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TABLE OF CONTENTS
ARTICLE I Organizational Matters ...................................................................................2
ARTICLE II Members ............................................... ~····················· .................................. 3
ARTICLE Ill Management ................................................................................................?
ARTICLE IV Allocations ...................................................................................................8
ARTICLE V Distributions ..................................................................................................9
ARTICLE VI Transfers .....................................................................................................9
ARTICLE VII Tag- Along Rights ..................................................................................... 11
ARTICLE VIII Drag Along Rights ................................................................................... 14
ARTICLE IX Exculpation and lndemnification ................................................................ 15
ARTICLE X Accounting and Tax Matters ....................................................................... 17
ARTICLE XI Dissolution and Liquidation ........................................................................ 18
ARTICLE XII Definitions .................................................................................................19
ARTICLE XIII Miscellaneous ..........................................................................................21
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OPERATING AGREEMENT
This Operating Agreement (this "Agreement") of Atlas Cybersecurity, LLC, a New York
limited liability company (the "Company"), is entered into as of December 31, 2018 by and
among the Company, DACS Cybersecurity Holdings, LLC and any other person or entity that,
after the date hereof, becomes a member of the Company in accordance with the terms of this
Agreement (collectively, the "Members"). Unless otherwise noted or defined elsewhere in this
Agreement, capitalized terms used in this Agreement have the meanings set forth in Article X.
ARTICLE I
Organizational Matters
Section 1.01 Name. The name of the Company is Atlas Cybersecurity, LLC.
Section 1.02 Principal Office. The principal office of the Company is located at 107
Norther Boulevard, Great Neck, NY 11021, or such other location in New York as may be
determined by the Manager from time to time. The Manager shall give prompt notice of any such
change to each of the Members.
Section 1.03 Registered Office; Registered Agent. The registered office of the
Company and the registered agent for service of process on the Company in the State ofNew
York shall be that office and Person named in the Articles of Organization or such other office
(which need not be a place of business of the Company) or such other Person or Persons as the
Manager may designate from time to time in the manner provided by the NY LLCL and
Applicable Law.
Section 1.04 Purpose; Powers. The purpose of the Company is to engage in any lawful
business purpose or activity for which limited liability companies may be formed under the NY
LLCL and to engage in any and all activities necessary or incidental thereto.
Section 1.05 Term. The term of the Company commenced on the date the Articles of
Organization were filed with the Department of State of the State of New York and shall
continue in existence perpetually until the Company is dissolved in accordance with the
provisions of this Agreement or as provided by law.
Section 1.06 Foreign Qualification. Prior to the Company's conducting business in any
jurisdiction other than New York, the Manager shall cause the Company to comply, to the extent
procedures are available and those matters are reasonably within the control of the Manager,
with all requirements necessary to qualify the Company as a foreign limited liability company in
that jurisdiction. At the request of the Manager, each Member shall immediately execute,
acknowledge, swear to, and deliver all certificates and other instruments conforming with this
Agreement that are necessary or appropriate to qualify, continue, and terminate the Company as
a foreign limited liability company or registered foreign entity or DBA in all such jurisdictions in
which the Company may conduct business
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ARTICLE II
Members
Section 2.01 Members. The names, mailing addresses, and Membership Interests of the
Members are set out in Schedule I attached hereto (the "Members Schedule").
Section 2.02 Capital Contributions; Capital Accounts; No Withdrawals.
(a) The Members have contributed to the Company the amounts, in the form
of cash, property, services or a promissory note or other obligation (as such amounts may
be amended herein from time to time, the "Capital Contributions"), set out in the
Members Schedule. No Member is required to make additional Capital Contributions to
the Company. No Member shall be entitled to receive any interest on its Capital
Contributions or Capital Account.
(b) The Company shall establish and maintain for each Member a separate
capital account (each, a "Capital Account") on its books and records in accordance with
the provisions of Section 704(b) of the Code and Treasury Regulations Section 1. 704-
l {b)(2)(iv). Each Capital Account shall be (i) credited by such Member's Capital
Contributions to the Company and any profits allocated to such Member in accordance
with Section 4.01 and (ii) debited by any distributions to such Member pursuant to
Section 5.0l(a) and any losses allocated to such Member in accordance with Section
4.01. For purposes of maintaining the Members' Capital Accounts, profits and losses shall
be determined in accordance with Treasury Regulations Section 1. 704-1 (b ). The Capital
Accounts shall be adjusted by the Manager upon the occurrence of an event described in
Treasury Regulations Section 1.704-l(b)(2)(iv)(t)(5) in the manner described in Treasury
Regulations Section 1.704-l(b)(2)(iv)(t)(S) and (g) if the Manager determines that such
adjustments are necessary or appropriate to reflect the relative economic interests of the
Members. In the event of a Transfer of any Membership Interest in accordance with the
terms of this Agreement, the Transferee shall succeed to the Capital Account of the
Transferor to the extent it relates to the transferred Membership Interest.
(c) No Member shall be entitled to withdraw any part of its Capital Account
or to receive any distribution from the Company, except as otherwise provided in this
Agreement.
(d) If any Member shall have a deficit balance in its Capital Account, such
Member shall have no obligation, during the term of the Company or upon dissolution or
liquidation thereof, to restore such negative balance or make any Capital Contributions to
the Company by reason thereof, except as may be required by Applicable Law or in
respect of any negative balance resulting from such Member's withdrawal of capital or
dissolution in contravention of this Agreement.
Section 2.03 Admission of Additional Members.
(a) Additional Members may be admitted from time to time in connection
with (i) the issuance of Membership Interests by the Company, subject to compliance
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~ with the provisions of Section 3.02(b) or (ii) a Transfer of Membership Interests, subject
to compliance with the provisions of Article VI, and in either case, following compliance
with the provisions of Section 2.03(b).
(b) In order for any Person not already a Member of the Company to be
admitted as a Member, whether pursuant to an issuance or a Transfer (including a
Permitted Transfer) of Membership Interests, this Agreement shall be amended and
restated to reflect the admission of such Person, who shall be a party hereto. Upon the
amendment of this Agreement and the satisfaction of any other applicable conditions,
including the receipt by the Company of payment for the issuance of Membership
Interests, such Person shall be admitted as a Member, shall be a party hereto, shall be
deemed listed as such on the books and records of the Company, and thereupon shall be
issued his, her, or its Membership Interests. The Manager shall also adjust the Capital
Accounts of the Members as necessary in accordance with Section 2.02.
Section 2.04 No Withdrawal; Death of Member.
(a) So long as a Member continues to hold any Membership Interest, such
Member shall not have the ability to withdraw as a Member prior to the dissolution and
winding up of the Company and any such withdrawal or attempted withdrawal by a
Member prior to the dissolution and winding up of the Company shall be null and void.
As soon as any Member ceases to hold any Membership Interests, such Person shall no
longer be a Member.
(b) The death of any Member shall not cause the dissolution of the Company.
In such event, the Company and its business shall be continued by the remaining Member
or Members and the Membership Interests owned by the deceased Member shall be
automatically Transferred to such Member's executors, administrators, testamentary
trustees, legatees, or beneficiaries, as applicable, as Permitted Transferees; provided, that
any such Permitted Transferee shall be admitted as a Member only upon compliance with
the provisions of Section 2.03(b).
