Put Price.

 

Section 9. Certain Definitions. For purposes of this Schedule A, the following
terms shall have the following meanings:

 

“Attorney-In-Fact” is defined in Section 5(d).

 

“Bidders” is defined in Section 5(a)(i).

 

“Business Day” means any day except a Saturday, Sunday or legal holiday in the
State of New York.

 

“Capital Park” means Capital Park Holdings Corp., a Delaware corporation.

 

“Capital Stock” means: (a) in the case of a corporation, corporate stock or
shares, and (b) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership interests, and
including any debt securities convertible into or warrants, options or rights to
acquire Capital Stock, whether or not such debt securities, warrants, options or
rights include any right of participation with Capital Stock and (c) any
synthetic equity rights or rights to payment based on the value of or other
reference to the Capital Stock of a corporation, partnership or limited
liability company.

 

“Certificate of Formation” means that Certificate of Formation for C-Pak
Consumer Products Holdings SVP I LLC, as the same may be amended and restated.

 

“Certificate of Incorporation” means the Amended and Restated Certificate of
Incorporation of C-PAK PREFCO SVP I, Inc., a Delaware corporation, as in effect
on the date hereof.

 

“Change of Control” shall have the meaning set forth in the Loan Agreement and
shall also include any other event that is a Change of Control as defined in the
Certificate of Incorporation.

 

“Distribution Payment Date” is defined in Section 1(a).

 

“Drag Along Notice” is defined in Section 5(b).

 

“Drag Along Sellers” is defined in Section 5(b).

 

 Schedule A-9  

 

 

“Exit Sale” is defined in Section 5(a).

 

“Indebtedness” shall have the meaning set forth in the Loan Agreement. For the
avoidance of doubt, “Indebtedness” of the Company shall not include the
Preferred Units or accrued and unpaid distributions or increases in the
Liquidation Preference thereon.

 

“Insolvency Event” means the occurrence of any event that would constitute an
“Event of Default” under Article X of the Loan Agreement.

 

“Investment Bank” is defined in Section 5(a)(i).

 

“Issue Price” means $1,000.

 

“Law Firm” is defined in Section 5(a)(i).

 

“LIBOR Rate” shall mean the LIBOR Rate in effect under the terms of the Loan
Agreement.

 

“Liquidation Event” means when the Company liquidates, dissolves or winds up its
affairs.

 

“Liquidation Preference” means, with respect to a Preferred Unit, as of any time
of determination, the Issue Price plus the amount of accrued and unpaid
Preferred Distributions.

 

“Loan Agreement” means the Loan Agreement, dated as of May 3, 2019, entered into
by and among C-PAK Consumer Product Holdings LLC, a Delaware limited liability
company, and C-PAK Consumer Product IP SPV LLC, a Delaware limited liability
company, as borrowers, Pak Consumer Product Holdings SPV I LLC, a Delaware
limited liability company, and its subsidiaries that are Guarantors (as defined
therein) or become Guarantors thereunder, the Lenders (as defined therein) from
time to time party thereto, and PLC as administrative agent for the Lenders and
as collateral agent for the Secured Parties (as defined therein), as in effect
on the date of this Agreement.

 

“Mandatory Redemption Event” means any of (i) a Change of Control, (ii) an
Insolvency Event, (iii) a Liquidation Event, and (iv) acceleration under the
Loan Agreement as modified, amended or replaced from time to time.

 

“Material Non-Compliance Event” means any of (i) the occurrence of a Redemption
Breach or (ii) the Company’s breach of any provision of Section 4(a), which
remains uncured for five (5) days after the earlier of (i) prior written notice
to the Company of the aforementioned breach by the Company or (ii) actual
knowledge of such breach by an officer of the Company.

 

“Plan” means that employee equity incentive plan established by the Company
pursuant to which members of senior management of the Company or Managers of the
Company (other than Persons employed by or affiliated with Capital Park) receive
Common Units of the Company or equivalents thereto which (i) are junior with
regards to rights and preferences to the Preferred Units and (ii) are subject to
standard vesting and forfeiture provisions; provided, that the Common Units or
equivalents thereto issued thereunder shall not exceed twelve percent (12%) of
the then outstanding Common Units of the Company on a fully-diluted basis.

 

 Schedule A-10  

 

 

“Preferred Delay Condition” means the Company is prohibited from purchasing any
Preferred Units by any law.

 

“Preferred Distribution Rate” means 13.00% per annum plus the LIBOR Rate;
provided, that upon a Material Non-Compliance Event, the Preferred Dividend Rate
shall increase by 2.00% per annum on such Material Non-Compliance Event and so
long as such Material Non-Compliance Event continues without cure, on each
anniversary thereof. Any such increase shall continue until such time as there
is no longer any Material Non-Compliance Event, Sale Trigger Event or Preferred
Delay Condition, as applicable, or the Redemption Price is paid in full in cash,
subject to reinstatement upon the occurrence of a subsequent Material
Non-Compliance Event.