Section 2.05 Certification.
(a) The Company may, but shall not be required to, issue certificates
evidencing Membership Interests in the Company.
(b) If the Manager shall issue certificates representing Membership Interests
in accordance with Section 2.05(a), then in addition to any other legend required by
Applicable Law, all certificates representing issued and outstanding Membership
Interests shall bear a legend substantially in the following form:
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE NEW YORK LIMITED LIABILITY COMPANY
LAW AND AN OPERATING AGREEMENT AMONGTHECOMPANY AND
ITS MEMBERS, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, GIFT,
PLEDGE, ENCUMBRANCE, HYPOTHECATION OR OTHER DISPOSITION
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OF THE MEMBERSHIP INTERESTS REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF THE NEW YORK LIMITED LIABILITY COMPANY LAW
AND SUCH OPERATING AGREEMENT.
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED EXCEPT PURSUANT TO
(A) A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND
LAWS, OR (B) AN EXEMPTION FROM REGISTRATION THEREUNDER.
Section 2.06 Meetings.
(a) Meetings of the Members will be held annually for the purpose of
transacting such business as comes before the meeting at the principal office of the
Company or at such other time and place as may be determined by the Manager.
Additional meetings may be called by (i) the Manager or (ii) a Member or group of
Members holding more than 50% of the Membership Interests.
(b) Written notice stating the place, date and time of the meeting and, in the
case of a meeting of the Members not regularly scheduled, describing the purposes for
which the meeting is called, shall be delivered not fewer than 10 days and not more than
60 days before the date of the meeting to each Member, by or at the direction of the
Manager or the Member( s) calling the meeting, as the case may be. The Members may
hold meetings at the Company's principal office or at such other place as the Manager or
the Member(s) calling the meeting may designate in the notice for such meeting.
(c) Any Member may participate in a meeting of the Members by means of
conference telephone or other communications equipment by means of which all Persons
participating in the meeting can hear each other, and participation in a meeting by such
means shall constitute presence in person at such meeting.
(d) On any matter that is to be voted on by the Members, a Member may vote
in person or by proxy, and such proxy may be granted in writing, by means of Electronic
Transmission or as otherwise permitted by Applicable Law. Every proxy shall be
revocable in the discretion of the Member executing it unless otherwise provided in such
proxy; provided, that such right to revocation shall not invalidate or otherwise affect
actions taken under such proxy prior to such revocation.
(e) The business to be conducted at a regular meeting need not be limited to
the purpose described in the notice and can include other business to be conducted by the
Members; provided, that the Members shall have been notified of the meeting in
accordance with Section 2.06(b). Attendance of a Member at any meeting shall constitute
a waiver of notice of such meeting, except where a Member attends a meeting for the
express purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
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(f) A quorum of any meeting of the Members shall require the presence,
whether in person or by proxy, of the Members holding a majority of the Membership
Interests entitled to vote thereon. Subject to Section 2.07, no action may be taken by the
Members unless the appropriate quorum is present at a meeting.
(g) Subject to Section 2.07, 3.02 and any other provision of this Agreement or
the NY LLCL requiring the vote, consent or approval of a different percentage of the
Membership Interests or of particular Members, no action may be taken by the Members
at any meeting at which a quorum is present without the affirmative vote of the Members
holding at least a majority of the Membership Interests entitled to vote thereon.
Section 2.07 Action Without Meeting.
(a) Notwithstanding the provisions of Section 2.06, any action that is to be
voted on, consented to or approved by Members may be taken without a meeting, without
prior notice and without a vote if a written consent or consents signed by a Member or
Members holding not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all of the members entitled to vote
thereon were present and voted are delivered to the Company at its principal office by
hand or by certified or registered mail, return receipt requested within 60 days of the
earliest dated consent delivered to the Company with respect to such action. A record
shall be maintained by the Manager of each such action taken by written consent of a
Member or Members.
(b) The Manager shall give prompt notice to any Member who does not
consent in writing of any action approved by less than all the Members without a
meeting.
Section 2.08 Confidential Information. The Members agree that the Manager from
time to time may determine, due to contractual obligations, business concerns, or other
considerations, that certain information regarding the business, affairs, properties, and financial
condition of the Company should be kept confidential and not provided to some or all other
Members, and that it is not just or reasonable for those Members or assignees or representatives
thereof to examine or copy that information. The Members acknowledge that, from time to time,
they may receive information from or regarding the Company in the nature of trade secrets or
that otherwise is confidential, the release of which may be damaging to the Company or persons
with which it does business. Each Member shall hold in strict confidence any information it
receives regarding the Company that is identified as being confidential (and if that information is
provided in writing, that is so marked) and may not disclose it to any person other than another
Member or a Manager, except for disclosures (i) compelled by law (but the Member must notify
the Manager promptly of any request for that information, before disclosing it if practicable), (ii)
to advisers or representatives of the Member or persons to which that Member's Membership
Interest may be transferred as permitted by this Agreement, but only if the recipients have agreed
to be bound by the provisions of this Section, or (iii) of information that Member also has
received from a source independent of the Company that the Member reasonably believes
obtained that information without breach of any obligation of confidentiality. However, to
reiterate Company is in a new industry, creating and surrounding itself with new intellectual
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property, is designing and engaging in new intellectual property of its own, as well as involved
with new ideas, concerns, businesses and business opportunities, - all of which is in the
discretion of the Manager as to the disclosure or non-disclosure of such information and if so, to
what extent.
(a) The Members acknowledge that breach of the provisions of Section 2.08
of this Agreement may cause irreparable injury to the Company for which monetary
damages are inadequate, difficult to compute, or both. Accordingly, the Members agree
that the provisions of Section 2.08 of this Agreement may be enforced by specific
performance or injunction without bond.
ARTICLE III
Management
Section 3.01 Management of the Company. Subject to the provisions of Section 3.02
and except as otherwise provided by the NY LLCL, the business, property and affairs of the
Company shall be managed by the Manager. The actions of the Manager taken in accordance
with the provisions of this Agreement shall bind the Company. No other Member of the
Company shall have any authority or right to act on behalf of or bind the Company, unless
otherwise provided herein or unless specifically authorized by the Manager pursuant to a duly
adopted resolution expressly authorizing such action.
Section 3.02 Actions Requiring Approval of Members. Without the written approval of
all the Members, subject to any provision in the NY LLCL requiring approval by a different
percentage or of particular Members, without the written approval of Members holding 51 % of
the Membership Interests, the Company shall not enter into any commitment to:
(a) Amend, modify, or waive any provisions of the Articles of Organization
or this Agreement, in whole or in part; provided that the Manager may, without the
consent of the other Members, amend the Members Schedule following any new
issuance, redemption, repurchase or Transfer of Membership Interests in accordance with
this Agreement.
(b) Issue additional Membership Interests, Equity Securities or other
securities or, except in connection with a Transfer of Membership Interests that complies
with the applicable provisions of Article VI and Section 2.03(b), admit additional
Members to the Company.
(c) Incur any indebtedness, pledge or grant Liens on any assets or guarantee,
assume, endorse or otherwise become responsible for the obligations of any other Person
in excess of $5,000 in a single transaction or series of related transactions, or in excess of
$10,000 in the aggregate at any time outstanding.
(d) Make any loan or advance to, or a Capital Contribution or investment in,
any Person, in excess of $5,000.
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(e) Enter into or effect any transaction or series of related transactions
involving the purchase, lease, license, exchange or other acquisition (including by
merger, consolidation, sale of stock or acquisition of assets) by the Company of any
assets and/or equity interests of any Person, other than in the ordinary course of business
consistent with past practice.
(f) Enter into or effect any transaction or series of related transactions
involving the sale, lease, license, exchange or other disposition (including by merger,
consolidation, sale of stock or sale of assets) by the Company of any assets or equity
interests, other than sales of inventory in the ordinary course of business consistent with
past practice.
(g) Settle any lawsuit, action, dispute or other proceeding or otherwise assume
any liability with a value in excess of $5,000 or agree to the provision of any equitable
relief by the Company.
(h) Dissolve, wind up or liquidate the Company or initiate a bankruptcy
proceeding involving the Company.
Section 3.03 Officers. The Manager may appoint individuals as officers of the
Company (the "Officers") as the Manager deems necessary or desirable to carry on the business
of the Company and may delegate to such Officers such power and authority as the Manager
deems advisable. An Officer is not required to be a Member of the Company. Any individual
may hold two or more offices of the Company. Each Officer shall hold office until his or her
successor is designated by the Manager or until his or her earlier death, resignation, or removal.
Any Officer may resign at any time upon written notice to the Manager. Any Officer may be
removed by the Manager at any time, with or without cause. A vacancy in any office occurring
because of death, resignation, removal, or otherwise may, but need not, be filled by the Manager.
Section 3.04 Replacement and Resignation of Manager. A Manager may be removed at
any time, with or without cause, by the holders of more than 50% of the Membership Interests. A
Manager may resign at any time by delivering a written resignation to the Company, which
resignation shall be effective upon receipt thereof unless it is specified to be effective at some
other time or upon the occurrence of a particular event. Following a Manager's removal or
resignation, a successor Manager shall be elected by the holders of more than 50% of the
Membership Interests. The removal of a Manager shall not affect that Manager's rights as a
Member and shall not constitute a withdrawal by such Member from the Company.
ARTICLE IV
Allocations
Section 4.01 Allocation of Profits and Losses.
(a) The Company's profits and losses for each Fiscal Year will be allocated
among the Members pro rata in accordance with their Membership Interests.
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(b) Notwithstanding any other provision of this Agreement, (i) "partner
nonrecourse deductions" (as defined in Treasury Regulations Section l.704-2(i)), if any,
of the Company shall be allocated for each Fiscal Year to the Member that bears the
economic risk of loss within the meaning of Treasury Regulations Section l.704-2(i) and
"nonrecourse deductions" (as defined in Treasury Regulations Section l.704-2(b)) and
"excess nonrecourse liabilities" (as defined in Treasury Regulations Section 1.752-3(a)),
if any, shall be allocated to and among the Members in accordance with their
Membership Interests.
(c) This Agreement shall be deemed to include "qualified income offset,"
"minimum gain chargeback" and "partner nonrecourse debt minimum gain chargeback"
provisions within the meaning of Treasury Regulations under Section 704(b) of the Code.
(d) All items of income, gain, loss, deduction and credit of the Company shall
be allocated among the Members for federal, state and local income tax purposes
consistent with the manner that the corresponding items are allocated among the
Members pursuant to this section, except as may otherwise be provided herein or under
the Code.
ARTICLEV
Distributions
Section 5.01 Distributions.
(a) Distributions of available cash shall be made to the Members at the times
and in the aggregate amounts determined by the Manager. Such distributions shall be
paid to the Members pro rata in accordance with their respective Membership Interests.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not make any distribution to Members if such distribution
would violate Section 508 of the NY LLCL or other Applicable Law.
ARTICLE VI
Transfers
Section 6.01 General Restrictions on Transfer.
(a) Except as permitted pursuant to Section 6.02, no Member shall Transfer
all or any portion of its Membership Interest in the Company, except with the written
consent of more than 50% of the Membership Interests. No Transfer of Membership
Interests to a Person not already a Member of the Company shall be deemed completed
until the prospective Transferee is admitted as a Member of the Company in accordance
with Section 2.03 hereof.
(b) Notwithstanding any other provision of this Agreement (including Section
6.02), each Member agrees that it will not Transfer all or any portion of its Membership
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Interest in the Company, and the Company agrees that it shall not issue any Membership
Interests:
(i) except as permitted under the Securities Act and other applicable
federal or state securities or blue sky laws, and then, with respect to a Transfer of
Membership Interests, only upon delivery to the Company of an opinion of
counsel in form and substance satisfactory to the Company to the effect that such
Transfer may be effected without registration under the Securities Act;
(ii) if such Transfer or issuance would cause the Company to be
considered a "publicly traded partnership" under Section 7704(b) of the Code
within the meaning of Treasury Regulations Section 1. 7704-1 (h)( 1)(ii), including
the look-through rule in Treasury Regulations Section 1. 7704-1 (h)(3);
(iii) if such Transfer or issuance would affect the Company's existence
or qualification as a limited liability company under the NY LLCL;
(iv) if such Transfer or issuance would cause the Company to lose its
status as a partnership for federal income tax purposes;
(v) if such Transfer or issuance would cause the Company to be
required to register as an investment company under the Investment Company Act
of 1940, as amended; or
(vi) if such Transfer or issuance would cause the assets of the
Company to be deemed "Plan Assets" as defined under the Employee Retirement
Income Security Act of 1974 or its accompanying regulations or result in any
"prohibited transaction" thereunder involving the Company.
(c) Any Transfer or attempted Transfer of any Membership Interest in
violation of this Agreement shall be null and void, no such Transfer shall be recorded on
the Company's books and the purported Transferee in any such Transfer shall not be
treated (and the purported Transferor shall continue be treated) as the owner of such
Membership Interest for all purposes of this Agreement.
(d) Except as provided in Section 2.04(b), no Transfer (including a Permitted
Transfer) of Membership Interests to a Person not already a Member of the Company
shall be deemed completed until the prospective Transferee (including a Permitted
Transferee) is admitted as a Member of the Company in accordance with Section 2.03(b)
hereof.
(e) For the avoidance of doubt, any Transfer of a Membership Interest
permitted by this Agreement shall be deemed a sale, transfer, assignment, or other
disposal of such Membership Interest in its entirety as intended by the parties to such
Transfer, and shall not be deemed a sale, transfer, assignment, or other disposal of any
less than all of the rights and benefits described in the definition of the term "Membership
Interest" unless otherwise explicitly agreed to by the parties to such Transfer.