 

“Preferred Distributions” is defined in Section 1(a).

 

“PrefCo” means the C-PAK PREFCO SVP I, Inc., a Delaware corporation.

 

“Preferred Put Notice” is defined in Section 8(b).

 

“Preferred Stock” means the preferred stock issued by PrefCo pursuant to the
Certificate of Incorporation.

 

“Prospective Buyer” is defined in Section 5(b).

 

“Redemption Breach” means the failure of the Company to (i) timely redeem
Preferred Units in accordance with Sections 5, 6 or 8, including the failure of
the Company to timely (y) redeem all outstanding Preferred Units for the
Redemption Price pursuant to Sections 5 or 6 or (z) pay the Redemption Price on
all Preferred Units that the Preferred Members have elected to sell to the
Company pursuant to Section 8, in each case, without regard to any Preferred
Delay Condition, (ii) pay the Redemption Price upon a Liquidation Event in
accordance with Section 3 without regard to any Preferred Delay Condition, or
(iii) timely redeem Common Units in accordance with Section 15.2 of the
Agreement, including failure of the Company to pay the Common Put Price on all
Common Units that PLC has elected to sell to the Company pursuant to Section
15.2 of the Agreement without regard to any Common Delay Condition.

 

“Redemption Price” means an amount per Preferred Unit equal to (i) in the case
of any determination of Redemption Price occurring on or before May 2, 2022, two
(2) times the sum of the Liquidation Preference as of the date of such
determination plus the Preferred Distributions that would accrue on such
Liquidation Preference from the date of such determination through May 2, 2022
or (ii) in the case of any determination of Redemption Price occurring after May
2, 2022, two (2) times the Liquidation Preference as of the date of such
determination.

 

“Required Preferred Holders” means Preferred Members holding more than fifty
percent (50%) of the then issued and outstanding Preferred Units.

 

“Restricted Payment” shall have the meaning set forth in the Loan Agreement.

 

 Schedule A-11  

 

 

“Sale Notice” is defined in Section 5(a).

 

“Sale of the Company” means a transaction pursuant to which all of the Capital
Stock or all or substantially all of the assets of the Company is purchased by
an unaffiliated third party.

 

“Sale Trigger Event” means any Redemption Breach which continues for a period of
six (6) consecutive months.

 

Section 9. Miscellaneous. For purposes of this Schedule A, the following
provisions shall apply:

 

(a) Severability. If any right, preference or limitation of the Preferred Units
set forth in this Schedule is invalid, unlawful or incapable of being enforced
by reason of any rule of law or public policy, all other rights, preferences and
limitations set forth in this Schedule which can be given effect without the
invalid, unlawful or unenforceable right, preference or limitation shall,
nevertheless, remain in full force and effect, and no right, preference or
limitation herein set forth shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.

 

(b) Headings. The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.

 

(c) Interpretation. When a reference is made in this Schedule A to Sections,
paragraphs, clauses or similar subdivisions, such reference shall be to a
Section, paragraph, clause or subdivision to or of this Schedule A unless
otherwise explicitly indicated. The words “include,” “includes,” and “including”
when used herein shall be deemed in each case to be followed by the words
“without limitation.” Terms used in this Schedule A, but not otherwise defined
in this Schedule A shall have the meanings ascribed to such terms in the
Agreement.

 

 Schedule A-12  

 

 

EXHIBIT A

 

MEMBERS; UNITS; PERCENTAGE INTERESTS

 

COMMON MEMBERS:  Number of Units:  Percentage
Interest:   Initial Capital Contribution:               C-PAK PREFCO SPV I, INC.
8117 Preston Road, Suite 300
Dallas, TX 75225
Attention: Eric Blue
Email: eric.blue@capitalpark.net  9,000 Common Units   90%  $450,000            
    Piney Lake Opportunities
ECI Master Fund LP
Four Greenwich Office Park
Greenwich, CT 06831
Fax: (203) 307-5988
Attention: Michael C. Cassetta  1,000 Common Units   10%  $907,954.40       
            10,000 Common Units   100.00%  $1,357,954.40 

 

PREFERRED MEMBER  Number of Units  Percentage
Interest:   Initial Capital Contribution:                 C-PAK PREFCO SPV I,
INC.
8117 Preston Road, Suite 300
Dallas, Texas 75225
Fax (972)525-8720
Attention: Eric Blue
Email: eric.blue@capitalpark.net  3,000 Preferred Units   100%  $3,000,000