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Section 6.02 Permitted Transfers. The provisions of Section 6.0l(a) shall not apply to
any Transfer by any Member of all or any portion of its Membership Interest to any of the
following (each, a "Permitted Transferee" and, any such Transfer to a Permitted Transferee, a
"Permitted Transfer"):
(a) Any Affiliate of such Member; or
(b) With respect to a Member that is an individual: (i) such Member's spouse,
parent, siblings, descendants (including adoptive relationships and stepchildren) and the
spouses of each such natural persons (collectively, "Family Members"); (ii) a trust under
which the distribution of Membership Interests may be made only to such Member and/or
any Family Member of such Member; (iii) a charitable remainder trust, the income from
which will be paid to such Member during his or her life; (iv) a corporation, partnership,
or limited liability company, the shareholders, partners, or members of which are only
such Member and/or Family Members of such Member; or (v) such Member's executors,
administrators, testamentary trustees, legatees, or beneficiaries, by will or the laws of
intestate succession.
ARTICLE VII
Tag- Along Rights
Section 7.01 Participation. If at any time a Member who (together with its Affiliates)
holds no less than 10% of the outstanding Units of the Company (the "Selling Member")
proposes to sell any Units to an Independent Third Party (the "Proposed Transferee") and the
Selling Member cannot or has not elected to exercise its drag-along rights set forth in 14 each
other Member (each, a "Tag-along Member") shall be permitted to participate in such sale (a
"Tag-along Sale") on the terms and conditions set forth in this Article
Section 7.02 Sale Notice. Prior to the consummation of the sale described in Section
7.01, the Selling Member shall deliver to the Company and each other Member a written notice
(a "Sale Notice") of the proposed sale subject to this Section no more than 10 Business Days
after the execution and delivery by all the parties thereto of the definitive agreement entered into
with respect to the Tag-along Sale and, in any event, no later than 20 Business Days prior to the
closing date of the Tag-along Sale. The Tag-along Notice shall make reference to the Tag-along
Members' rights hereunder and shall describe in reasonable detail:
(a) the number of Units to be sold by the Selling Member;
(b) the name of the Proposed Transferee;
(c) the per Unit purchase price and the other material terms and
conditions of the sale, including a description of any non-cash consideration in
sufficient detail to permit the valuation thereof;
(d) the proposed date, time and location of the closing of the sale; and
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(e) a copy of any form of agreement proposed to be executed in
connection therewith.
Section 7.03 Units to be Sold.
(a) Each Tag-along Member shall exercise its right to participate in a
sale of Units by the Selling Member subject to this Section by delivering to the
Selling Member a written notice (a "Tag-along Notice") stating its election to do
so and specifying the number of Units to be sold by it no later than five Business
Days after receipt of the Sale Notice (the "Tag-along Period"). The offer of each
Tag-along Member set forth in a Tag-along Notice shall be irrevocable, and, to
the extent such offer is accepted, such Tag-along Member shall be bound and
obligated to sell in the proposed sale on the terms and conditions set forth in this
Article. Each Tag-along Member shall have the right to sell in a sale subject to
this Article the number of Units equal to the product obtained by multiplying (x)
the number of Units held by the Tag-along Member by (y) a fraction (A) the
numerator of which is equal to the number of Units the Selling Member proposes
to sell or transfer to the Proposed Transferee and (B) denominator of which is
equal to the number of Units then owned by such Selling Member.
(b) The Selling Member shall use reasonable efforts to include in the
proposed sale to the Proposed Transferee all of the Units that the Tag-along
Members have requested to have included pursuant to the applicable Tag-along
Notices, it being understood that the Proposed Transferee shall not be required to
purchase Units in excess of the number set forth in the Sale Notice. In the event
the Proposed Transferee elects to purchase less than all of the Units sought to be
sold by the Tag-along Members, the number of Units to be sold to the Proposed
Transferee by the Selling Member and each Tag-along Member shall be reduced
so that each such Member is entitled to sell its Pro Rata Portion of the number of
Units the Proposed Transferee elects to purchase (which in no event may be less
than the number of Units set forth in the Sale Notice).
(c) Each Tag-along Member who does not deliver a Tag-along Notice
in compliance with clause (i) above shall be deemed to have waived all of such
Tag-along Member's rights to participate in such sale, and the Selling Member
shall (subject to the rights of any participating Tag-along Member) thereafter be
free to sell to the Proposed Transferee its Units at a per Unit price that is no
greater than the per Unit price set forth in the Sale Notice and on other same terms
and conditions which are not materially more favorable to the Selling Member
than those set forth in the Sale Notice, without any further obligation to the non-
accepting Tag-along Members.
Section 7.04 Consideration. Each Member participating in a sale pursuant to Section
7 .0 I shall receive the same consideration per Unit after deduction of such Member's
proportionate share of the related expenses in accordance with Section 7 .07 below.
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Section 7.05 Conditions of Sale. Each Tag-along Member shall make or provide the
same representations, warranties, covenants, indemnities and agreements as the Selling Member
makes or provides in connection with the Tag-along Sale (except that in the case of
representations, warranties, covenants, indemnities and agreements pertaining specifically to the
Selling Member, the Tag-along Member shall make the comparable representations, warranties,
covenants, indemnities and agreements pertaining specifically to itself); provided, that all
representations, warranties, covenants and indemnities shall be made by the Selling Member and
each other Tag-along Member severally and not jointly and any indemnification obligation in
respect of breaches of representations and warranties that do not relate to such Tag-along
Member shall be in an amount not to exceed the aggregate proceeds received by such Tag-along
Member in connection with any sale consummated pursuant to this Article.
Section 7.06 Expenses. The fees and expenses of the Selling Member incurred in
connection with a sale under this Article and for the benefit of all Members (it being understood
that costs incurred by or on behalf of the Selling Member for its sole benefit will not be
considered to be for the benefit of all Members), to the extent not paid or reimbursed by the
Company or the Proposed Transferee, shall be shared by all the Members on a pro rata basis,
based on the consideration received by each Member; provided, that no Member shall be
obligated to make any out-of-pocket expenditure prior to the consummation of the transaction
consummated pursuant to this Article.
Section 7.07 Cooperation. Each Member shall take all actions as may be reasonably
necessary to consummate the Tag-along Sale, including, without limitation, entering into
agreements and delivering certificates and instruments, in each case, consistent with the
agreements being entered into and the certificates being delivered by the Selling Member.
Section 7.08 Deadline for Completion of Sale. The Selling Member shall have 90
Business Days following the expiration of the Tag-along Period in which to sell the Units
described in the Sale Notice, on terms not more favorable to the Selling Member than those set
forth in the Sale Notice which such period may be extended for a reasonable time not to exceed
120 Business Days to the extent reasonably necessary to obtain any regulatory approvals). If at
the end of such period the Selling Member has not completed such sale, the Selling Member may
not then effect a sale of Units subject to this Article without again fully complying with the
provisions of this Article.
Section 7.09 Sales in Violation of the Tag-along Right. If the Selling Member sells or
otherwise transfers to the Proposed Transferee any of its Units in breach of this Article, then
each Tag-along Member shall have the right to sell to the Selling Member, and the Selling
Member undertakes to purchase from each Tag-along Member, the number of Units that such
Tag-along Member would have had the right to sell to the Proposed Transferee pursuant to this
Article, for a per Unit amount and form of consideration and upon the term and conditions on
which the Proposed Transferee bought such Units from the Selling Member, but without
indemnity being granted by any Tag-along Member to the Selling Member; provided, that
nothing contained in this Article shall preclude any Member from seeking alternative remedies
against such Selling Member as a result of its breach of this Article. The Selling Member shall
also reimburse each Tag-along Member for any and all reasonable and documented out-of-
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Preview
FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 TABLE OF CONTENTS ARTICLE I Organizational Matters ...................................................................................2 ARTICLE II Members ............................................... ~····················· .................................. 3 ARTICLE Ill Management ................................................................................................? ARTICLE IV Allocations ...................................................................................................8 ARTICLE V Distributions ..................................................................................................9 ARTICLE VI Transfers .....................................................................................................9 ARTICLE VII Tag- Along Rights ..................................................................................... 11 ARTICLE VIII Drag Along Rights ................................................................................... 14 ARTICLE IX Exculpation and lndemnification ................................................................ 15 ARTICLE X Accounting and Tax Matters ....................................................................... 17 ARTICLE XI Dissolution and Liquidation ........................................................................ 18 ARTICLE XII Definitions .................................................................................................19 ARTICLE XIII Miscellaneous ..........................................................................................21 FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 OPERATING AGREEMENT This Operating Agreement (this "Agreement") of Atlas Cybersecurity, LLC, a New York limited liability company (the "Company"), is entered into as of December 31, 2018 by and among the Company, DACS Cybersecurity Holdings, LLC and any other person or entity that, after the date hereof, becomes a member of the Company in accordance with the terms of this Agreement (collectively, the "Members"). Unless otherwise noted or defined elsewhere in this Agreement, capitalized terms used in this Agreement have the meanings set forth in Article X. ARTICLE I Organizational Matters Section 1.01 Name. The name of the Company is Atlas Cybersecurity, LLC. Section 1.02 Principal Office. The principal office of the Company is located at 107 Norther Boulevard, Great Neck, NY 11021, or such other location in New York as may be determined by the Manager from time to time. The Manager shall give prompt notice of any such change to each of the Members. Section 1.03 Registered Office; Registered Agent. The registered office of the Company and the registered agent for service of process on the Company in the State ofNew York shall be that office and Person named in the Articles of Organization or such other office (which need not be a place of business of the Company) or such other Person or Persons as the Manager may designate from time to time in the manner provided by the NY LLCL and Applicable Law. Section 1.04 Purpose; Powers. The purpose of the Company is to engage in any lawful business purpose or activity for which limited liability companies may be formed under the NY LLCL and to engage in any and all activities necessary or incidental thereto. Section 1.05 Term. The term of the Company commenced on the date the Articles of Organization were filed with the Department of State of the State of New York and shall continue in existence perpetually until the Company is dissolved in accordance with the provisions of this Agreement or as provided by law. Section 1.06 Foreign Qualification. Prior to the Company's conducting business in any jurisdiction other than New York, the Manager shall cause the Company to comply, to the extent procedures are available and those matters are reasonably within the control of the Manager, with all requirements necessary to qualify the Company as a foreign limited liability company in that jurisdiction. At the request of the Manager, each Member shall immediately execute, acknowledge, swear to, and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue, and terminate the Company as a foreign limited liability company or registered foreign entity or DBA in all such jurisdictions in which the Company may conduct business Page 2 of24 Initials 6D FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 ARTICLE II Members Section 2.01 Members. The names, mailing addresses, and Membership Interests of the Members are set out in Schedule I attached hereto (the "Members Schedule"). Section 2.02 Capital Contributions; Capital Accounts; No Withdrawals. (a) The Members have contributed to the Company the amounts, in the form of cash, property, services or a promissory note or other obligation (as such amounts may be amended herein from time to time, the "Capital Contributions"), set out in the Members Schedule. No Member is required to make additional Capital Contributions to the Company. No Member shall be entitled to receive any interest on its Capital Contributions or Capital Account. (b) The Company shall establish and maintain for each Member a separate capital account (each, a "Capital Account") on its books and records in accordance with the provisions of Section 704(b) of the Code and Treasury Regulations Section 1. 704- l {b)(2)(iv). Each Capital Account shall be (i) credited by such Member's Capital Contributions to the Company and any profits allocated to such Member in accordance with Section 4.01 and (ii) debited by any distributions to such Member pursuant to Section 5.0l(a) and any losses allocated to such Member in accordance with Section 4.01. For purposes of maintaining the Members' Capital Accounts, profits and losses shall be determined in accordance with Treasury Regulations Section 1. 704-1 (b ). The Capital Accounts shall be adjusted by the Manager upon the occurrence of an event described in Treasury Regulations Section 1.704-l(b)(2)(iv)(t)(5) in the manner described in Treasury Regulations Section 1.704-l(b)(2)(iv)(t)(S) and (g) if the Manager determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members. In the event of a Transfer of any Membership Interest in accordance with the terms of this Agreement, the Transferee shall succeed to the Capital Account of the Transferor to the extent it relates to the transferred Membership Interest. (c) No Member shall be entitled to withdraw any part of its Capital Account or to receive any distribution from the Company, except as otherwise provided in this Agreement. (d) If any Member shall have a deficit balance in its Capital Account, such Member shall have no obligation, during the term of the Company or upon dissolution or liquidation thereof, to restore such negative balance or make any Capital Contributions to the Company by reason thereof, except as may be required by Applicable Law or in respect of any negative balance resulting from such Member's withdrawal of capital or dissolution in contravention of this Agreement. Section 2.03 Admission of Additional Members. (a) Additional Members may be admitted from time to time in connection with (i) the issuance of Membership Interests by the Company, subject to compliance Page 3 of24 Initials 6P FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 ~ with the provisions of Section 3.02(b) or (ii) a Transfer of Membership Interests, subject to compliance with the provisions of Article VI, and in either case, following compliance with the provisions of Section 2.03(b). (b) In order for any Person not already a Member of the Company to be admitted as a Member, whether pursuant to an issuance or a Transfer (including a Permitted Transfer) of Membership Interests, this Agreement shall be amended and restated to reflect the admission of such Person, who shall be a party hereto. Upon the amendment of this Agreement and the satisfaction of any other applicable conditions, including the receipt by the Company of payment for the issuance of Membership Interests, such Person shall be admitted as a Member, shall be a party hereto, shall be deemed listed as such on the books and records of the Company, and thereupon shall be issued his, her, or its Membership Interests. The Manager shall also adjust the Capital Accounts of the Members as necessary in accordance with Section 2.02. Section 2.04 No Withdrawal; Death of Member. (a) So long as a Member continues to hold any Membership Interest, such Member shall not have the ability to withdraw as a Member prior to the dissolution and winding up of the Company and any such withdrawal or attempted withdrawal by a Member prior to the dissolution and winding up of the Company shall be null and void. As soon as any Member ceases to hold any Membership Interests, such Person shall no longer be a Member. (b) The death of any Member shall not cause the dissolution of the Company. In such event, the Company and its business shall be continued by the remaining Member or Members and the Membership Interests owned by the deceased Member shall be automatically Transferred to such Member's executors, administrators, testamentary trustees, legatees, or beneficiaries, as applicable, as Permitted Transferees; provided, that any such Permitted Transferee shall be admitted as a Member only upon compliance with the provisions of Section 2.03(b). Section 2.05 Certification. (a) The Company may, but shall not be required to, issue certificates evidencing Membership Interests in the Company. (b) If the Manager shall issue certificates representing Membership Interests in accordance with Section 2.05(a), then in addition to any other legend required by Applicable Law, all certificates representing issued and outstanding Membership Interests shall bear a legend substantially in the following form: THE MEMBERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE NEW YORK LIMITED LIABILITY COMPANY LAW AND AN OPERATING AGREEMENT AMONGTHECOMPANY AND ITS MEMBERS, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, GIFT, PLEDGE, ENCUMBRANCE, HYPOTHECATION OR OTHER DISPOSITION Page 4 of24 Initials BD FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 OF THE MEMBERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE NEW YORK LIMITED LIABILITY COMPANY LAW AND SUCH OPERATING AGREEMENT. THE MEMBERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED EXCEPT PURSUANT TO (A) A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS, OR (B) AN EXEMPTION FROM REGISTRATION THEREUNDER. Section 2.06 Meetings. (a) Meetings of the Members will be held annually for the purpose of transacting such business as comes before the meeting at the principal office of the Company or at such other time and place as may be determined by the Manager. Additional meetings may be called by (i) the Manager or (ii) a Member or group of Members holding more than 50% of the Membership Interests. (b) Written notice stating the place, date and time of the meeting and, in the case of a meeting of the Members not regularly scheduled, describing the purposes for which the meeting is called, shall be delivered not fewer than 10 days and not more than 60 days before the date of the meeting to each Member, by or at the direction of the Manager or the Member( s) calling the meeting, as the case may be. The Members may hold meetings at the Company's principal office or at such other place as the Manager or the Member(s) calling the meeting may designate in the notice for such meeting. (c) Any Member may participate in a meeting of the Members by means of conference telephone or other communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. (d) On any matter that is to be voted on by the Members, a Member may vote in person or by proxy, and such proxy may be granted in writing, by means of Electronic Transmission or as otherwise permitted by Applicable Law. Every proxy shall be revocable in the discretion of the Member executing it unless otherwise provided in such proxy; provided, that such right to revocation shall not invalidate or otherwise affect actions taken under such proxy prior to such revocation. (e) The business to be conducted at a regular meeting need not be limited to the purpose described in the notice and can include other business to be conducted by the Members; provided, that the Members shall have been notified of the meeting in accordance with Section 2.06(b). Attendance of a Member at any meeting shall constitute a waiver of notice of such meeting, except where a Member attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Page 5 of24 Initials BP FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 (f) A quorum of any meeting of the Members shall require the presence, whether in person or by proxy, of the Members holding a majority of the Membership Interests entitled to vote thereon. Subject to Section 2.07, no action may be taken by the Members unless the appropriate quorum is present at a meeting. (g) Subject to Section 2.07, 3.02 and any other provision of this Agreement or the NY LLCL requiring the vote, consent or approval of a different percentage of the Membership Interests or of particular Members, no action may be taken by the Members at any meeting at which a quorum is present without the affirmative vote of the Members holding at least a majority of the Membership Interests entitled to vote thereon. Section 2.07 Action Without Meeting. (a) Notwithstanding the provisions of Section 2.06, any action that is to be voted on, consented to or approved by Members may be taken without a meeting, without prior notice and without a vote if a written consent or consents signed by a Member or Members holding not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the members entitled to vote thereon were present and voted are delivered to the Company at its principal office by hand or by certified or registered mail, return receipt requested within 60 days of the earliest dated consent delivered to the Company with respect to such action. A record shall be maintained by the Manager of each such action taken by written consent of a Member or Members. (b) The Manager shall give prompt notice to any Member who does not consent in writing of any action approved by less than all the Members without a meeting. Section 2.08 Confidential Information. The Members agree that the Manager from time to time may determine, due to contractual obligations, business concerns, or other considerations, that certain information regarding the business, affairs, properties, and financial condition of the Company should be kept confidential and not provided to some or all other Members, and that it is not just or reasonable for those Members or assignees or representatives thereof to examine or copy that information. The Members acknowledge that, from time to time, they may receive information from or regarding the Company in the nature of trade secrets or that otherwise is confidential, the release of which may be damaging to the Company or persons with which it does business. Each Member shall hold in strict confidence any information it receives regarding the Company that is identified as being confidential (and if that information is provided in writing, that is so marked) and may not disclose it to any person other than another Member or a Manager, except for disclosures (i) compelled by law (but the Member must notify the Manager promptly of any request for that information, before disclosing it if practicable), (ii) to advisers or representatives of the Member or persons to which that Member's Membership Interest may be transferred as permitted by this Agreement, but only if the recipients have agreed to be bound by the provisions of this Section, or (iii) of information that Member also has received from a source independent of the Company that the Member reasonably believes obtained that information without breach of any obligation of confidentiality. However, to reiterate Company is in a new industry, creating and surrounding itself with new intellectual Page 6 of24 Initials {1}D FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 property, is designing and engaging in new intellectual property of its own, as well as involved with new ideas, concerns, businesses and business opportunities, - all of which is in the discretion of the Manager as to the disclosure or non-disclosure of such information and if so, to what extent. (a) The Members acknowledge that breach of the provisions of Section 2.08 of this Agreement may cause irreparable injury to the Company for which monetary damages are inadequate, difficult to compute, or both. Accordingly, the Members agree that the provisions of Section 2.08 of this Agreement may be enforced by specific performance or injunction without bond. ARTICLE III Management Section 3.01 Management of the Company. Subject to the provisions of Section 3.02 and except as otherwise provided by the NY LLCL, the business, property and affairs of the Company shall be managed by the Manager. The actions of the Manager taken in accordance with the provisions of this Agreement shall bind the Company. No other Member of the Company shall have any authority or right to act on behalf of or bind the Company, unless otherwise provided herein or unless specifically authorized by the Manager pursuant to a duly adopted resolution expressly authorizing such action. Section 3.02 Actions Requiring Approval of Members. Without the written approval of all the Members, subject to any provision in the NY LLCL requiring approval by a different percentage or of particular Members, without the written approval of Members holding 51 % of the Membership Interests, the Company shall not enter into any commitment to: (a) Amend, modify, or waive any provisions of the Articles of Organization or this Agreement, in whole or in part; provided that the Manager may, without the consent of the other Members, amend the Members Schedule following any new issuance, redemption, repurchase or Transfer of Membership Interests in accordance with this Agreement. (b) Issue additional Membership Interests, Equity Securities or other securities or, except in connection with a Transfer of Membership Interests that complies with the applicable provisions of Article VI and Section 2.03(b), admit additional Members to the Company. (c) Incur any indebtedness, pledge or grant Liens on any assets or guarantee, assume, endorse or otherwise become responsible for the obligations of any other Person in excess of $5,000 in a single transaction or series of related transactions, or in excess of $10,000 in the aggregate at any time outstanding. (d) Make any loan or advance to, or a Capital Contribution or investment in, any Person, in excess of $5,000. Page 7 of24 Initials ~p FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 (e) Enter into or effect any transaction or series of related transactions involving the purchase, lease, license, exchange or other acquisition (including by merger, consolidation, sale of stock or acquisition of assets) by the Company of any assets and/or equity interests of any Person, other than in the ordinary course of business consistent with past practice. (f) Enter into or effect any transaction or series of related transactions involving the sale, lease, license, exchange or other disposition (including by merger, consolidation, sale of stock or sale of assets) by the Company of any assets or equity interests, other than sales of inventory in the ordinary course of business consistent with past practice. (g) Settle any lawsuit, action, dispute or other proceeding or otherwise assume any liability with a value in excess of $5,000 or agree to the provision of any equitable relief by the Company. (h) Dissolve, wind up or liquidate the Company or initiate a bankruptcy proceeding involving the Company. Section 3.03 Officers. The Manager may appoint individuals as officers of the Company (the "Officers") as the Manager deems necessary or desirable to carry on the business of the Company and may delegate to such Officers such power and authority as the Manager deems advisable. An Officer is not required to be a Member of the Company. Any individual may hold two or more offices of the Company. Each Officer shall hold office until his or her successor is designated by the Manager or until his or her earlier death, resignation, or removal. Any Officer may resign at any time upon written notice to the Manager. Any Officer may be removed by the Manager at any time, with or without cause. A vacancy in any office occurring because of death, resignation, removal, or otherwise may, but need not, be filled by the Manager. Section 3.04 Replacement and Resignation of Manager. A Manager may be removed at any time, with or without cause, by the holders of more than 50% of the Membership Interests. A Manager may resign at any time by delivering a written resignation to the Company, which resignation shall be effective upon receipt thereof unless it is specified to be effective at some other time or upon the occurrence of a particular event. Following a Manager's removal or resignation, a successor Manager shall be elected by the holders of more than 50% of the Membership Interests. The removal of a Manager shall not affect that Manager's rights as a Member and shall not constitute a withdrawal by such Member from the Company. ARTICLE IV Allocations Section 4.01 Allocation of Profits and Losses. (a) The Company's profits and losses for each Fiscal Year will be allocated among the Members pro rata in accordance with their Membership Interests. Page 8 of24 Initials io FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 (b) Notwithstanding any other provision of this Agreement, (i) "partner nonrecourse deductions" (as defined in Treasury Regulations Section l.704-2(i)), if any, of the Company shall be allocated for each Fiscal Year to the Member that bears the economic risk of loss within the meaning of Treasury Regulations Section l.704-2(i) and "nonrecourse deductions" (as defined in Treasury Regulations Section l.704-2(b)) and "excess nonrecourse liabilities" (as defined in Treasury Regulations Section 1.752-3(a)), if any, shall be allocated to and among the Members in accordance with their Membership Interests. (c) This Agreement shall be deemed to include "qualified income offset," "minimum gain chargeback" and "partner nonrecourse debt minimum gain chargeback" provisions within the meaning of Treasury Regulations under Section 704(b) of the Code. (d) All items of income, gain, loss, deduction and credit of the Company shall be allocated among the Members for federal, state and local income tax purposes consistent with the manner that the corresponding items are allocated among the Members pursuant to this section, except as may otherwise be provided herein or under the Code. ARTICLEV Distributions Section 5.01 Distributions. (a) Distributions of available cash shall be made to the Members at the times and in the aggregate amounts determined by the Manager. Such distributions shall be paid to the Members pro rata in accordance with their respective Membership Interests. (b) Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any distribution to Members if such distribution would violate Section 508 of the NY LLCL or other Applicable Law. ARTICLE VI Transfers Section 6.01 General Restrictions on Transfer. (a) Except as permitted pursuant to Section 6.02, no Member shall Transfer all or any portion of its Membership Interest in the Company, except with the written consent of more than 50% of the Membership Interests. No Transfer of Membership Interests to a Person not already a Member of the Company shall be deemed completed until the prospective Transferee is admitted as a Member of the Company in accordance with Section 2.03 hereof. (b) Notwithstanding any other provision of this Agreement (including Section 6.02), each Member agrees that it will not Transfer all or any portion of its Membership Page 9 of24 Initials J~ FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 Interest in the Company, and the Company agrees that it shall not issue any Membership Interests: (i) except as permitted under the Securities Act and other applicable federal or state securities or blue sky laws, and then, with respect to a Transfer of Membership Interests, only upon delivery to the Company of an opinion of counsel in form and substance satisfactory to the Company to the effect that such Transfer may be effected without registration under the Securities Act; (ii) if such Transfer or issuance would cause the Company to be considered a "publicly traded partnership" under Section 7704(b) of the Code within the meaning of Treasury Regulations Section 1. 7704-1 (h)( 1)(ii), including the look-through rule in Treasury Regulations Section 1. 7704-1 (h)(3); (iii) if such Transfer or issuance would affect the Company's existence or qualification as a limited liability company under the NY LLCL; (iv) if such Transfer or issuance would cause the Company to lose its status as a partnership for federal income tax purposes; (v) if such Transfer or issuance would cause the Company to be required to register as an investment company under the Investment Company Act of 1940, as amended; or (vi) if such Transfer or issuance would cause the assets of the Company to be deemed "Plan Assets" as defined under the Employee Retirement Income Security Act of 1974 or its accompanying regulations or result in any "prohibited transaction" thereunder involving the Company. (c) Any Transfer or attempted Transfer of any Membership Interest in violation of this Agreement shall be null and void, no such Transfer shall be recorded on the Company's books and the purported Transferee in any such Transfer shall not be treated (and the purported Transferor shall continue be treated) as the owner of such Membership Interest for all purposes of this Agreement. (d) Except as provided in Section 2.04(b), no Transfer (including a Permitted Transfer) of Membership Interests to a Person not already a Member of the Company shall be deemed completed until the prospective Transferee (including a Permitted Transferee) is admitted as a Member of the Company in accordance with Section 2.03(b) hereof. (e) For the avoidance of doubt, any Transfer of a Membership Interest permitted by this Agreement shall be deemed a sale, transfer, assignment, or other disposal of such Membership Interest in its entirety as intended by the parties to such Transfer, and shall not be deemed a sale, transfer, assignment, or other disposal of any less than all of the rights and benefits described in the definition of the term "Membership Interest" unless otherwise explicitly agreed to by the parties to such Transfer. Page 10 of24 Initials, FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 Section 6.02 Permitted Transfers. The provisions of Section 6.0l(a) shall not apply to any Transfer by any Member of all or any portion of its Membership Interest to any of the following (each, a "Permitted Transferee" and, any such Transfer to a Permitted Transferee, a "Permitted Transfer"): (a) Any Affiliate of such Member; or (b) With respect to a Member that is an individual: (i) such Member's spouse, parent, siblings, descendants (including adoptive relationships and stepchildren) and the spouses of each such natural persons (collectively, "Family Members"); (ii) a trust under which the distribution of Membership Interests may be made only to such Member and/or any Family Member of such Member; (iii) a charitable remainder trust, the income from which will be paid to such Member during his or her life; (iv) a corporation, partnership, or limited liability company, the shareholders, partners, or members of which are only such Member and/or Family Members of such Member; or (v) such Member's executors, administrators, testamentary trustees, legatees, or beneficiaries, by will or the laws of intestate succession. ARTICLE VII Tag- Along Rights Section 7.01 Participation. If at any time a Member who (together with its Affiliates) holds no less than 10% of the outstanding Units of the Company (the "Selling Member") proposes to sell any Units to an Independent Third Party (the "Proposed Transferee") and the Selling Member cannot or has not elected to exercise its drag-along rights set forth in 14 each other Member (each, a "Tag-along Member") shall be permitted to participate in such sale (a "Tag-along Sale") on the terms and conditions set forth in this Article Section 7.02 Sale Notice. Prior to the consummation of the sale described in Section 7.01, the Selling Member shall deliver to the Company and each other Member a written notice (a "Sale Notice") of the proposed sale subject to this Section no more than 10 Business Days after the execution and delivery by all the parties thereto of the definitive agreement entered into with respect to the Tag-along Sale and, in any event, no later than 20 Business Days prior to the closing date of the Tag-along Sale. The Tag-along Notice shall make reference to the Tag-along Members' rights hereunder and shall describe in reasonable detail: (a) the number of Units to be sold by the Selling Member; (b) the name of the Proposed Transferee; (c) the per Unit purchase price and the other material terms and conditions of the sale, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof; (d) the proposed date, time and location of the closing of the sale; and Page 11 of24 Initials m_ FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 (e) a copy of any form of agreement proposed to be executed in connection therewith. Section 7.03 Units to be Sold. (a) Each Tag-along Member shall exercise its right to participate in a sale of Units by the Selling Member subject to this Section by delivering to the Selling Member a written notice (a "Tag-along Notice") stating its election to do so and specifying the number of Units to be sold by it no later than five Business Days after receipt of the Sale Notice (the "Tag-along Period"). The offer of each Tag-along Member set forth in a Tag-along Notice shall be irrevocable, and, to the extent such offer is accepted, such Tag-along Member shall be bound and obligated to sell in the proposed sale on the terms and conditions set forth in this Article. Each Tag-along Member shall have the right to sell in a sale subject to this Article the number of Units equal to the product obtained by multiplying (x) the number of Units held by the Tag-along Member by (y) a fraction (A) the numerator of which is equal to the number of Units the Selling Member proposes to sell or transfer to the Proposed Transferee and (B) denominator of which is equal to the number of Units then owned by such Selling Member. (b) The Selling Member shall use reasonable efforts to include in the proposed sale to the Proposed Transferee all of the Units that the Tag-along Members have requested to have included pursuant to the applicable Tag-along Notices, it being understood that the Proposed Transferee shall not be required to purchase Units in excess of the number set forth in the Sale Notice. In the event the Proposed Transferee elects to purchase less than all of the Units sought to be sold by the Tag-along Members, the number of Units to be sold to the Proposed Transferee by the Selling Member and each Tag-along Member shall be reduced so that each such Member is entitled to sell its Pro Rata Portion of the number of Units the Proposed Transferee elects to purchase (which in no event may be less than the number of Units set forth in the Sale Notice). (c) Each Tag-along Member who does not deliver a Tag-along Notice in compliance with clause (i) above shall be deemed to have waived all of such Tag-along Member's rights to participate in such sale, and the Selling Member shall (subject to the rights of any participating Tag-along Member) thereafter be free to sell to the Proposed Transferee its Units at a per Unit price that is no greater than the per Unit price set forth in the Sale Notice and on other same terms and conditions which are not materially more favorable to the Selling Member than those set forth in the Sale Notice, without any further obligation to the non- accepting Tag-along Members. Section 7.04 Consideration. Each Member participating in a sale pursuant to Section 7 .0 I shall receive the same consideration per Unit after deduction of such Member's proportionate share of the related expenses in accordance with Section 7 .07 below. Page 12 of24 Initials~ FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150 RECEIVED NYSCEF: 09/23/2023 Section 7.05 Conditions of Sale. Each Tag-along Member shall make or provide the same representations, warranties, covenants, indemnities and agreements as the Selling Member makes or provides in connection with the Tag-along Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to the Selling Member, the Tag-along Member shall make the comparable representations, warranties, covenants, indemnities and agreements pertaining specifically to itself); provided, that all representations, warranties, covenants and indemnities shall be made by the Selling Member and each other Tag-along Member severally and not jointly and any indemnification obligation in respect of breaches of representations and warranties that do not relate to such Tag-along Member shall be in an amount not to exceed the aggregate proceeds received by such Tag-along Member in connection with any sale consummated pursuant to this Article. Section 7.06 Expenses. The fees and expenses of the Selling Member incurred in connection with a sale under this Article and for the benefit of all Members (it being understood that costs incurred by or on behalf of the Selling Member for its sole benefit will not be considered to be for the benefit of all Members), to the extent not paid or reimbursed by the Company or the Proposed Transferee, shall be shared by all the Members on a pro rata basis, based on the consideration received by each Member; provided, that no Member shall be obligated to make any out-of-pocket expenditure prior to the consummation of the transaction consummated pursuant to this Article. Section 7.07 Cooperation. Each Member shall take all actions as may be reasonably necessary to consummate the Tag-along Sale, including, without limitation, entering into agreements and delivering certificates and instruments, in each case, consistent with the agreements being entered into and the certificates being delivered by the Selling Member. Section 7.08 Deadline for Completion of Sale. The Selling Member shall have 90 Business Days following the expiration of the Tag-along Period in which to sell the Units described in the Sale Notice, on terms not more favorable to the Selling Member than those set forth in the Sale Notice which such period may be extended for a reasonable time not to exceed 120 Business Days to the extent reasonably necessary to obtain any regulatory approvals). If at the end of such period the Selling Member has not completed such sale, the Selling Member may not then effect a sale of Units subject to this Article without again fully complying with the provisions of this Article. Section 7.09 Sales in Violation of the Tag-along Right. If the Selling Member sells or otherwise transfers to the Proposed Transferee any of its Units in breach of this Article, then each Tag-along Member shall have the right to sell to the Selling Member, and the Selling Member undertakes to purchase from each Tag-along Member, the number of Units that such Tag-along Member would have had the right to sell to the Proposed Transferee pursuant to this Article, for a per Unit amount and form of consideration and upon the term and conditions on which the Proposed Transferee bought such Units from the Selling Member, but without indemnity being granted by any Tag-along Member to the Selling Member; provided, that nothing contained in this Article shall preclude any Member from seeking alternative remedies against such Selling Member as a result of its breach of this Article. The Selling Member shall also reimburse each Tag-along Member for any and all reasonable and documented out-of- Page 13 of24 Initials~~ FILED: NASSAU COUNTY CLERK 09/23/2023 04:04 PM INDEX NO. 602826/2022 NYSCEF DOC. NO. 150